The case of Amrish Aggarwal vs. Venus Home Appliances Pvt. Ltd. explores a pivotal question under the Trade Marks Act, 1999: Should infringement suits be mandatorily stayed when rectification proceedings are initiated? The judgment, delivered by the Delhi High Court on May 17, 2024, evaluates the legislative framework of Section 124 of the Act, particularly in light of the abolition of the Intellectual Property Appellate Board (IPAB) through the Tribunal Reforms Act, 2021. The court examined whether the observations in the Sana Herbals case align with the statutory requirements, setting a significant precedent for intellectual property jurisprudence in India.

Date of Order:Judgement:17.05.2024
Case No.CO (COMM.IPD-TM) 258/2022
Neutral Citation: 2024:DHC:3991:DB
Name of Court: Delhi High Court
Name of Hon’ble Judge: Yashwant Varma and Ravinder Dudeja
Case Title:Mr. Amrish Aggarwal Trading as Mahalaxmi Product
Versus Venus Home Appliances Pvt. Ltd. and another

Brief Facts of the Case

Parties Involved:

• Petitioner: Mr. Amrish Aggarwal, trading as M/s Mahalaxmi Product.
• Respondent: Venus Home Appliances Pvt. Ltd.

Background:

• The respondent filed an infringement and passing off suit before the Additional District Judge, exercising Commercial Court powers.
• The petitioner, in their defense, challenged the validity of the respondent’s trademark.
• Before the Commercial Court could determine the prima facie tenability of this challenge, the petitioner initiated rectification proceedings before the High Court.

Issues Involved:

• Primary Issue: Whether an infringement suit must be stayed under Section 124(2) of the Trade Marks Act, 1999, upon the initiation of rectification proceedings.
• Secondary Issue: Whether rectification petitions can be filed before the suit court determines the prima facie tenability of the validity challenge.

Arguments of the Parties:

• Petitioner’s Arguments:
  • Asserted that rectification proceedings are independent and can be initiated without awaiting the prima facie determination of validity by the suit court.
  • Emphasized the mandatory nature of the stay under Section 124(2) once rectification is initiated.
• Respondent’s Arguments:
  • Opposed the stay, relying on the Sana Herbals case, which held that post-IPAB abolition, rectification and infringement proceedings being heard by the same High Court obviates the need for a stay.
• Intervening Counsels:
  • Highlighted conflicting precedents, including Elofic Industries, Puma Stationer, and Patel Field Marshal Agencies, which reinforced the statutory obligation to stay suits under Section 124(2).

Legal Reasoning and Analysis:

• Judicial Interpretation of Section 124:
  • Section 124 mandates that infringement suits be stayed if rectification proceedings are initiated, reflecting legislative intent to avoid conflicting decisions.
  • The court questioned the correctness of Sana Herbals, which suggested that the stay is unnecessary as both proceedings are now under the High Court’s jurisdiction.
• Contrary Precedents:
  • Sana Herbals: Held that the abolition of IPAB eliminated the risk of conflicting decisions, making the stay redundant.
  • Patel Field Marshal Agencies: Emphasized that staying infringement suits is a statutory requirement to prevent parallel adjudication.
• Court’s Observations:
  • The court found that Sana Herbals contradicted the plain text of Section 124(2), which does not grant discretion to refuse a stay.
  • The stay is an "inexorable legislative consequence" of filing rectification proceedings.
• Impact of IPAB Abolition:
  • The abolition of IPAB and transfer of rectification jurisdiction to High Courts does not alter the statutory mandate under Section 124(2).
  • The legislature amended Section 124(1) to replace “Appellate Board” with “High Court” but retained Section 124(2), signifying the continued necessity of a stay.

Decision:

• The Delhi High Court ruled:
• Observations in Sana Herbals are inconsistent with the statutory framework.
• Section 124(2) imposes a mandatory obligation to stay infringement suits when rectification proceedings are initiated, irrespective of the jurisdictional changes post-IPAB abolition.

Implications:

• Legal Precedent:
  • Reinforces the procedural mandate under Section 124(2) of the Trade Marks Act, 1999.
  • Clarifies the interplay between rectification and infringement proceedings, aligning with the legislative objective of avoiding conflicting judgments.
• Practical Impact:
  • Ensures that validity challenges in rectification proceedings are resolved before adjudicating infringement claims.
  • Provides clarity to litigants and courts on procedural obligations post-IPAB abolition.

Conclusion
The judgment in Amrish Aggarwal vs. Venus Home Appliances Pvt. Ltd. underscores the importance of adhering to statutory mandates to maintain procedural consistency and prevent conflicting decisions in intellectual property disputes. By reaffirming the necessity of staying infringement suits under Section 124(2), the Delhi High Court has provided a robust interpretation that balances legislative intent with practical realities in the post-IPAB era.

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: [email protected], Ph no: 9990389539