Dr. Reddy’s Laboratories Ltd. Vs. Fast Cure Pharma

Effect of Dynamic Effect: Part-3 [Trademark Cancellation]

Introduction:

This case primarily deals with whether a High Court other than the one having jurisdiction over the Trade Marks Registry that granted the trademark can entertain rectification petitions under Section 47 and Section 57 of the Trade Marks Act, 1999. The key issue is whether the dynamic effect of trademark registration—which impacts business interests beyond the place of registration—can be a factor in determining jurisdiction?

Factual Background:

Dr. Reddy’s Laboratories Limited, the petitioner, had filed CS (COMM) 436/2021 against Fast Cure Pharma (FCP), alleging that FCP’s mark "RAZOFAST" infringed its registered trademark "RAZO", which is used for Rabeprazole, a pharmaceutical compound. The Delhi High Court, on 16 August 2023, had already decreed the infringement suit in favor of Dr. Reddy’s Laboratories.

During the pendency of the infringement suit, on 23 August 2022, the petitioner sought adjournment to file a rectification petition for cancellation of the respondent’s "RAZOFAST" mark. The present rectification petition was filed on 15 November 2022, seeking to remove "RAZOFAST" from the Register of Trade Marks. However, the registered mark "RAZOFAST" was granted by the Kolkata Office of the Trade Marks Registry, leading to the issue of whether the Delhi High Court had jurisdiction to hear the rectification petition.

Procedural Background:

16 August 2023 – Delhi High Court decreed the infringement suit in favor of Dr. Reddy’s Laboratories.

23 August 2022 – The petitioner sought adjournment to file a rectification petition.

15 November 2022 – The petitioner filed the rectification petition under Section 57 of the Trade Marks Act before the Delhi High Court.

Respondent’s Argument:Fast Cure Pharma challenged the jurisdiction of the Delhi High Court, arguing that the rectification petition should have been filed before the Calcutta High Court, as the registration was granted by the Kolkata Trade Marks Registry.

Issues Involved:

Whether the Delhi High Court had jurisdiction to entertain a rectification petition under Section 47 and Section 57 of the Trade Marks Act, 1999, when the impugned mark was registered at the Kolkata Trade Marks Registry?

Whether the concept of “dynamic effect” could be applied to determine jurisdiction, allowing the rectification petition to be filed where the trademark’s impact was felt?

Whether jurisdiction in rectification matters should be limited to the High Court having territorial jurisdiction over the Trade Marks Registry that granted the mark?

Submissions of the Parties

Submissions of the Petitioner (Dr. Reddy’s Laboratories Limited):

The Delhi High Court had jurisdiction as the dynamic effect of the trademark was felt in Delhi.The petitioner’s business was adversely affected in Delhi due to the presence of the respondent’s trademark in the Register.Under Section 57 of the Trade Marks Act, a rectification petition can be filed before “the High Court”, and the law does not limit this to the High Court covering the Trade Marks Registry.The petitioner relied on Girdhari Lal Gupta v. K. Gian Chand Jain & Co. AIR 1978 Delhi 146, where the Delhi High Court’s Full Bench recognized that jurisdiction could be based on the dynamic effect of registration.

Submissions of the Respondent (Fast Cure Pharma & Anr.):The Delhi High Court lacked jurisdiction as the correct jurisdiction was the Calcutta High Court, which covered the Kolkata Trade Marks Registry.Section 47 and Section 57 of the Trade Marks Act do not expressly state that rectification petitions can be filed outside the territorial jurisdiction of the Trade Marks Registry where the mark was granted.The Tribunal Reforms Act, 2021, abolished the Intellectual Property Appellate Board (IPAB) and transferred jurisdiction to High Courts. The respondent argued that this did not expand the scope of jurisdiction beyond what existed under IPAB rules.Cited Ayyangar Committee Report, which recommended that rectification petitions should be filed in the High Court covering the Trade Marks Registry where the mark was registered.

Discussion on Judgments and Citations:

The court extensively analyzed judicial precedents to determine the correct interpretation of jurisdiction under the Trade Marks Act:Girdhari Lal Gupta v. K. Gian Chand Jain & Co. AIR 1978 Delhi 146:The Full Bench of the Delhi High Court held that jurisdiction in rectification matters is not confined to the place of registration but also extends to the place where the business impact is felt.This introduced the concept of dynamic effect, recognizing that intellectual property rights impact businesses beyond their place of registration. Kusum Ingots & Alloys Ltd. Vs. Union of India (2004) 6 SCC 254:The Supreme Court ruled that jurisdiction is determined not only by where an order is passed but also by where its legal consequences are felt.Applied to trademarks, this meant that if a business suffers due to a registered mark in Delhi, the Delhi High Court could have jurisdiction.Workmen of Shri Rangavilas Motors (P) Ltd. v. Shri Rangavilas Motors (P) Ltd. (1967) 2 SCR 528: Held that the place where an order affects employees determines jurisdiction. This reasoning was applied to trademarks, concluding that the impact of a trademark in a jurisdiction can be a factor in determining High Court jurisdiction.

Detailed Reasoning and Interpretation of the Court on the Issue of Dynamic Effect:

The court analyzed the static effect and dynamic effect of trademark registration. The static effect refers to the registration of the mark in the Trade Marks Registry, while the dynamic effect refers to the impact of the registration on businesses beyond the place of registration. 

The court held that:The dynamic effect of a trademark is not confined to the place of its registration but extends to all locations where it restricts competitors’ business activities.If a trademark’s presence in the Register adversely impacts a business in Delhi, Delhi High Court can exercise jurisdiction over a rectification petition.Section 57 of the Trade Marks Act does not restrict jurisdiction to the High Court covering the Trade Marks Registry, unlike the Patent Act, which specifies jurisdiction.The Tribunal Reforms Act, 2021, did not change the principle that High Courts could hear rectification petitions based on their impact on businesses.

Final Decision:

The Delhi High Court held that:The rectification petition was maintainable before the Delhi High Court, as the dynamic effect of the registered mark was felt in Delhi.The concept of dynamic effect is applicable to trademark cases, meaning businesses affected by a mark’s presence in the Register can file rectification petitions in their jurisdiction. Jurisdiction for rectification petitions is not confined to the place of grant but includes locations where the trademark has a restrictive impact on businesses.

Law Settled in this Case:

Dynamic effect applies to trademark rectification petitions, allowing businesses to file cases in High Courts where they suffer commercial injury.

Rectification petitions are not limited to the jurisdiction of the Trade Marks Registry that granted the mark.

The abolition of IPAB did not restrict jurisdiction but instead allowed businesses to seek relief where they feel the impact of a registered mark.

Case Title: Dr. Reddy’s Laboratories Ltd. vs. Fast Cure Pharma & Anr.

Date of Order: 4 September 2023

Case No.: C.O. (COMM.IPD-TM) 8/2023

Court: Delhi High Court

Judge: Hon'ble Justice Shri C. Hari Shankar

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