Supreme Court clarifies Suit section 62 of the Copyright Act or section 134 of the Trade Marks Act to be filed plaintiff is residing or carrying on business if cause of action wholly or partly has also arise there

Supreme Court  in Indian Performing Rights Society Ltd. vs. Sanjay Dalia held that the provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act have to be interpreted in the purposive manner and clarified that if the plaintiff is residing or carrying on business etc. at a place where cause of action, wholly or in part, has also arisen, he has to file a suit at that place.

The Court observed that under Section 62 of the Copyright Act and Section 134 of the Trade Marks Act, an additional forum has been provided by including a District Court within whose limits the plaintiff actually and voluntarily resides or carries on business or personally works for gain. The object of the provisions was to enable the plaintiff to institute a suit at a place where he or they resided or carried on business, not to enable them to drag defendant further away from such a place also as is being done in the instant cases.

The Court held that the expression “notwithstanding anything contained in the Code of Civil Procedure” does not oust the applicability of the provisions of section 20 of the Code of Civil Procedure and it is clear that additional remedy has been provided to the plaintiff so as to file a suit where he is residing or carrying on business etc., as the case may be. Section 20 of the Code of Civil Procedure enables a plaintiff to file a suit where the defendant resides or where cause of action arose. Section 20(a) and section 20(b) usually provides the venue where the defendant or any of them resides, carries on business or personally works for gain. Section 20(c) of the Code of Civil Procedure enables a plaintiff to institute a suit where the cause of action wholly or in part, arises. The Explanation to Section 20 C.P.C. has been added to the effect that Corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has subordinate office at such place. Thus, ‘corporation’ can be sued at a place having its sole or principal office and where cause of action wholly or in part, arises at a place where it has also a subordinate office at such place.

On a due and anxious consideration of the provisions contained in section 20 of the CPC, section 62 of the Copyright Act and section 134 of the Trade Marks Act, and the object with which the latter provisions have been enacted, it is clear that if a cause of action has arisen wholly or in part, where the plaintiff is residing or having its principal office/carries on business or personally works for gain, the suit can be filed at such place/s. Plaintiff(s) can also institute a suit at a place where he is residing, carrying on business or personally works for gain de hors the fact that the cause of action has not arisen at a place where he/they are residing or any one of them is residing, carries on business or personally works for gain. However, this right to institute suit at such a place has to be read subject to certain restrictions, such as in case plaintiff is residing or carrying on business at a particular place/having its head office and at such place cause of action has also arisen wholly or in part, plaintiff cannot ignore such a place under the guise that he is carrying on business at other far flung places also. The very intendment of the insertion of provision in the Copyright Act and Trade Marks Act is the convenience of the plaintiff. The rule of convenience of the parties has been given a statutory expression in section 20 of the CPC as well. The interpretation of provisions has to be such which prevents the mischief of causing inconvenience to parties.

The intendment of the aforesaid provisions inserted in the Copyright Act and the Trade Marks Act is to provide a forum to the plaintiff where he is residing, carrying on business or personally works for gain. The object is to ensure that the plaintiff is not deterred from instituting infringement proceedings “because the court in which proceedings are to be instituted is at a considerable distance from the place of their ordinary residence”. The impediment created to the plaintiff by section 20 C.P.C. of going to a place where it was not having ordinary residence or principal place of business was sought to be removed by virtue of the aforesaid provisions of the Copyright Act and the Trade Marks Act. Where the Corporation is having ordinary residence/principal place of business and cause of action has also arisen at that place, it has to institute a suit at the said place and not at other places. The provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act never intended to operate in the field where the plaintiff is having its principal place of business at a particular place and the cause of action has also arisen at that place so as to enable it to file a suit at a distant place where its subordinate office is situated though at such place no cause of action has arisen. Such interpretation would cause great harm and would be juxtaposed to the very legislative intendment of the provisions so enacted.

