The case of Patel Field Marshal Agencies & Anr. v. P.M. Diesels Ltd. & Ors. decided by the Supreme Court of India on November 29, 2017, is a landmark judgment in the domain of trademark law. The dispute centered around the use of the trademark "Field Marshal," with the respondent claiming infringement by the appellants, who sought to register the mark "Marshal." The primary issue revolved around the interplay of rights under Sections 46, 56, 107, and 111 of the Trade and Merchandise Marks Act, 1958. This judgment provides clarity on procedural aspects related to rectification proceedings and the implications of deemed abandonment of invalidity claims in trademark infringement suits.

Detailed Factual Background of the Case:
Respondent's Business and Trademark Registration: P.M. Diesels Ltd., the respondent, is the registered owner of the following trademarks:Trademark No. 224879: "Field Marshal" (registered on October 16, 1964.Trademark No. 252070: "Field Marshal" in a specific lettering style (registered on October 4, 1968).Trademark No. 252071-B: "FM Field Marshal" (registered on October 4, 1968).These trademarks were registered for use in relation to diesel engines and machinery, and the respondent had been using these marks extensively in its business, gaining goodwill and recognition in the market.

Appellants' Business and Trademark Application:
The appellants, Patel Field Marshal Agencies & Anr., were engaged in a similar business of manufacturing and trading diesel engines and related machinery. In 1982, the appellants applied to register the trademark "Marshal" for their products. The respondent opposed this application, claiming that "Marshal" was deceptively similar to "Field Marshal," which could lead to consumer confusion and dilute the distinctiveness of its trademarks. 

Respondent's Infringement Suit (1989):
In 1989, the respondent filed Suit No. 1612 of 1989 before the Delhi High Court seeking the following reliefs: Injunction: Restraining the appellants from using the trademarks "Marshal" or "Patel Field Marshal Agencies/Industries." Rendition of Accounts: Seeking damages or profits earned by the appellants through the use of the disputed trademark. Declaration of Infringement: Asserting exclusive rights over its registered trademarks.

The appellants, in their defense, raised the following: Jurisdictional Objections: Challenged the pecuniary and territorial jurisdiction of the Delhi High Court. Validity of Respondent's Trademarks: Claimed the trademarks were invalid and sought their rectification from the register. Rectification Proceedings by Appellants (1997) While the infringement suit was pending, the appellants filed three rectification applications in 1997 before the Gujarat High Court under Sections 46 and 56 of the 1958 Act, challenging the validity of the respondent's trademarks.

• The grounds for rectification included:
  • Non-Use: Alleging the trademarks had not been used continuously as required by law.
  • Improper Registration: Claiming the marks were descriptive and lacked distinctiveness at the time of registration.
     
• Developments in the Infringement Suit:
  • Interim Injunctions: The respondent sought temporary injunctions in the Delhi High Court, which were initially denied by a Single Judge on grounds of lack of jurisdiction.
  • Appeals and Transfers: The matter was transferred to the Rajkot District Court in 2009 after the Delhi High Court ruled that jurisdiction lay in Gujarat.
     
• Key Issue Before the Supreme Court: The Supreme Court had to address whether, in cases where an infringement suit is pending and the issue of trademark validity has been raised, parties can pursue independent rectification proceedings under Sections 46 and 56, or whether Section 111 restricts such actions to rectification proceedings initiated following the trial court's prima facie findings.
   
• Cases Referred and Discussed: The Supreme Court relied on several precedents and interpretations to resolve the central issue in this case. Below is a detailed analysis of the cases referred to and discussed in the judgment, along with their relevance to the matter at hand:
  • National Bell Co. v. Metal Goods Mfg. Co. (1971 AIR 898):
    • Context: This case defined the term "person aggrieved" under Sections 46 and 56 of the Trade and Merchandise Marks Act, 1958.
    • Court's Discussion in the Present Case: The appellants relied on this case to assert that they, as parties aggrieved by the registration of "Field Marshal," had an independent statutory right to file rectification applications. The Supreme Court acknowledged this interpretation but clarified that when a suit for infringement is pending, the procedural scheme under Sections 107 and 111 restricts the independent exercise of rights under Sections 46 and 56.
       
  • Cotton Corporation of India Ltd. v. United Industrial Bank Ltd. (1983 4 SCC 625):
    • Context: This case discussed the inability of lower courts to restrain parties from pursuing statutory remedies in higher forums.
    • Court's Discussion in the Present Case: The appellants argued that requiring trial court permission to file rectification applications violated this principle. The Court distinguished the procedural requirement under Section 111, emphasizing that it was not a matter of granting permission but ensuring prima facie tenability before invoking rectification.
       
  • Astrazeneca UK Ltd. v. Orchid Chemicals & Pharmaceuticals Ltd. (2006 (32) PTC 733):
    • Context: This decision of the Delhi High Court dealt with Section 124(1) of the Trade Marks Act, 1999 (similar to Section 111 of the 1958 Act), focusing on the stay of infringement suits pending rectification proceedings.
    • Court's Discussion in the Present Case: The Supreme Court noted the Delhi High Court's view that when a trial court does not find a prima facie case of invalidity, the party can only challenge this finding on appeal. However, the Supreme Court rejected any interpretation allowing parallel rectification proceedings, stating that the procedural scheme must avoid inconsistent outcomes.
       
