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Stay of Suit proceeding under Section 124 of Trademarks Act 1999

This article analyzes the legal issue concerning the stay of civil suit proceedings under Section 124 of the Trade Marks Act, 1999, following the abolition of the Intellectual Property Appellate Board (IPAB) by the Tribunal Reforms Act, 2021. The discussion centers on the correctness of the view expressed in Sana Herbals Pvt. Ltd. vs. Mohsin Dehlvi: 2022 SCC OnLine Del 4482, particularly regarding whether a stay is required during the pendency of a rectification petition. The Hon'ble Division Bench of the High Court of Delhi examines the statutory implications of Section 124(2) and addresses the erroneous presumption that infringement suits and rectification actions would always be adjudicated by the High Court. There by Hon'ble Division Bench negated the finding of Sana Herbals and observed that under Section 124 of Trademarks Act 1999, suit proceeding is liable to be stayed.

In the case of Sana Herbals Pvt. Ltd. vs. Mohsin Dehlvi, the Court examined the impact of the Tribunal Reforms Act, 2021, which led to the abolition of the IPAB. The jurisdiction for rectification petitions under the Trade Marks Act reverted to the High Courts. The Single Judge in Sana Herbals held that because both the rectification petition and the suit for infringement would be handled by the High Court, there was no need to stay the civil suit proceedings during the pendency of the rectification petition. This view was contested, and the correctness of this legal interpretation was brought before a Division Bench for consideration.

The Division Bench found that the Single Judge in Sana Herbals erroneously assumed that both the suit for infringement and the rectification petition would always be instituted before the High Court. This presumption neglected the reality that suits and rectification actions could be pending before different forums, potentially leading to conflicting decisions. Consequently, the Bench emphasized that the statutory mandate to stay civil suit proceedings under Section 124(1) of the Trade Marks Act, 1999, remains relevant and necessary to avoid jurisdictional conflicts and ensure legal coherence.

Legal Implication:
The legal implication of this case is significant for the interpretation and application of Section 124 of the Trade Marks Act, 1999. The decision clarifies that the abolition of the IPAB and the reversion of its jurisdiction to the High Courts does not eliminate the need for a stay of civil proceedings during the pendency of rectification petitions. This interpretation ensures that the procedural safeguards intended by the legislature to prevent contradictory rulings remain intact, thereby maintaining the integrity of the judicial process in trademark disputes.

The ratio decidendi of the Division Bench's decision is that the statutory requirement to stay civil suit proceedings under Section 124(1) of the Trade Marks Act, 1999, persists even after the abolition of the IPAB. This is based on the understanding that rectification petitions and infringement suits might not always be concurrently pending before the same High Court, thus necessitating a stay to prevent potential conflicts in judicial decisions. The decision underscores the need for consistency and coherence in the adjudication of trademark disputes.

Concluding Note:
The Division Bench's decision in this case reaffirms the necessity of staying civil suit proceedings under Section 124 of the Trade Marks Act, 1999, during the pendency of rectification petitions, despite the abolition of the IPAB. The judgment addresses and corrects the erroneous assumptions made in Sana Herbals, ensuring that the procedural mechanisms designed to prevent conflicting decisions remain effective.

Case Title: Mr. Amrish Aggarwal Trading as Mahalaxmi Product Vs Venus Home Appliances Pvt. Ltd. and another
Order Date: 17.05.2024
Case No. CA Comm IPD TM 258 of 2022
Neutral Citation:2024:DHC:3991-DB
Name of Court: Delhi High Court
Name of Hon'ble Judge: Yashwant Varma and Ravinder Dudeja, H.J.

Ideas, thoughts, views, information, discussions and interpretation expressed herein are being shared in the public Interest. Readers' discretion is advised as these are subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the fact and issue involved herein.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539

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