In our opinion, in a case where cause of action has arisen at a place where the plaintiff is residing or where there are more than one such persons, any of them actually or voluntarily resides or carries on business or personally works for gain would oust the jurisdiction of other place where the cause of action has not arisen though at such a place, by virtue of having subordinate office, the plaintiff instituting a suit or other proceedings might be carrying on business or personally works for gain.

At the same time, the provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act have removed the embargo of suing at place of accrual of cause of action wholly or in part, with regard to a place where the plaintiff or any of them ordinarily resides, carries on business or personally works for gain. We agree to the aforesaid extent the impediment imposed under section 20 of the CPC to a plaintiff to institute a suit in a court where the defendant resides or carries on business or where the cause of action wholly or in part arises, has been removed. But the right is subject to the rider in case plaintiff resides or has its principal place of business/carries on business or personally works for gain at a place where cause of action has also arisen, suit should be filed at that place not at other places where plaintiff is having branch offices etc.

There is no doubt about it that the words used in section 62 of the Copyright Act and section 134 of the Trade Marks Act, ‘notwithstanding anything contained in CPC or any other law for the time being in force’, emphasise that the requirement of section 20 of the CPC would not have to be complied with by the plaintiff if he resides or carries on business in the local limits of the court where he has filed the suit but, in our view, at the same time, as the provision providing for an additional forum, cannot be interpreted in the manner that it has authorised the plaintiff to institute a suit at a different place other than the place where he is ordinarily residing or having principal office and incidentally where the cause of action wholly or in part has also arisen. The impugned judgments, in our considered view, do not take away the additional forum and fundamental basis of conferring the right and advantage to the authors of the Copyright Act and the Trade Marks Act provided under the aforesaid provisions.

The Supreme Court further refuting the submission of the Appellant observed that it is settled proposition of law that the interpretation of the provisions has to be such which prevents mischief. The said principle was explained in Heydon’s case [76 ER 637]. According to the mischief rule, four points are required to be taken into consideration. While interpreting a statute, the problem or mischief that the statute was designed to remedy should first be identified and then a construction that suppresses the problem and advances the remedy should be adopted.

The rule was explained in the Bengal Immunity Co. v. State of Bihar [AIR 1955 SC 661] by S.R. DAS, CJI as follows: “It is a sound rule of construction of a statute firmly established in England as far back as 1584 when Heydon’s case (supra) was decided that for the sure and true interpretation of all Statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered:

1st - What was the common law before the making of the Act?

2nd - What was the mischief and defect for which the common law did not provide?

3rd - What remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth, and

4th - The true reason of the remedy;

Considering the first aspect of aforesaid principle, the common law which was existing before the provisions of law were passed was section 20 of the CPC. It did not provide for the plaintiff to institute a suit except in accordance with the provisions contained in section 20. The defect in existing law was inconvenience/deterrence caused to the authors suffering from financial constraints on account of having to vindicate their intellectual property rights at a place far away from their residence or the place of their business. The said mischief or defect in the existing law which did not provide for the plaintiff to sue at a place where he ordinarily resides or carries on business or personally works for gain, was sought to be removed. Hence, the remedy was provided incorporating the provisions of section 62 of the Copyright Act. The provisions enabled the plaintiff or any of them to file a suit at the aforesaid places. But if they were residing or carrying on business or personally worked for gain already at such place, where cause of action has arisen, wholly or in part, the said provisions have not provided additional remedy to them to file a suit at a different place. The said provisions never intended to operate in that field. The operation of the provisions was limited and their objective was clearly to enable the plaintiff to file a suit at the place where he is ordinarily residing or carrying on business etc., as enumerated above, not to go away from such places. The Legislature has never intended that the plaintiff should not institute the suit where he ordinarily resides or at its Head Office or registered office or where he otherwise carries on business or personally works for gain where the cause of action too has arisen and should drag the defendant to a subordinate office or other place of business which is at a far distant place under the guise of the fact that the plaintiff/corporation is carrying on business through branch or otherwise at such other place also. If such an interpretation is permitted, as rightly submitted on behalf of the respondents, the abuse of the provision will take place. Corporations and big conglomerates etc. might be having several subordinate offices throughout the country. Interpretation otherwise would permit them to institute infringement proceedings at a far flung place and at unconnected place as compared to a place where plaintiff is carrying on their business, and at such place, cause of action too has arisen. In the instant cases, the principal place of business is, admittedly, in Mumbai and the cause of action has also arisen in Mumbai. Thus, the provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act cannot be interpreted in a manner so as to confer jurisdiction on the Delhi court in the aforesaid circumstances to entertain such suits. The Delhi court would have no territorial jurisdiction to entertain it.

