Lotus Organic Care Vs. Aadhar Products Pvt. Ltd.: Under Section 124 of Trademark Act 1999, passing off action can not be stayed.
Introduction:This case involves a dispute between M/S. Lotus Organic Care and M/S. Aadhar Products Pvt. Ltd. concerning trademark infringement and passing off. The primary contention revolves around the validity of the plaintiff's registered trademarks and the application filed by the defendant under Section 124 of the Trademarks Act, 1999, for staying the suit proceedings pending rectification of the trademarks in question.
Detailed Factual Background: The respondent-plaintiff, M/S. Aadhar Products Pvt. Ltd., filed a suit against the petitioner-defendant, M/S. Lotus Organic Care, for infringement and passing off of its registered label trademarks numbered 1961814 and 2551769. The suit was initiated before the Additional District and Sessions Judge, Mawli, District Udaipur. The plaintiff alleged that its trademarks had been unlawfully used by the defendant, leading to consumer confusion and potential loss of business.
The petitioner-defendant, in response, contested the suit, asserting that the plaintiff’s trademark registration was obtained in violation of the Trademarks Act. The defendant claimed prior usage of the disputed marks and argued that the plaintiff’s registration was invalid. Subsequently, the petitioner sought a stay on the suit proceedings under Section 124 of the Act on the grounds that it intended to file a rectification application against the plaintiff’s trademarks.
Detailed Procedural Background:The trial court issued summons upon the filing of the suit by the respondent-plaintiff. The petitioner-defendant filed a written statement, and the trial court framed issues on October 9, 2022. Additional issues were framed on February 23, 2023, based on applications moved by both parties.
The petitioner-defendant later filed an application under Section 124 of the Trademarks Act, 1999, requesting a stay of the suit proceedings, arguing that it proposed to file a rectification application against the plaintiff’s trademarks. After considering the arguments, the trial court rejected the application via an order dated October 19, 2023. Aggrieved by this decision, the petitioner-defendant filed the present writ petition before the Rajasthan High Court, Jodhpur.
Issues Involved in the Case:
Whether the petitioner-defendant’s plea for invalidity of the plaintiff’s trademarks was prima facie tenable.
Whether the trial court erred in rejecting the application under Section 124 of the Trademarks Act, 1999.
Whether the suit proceedings should have been stayed pending rectification of the plaintiff’s trademarks.
Detailed Submission of Parties : The petitioner-defendant contended that the trial court had failed to consider the prima facie validity of its claim under Section 124(1)(ii) of the Trademarks Act. It argued that the trial court was required to be satisfied only to a prima facie extent regarding the invalidity of the plaintiff’s trademark, rather than fully adjudicating the matter.
On the other hand, the respondent-plaintiff submitted that the trial court had rightly rejected the application, as the petitioner had not established a prima facie case for invalidity. The plaintiff asserted that the petitioner’s allegations lacked sufficient legal and factual grounding, and thus, the request for staying the proceedings was unfounded.
Detailed Discussion on Judgments: The Rajasthan High Court, while analyzing the matter, relied upon Section 124(1)(ii) of the Trademarks Act, which states that a suit for infringement should be stayed if the court is prima facie satisfied regarding the invalidity of the plaintiff’s trademark registration. The court examined the pleadings and found that the trial court had improperly rejected the petitioner’s application by failing to recognize the prima facie tenability of the petitioner’s claims.
The court observed that Section 124 mandates the court to prima facie assess the validity of a trademark when a rectification plea is proposed. The court determined that the petitioner had provided sufficient pleadings to warrant prima facie satisfaction regarding the invalidity of the plaintiff’s trademarks. The judge emphasized that the trial court’s role was not to adjudicate the merits of rectification but merely to ascertain whether the allegations had prima facie merit.
Final Decision The High Court allowed the writ petition and quashed the trial court’s order dated October 19, 2023. It directed that the suit proceedings concerning trademark infringement be stayed to allow the petitioner to file a rectification application. However, the court clarified that the suit proceedings concerning passing off would continue independently.
Law Settled: In This Case This judgment reiterates that under Section 124 of the Trademarks Act, the trial court must stay suit proceedings if it finds prima facie tenability in a rectification plea. The decision establishes that the trial court need not adjudicate the full merits of invalidity but must ensure that sufficient grounds exist to warrant rectification proceedings.
Case Title: M/S. Lotus Organic Care Vs M/S. Aadhar Products Pvt. Ltd.
Date of Order: May 16, 2024
Case No.: CW-18461/2023
Neutral Citation: [2024:RJ-JD:22234]
Name of Court: Rajasthan High Court, Jodhpur
Name of Judge: Hon’ble Mr. Justice Vinit Kumar Mathur
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