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Passing Off Remedy Can Not Be Stayed Under Section 124 Of The Trademarks Act 1999

The Defendant has filed application under Section 124 of the Trademarks Act 1999,seeking stay of the suit proceeding pending cancellation petition filed by them against registered Trademarks of the Plaintiff.

The Defendant alleged that since they have filed cancellation Petition against the registered Trademarks of the Plaintiff prior to filing of the suit, the Suit proceeding is liable to be stayed.

However the Plaintiff alleged that the subject matter Suit is a composite Suit, comprising of Trademarks Infringement and passing off both. Hence the suit can not be stayed in so far as relief pertaining to passing off is concerned.

Let us see whether Section 124 of Trademarks Act 1999 is applicable to relief to infringement and passing off or not? For ease in reference, Section 124 of Trademarks Act 1999 is reproduced as under:

Section 124 in The Trade Marks Act, 1999
124. Stay of proceedings where the validity of registration of the trade mark is questioned, etc.
  1. Where in any suit for infringement of a trade mark
    1. the defendant pleads that registration of the plaintiff's trade mark is invalid; or
    2. the defendant raises a defense under clause (e) of sub-section (2) of section 30 and the plaintiff pleads the invalidity of registration of the defendant's trade mark, the court trying the suit (hereinafter referred to as the court), shall:
      1. if any proceedings for rectification of the register in relation to the plaintiff's or defendant's trade mark are pending before the Registrar or the Appellate Board, stay the suit pending the final disposal of such proceedings;
      2. if no such proceedings are pending and the court is satisfied that the plea regarding the invalidity of the registration of the plaintiff's or defendant's trade mark is prima facie tenable, raise an issue regarding the same and adjourn the case for a period of three months from the date of the framing of the issue in order to enable the party concerned to apply to the Appellate Board for rectification of the register.
  2. If the party concerned proves to the court that he has made any such application as is referred to in clause (b) (ii) of sub-section (1) within the time specified therein or within such extended time as the court may for sufficient cause allow, the trial of the suit shall stand stayed until the final disposal of the rectification proceedings.
  3. If no such application as aforesaid has been made within the time so specified or within such extended time as the court may allow, the issue as to the validity of the registration of the trade mark concerned shall be deemed to have been abandoned and the court shall proceed with the suit in regard to the other issues in the case."

From bare reading of Section 124 of Trademarks Act 1999,It is apparent that this provision is applicable only in relation to remedy pertaining to an action of Infringement of Trademarks.

In so far remedy of passing off is concerned, this provision has no applicability at all. The natural effect of this interpretation would be that this provision can not stay the suit for passing off to be proceeded further.

The Hon'ble High Court of Delhi, after relying upon the Judgement passed by the Hon'ble High Court of Delhi in Judgement reported as M/s. J.K. Oil Industries v. M/s. Adani Wilmar Limited, 2018 SCC OnLine Del 9367, , which have reiterated that afore mentioned principle, was pleased to stay the suit proceeding pertaining to Infringement of Trademark. However the Suit proceeding, in so far as it relate to passing off remedy, was ordered to be continued.

Thus if a suit comprised the relief of infringement of Trademark as well as passing off both, by virtue of operation of Section 124 of Trademarks Act, the suit ,in so far as it pertain to the remedy of infringement of Trademark, may be stayed , however the suit ,in so far as it relate to the remedy of passing off, will continue to proceed further.

Written By: Ajay Amitabh Suman, IPR Advocate, Hon'ble High Court of Delhi
Email: [email protected], Ph no: 9990389539

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