Effect of dynamic effect in Trademark, Design and Patent Revocation Petition

Effect of dynamic effect: Part:5 [Trademark, Design and Patent Revocation Petitions]

Introduction:The concept of dynamic effect has played a crucial role in determining the jurisdiction of High Courts in intellectual property disputes, particularly in trademark rectification, design cancellation, and patent revocation petitions. Courts have examined whether the impact of an intellectual property right beyond its place of registration can justify jurisdiction in a different High Court. While this principle has been recognized in design and patent revocation cases, its applicability to trademark rectification petitions has been rejected in recent rulings, particularly in The Hershey Company v. Dilip Kumar Bacha, Trading as Shree Ganesh Namkeen & Anr. (2024).

However, the Hershey judgment appears to have overlooked Section 29(4) of the Trade Marks Act, 1999, which extends trademark rights even to different classes of goods and services where the mark has a reputation in India. The court failed to appreciate that, like patents and designs, trademark rights also extend nationwide, thereby warranting a broader interpretation of jurisdiction under the dynamic effect doctrine. This article critically examines the evolution of the dynamic effect doctrine, its judicial interpretations, and how the Hershey judgment deviates from established IP principles.

The Concept of Dynamic Effect in IP Disputes:The static effect of an intellectual property right refers to its formal registration at a particular registry, while the dynamic effect refers to the wider commercial impact of that right beyond the registry location. In disputes involving patents and designs, courts have acknowledged that such rights operate nationwide, restricting competitors across multiple jurisdictions. This has led to an expanded interpretation of jurisdiction in patent revocation and design cancellation cases.

However, in trademark rectification matters, the Hershey judgment limited jurisdiction to the High Court governing the Trade Marks Registry where the mark was granted, disregarding the nationwide impact of well-known trademarks under Section 29(4) of the Trade Marks Act, 1999.

Dynamic Effect in Design Cancellation Petitions:Girdhari Lal Gupta Vs. K. Gian Chand Jain & Co., AIR 1978 Delhi 146

Factual Background:The Petitioner, Girdhari Lal Gupta, obtained registration for two designs (Nos. 131357 and 131364) under the Designs Act, 1911, for laces. The Respondents, K. Gian Chand Jain & Co., were also engaged in the lace business in Delhi. They contested the validity of these registered designs, claiming that the designs had been published in India before registration, which restricted their business unfairly.

Procedural Background:The Respondents filed applications under Section 51-A of the Designs Act, 1911, before the Delhi High Court, seeking cancellation of the registrations. The Petitioner challenged the jurisdiction, arguing that only the Calcutta High Court had authority since the Register of Designs was maintained in Calcutta.

The Delhi High Court ruled that the impact of a design registration extends beyond the place of registration. Since the Respondents’ business in Delhi was affected, they had a legitimate right to seek cancellation in Delhi. The court held that the dynamic effect of the design’s monopoly was directly felt in Delhi, thereby establishing jurisdiction for the Delhi High Court.

Law Settled

The case established that applications for design cancellation can be filed not only in the Calcutta High Court but also in High Courts where the business impact is felt.

Dynamic Effect in Patent Revocation Petitions:Dr. Reddy’s Laboratories Ltd. & Anr. Vs The Controller of Patents & Ors. (2022/DHC/004746)

Factual Background:The Petitioner, Dr. Reddy’s Laboratories Ltd., filed a patent revocation petition against Patent No. IN 268846, granted to Boehringer Ingelheim for Benzenol derivatives and their medicinal applications. The Petitioners argued that the patent was invalid and filed the revocation petition before the Delhi High Court.

Procedural Background:The Respondent challenged the maintainability of the petition, arguing that since infringement suits were already pending before the Himachal Pradesh High Court, the revocation should be filed as a counterclaim instead of an independent petition.

Decision and Law Settled:The Delhi High Court held that patent revocation is an independent right under Section 64 and can be filed irrespective of pending infringement suits. The court recognized the dynamic effect doctrine, stating that patents impact businesses beyond their place of registration.

