Recently, the Delhi High Court referred 3 questions regarding the jurisdiction of a High Court to hear trademark rectification applications, to a larger bench. Discussing this controversy along with his thoughts on the probable solution, we are pleased to bring to you this post by SpicyIP intern Kevin Preji. Kevin is a second-year law student at NLSIU Bangalore. His passion lies in understanding the intersection of economics and public health with intellectual property rights. His previous posts can be accessed here.

Legislative Oversight? Addressing the High Court Jurisdiction Vacuum Post-IPAB vis-a-vis Cancellation Petitions under the Trademark Act

By Kevin Preji

On 9th February 2024, passing a joint order in a batch of 5 rectification petitions including The Hershey Company vs Dilip Kumar Bacha, Trading As Shree Ganesh Namkeen, and others, the Delhi High Court highlighted a pressing issue in trademark litigation. The question that surfaced here was “which High Court shall have the jurisdiction to hear cancellation/rectification petitions under Section 57 of the Trademark Act, 1999 (‘1999 Act’).” This issue arose out of the absence of a clear definition of ‘High Court’ post the Tribunal Reforms Act, 2021 (‘TRA’) which abolished the IPAB and returned the powers to the High Courts.

Explaining the context, three possible views have been argued for by the parties before the Court: 

1. Any High Court has jurisdiction, given the absence of a clear definition
2. The High Court with territorial link where the dynamic effect of the legislation is felt. The Court in Girdhari Lal Gupta v. K. Gian Chand Jain was dealing with a similar issue since in the Design Act, 1911, the Act didn’t define which High Court would have jurisdiction. The Court applied the concept of dynamic effect and held that where the legal injury occurs, and which have a territorial nexus to the dispute or where the cause of action arises, those High Courts can entertain rectification/cancellation petitions. 
3. The High Court having territorial jurisdiction over the appropriate office of the trademark registry. This would limit the jurisdiction to 5 High Courts. 

However, the Court did not pass a verdict on this issue. Rather, after analysing the legislative intent of the TRA, conflicting High Court judgements on the said issue and the earlier position of trademark law in India, the Court referred the matter to a larger bench for reconsideration. Analysing the developments in the position of law in India, this post argues that the TRA played no role in changing the position of law in India with respect to trademarks apart from abolishing the IPAB, thus returning the jurisdiction to the five High Courts that have territorial jurisdiction over the appropriate office of the trademark registry.

What is the Issue Here (Procedural History)? 

Initially governed by the Trade Marks Act, 1940, the jurisdictional ambiguity over High Courts handling trademark rectification petitions led to the subsequent enactment of the Trade and Merchandise Marks Act, 1958 which clarified High Court jurisdiction based on the location of the Trade Marks Registry. The Intellectual Property Appellate Board (IPAB) later assumed authority under the 1999 Act, but the Tribunal Reforms Act, 2021, abolished IPAB, restoring High Courts’ jurisdiction for trademark cancellation and rectification petitions. I’ve made a table to make this easier to understand. 

What is the Question?

Once the IPAB was abolished, considering that the High Court wasn’t defined (to be territorially linked to the appropriate office of the trademark registry), would the situation revert to the 1958 act (territorial link) or the 1940 Act (any High Court or wherever cause of action arises)? 

After all, the TRA simply abolished the IPAB and reverted the powers back to the High Court. Both the 1940 Act and the 1958 Act vested such powers in the High Court. Thus if the absence of the definition was intentional, this would indicate similarity with the 1940 Act which merely defined the High Court as per Section 219(1) of GOI Act, 1935 but didn’t clarify which High Court would have jurisdiction over cancellation/rectification petitions. On the other hand, if the absence of the definition was a legislative oversight (to add back a definition similar to Section 3, 1958 Act), the Court ought to interpret it in line with the 1958 Act, being the position of law before the IPAB was established.  

Was it a Mere Mistake (Casus Omissus)? What did the Legislature Try Doing with the Tribunal Reforms Act, 2021? 

