Sana Herbals Set Aside By The Delhi High Court’s Division Bench

In a recent ruling, a division bench of the Delhi High Court overturned a single judge’s decision in the case of Sana Herbals Pvt. Ltd. v. Mohsin Dehlvi 2022 SCC OnLine Del 4482. The bench determined that the requirement to stay proceedings in an infringement lawsuit, pending the resolution of a rectification petition, is obligatory. This obligation remains unchanged even after the Intellectual Property Appellate Board (IPAB) was abolished.

Background

Previously, the judgment was rendered by a Delhi High Court judge, wherein the issue was referred to a two-judge bench to determine whether the view taken in Sana Herbals, which held that there is no need to stay a civil suit during the pendency of a rectification petition following the abolition of the IPAB, can be upheld.

Analysis & Decision

The Division Bench, referencing Puma Stationer P. Ltd. v. Hindustan Pencil Ltd [(2010) 43 PTC 479], observed that the rectification petition in the current case could not be dismissed as non-maintainable solely because it was filed before the court framed any issue regarding the validity challenge to Venus’s mark by Mahalaxmi.

The Court opined that the Legislature intended for the court handling the suit to await the outcome of the rectification process involving the validity of the registration. Additionally, the Court cited paragraphs 10 and 42 of the Supreme Court’s decision in Patel Field Marshal v. P.M. Diesels Ltd. [(2018) 2 SCC 112], which acknowledges that Section 111 of the Trade and Merchandise Marks Act, 1958 is materially similar to Section 124 of the current Trade Marks Act. Consequently, the legal principles developed under Section 111 of the 1958 Act apply equally to Section 124 of the 1999 Act.

The Court also examined various sections of the Trade Marks Act, 1999, and the Trade and Merchandise Marks Act, 1958 to understand the legislative intent regarding the stay of proceedings when rectification petitions are filed. It emphasized the necessity of staying suit proceedings pending the final outcome of rectification or cancellation proceedings, as mandated by Section 124(1) of the 1999 Act and its predecessor, Section 111 of the 1958 Act. The Court noted that the status of a trademark’s registration affects which court has jurisdiction over the rectification petition, whether it should be filed before a High Court or the IPAB (prior to its abolition).

Conclusion

In conclusion, the Court overruled the decision in Sana Herbals, noting that the judgment in Patel Field Marshal Agencies had been misconstrued. It clarified that there is no automatic stay of proceedings under Section 124(1) of the 1999 Act.

Furthermore, the obligation to stay proceedings is not nullified by the abolition of the IPAB. Parties must inform the Court of pending rectification actions or request a stay if a validity issue is raised. The Court held that the stay of proceedings can still be requested by parties and noted that the Sana Herbals decision failed to consider the earlier ruling in Puma Stationer.