  • Data Infosys Ltd. v. Infosys Technologies Ltd. (2016 (65) PTC 209):
    • Context: This Full Bench decision of the Delhi High Court clarified the abandonment of invalidity pleas under Section 124(3) of the 1999 Act (analogous to Section 111(3) of the 1958 Act).
    • Court's Discussion in the Present Case: The Supreme Court endorsed this case, holding that the abandonment of invalidity claims in an infringement suit extends beyond the suit and bars subsequent rectification applications. It rejected the argument that abandonment is limited to the context of the suit alone.
       
  • B. Mohamed Yousuff v. Prabha Singh Jaswant Singh (2008 (38) PTC 576):
    • Context: This Madras High Court case argued that the right to file rectification under Sections 47 and 57 of the 1999 Act is not contingent on obtaining permission from a trial court under Section 124(1)(ii).
    • Court's Discussion in the Present Case: The Supreme Court disagreed with this view, reiterating that the legislative intent under Sections 111 and 124 was to channel rectification claims through a controlled process to avoid duplicity and conflicts.
       
  • York Products Ltd. v. York International Corp. (AIR 2001 SC 1491):
    • Context: This case addressed the concept of deceptive similarity and the rights of registered trademark owners under the Trade and Merchandise Marks Act, 1958.
    • Court's Discussion in the Present Case: Although not directly linked to rectification, this case was referenced to reaffirm the exclusive rights granted to registered trademark owners and the procedural safeguards for protecting those rights.
       
• Key Takeaways from Court's Use of These Cases: The Court distinguished between the substantive rights of aggrieved parties and the procedural mechanisms controlling their exercise. It emphasized the legislative intent to prevent conflicting outcomes by channeling rectification claims through the trial court's prima facie assessment during infringement suits.

The Reasoning and Discussion by the Court:
Exclusive Jurisdiction of Statutory Authorities on Trademark Validity Principle Established:
The Court reaffirmed that the validity of a registered trademark must exclusively be decided by statutory authorities—the Registrar of Trademarks, the High Court, or the Intellectual Property Appellate Board (IPAB)—and not by civil courts.Rationale:Sections 46 and 56 of the 1958 Act confer jurisdiction on statutory authorities to entertain applications for rectification of the trademark register.Sections 107 and 111 further specify that once the validity of a trademark is raised in an infringement suit, the civil court is required to stay the suit and direct the concerned party to approach the statutory authorities for rectification.Key Observation:"The Act mandates that decisions rendered by the prescribed statutory authority will bind the civil court, which is not empowered to decide the question of validity."

Interplay Between Sections 46, 56, and 111 (Rectification and Stay of Proceedings) Principle Established:
Section 111 creates a procedural regime that governs rectification claims when an infringement suit is pending. If a party raises the issue of trademark validity, they must follow the process outlined in Section 111. This overrides independent rights under Sections 46 and 56. Key Points: Prima Facie Tenability: The civil court must first assess whether the claim of invalidity is prima facie tenable. Only if the court finds merit in the claim can it frame an issue and grant time for the concerned party to file a rectification application. Stay of Suit: Once rectification proceedings are initiated, the infringement suit remains stayed until a decision is rendered on the validity of the trademark.

Deemed Abandonment (Section 111(3)):
If the concerned party fails to initiate rectification proceedings within the prescribed time (three months or as extended), the plea of invalidity is deemed abandoned, not just in the suit but for all future rectification claims.

Key Observation:
"The legislative scheme under Section 111 ensures that issues relating to invalidity are decided comprehensively in one forum, avoiding multiple proceedings and conflicting decisions."

Parallel Proceedings and Avoidance of Conflicts:
Principle Established: Parallel rectification proceedings under Sections 46/56 and 111 are prohibited when an infringement suit is pending. Once the issue of validity is raised in a suit, all rectification claims must adhere to the procedural mechanism of Section 111. Rationale: Allowing parallel proceedings could result in conflicting decisions, one by the civil court and another by the statutory authority.

The Supreme Court clarified that the legislature intended rectification issues in pending suits to be governed solely by Section 111 to maintain procedural consistency. Key Observation: "Once a civil court is approached, the rights under Sections 46 and 56 must be exercised through the procedural safeguards under Section 111."

Dismissal of Appeals and Final Decision:
Outcome: The Supreme Court dismissed the appellants' appeals, upholding the Gujarat High Court's decision. It affirmed that the appellants had abandoned their plea of invalidity under Section 111(3) by failing to initiate rectification proceedings within the prescribed time. Implications of the Law Laid Down: Streamlined Litigation: Ensures that trademark validity issues are dealt with comprehensively by statutory authorities, reducing the burden on civil courts.

Judicial Finality: Deemed abandonment provisions under Section 111(3) provide certainty to trademark disputes, preventing indefinite challenges to registration. Safeguard Against Abuse:The prima facie assessment ensures only legitimate challenges proceed, protecting trademark owners from frivolous claims.Consistency Across Forums:Prohibits parallel rectification proceedings to avoid conflicting decisions, maintaining the integrity of trademark law.

Conclusion:
The judgment in Patel Field Marshal Agencies lays down a clear procedural framework for handling trademark validity challenges in the context of infringement suits. By emphasizing the exclusivity of statutory authorities and the finality of deemed abandonment, the Court has strengthened the integrity of trademark litigation, ensuring efficient and consistent outcomes.

Case Title: Patel Field Marshal Agencies & Anr. v. P.M. Diesels Ltd. & Ors.
Date of Order: November 29, 2017
Case Nos.: Civil Appeals Nos. 4767-4769/2001
Neutral Citation: N/A
Court: Supreme Court of India
Judges: Justice Ranjan Gogoi and Justice Navin Sinha

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