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September 9, 2019

Court Allows Cargill’s Application For Issue Of Invalidity Of Defendant’s Mark To Be Added To Already Framed Issues

Author: Sri Lekha

In the matter of Cargill India Private Limited v. Gati Limited [CS (Comm) 740/2017], the Delhi High Court vide its judgment dated August 29, 2019, allowed the Plaintiff’s application for framing of an additional issue in respect of invalidity of Defendant’s registered trademark and adjourned the matter to enable the Plaintiff to take appropriate steps to initiate rectification proceedings before the IPAB.

The instant application (I.A. No. 16635/2018) under Section 124 of the Trade Marks Act, 1999 (for framing additional issue in respect of invalidity of Defendant’s registered trademark) was filed by the Plaintiff in its suit against Defendants for permanent injunction restraining passing off and infringement of its registered trademark NATURE FRESH. The Plaintiffs contended that it learnt about the Defendant’s trademark registration for ‘GATI Nature Fresh Apples’ from its Written Statement and therefore, it is necessary to frame an additional issue regarding the invalidity of the Defendant’s trademark registration.

The Defendant, on the other hand, submitted that the Plaintiff’s application was not maintainable on account of Plaintiff’s prior knowledge of the Defendant’s trademark registration through its reply to the Plaintiff’s Legal Notice. The Defendant contended that Plaintiff waived its right as it did not initiate any rectification proceedings before the IPAB, which according to the Defendant, should have been done within three months from the knowledge of the trademark registration in question.

 The Court discussed the Supreme Court’s decision in  Patel Field Agencies & Another v. P. M. Diesels Ltd & Ors., (2018) 2 SCC 112 and observed ‘…The time limit of three months prescribed under section 124(1) (b) (ii) starts after the Court has framed the additional issue. By virtue of Section 124 (3), the issue of invalidity of registered trademark would not survive to be decided in the suit, if, the Plaintiff does not raise this issue by filing the rectification proceedings within the stipulated time of three months and the plea of invalidity would be deemed to have been abandoned in the suit…’. It further held ‘…it becomes clear that the question of abandonment can be presumed only if the rectification proceedings are not filed within the period of three months from the date of raising the issue of invalidity. This is not the situation in the present case, as that stage has not occurred as of yet. Defendant’s contention that the Plaintiff has waived or abandoned its right to challenge the invalidity of Defendant’s impugned mark, as provided under Section 124 (3) of the Act is of no consequence.’

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