The avoidance of counter mischief to the defendant is also necessary while giving the remedy to the plaintiff under the provisions in question. It was never visualised by the law makers that both the parties would be made to travel to a distant place in spite of the fact that the plaintiff has a remedy of suing at the place where the cause of action has arisen where he is having head office/carrying on business etc. The provisions of the Copyright Act and the Trade Marks Act provide for the authors/trade marks holders to sue at their ordinary residence or where they carry on their business. The said provisions of law never intended to be oppressive to the defendant. The Parliamentary Debate quoted above has to be understood in the manner that suit can be filed where the plaintiff ordinarily resides or carries on business or personally works for gain. Discussion was to provide remedy to plaintiff at convenient place; he is not to travel away. Debate was not to enable plaintiff to take defendant to farther place, leaving behind his place of residence/business etc. The right to remedy given is not unbriddled and is subject to the prevention of abuse of the aforesaid provisions, as discussed above. Parliament never intended that the subject provisions to be abused by the plaintiff by instituting suit in wholly unconnected jurisdiction. In the instant cases, as the principal place of business is at Mumbai the cause of action is also at Mumbai but still the place for suing has been chosen at Delhi. There may be a case where plaintiff is carrying on the business at Mumbai and cause of action has arisen in Mumbai. Plaintiff is having branch offices at Kanyakumari and also at Port Blair, if interpretation suggested by appellants is acceptable, mischief may be caused by such plaintiff to drag a defendant to Port Blair or Kanyakumari. The provisions cannot be interpreted in the said manner devoid of the object of the Act.

The Court further refuted the argument that Heydon’s rule is not applicable where the words of the statute are clear. Reliance has been placed on M/s. Hiralal Rattanlal etc. etc. v. State of U.P. and Anr. etc. [1973 (1) SCC 216] in which it has been observed that when the provision is unambiguous and if from the provision legislative intent is clear, the court need not call into aid the other rule of construction of statutes such as that of ‘mischief’. The Court opined that when two interpretations are possible, the court has to adopt the one which furthers the object as provided in the statute itself.

Court opined that the provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act have to be interpreted in the purposive manner. No doubt about it that a suit can be filed by the plaintiff at a place where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where defendant is residing or cause of action wholly or in part arises. However, if the plaintiff is residing or carrying on business etc. at a place where cause of action, wholly or in part, has also arisen, he has to file a suit at that place, as discussed above.

NOTICE FOR SUSPENSION OF CLEARANCE OF INFRINGING GOODS

The Intellectual Property Rights (Imported Goods) Enforcements Rules 2007 allows registration of notice for suspension of clearance of infringing goods by Indian custom authorities, but rarely this notice is registered by Registered Proprietor/ Owners of Intellectual property rights (Right Holder).

Registration of notice allows the IP owner protection against import of infringed goods especially in case of Copyrights, Trademarks and Designs. Though Patents are also covered but they involve more technicality and expertise as compared to other IP rights. The period of protection is minimum one year unless any shorter period is demanded by the right holder.

The notice is to be filed along with certified copy of the IP right, Annexure containing details of Right Holder's rights as well as grounds for registration of notice and prescribed fee of INR 2000. An indemnity bond along with surety bond is to be supplied along with the request. Where such request is filed through an Attorney, POA should be supplied. 

Wherever required, the custom office may demand photographs or sample of the product/article/work (IP right). Where information is not provided in requisite format the Custom office may demand same from the Right holder.

