Section 124 of TradeMark Act, 1999 helps manage trademark disputes in India. It comes into play when someone questions whether a trademark is validly registered during a court case about trademark infringement. This section makes sure that the court first decides if the trademark is valid before moving forward with the main case. This helps avoid confusion and prevents conflicting decisions. For lawyers and businesses, understanding Section 124 is important because it shapes how they handle trademark disputes and applications to cancel or change trademark registrations. This article explains Section 124 in simple terms, covering its provisions, how it works, landmark judgements, and the importance of Section 124.
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What is Section 124 of Trademark Act
Section 124 of Trademark Act is called "Stay of proceedings where the validity of registration of the trade mark is questioned, etc.," deals with situations in a trademark infringement lawsuit where one side argues that the other’s trademark registration isn’t valid.
Its main goal is to stay the lawsuit until the question of the trademark’s validity is settled. This ensures that courts don’t waste time on cases if the trademark itself might not be legally valid.
Section 124 of Trademark Act works with lawsuits filed under Section 134 of the Act, which allows people to file trademark infringement cases in district courts.
By pausing the case when validity is questioned, Section 124 saves court resources. Before 2021, issues about trademark validity were handled by the Intellectual Property Appellate Board (IPAB), but after the IPAB was abolished, High Courts now handle these matters.
This change has made the process smoother in some ways but has also led to debates about whether courts must always stay the case, showing how trademark law is still evolving.
Essentials of Section 124 of Trademark Act
Section 124 of Trademark Act is structured into 5 sub-sections with each outlining specific conditions and outcomes. Let's break them down:
Sub-section (1): Triggering the Stay
This sub-section applies in two main scenarios during an infringement suit:
The defendant says the plaintiff’s trademark registration isn’t valid.
The defendant uses a defense under Section 30(2)(e), which says a registered trademark can’t be challenged by another similar registered mark, but the plaintiff argues the defendant’s trademark is invalid.
In these cases, the court must:Stay the lawsuit if a rectification (a request to cancel or change the trademark registration) is already being handled by the Registrar or High Court.
If no rectification is pending and the court thinks the invalidity argument has some merit, it identifies the validity issue and stays the case for three months so the party can file for rectification.
Sub-section (2): Effect of Rectification Application
If the party files a rectification application within the three-month period (or extended time allowed by the court), the infringement suit is stayed until the rectification proceedings are finally disposed of.
Sub-section (3): Abandonment of Plea
Failure to apply for rectification within the specified time results in the invalidity plea being deemed abandoned, allowing the court to proceed with the suit on other grounds.
Sub-section (4): Binding Nature of Rectification Order
The final order in the rectification proceedings is binding on the parties in the infringement suit, and the court must dispose of the suit accordingly regarding the validity issue.
Sub-section (5): Interim Orders During Stay
Importantly, the stay does not prevent the court from issuing interlocutory orders, such as injunctions, account-keeping directives, or property attachments, to protect interests during the pendency.
These provisions make Section 124 of Trademark Act a balanced tool, protecting against frivolous delays while ensuring validity disputes are addressed.
Read aboutWhat is a Trade Secret?
Procedure Under Section 124 of Trademark Act
Applying Section 124 of Trademark Act involves a process in order to ensure fairness. This procedure underscores the efficiency of Section 124 of Trademark Act in integrating rectification with infringement proceedings:
Raising the Defense: In their written response or reply, a party must clearly state that the other side’s trademark isn’t valid. General or vague claims aren’t enough; they need to be specific to trigger the court’s review.
Court's Assessment: The court checks if the invalidity argument seems reasonable based on the documents and statements. If it does, the court officially notes the validity issue.
Adjournment and Application: The court adjourns the lawsuit for three months (or longer if allowed) so the party can file a rectification request with the High Court (since the IPAB no longer exists).
Stay or Proceeding: If the party files the rectification request and shows proof, the lawsuit stays paused. If they don’t file, their invalidity argument is dropped.
Resolution: The High Court’s decision on the rectification binds the district court, which then continues the lawsuit.
Interplay with Other Sections
Section 124 of Trademark Act doesn't work alone; it connects with other parts of the Trade Marks Act, like Sections 47, 57, and 125:
Section 47: This covers removing trademarks from the register if they haven’t been used. If someone claims invalidity based on this in a lawsuit, Section 124 applies.
Section 57: This allows rectification for mistakes, fraud, or other issues in trademark registrations. Some courts say this can be done without Section 124, while others say it requires court permission first.
Section 125: This says that when a lawsuit is ongoing, rectification requests must go to the High Court, not the Registrar.
The Supreme Court in the Patel Field Marshal case explained that when a lawsuit is pending, rectification under Sections 47 or 57 must follow Section 124 to avoid multiple cases running at the same time. However, since the IPAB was abolished, some High Courts have been more flexible, leading to ongoing discussions about how strict these rules should be.
