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July 8, 2020

Delay In Registration Of Trademark Assignment By TM Registry Cannot Prejudice Assignee’s Rights

Author: Sunidhi Bansal

Author: Sunidhi Bansal

In the connected matters of M/s Liberty Footwear Company v. Liberty Innovative Outfits Limited and M/s Liberty Footwear Company v. M/s Liberty Fashion Outfit [CS(COMM) 637/2019 and 638/2019], the Delhi High Court, vide its order dated May 26, 2020 in a suit for trademark infringement, held that a delay by the TM Registry in registering an assignment cannot preclude the assignee from claiming rights in the assigned mark.

The Plaintiff claimed to be the proprietor of the mark LIBERTY in respect of footwear. The Plaintiff is a part of a group of companies, which includes, inter alia, a partnership firm – Liberty Enterprises (“LE”). The Plaintiff was aggrieved by the Defendants’ use of the mark LIBERTY for similar goods.

The Defendants alleged that since the trademark registrations on which the Plaintiff was relying were in the name of LE, and the request for assignment of the same from LE to the Plaintiff had not been recorded by the TM Registry, the Plaintiff could not claim any ownership therein.

The Plaintiff argued that it acquired rights in the LIBERTY marks immediately upon execution of the assignments and mere non-registration of the assignments did not preclude it from asserting its rights, especially when the requests for registration of assignments were pending with the TM Registry.

The Court noted that that (i) as per Section 45 of the Trade Marks Act, 1999, registration of assignment is mandatory; and (ii) it is mandatory for an assignee of a registered trade mark to apply in the prescribed manner to the Registrar of Trade Marks to register his title.

Observing that the Plaintiff had been assigned the trademarks and had also filed requests for registration of the assignment, the Court accepted the Plaintiff’s contentions and granted an interim injunction. While placing reliance on Sun Pharma Industries vs. Cipla Ltd., 2009 (108) DRJ 207, the Court held that, “Any delay on the part of the Trade Marks Registry cannot…prejudice…the plaintiff…. The observation…in Sun Pharmaceuticals…that, “…allowing a person who is divested by assignment of title to registered trade mark to nevertheless continue exercising such rights…would play havoc with assignability and trading in trade mark, expressly permitted under the Act. If the person in whom title has vested by assignment is held to be not entitled to exercise such rights owing to non-registration, the same result will follow besides giving premium to third parties”, is important and conclusive.”

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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