The concept of dynamic effect has played a crucial role in determining the jurisdiction of High Courts in intellectual property disputes, particularly in trademark rectification, design cancellation, and patent revocation petitions. Courts have examined whether the impact of an intellectual property right beyond its place of registration can justify jurisdiction in a different High Court. While this principle has been recognized in design and patent revocation cases, its applicability to trademark rectification petitions has been rejected in recent rulings, particularly in The Hershey Company v. Dilip Kumar Bacha, Trading as Shree Ganesh Namkeen & Anr. (2024).

However, the Hershey judgment appears to have overlooked Section 29(4) of the Trade Marks Act, 1999, which extends trademark rights even to different classes of goods and services where the mark has a reputation in India. The court failed to appreciate that, like patents and designs, trademark rights also extend nationwide, thereby warranting a broader interpretation of jurisdiction under the dynamic effect doctrine. This article critically examines the evolution of the dynamic effect doctrine, its judicial interpretations, and how the Hershey judgment deviates from established IP principles.

• The Concept of Dynamic Effect in IP Disputes:
  • The static effect of an intellectual property right refers to its formal registration at a particular registry, while the dynamic effect refers to the wider commercial impact of that right beyond the registry location.
  • In disputes involving patents and designs, courts have acknowledged that such rights operate nationwide, restricting competitors across multiple jurisdictions.
  • This has led to an expanded interpretation of jurisdiction in patent revocation and design cancellation cases.
     
• Hershey Judgment on Trademark Rectification:
  • In trademark rectification matters, the Hershey judgment limited jurisdiction to the High Court governing the Trade Marks Registry where the mark was granted.
  • It disregarded the nationwide impact of well-known trademarks under Section 29(4) of the Trade Marks Act, 1999.
• Dynamic Effect in Design Cancellation Petitions: Girdhari Lal Gupta Vs. K. Gian Chand Jain & Co., AIR 1978 Delhi 146
   
  • Factual Background:
    • The Petitioner, Girdhari Lal Gupta, obtained registration for two designs (Nos. 131357 and 131364) under the Designs Act, 1911, for laces.
    • The Respondents, K. Gian Chand Jain & Co., contested the validity of these registered designs, claiming prior publication in India.
       
  • Procedural Background:
    • The Respondents filed applications under Section 51-A of the Designs Act, 1911, before the Delhi High Court, seeking cancellation of the registrations.
    • The Petitioner challenged jurisdiction, arguing that only the Calcutta High Court had authority.
    • The Delhi High Court ruled that the impact of a design registration extends beyond the place of registration.
  • Law Settled: Applications for design cancellation can be filed in High Courts where the business impact is felt.
     
• Dynamic Effect in Patent Revocation Petitions: Dr. Reddy’s Laboratories Ltd. & Anr. Vs The Controller of Patents & Ors. (2022/DHC/004746)
  • Factual Background:
    • The Petitioner, Dr. Reddy’s Laboratories Ltd., filed a patent revocation petition against Patent No. IN 268846 granted to Boehringer Ingelheim.
    • The Petitioners argued the patent was invalid and filed the petition before the Delhi High Court.
  • Procedural Background:
    • The Respondent challenged maintainability, arguing that revocation should be filed as a counterclaim in an existing infringement suit.
  • Decision and Law Settled: Patent revocation is an independent right under Section 64 and can be filed irrespective of pending infringement suits.
• Dynamic Effect in Trademark Revocation Petitions: Dr. Reddy’s Laboratories Ltd. v. Fast Cure Pharma & Anr. (2023/DHC/004746)
   
  • Factual Background:
    • Dr. Reddy’s Laboratories filed a suit against Fast Cure Pharma (FCP) alleging infringement of its "RAZO" trademark.
    • During the suit, the petitioner sought rectification of FCP’s "RAZOFAST" trademark.
    • The issue was whether the Delhi High Court had jurisdiction since "RAZOFAST" was registered with the Kolkata Trade Marks Registry.
       
  • Decision and Law Settled:
    • Trademark rights impact businesses beyond their place of registration.
    • The Delhi High Court upheld jurisdiction since the mark affected the petitioner’s ability to operate freely in Delhi.
       
• Rejection of Dynamic Effect in Trademark Rectification Cases: The Hershey Company v. Dilip Kumar Bacha & Anr. (2024/DHC/004746)
  • Factual Background:
    • The Petitioner, The Hershey Company, owned the well-known trademark "HERSHEY".
    • The Respondent, Dilip Kumar Bacha, obtained registration for the trademark "HARSHY" at the Mumbai Trade Marks Registry.
       
  • Procedural Background:
    • July 25, 2018 – "HARSHY" was registered at the Mumbai Trade Marks Registry.
    • August 2023 – Hershey filed the rectification petition before the Delhi High Court.
    • The Respondent objected, arguing that the correct forum was the Bombay High Court under Rule 4 of the Trade Marks Rules, 2017.
       
  • Decision and Criticism:
    • The Delhi High Court ruled that rectification petitions must be filed in the High Court governing the Trade Marks Registry where the mark was granted.
    • The court rejected the dynamic effect doctrine in trademark rectifications but referred the matter to a larger Bench for evaluation.

While the court attempted to distinguish trademark rectification from patent and design revocation, it failed to consider Section 29(4) of the Trade Marks Act, 1999, which expands trademark protection beyond its class of goods and services where the mark has a reputation in India.

Section 29(4) states that a trademark may be infringed even if used on completely different goods or services, provided the mark has a reputation in India and its use takes unfair advantage of or is detrimental to the distinctive character or reputation of the mark. This means that trademark rights extend across India, affecting businesses in multiple jurisdictions, much like patents and designs. A well-known mark like "HERSHEY" would be impacted by an infringing mark anywhere in India, justifying jurisdiction in any High Court where the commercial effect of the infringement is felt. The court’s reasoning in rejecting dynamic effect contradicts the expanded protection granted to trademarks under Section 29(4).

By overlooking Section 29(4), the Hershey judgment wrongly confined trademark rectification to the Trade Marks Registry's location, disregarding the nationwide impact of a trademark's reputation and infringement.

Design registrations are specific to particular products as per Section 6 of the Designs Act. Hence, the court wrongly distinguished design and trade mark rights on the ground that trademark rights are in relation to particular products, while design and patent rights are not. Even patent rights are subject to specific products for which patents are granted. Thus, trademarks, patents, and design rights stand on the same footing.

The term "High Court" as defined in Sections 47, 57, and 125 of the Trade Marks Act, 1999, should not derive its interpretation from Rule 3 of the Trade Marks Rules, 2017. Rules are subordinate legislation made under the Act and cannot override the primary statutory provisions.

If the dynamic effect doctrine is valid for patents and designs, where rights extend beyond registration, it should logically apply to trademarks as well, especially in cases involving well-known marks. By restricting jurisdiction to the Trade Marks Registry location, the Hershey judgment creates an artificial and unjustified distinction between different forms of intellectual property rights, weakening trademark enforcement.

Thus, the ruling in Hershey v. Dilip Kumar Bacha should be reconsidered to align trademark jurisprudence with patent and design laws, ensuring a consistent and effective approach to intellectual property protection.

Disclaimer:
The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: ajayamitabhsuman@gmail.com, Ph no: 9990389539