Within 30 days of filing of such notice or providing of requisite information/details as demanded by custom authorities, the custom authorities have to either register such request or reject it. Once registered, the custom office shall inform the validity period of the notice, which is minimum of one year unless any shorter period is sought by right holder. Once notice is registered, the custom office notifies all custom offices covered under said notices.


Once any import of goods is suspended, the Custom office informs the right holder as well  as importer about such suspension with reasons for such suspension.


Where within 10 working days from the date of suspension of imported goods, the Right holder does not join the proceeding, the custom office may decide the matter on merit. The time limit may be extended by 10 working days by custom offices in appropriate cases.


The right holder and importer are allowed to examine the goods, even representative samples for examination, testing and analysis where felt necessary. 


Where the right holder joins the proceedings and the goods are found to be infringing the IP rights the custom officials can seize such goods. Under intimation to right holder, the seized goods would be destroyed under official supervision or disposed outside normal trading channel by custom authorities  and after obtaining NOC or concurrence from the right holder. The right holder may oppose to manner/mode of disposal by custom authorities within 20 day of information. The cost towards detention and destruction shall be borne by the right holder.


Goods of non-commercial nature contained in personal baggage or sent in small consignments for person use does not come under the purview of these regulations. 

However, in case of perishable goods such time limit is only 3 working days, further extendible to 4 working days where custom officials are satisfied and same does not affect the condition of goods.

Notice of Provisional Refusal by Indian Trade marks Registry

Where the Indian Trademark Registry has any objection to the Trademark, a  provisional refusal report is issued by IRDI Section and forwarded to WIPO and then WIPO notifies the Right Holder. The registry normally issues the notice of provisional refusal to WIPO within a week of issuance of same and within 15 days of receipt WIPO dispatches the notice to right holder vide registered mail or post.

The deadline to respond to provisional refusal is one month from the date of receipt of notice of provisional refusal by the Holder or his legal representative. The response to provisional refusal is required to be filed through an Agent (either a Trademark Agent or an Advocate) or through a representative, having address within territory of India.

A response to provisional refusal or request for reconsideration of provisional refusal, evidence in support of prior use of Trademark in India by way of Owner's Affidavit, or limiting the scope of protection or a request for hearing can be sought the Agent/ Attorney/ Representative.

Unlike the typical examination reports issued to Applicants in India, the notice of provisional refusal by Trademark Registry also provides in detail the essential provision under the Indian Trademarks Act as well as information relating to subsequent procedure.

Delhi High Court Five-Judge Bench Overrules Mohan Lal and Upholds Maintainability of Composite Suits for Design Infringement and Passing Off

Summary

A five-judge bench of the Delhi High Court delivered a landmark judgment overruling the earlier three-judge bench decision in Mohan Lal v. Sona Paint & Hardwares, holding that plaintiffs can maintain composite suits combining design infringement and passing off claims against the same defendant. The Court clarified that when both causes of action arise from the same transaction and involve common questions of fact and law, they can be joined under Order II Rule 3 of the CPC to avoid multiplicity of proceedings and promote judicial efficiency.

Introduction

On December 14, 2018, a five-judge bench of the Delhi High Court delivered a significant judgment in Carlsberg Breweries v. Som Distilleries and Breweries Ltd., addressing the critical question of whether design infringement and passing off claims can be combined in a single composite suit. This ruling effectively overruled the earlier three-judge full bench decision in Mohan Lal v. Sona Paint & Hardwares, which had held that such claims could not be consolidated.

The case arose from a suit filed by Carlsberg Breweries complaining of infringement of its registered bottle design as well as passing off of its trade dress in respect of the bottle and overall get-up of the "Carlsberg" mark. The defendant objected to the framing of the suit, arguing that per the Mohan Lal judgment, the two claims could not be combined in one suit. This fundamental question of maintainability was referred to a special five-judge bench for authoritative determination.

Key Issue Before the Court

The central issue before the five-judge bench was:

Whether in one composite suit, there can be joinder of two causes of action: (i) infringement by the defendant of a registered design under the Designs Act, 2000, and (ii) passing off by the defendant of its goods/articles as those of the plaintiff?