Taking a literal interpretation of the current Act post 2021 amendment, the 1999 Act now lacks the clear definition of the High Court that was present in the 1958 Act (Section 3, 1958 Act). However, Courts cannot readily proceed based on an assumption of a mistake made by the legislature. Thus, Courts require cogent reasons to prove casus omissus (which we shall explore below).

The Statement of Objects and Reasons of the TRA (at page 21) clearly indicates that the Act was to abolish the tribunals due to lack of efficiency (see para. 2). Thus, there was no legislative intention to empower other High Courts without territorial jurisdiction over the trademark registry to handle cancellation petitions. Afterall, the TRA was merely dealing with dissolution of tribunals and reversing the implementation of the IPAB. 

The Parliamentary Debate in the Rajya Sabha (pg 3650-3653), regarding the 1958 Act, reveals the clear legislative intent regarding jurisdiction, emphasising that the trade mark owner should not be subjected to hardship by allowing the trademark to be challenged in any High Court regardless of territorial jurisdiction. This reasoning was consistently applied to both appeals and rectification petitions. This legislative intent persisted even with the enactment of the 1999 Act, while the IPAB was operational. The introduction of the Tribunal Reforms Act (TRA) does not negate this legislative intent simply by not providing a definition for the term ‘the High Court.’

The 1955 Ayyangar Committee Report on Trademarks (1955 Report), recommended establishing a territorial connection between the location of the Registrar of Trademarks and the High Court. The Report stated that the earlier position of law (1940 Act) made it difficult to determine jurisdiction of the High Court, given its vague definition. Based on the 1955 report, the 1958 Act was passed which establishes a territorial nexus between the High Court and the Register.

Hence, the Tribunal Reforms Act (TRA) did not aim to alter or supplement the existing rights and remedies established by the 1999 Act. According to the Statement of Objects and Reasons (SOR), the primary intention was specific – to eliminate certain tribunals and authorities while introducing a mechanism for direct appeals to the Commercial Court or the High Court, depending on the circumstances since in its view, the abolished tribunals were unable to alleviate the workload of the High Courts.

In conclusion, if there existed a legislative oversight, the position should then clearly be similar to the 1958 position since the TRA merely reverted the establishment of the IPAB. If there was no legislative oversight, even then based on the overall construction of the act (which we’ll look at below) and the sustaining principle of territoriality within the IPAB establishment, the current post-amended Act is to be read incorporating the same values. 

What then is the Legislative Intent, Given the Overall Construction of the Act and the Absence of the Definition? 

Can other Acts Help us? 

While it might be lucrative to say that the current position should be the position established by the 1940 Act due to the absence of any territorial based definition, the 1999 (post 2021) amendment Act is still not in principle either similar to the 1940 Act. The Counsels for the Hershey Company (in page 8, para 8) argued that the designation of ‘High Court’ should be under Section 2(1)(i) of the Patents Act, 1970. This argument is untenable since it is not appropriate to use other Intellectual property Acts to help us define the ‘High Court’ as these other IP statutes establish separate regimes and have different mechanisms and thus may attribute different meaning to a common term. The provisions of the Trade Marks Act, 1999, are not in pari materia to the provisions of Patents Act, 1970 and/or Designs Act, 2000. Afterall, the trademark act is a self contained code.

What about Flexibility and Convenience of Having Multiple High Courts? 

The Court, in the present order, acknowledges that providing jurisdiction to multiple courts might be a better policy decision but this comes with its own set of issues. Firstly, the 1999 Act does not envisage consolidating such rectification or cancellation petitions with an action for infringement. Instead, the 1999 Act contemplates suits and rectification petitions before different Courts. This can be seen in Section 97 (procedure for rectification) of the 1999 Act which clearly supplants the existing framework and prescribes that a rectification petition can be filed before the High Court as prescribed. Once the High Court has passed judgement, the Registrar is required to give effect to the order. Therefore, the High Court in question must be one that exercises jurisdiction over the relevant Registrar’s office. Either ways, Section 124 of the 1999 Act which ensures that the proceedings in one court are stayed when the validity of the trademark is questioned in another forum, takes care of any potential mischief that may be possible due to two forums exercising jurisdiction. This way, it is clear that the 1999 Act never required consolidating such rectification or cancellation petitions with an action for infringement.

