[This post is authored 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.]

While the Trademark Act provides for proprietors to protect their trademarks using evidence of prior use, goodwill etc which requires documentation dating back to the early days of the business, the Commercial Courts Act 2015 provides for strict deadlines with respect to filing documents. When trademark justice to prevent infringement clashes with procedural rigours, a balancing act is of utmost importance to address both the concerns of substantive as well as procedural justice. This post shall be analysing the decision of the Delhi High Court in TTK Prestige Limited vs Baghla Sanitaryware Private Limited where the court denied the plaintiff’s additional filing of documents due to lack of a ‘reasonable cause’ for delayed filing while allowing the defendant’s additional filing of documents. In trademark disputes, what constitutes ‘reasonable cause’ then? 

What is the Dispute?

For clarity, I have arranged the flow of events in the table below:- 

While the Court’s refusal might initially look like double standards, a closer inspection displays the multiple opportunities for the plaintiff to have filed the additional documents earlier. 

First Opportunity (2nd June 2021) – (Filing of the suit) The additional documents filed were related to prove prior use from 1959 onwards. Despite this being their contention in the filing of the suit, they failed to provide it at the time of filing of the suit. 

Second Opportunity (7th September 2021) – (Replication) In response to the defendant’s written statement claiming use of the trademark “PRESTIGE” since 2005, it was evidently foreseeable that they would have to prove prior use to 2005 and thus would have to provide additional documents to prove the same. Nevertheless, they weren’t filed along with the replication. 

Third Opportunity (27th February 2023) – (Once Defendants filed additional documents) The court struggled to understand why the plaintiffs after seeing the defendant’s additional documents being allowed, took 5 months (21st July, 2023) to file the documents in rebuttal. After all, it was crucial since the filing of the suit and wasn’t merely a rebuttal to the defendant’s immediate filing of additional documents. These instances were pointed to by the court to highlight the plaintiff’s lackadaisical attitude towards the filing of additional documents. 

Double Standard? 

But despite earlier opportunities, the Court’s decision still seems unfair. While the defendant’s filed documents (29th August, 2022) were invoices for the period 2012-2016 a year after their written statement (26th July, 2021), the documents weren’t required to prove their main contention, i.e., use since 2005. The Court, relying on Sugandhi v. P. Rajkumar (which held that procedural hurdles shouldn’t obstruct substantive justice) allowed the same. One must note that Sugandhi was based on a civil suit under Order VIII Rule 1-A(3) (imposes a duty on the defendant to produce documents upon which relief is claimed or relied upon by them) while the current case is a commercial suit where Order XI Rule 1(5) (states that the plaintiff cannot rely on documents which haven’t been disclosed before without reasonable cause) is applicable. Thus the same shouldn’t have applied to the defendants since commercial suits are under statutory prescriptions for stricter standards. The defendant’s additional documents weren’t as crucial to the defendant’s case thus not warranting any form of leniency. On the other hand, while the plaintiffs may have missed multiple opportunities to file additional documents, such documents were more relevant to their contention of prior use since 1955. Being lenient for the filing of the defendant’s additional documents which were not as crucial to their case compared to the plaintiff’s documents while being strict for the filing of the plaintiff’s additional documents might be double standards by the Court. Procedural rigours would then be specifically blocking substantive justice. 

One can also state that being lenient for ‘not very crucial’ documents doesn’t necessarily go against the strict deadlines of the Commercial Courts since the whole point is to be strict with the filing of additional crucial documents. 

Understanding the Rigour of the Commercial Courts Act vis-a-vis CPC

The commencement of the Commercial Courts Act 2015 amended the CPC for commercial suits of a specific value to introduce Order XI Rule 1(5) which states that the plaintiff is prohibited from relying on documents that were within their power, possession, control, or custody but were not disclosed along with the initial pleading or within the extended period provided. However, the court may grant permission for the plaintiff to use such documents only if they can establish a reasonable cause for the non-disclosure at the time of filing the initial pleading. This burden to justify their delay in non-disclosure cannot be seen in the CPC (look at analogous Order XI Rule 12,13,14, 16 & 21 which deals with the production of documents). 

While the Apex Court in Sugandhi stated that courts must lean towards doing substantial justice rather than relying upon procedural and technical violation, the position of law in Commercial suits emphasises stricter enforcement of deadlines. The Court in Ambalal Sarabhai Enterprises Ltd. vs. K.S Infraspace LLP stated that the provisions of the Act are required to be strictly construed due to the object behind the constitution of the Commercial Division of Courts is to put the matter on fast track and speedy resolution of commercial disputes.

This can be seen in Sudhir Kumar vs Vinay Kumar G.B where the non-filing of additional documents due to voluminous records despite it being crucial to the case was held to be insufficient to meet the reasonable cause standard. In Vijay Kumar Varshney vs Longlast Power Products Ltd, the Court held that restrictions due to COVID-19 were sufficient to satisfy the reasonable cause standard. On the other hand, employees leaving due to COVID-19 were insufficient. The Court in The Great Gatsby Club Of India vs Mahesh Prefab Pvt Ltd held that the court cannot dilute the rigour of the said provisions on any sympathetic or other considerations.

Conclusion

The conclusion is clear, the interpretation of Order XI Rule 1(5) as applicable to Commercial suits are definitely strict, especially when restrictions due to COVID-19 barely met the cut. While the Court shouldn’t have allowed the defendants to file their additional documents considering the rigours of the Commercial Courts Act 2015, the Court was right in disallowing the plaintiff to file additional documents. This case rightly places a stricter emphasis on the trademark owners to be diligent in protecting their trademark interests in a timely manner.

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• Source: https://spicyip.com/2024/02/navigating-denied-filings-trademark-justice-at-the-crossroads-of-the-commercial-courts-act.html