Legal Framework: Joinder of Causes of Action

The joinder of two or more causes of action in a single suit is governed by Order II Rule 3 of the Code of Civil Procedure, 1908 (CPC), which permits plaintiffs to unite several causes of action against the same defendant to save cost, time, and effort.

The Mohan Lal Precedent

The earlier case of Mohan Lal v. Sona Paint & Hardwares had held that design infringement and passing off claims could not be combined, reasoning that they were fundamentally different in nature—one being statutory (design infringement) and the other common law (passing off). The Mohan Lal bench relied on Supreme Court precedents in Dabur India Limited v. K.R. Industries and M/s. Dhodha House v. S.K. Maingi.

The Five-Judge Bench's Analysis

1. Erroneous Application of Precedents

The five-judge bench held that Mohan Lal erroneously applied the Dabur and Dhodha House precedents. Both those cases were primarily concerned with territorial jurisdiction issues, not the maintainability of composite suits per se. Neither case held that composite suits are impermissible where common questions of law and fact arise from the same transaction.

2. Common Questions of Law and Fact

The Court relied on the Supreme Court's ruling in Prem Lata Nahata v. Chandi Prasad Sikaria, which held that the main purpose of joining suits is to save cost, time, and effort. The Court derived the principle that if the substantial evidence of two causes of action would be common, then there can be joinder under Order II Rule 3 CPC.

3. Same Transaction Test

Applying the precedent in M/s. Jay Industries v. M/s. Nakson Industries (which allowed joinder of trademark and copyright claims arising from the same sale transaction), the Court held that where design infringement and passing off claims arise from the same transaction of sale, they involve common questions and evidence, including:

• The plaintiff's registered design and its features
• The defendant's allegedly infringing design
• Comparison between the two designs
• Evidence of sales and use in commerce
• Evidence of market confusion and consumer perception

Final Holdings

1. Composite suits combining design infringement and passing off claims are maintainable when both causes of action arise from the same transaction and involve common questions of law and fact.
2. Mohan Lal v. Sona Paint & Hardwares is overruled to the extent it held that such composite suits are not maintainable.
3. Order II Rule 3 CPC permits joinder of design infringement and passing off causes of action when they satisfy the requirements of common questions and same transaction.

Significance and Practical Implications

1. Procedural Efficiency and Cost Savings

The judgment upholds the fundamental rationale behind joinder provisions—avoiding needless multiplicity of suits. With ever-escalating IP litigation costs, this ruling brings massive relief to plaintiffs through:

• Reduced litigation costs (single filing, single trial)
• Faster resolution (no parallel proceedings)
• Consistent findings on common factual issues
• Reduced burden on courts

2. Comprehensive IP Protection Strategy

Design proprietors can now pursue comprehensive protection strategies combining statutory and common law remedies in a single proceeding, providing layered protection addressing both technical piracy and commercial misrepresentation.

3. Alignment with Commercial Reality

The judgment recognizes that when a defendant copies a registered design and uses it in trade, that single act simultaneously infringes the statutory monopoly and creates market confusion—it would be artificial and wasteful to require separate suits.

4. Judicial Hierarchy and Precedential Value

As a five-judge bench decision, this judgment carries significant precedential weight, overruling the earlier three-judge bench and establishing clear, binding precedent for Delhi High Court's jurisdiction.

5. Strategic Litigation Guidance

Recommended Strategy for Practitioners:

• File composite suits combining design infringement and passing off claims where both arise from the same infringing conduct
• Plead both causes of action clearly while highlighting common evidence
• Present evidence showing the same transaction gives rise to both claims
• Demonstrate common questions of law and fact to justify joinder

6. Reconciling with Mohan Lal

This judgment does not completely overturn all aspects of Mohan Lal. The holdings regarding maintainability of design infringement suits against other registered proprietors and availability of passing off remedies for registered designs remain valid. What is specifically overruled is the prohibition on combining these claims in a single composite suit.

Conclusion

The Carlsberg Breweries v. Som Distilleries and Breweries Ltd. judgment represents a significant advancement in IP litigation practice in India. By overruling the restrictive approach in Mohan Lal and affirming the maintainability of composite suits, the five-judge bench has promoted judicial efficiency, reduced litigation costs, recognized commercial reality, and provided clear guidance to IP practitioners.

This decision reflects a pragmatic and progressive approach to IP litigation, balancing the interests of rights holders in obtaining comprehensive relief, defendants in defending consolidated claims efficiently, and the public interest in expeditious and economical administration of justice.

For design proprietors and IP practitioners, this judgment provides a clear roadmap: where design infringement and passing off arise from the same transaction and involve common evidence, they should be pursued together in a composite suit to maximize efficiency, minimize costs, and ensure consistent adjudication of related claims.

 

Trademark (Amendment) Rules 2014 notified

The Trademark (Amendment) Rules 2014 have been notified and w.e.f. August 1, 2014, the Govt fee for filing Trademark Application in India has been increased to INR 4000 from earlier 3500. There is approx 15% increase in Govt. fee towards filing Now. Earlier in December 2010 the Govt fee was increased from INR 2500 to INR 3500.

Further, the Govt fee towards express examination has also been increased from INR 17500 to INR 20000.

Supreme Court held that Registration of FIR is mandatory under Section 154 of the Code, if the information discloses commission of a cognizable offence and no preliminary inquiry is permissible in such a situation

While considering under Section 32 of Constitution of India in Criminal Writ Petition no. 68 of 2008 titled Lalita Kumari Vs. State of UP & Ors. as to whether “a police officer is bound to register a First Information Report (FIR) upon receiving any information relating to commission of a cognizable offence under Section 154 of the Code of Criminal Procedure, or the police officer has the power to conduct a “preliminary inquiry” in order to test the veracity of such information before registering the same?” and in view of the conflicting decisions of Supreme Court on the issue, larger bench (5 Judge Bench) of the Supreme Court held that

(i) Registration of FIR is mandatory under Section 154 of the Code, if the information discloses commission of a cognizable offence and no preliminary inquiry is

permissible in such a situation.

(ii) If the information received does not disclose a cognizable offence but indicates the necessity for an inquiry, a preliminary inquiry may be conducted only to ascertain whether cognizable offence is disclosed or not.

(iii) If the inquiry discloses the commission of a cognizable offence, the FIR must be registered. In cases where preliminary inquiry ends in closing the complaint, a copy of the entry of such closure must be supplied to the first informant forthwith and not later than one week. It must disclose reasons in brief for closing the complaint and not proceeding further.

(iv) The police officer cannot avoid his duty of registering offence if cognizable offence is disclosed.  Action must be taken against erring officers who do not register the FIR if information received by him discloses a cognizable offence.

(v) The scope of preliminary inquiry is not to verify the veracity or otherwise of the information received but only to ascertain whether the information reveals any cognizable offence.

(vi) As to what type and in which cases preliminary inquiry is to be conducted will depend on the facts and circumstances of each case. The category of cases in which preliminary inquiry may be made are as under:

(a)Matrimonial disputes/ family disputes

(b)Commercial offences

(c) Medical negligence cases

(d)Corruption cases

(e) Cases where there is abnormal delay/laches in initiating criminal prosecution, for example, over 3 months delay in reporting the matter without satisfactorily explaining the reasons for delay.

The aforesaid are only illustrations and not exhaustive of all conditions which may warrant preliminary inquiry.

(vii) While ensuring and protecting the rights of the accused and the complainant, a preliminary inquiry should be made time bound and in any case it should not exceed 7 days. The fact of such delay and the causes of it must be reflected in the General Diary entry.

(viii) Since the General Diary/Station Diary/Daily Diary is the record of all information received in a police station, we direct that all information relating to cognizable offences, whether resulting in registration of FIR or leading to an inquiry, must be mandatorily and meticulously reflected in the said Diary and the decision to conduct a preliminary inquiry must also be reflected, as mentioned above.