In the Parliamentary Debate in the Rajya Sabha (pg 3650-3653), regarding the 1958 Act, the legislators acknowledge that it might be harder for aggrieved parties to file a case in the specific High Court given that their place of business might be elsewhere. Having the cancellation/rectification suit in one High Court and infringement proceedings in another might just be adding onto the workload of the High Courts. Nevertheless, all these were considered and acknowledged in passing the 1958 Act since the main purpose of defining the High Court with a territorial link was to protect the interests of the proprietor who would otherwise face multiple cancellation proceedings in different High Courts. 

The IPAB had the authority to hear appeals as outlined in Section 91 of the 1999 Act. During the IPAB’s tenure, the jurisdiction for rectification petitions was explicitly defined and not open to flexibility. Consequently, territoriality remains intact under the 1999 Act even after the enactment of the TRA.

Can the Trademark Rules 2017 Help us Decipher the Intent? 

As for the Registrar, Rule 4 of the 2017 Rules does not specify any particular High Court. The single judge in Dr. Reddys Laboratories Ltd. v. Fast Cure Pharma held that in the absence of a provision similar to Rule 4 in the Trade Marks Rules designating a specific High Court competent to exercise jurisdiction under Section 47 or Section 57 of the Trade Marks Act, it is unjustifiable to create such a designation through judicial interpretation. It seems that the legislative intent was not to restrict jurisdiction under Section 47 or Section 57 to any specific High Court.

However, under Section 57 and Rule 4 of the 2017 Rules, both the Registrar and the High Court possess concurrent jurisdiction. Consequently, the definition of ‘Appropriate office’ should be interpreted consistently for both the Registrar and the High Court.

The structure of the 2017 Rules suggests that once a trademark application is submitted to a specific Office of the Trade Marks Registry based on the criteria in Rule 4, it is generally not subject to change except in extraordinary circumstances. Moreover, Rule 5 of the Trade Marks Rules, 2017 specifies that even if there is a change in the principal office, place of business, or address for service after filing the application or granting registration, the Appropriate office remains unchanged. (Notice how flexibility was never the primary objective of the Act).

Conclusion

While convenience, and combining suits for efficient disposal might be laudable goals, it doesn’t seem like the TRA had anything to do with that. After all, the TRA was merely abolishing tribunals, reverting the powers back, naturally implying that the position would be pre-creation of the tribunals (i.e., the 1958 Act). The court must relook the reading in of the notion of territorial nexus based on dynamic effect of the legislation (Vishno talked about it here.) in Girdhari Lal Gupta v. K. Gian Chand Jain and Dr. Reddys Laboratories Limited & Anr. vs The Controller Of Patents. When the 1958 Act retained the principle of static effect up until 1999 and perhaps beyond it, it would arguably be beyond the power of the Court to adduce that there is a greater benefit in reading in the notion of territorial nexus based on dynamic effect of the legislation.

 The Delhi High Court in the order notes the above issues and has transferred the matter to a higher bench for reconsideration over the following questions: 

i) Whether the decision of the ld. Full Bench in Girdhari Lal Gupta (supra), rendered under the Designs Act, 1911, would be applicable in the context of the Trade Marks Act, 1999 as amended by the Tribunal Reforms Act, 2021, for determining jurisdiction of a High Court under Section 57 of the 1999 Act?

ii) Whether the jurisdiction of the High Court under Section 57 of the 1999 Act would be determined on the basis of the Appropriate office of the Trade Mark Registry, which granted the impugned trade mark registration?

iii) Whether the expression ‘the High Court’ can be differently construed in Sections 47, 57 and 91 of the 1999 Act?

Thus, while the matter is being transferred to a higher bench for reconsideration, it is hoped that either the legislature adds the definition back (reverting it to the 1958 act status) or clarifies the position to be taken.

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