Resilience Awarded in Appeal

The Delhi High Court recently dealt with appeals filed against a single judge’s finding, dismissing rectification petitions filed by Resilient Innovations.

The issue relevant to Section 124 of the Trade Marks Act (‘the Act’) arose when a suit filed by PhonePe (PPL) was pending adjudication before the Delhi High Court. RIPL had objected to the validity of PPL’s trademarks and the court was yet to frame the issue in this regard.

As background, PPL claimed to be using its logo trademark 1 since September 2015, which was registered in December 2016. RIPL applied for trademark 2 in January 2018, which was withdrawn in November 2018 after PPL filed a notice of objection. But RIPL continued using its trademark instead.

In May 2019, PPL filed a suit for infringement and passing off against RIPL, seeking an injunction against the use of a deceptive variant of ‘Pe’ or ‘PhonePe’ before the Delhi High Court. An interim injunction was not granted.

RIPL subsequently filed for the ‘PostPe’ trademark in April 2021, which was opposed by PPL in September of that year. In October 2021, RIPL initiated rectification petitions against PPL’s trademarks, which were dismissed by a single judge. PPL also filed a suit before the Bombay High Court asserting that RIPL’s continued use of its ‘PostPe’ trademark was infringing its ‘PhonePe’ mark and variants.

Two issues arose—the maintainability of appeals as PPL contended that there is no intra-court appeal available against a judgment passed under Section 57 of the Act (rectification provision); and whether the judgment was rightly passed.

With respect to the first issue, PPL contended that the rectification provision of the Act—including amendments following the abolition of the Intellectual Property Appellate Board (IPAB)—does not provide for an intra-court appeal in matters where the decision on the rectification was rendered by the High Court.

Provisions under the Code of Civil Procedure (CPC) were also not made applicable to rectification petitions filed under Section 57 of the Act, and therefore, appeal by way of Letters Patent would not be available in relation to a decision passed by a single judge.

RIPL claimed that an appeal lies under Clause 10 of the Letters Patent, from which the High Court derives its powers. And such intra-court appeal is not expressly excluded under the Act.

With respect to the second issue, RIPL contended that Section 124 of the Act for a stay of infringement proceeding is invoked when there is a pending infringement suit. The defendant had pleaded the invalidity of the plaintiff’s registered trademark, based on which the infringement action is filed.

The suit filed before the Delhi High Court by PPL was based on statutory rights in three registrations of trademark 1 against RIPL’s use of trademark 2 and rectification petitions filed by RIPL were initiated against the same three registrations and additional registration for trademark 1.

Thus, the single judge’s judgment wasn’t sustainable against the fourth registration since RIPL could not have pleaded its invalidity in the suit filed before the High Court. PPL countered that the suit before the High Court was based on infringement of trademark 1 by RIPL’s use of trademark 2. Since RIPL had taken the defence of invalidity in the Delhi suit, which was pending when rectification petitions were filed, instances of Section 124 of the Act were fulfilled.

Since no permission was sought by RIPL before filing rectification petitions, the petitions were rightly dismissed as mandated under this provision.

Appeals allowed

The court observed that since Letters Patent is the paramount charter under which the High Court functions, its provision for appeals cannot be obliterated unless specifically excluded by the concerned statute.

With the abolition of the IPAB, both the High Court and Registrar could decide the rectification petition. The High Court held that the Act 1999 did not exclude one level of scrutiny by way of an intra-court appeal preferred under the Letters Patent, and so present appeals filed before the Court were maintainable.

As per Section 124 of the Act, if rectification proceedings against trademarks are pending, the court trying the infringement action is required to stay the suit, pending the final disposal of those petitions before the Registrar or High Court.

The court agreed with RIPL’s contentions that the rectification petition filed against the fourth registered trademark of PPL could not have been dismissed by the single judge. Coming to the second issue, the court observed that Section 124 doesn’t state that a rectification petition ought to be dismissed in limine, where the court was yet to frame an issue.

Thus, the dismissal of the rectification petitions was not correct. The appeals were allowed, and petitions were directed to be kept in abeyance.

This decision captures that relief sought by a party cannot be dismissed in limine on a technicality.