DOCTRINE OF ESTOPPEL BY ACQUIESCENCE OR WAIVER FOR INFRINGEMENT

Acquiescence as a defense:

Section 33 (1) of the Trademarks Act, 1999 provides that if the earlier Registered Proprietor has acquiesced for a continuous period of 5 years in the use of a registered trademark, being aware of that use, he is not entitled to either seek invalidation of such later mark or oppose its use in relation to goods or services in relation to which it has been so used, unless registration of such mark was applied in bad faith.

The essential for defense of acquiescence shall be:

(a)    The mark should be registered

(b)   The earlier registered proprietor should be aware of use of such registered mark for a period of 5 years or more

(c)    The subsequent Applicant/ registered proprietor has used such registered trademark for a continuous period of 5 years

(d)   The subsequent mark if registered cannot be cancelled unless registration was applied in bad faith

(e)    The subsequent mark cannot be opposed for usage in respect of goods or services in respect of which it has been so used, unless application was made in bad faith

This section clearly establishes that if there is acquiescence for a continuous period of 5 years, the usage of such mark cannot be stopped by earlier registered proprietor. Though any application or registration of such mark can be challenged either in rectification or opposition proceedings if such application was made in bad faith.

Where such doctrine applies, the proprietor of later trademark is not entitled to oppose use of the earlier registered mark or exploitation of the earlier right. Burden of proof is on the defendant.

Acquiescence vs. Consent

Acquiescence is implied consent by remaining silent spectator. Section 30 (2) (c) of the Trademarks Act provides that express or implied consent by the registered proprietor or registered as to use of the mark is a defense to infringement. But as the infringement is a continuous process this consent may be withdrawn subsequently and such acts would amount to infringement unless a defense of acquiescence is available.  In other words implied consent of 5 years can be termed as acquiescence.

Laches:

Failure to assert one’s rights in a timely manner can result in a claim being barred by laches. Laches is an equitable defense or doctrine asserted in litigation. It is defined as an "unreasonable delay pursuing a right or claim by one party in a way that prejudices the opposite party". The person invoking laches is asserting that an opposing party has "slept on its rights," and that, as a result of this delay, circumstances have changed such that it is no longer just to grant the equitable relief sought for such as an interim or temporary injunction. Laches is a form of estoppel for delay. A successful defense of laches will find the court denying the request for equitable relief. However, even if equitable relief is not available, the party may still have an action at law if the statute of limitations has not run out.

The Hon’ble Supreme court of India in Khoday Distilleries Limited vs. The scotch whisky association and others, bared challenge to “peter scot” on principles of acquiescence and/ or waiver.

 

Appellant i.e. Khoday Distilleries Limited hereinafter “Khoday” was a company incorporated under the Companies Act, 1956 and manufactured whisky under the mark “Peter Scot” since May, 1968.  Its application for registration of its mark was accepted and allowed to proceed with the advertisement, subject to the condition that the mark would be treated as associated with Reg. T.M. No.249226-B. The said trade mark was subsequently registered. Respondents came to know of the appellants mark on or about 20th September, 1974. They filed an application for rectification of the said trade mark on 21st April, 1986.  Appellant by way of affidavit explained coining of the mark “Peter Scot” where “Peter” was his father’s name and “Scot” was his nationality. Another factor behind the coining of this brand name was the internationally known British explorer, Captain Scott, and his son Peter Scott, who is widely known as an artist, naturalist and Chairman of the World Wildlife Fund. 

 

However, the application for rectification was allowed. The appellant then preferred an appeal before the High Court. One of the main ground of appeal was that in one of the affidavit filed on behalf of the respondents affirmed by Ian Barclay it was stated that the respondents were aware of infringement of mark as far back in 1974 but as no action was taken in relation thereto till 1986, therefore the application for rectification was barred under the principles of waiver and acquiescence.

 

A learned Single Judge of the High Court dismissed the said appeal and as regards the plea of acquiescence held that the acquiescence if it is to be made a ground for declining to rectify, must be of such a character as to establish gross-negligence on the part of the applicant or deliberate inaction which had regulated in the appellant incurring substantial expenditure or being misled into the belief that the respondents though entitled to, had deliberately refrained from taking any action and were unmindful of the use of the mark by the person in whose name it was registered and held that the facts of this case are not such as to warrant the conclusion that there has been acquiescence.

 

On an appeal a Division Bench of the High Court, dismissed the said appeal and appellant approached the Supreme Court against said order. 

 

Supreme Court relied on ratio laid down by Oliver, L.J., in Taylor Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd. [ (Note) [1981] 2 W.L.R.] 576

“Of course, estoppel by conduct has been a field of the law in which there has been considerable expansion over the years and it appears to me that it is essentially the application of a rule by which justice is done where the circumstances of the conduct and behaviour of the party to an action are such that it would be wholly inequitable that he should be entitled to succeed in the proceeding.”

Supreme Court observed that “Thus, in cases involving equity or justice also, conduct of the parties has also been considered to be a ground for attracting the doctrine of estoppel by acquiescence or waiver for infringement.”

The ratio laid down in M/s. Power Control Appliances and others v. Sumeet Research and Holdings, [(1994) 2 SCC 448 ] was relied, where Supreme Court held :-

26. Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as is involved in laches. In Harcourt v. White Sr. John Romilly said: It is important to distinguish mere negligence and acquiescence. Therefore, acquiescence is one facet of delay. If the plaintiff stood by knowingly and let the defendants build up an important trade until it had become necessary to crush it, then the plaintiffs would be stopped by their acquiescence. If the acquiescence in the infringement amounts to consent, it will be a complete defence as was laid down in Mouson (J.G.) & Co. v. Boehm. The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant as was laid down in Rodgers v. Nowill.

Supreme Court observed that the question again came up for consideration in Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel and others, [(2006) 8 SCC 726] wherein it was held :-

103. Acquiescence is a facet of delay. The principle of acquiescence would apply where: (i) sitting by or allowing another to invade the rights and spending money on it; (ii) it is a course of conduct inconsistent with the claim for exclusive rights for trade mark, trade name, etc.

The delay by itself, however, may not be necessarily a ground for refusing to issue injunction.

It was opined:-

106. The defence of acquiescence, thus, would be satisfied when the plaintiff assents to or lays by in relation to the acts of another person and in view of that assent or laying by and consequent acts it would be unjust in all the circumstances to grant the specific relief.

It was furthermore observed:-

108. Specific knowledge on the part of the plaintiff and prejudice suffered by the defendant is also a relevant factor. (See Spry on Equitable Remedies, 4th Edn., p. 433.)

Taking into considerations all peculiar facts of the case as well as precedents laid down by Supreme Court it was observed that stand of respondents to object to the evidence that was produced before the learned Single Judge with regard to the increase in the volume of sale of Peter Scot, on the other hand urging that if a comparison is made of the Indian whisky and Scotch Whisky it would appear that some Indian whiskies are costlier than some of the Scottish brands.  The stand taken by the respondents is self-contradictory and is not fair and Supreme Court was of opinion that action of the respondents is barred under the principles of acquiescence and/ or waiver. 

 

As regards the question as to consideration is as to whether the use of the term Scot would itself be a sufficient ground to form an opinion that the mark Peter Scot is deceptive or confusing. The Supreme Court relied upon precedents operating in Australia and United States of America.

 

The Supreme Court observed that they are concerned with the class of buyer who supposed to know the value of money, the quality and content of Scotch Whisky. Who are supposed to be aware of the difference of the process of manufacture, the place of manufacture and their origin.  Trademark Registry, the learned Single Judge as also the Division Bench of the High Court, therefore, failed to notice the distinction, which is real and otherwise borne out from the precedents operating in the field. The SC further observed that had these tests been applied the matter might have been different.  In a given case probably SC would not have interfered but intend to do so only because wrong tests applied led to a wrong result. 

 

The Supreme Court allowed the appeal and dismissed the impugned judgement of High Court, thereby cancelling the rectification proceedings in respect of “Peter Scot’ mark abs reinstating the Registration in favour of Appellant.