Also, Get to Know AboutInfringement of Geographical Indication.
Landmark Judgements on Section 124 of the Trade Marks Act, 1999
Section 124 of the Trade Marks Act, 1999 plays a crucial role in handling challenges to the validity of trademark registrations during infringement proceedings. Below are four landmark judgments that have shaped the interpretation and application of this provision. Each includes a summary of the facts, issues and the court's judgment.
Patel Field Marshal Agencies v. P.M. Diesels Ltd. (2018)
Facts: Patel Field Marshal Agencies sued P.M. Diesels Ltd. for trademark infringement over the “FIELD MARSHAL” mark. The defendant challenged the plaintiff’s trademark validity and filed for rectification. Lower courts gave conflicting rulings on whether rectification could happen without following Section 124, so the case went to the Supreme Court.
Issues: Could rectification under Sections 47 or 57 happen without following Section 124 in a pending lawsuit? Does the court need to check if the invalidity argument is valid and allow time for rectification? What happens if the argument is dropped?
Decision: The Supreme Court said that when a lawsuit is pending and invalidity is raised, Sections 47 and 57 must follow Section 124. The court must check if the invalidity argument seems reasonable, pause the case, and give time for rectification. If the party doesn’t file for rectification, their argument is dropped forever, preventing multiple cases and conflicting decisions.Puma Stationer Ltd. v. Hindustan Pencils Ltd. (2010)
Facts: Puma Stationer Ltd. owned trademarks PLASTO and NON-DUST for erasers and sued Hindustan Pencils Ltd. for infringement. The defendant challenged the NON-DUST trademark’s validity and filed for rectification with the IPAB. Puma then filed a lawsuit for both infringement and passing off (using a similar trademark to confuse customers).
Issues: Does Section 124 pause the entire lawsuit, including passing off claims, or just the infringement part when a rectification is pending?
Decision: The Delhi High Court said Section 124 only pauses the infringement part of the lawsuit, not the passing off part. Passing off is a separate issue that doesn’t depend on trademark registration, so it can continue while rectification is decided.Sana Herbals Pvt. Ltd. vs Mohsin Dehlvi (2022)
Facts: Sana Herbals sued Mohsin Dehlvi for trademark infringement over similar herbal product marks. The defendant challenged the plaintiff’s trademark validity and filed for rectification. This case happened after the IPAB was abolished in 2021 and so the High Court handled the rectification.
Issues: Is pausing the lawsuit under Section 124 still required after the IPAB’s abolition, since the same High Court now handles both the lawsuit and rectification?
Decision: The Delhi High Court said pausing isn’t always required anymore because the same court handles both issues, reducing the chance of conflicting decisions. The lawsuit could continue alongside the rectification to save time.Amrish Aggarwal v. Venus Home Appliances Pvt. Ltd. (2024)
Facts: Amrish Aggarwal sued Venus Home Appliances for trademark infringement and passing off over electrical appliance trademarks. The defendant challenged the trademark validity of the plaintiff and filed for the rectification.
Issues: Should both infringement and passing off claims be paused under Section 124 when rectification is pending? Does the IPAB’s abolition change this?
Decision: The Delhi High Court overturned the Sana Herbals ruling, saying Section 124 requires pausing both infringement and passing off claims during rectification. Even though passing off doesn’t rely on registration, it’s closely tied to infringement, and separate cases could lead to conflicting decisions. The IPAB’s abolition doesn’t change this rule.
Summary
Section 124 of Trade Marks Act, 1999 ensures that trademark disputes are handled fairly by first checking if a trademark is valid. Its clear structure helps keep court cases fair and organized, but different court rulings show that its use is still being debated. Section 124 of Trademark is key to handling trademark disputes effectively, ensuring trademarks are protected without unnecessary delays. As the trademark laws continue to develop, Section 124 remains an important tool for fair dispute resolution.
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Section 124 of Trademark Act: FAQs
Q1. What is Section 112A of the Trade Marks Act?
Section 112A allows the Registrar to correct minor errors in trademark applications or registrations, like clerical mistakes, with notice to the applicant.
Q2. What is Section 125 of the Trade Marks Act?
Section 125 requires rectification applications to be filed with the High Court, not the Registrar, when an infringement lawsuit is pending.
Q3. What is Section 123 of the Trade Marks Act?
Section 123 allows courts to grant temporary injunctions to stop trademark infringement until the main lawsuit is decided.
Q4. What is Section 126 of the Trade Marks Act?
Section 126 gives the Registrar power to award costs in trademark proceedings and recover them like debts.
Q5. What is the difference between Section 112(1) and 112A?
Section 112(1) lets the Registrar correct errors in the trademark register, while Section 112A specifically allows corrections in applications or registrations with applicant notice.