Dynamic Effect in Trademark Revocation Petitions:Dr. Reddy’s Laboratories Ltd. v. Fast Cure Pharma & Anr. (2023/DHC/004746):

This case further reaffirmed the dynamic effect doctrine in Trademark matters. The Delhi High Court upheld jurisdiction, ruling that:Trademark rights impact businesses beyond their place of registration.The Delhi High Court had jurisdiction since the Trademark affected the petitioner’s ability to operate freely in Delhi.These cases confirm that jurisdiction in Trademark revocation is determined by the market impact of the patent, rather than where it was granted.

Rejection of Dynamic Effect in Trademark Rectification Cases: The Hershey Company v. Dilip Kumar Bacha, Trading as Shree Ganesh Namkeen & Anr. (2024/DHC/004746)

Factual Background:

The Petitioner, The Hershey Company, is a multinational corporation and the registered proprietor of the well-known trademark "HERSHEY". The Respondent, Dilip Kumar Bacha, obtained registration for the trademark "HARSHY" under Application No. 3897902 on July 25, 2018, at the Mumbai Trade Marks Registry.

The Petitioner contended that the Respondent’s mark was phonetically, structurally, and visually similar to "HERSHEY", thereby likely to cause consumer confusion. A rectification petition was filed before the Delhi High Court under Section 57 of the Trade Marks Act, 1999, seeking cancellation of the mark.

Procedural Background:July 25, 2018 – The Respondent’s mark "HARSHY" was registered at the Mumbai Trade Marks Registry.August 2023 – The Petitioner filed the rectification petition before the Delhi High Court.The Respondent objected to jurisdiction, arguing that the correct forum was the Bombay High Court, as per Rule 4 of the Trade Marks Rules, 2017, which links rectification petitions to the Trade Marks Registry where the mark was registered.

Decision and Criticism:The Delhi High Court ruled that trademark rectification petitions must be filed only in the High Court governing the Trade Marks Registry where the mark was granted. The court rejected the dynamic effect doctrine, stating that it applies to patents and designs but not trademarks. Accordingly the matter was referred to larger Bench to evaluate the effect of dynamic effect in Trademark Cancellation Proceeding.

While the court attempted to distinguish trademark rectification from patent and design revocation, it failed to consider Section 29(4) of the Trade Marks Act, 1999, which expands trademark protection beyond its class of goods and services where the mark has a reputation in India.

Section 29(4) states that a trademark may be infringed even if used on completely different goods or services, provided the mark has a reputation in India and its use takes unfair advantage of or is detrimental to the distinctive character or reputation of the mark. This means that trademark rights extend across India, affecting businesses in multiple jurisdictions, much like patents and designs. A well-known mark like "HERSHEY" would be impacted by an infringing mark anywhere in India, justifying jurisdiction in any High Court where the commercial effect of the infringement is felt. The court’s reasoning in rejecting dynamic effect contradicts the expanded protection granted to trademarks under Section 29(4).

By overlooking Section 29(4), the Hershey judgment wrongly confined trademark rectification to the Trade Marks Registry's location, disregarding the nationwide impact of a trademark's reputation and infringement.

Design registrations are specific to particular products as per Section 6 of the Designs Act. Hence, the court wrongly distinguished design and trade mark rights on the ground that trademark rights are in relation to particular products, while design and patent rights are not. Even patent rights are subject to specific products for which patents are granted. Thus, trademarks, patents, and design rights stand on the same footing.

The term "High Court" as defined in Sections 47, 57, and 125 of the Trade Marks Act, 1999, should not derive its interpretation from Rule 3 of the Trade Marks Rules, 2017. Rules are subordinate legislation made under the Act and cannot override the primary statutory provisions.

If the dynamic effect doctrine is valid for patents and designs, where rights extend beyond registration, it should logically apply to trademarks as well, especially in cases involving well-known marks. By restricting jurisdiction to the Trade Marks Registry location, the Hershey judgment creates an artificial and unjustified distinction between different forms of intellectual property rights, weakening trademark enforcement.

Thus, the ruling in Hershey v. Dilip Kumar Bacha should be reconsidered to align trademark jurisprudence with patent and design laws, ensuring a consistent and effective approach to intellectual property protection.

Disclaimer:The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi