Nippon Paint Holdings Co. Ltd Vs Suraj Sharma

Nippon Paint Holdings Co. Ltd Vs Suraj Sharma: Madras High Court has jurisdiction to transfer the rectification proceedings from the Trade Marks Registry, New Delhi, to itself

Introduction:

The case involves a trademark dispute between Nippon Paint Holdings Co. Ltd and Suraj Sharma, where the plaintiffs sought transfer of a rectification petition pending before the Trade Marks Registry, New Delhi, to the Madras High Court. The primary contention was whether the Madras High Court had territorial jurisdiction to consolidate the rectification petition with an infringement suit already pending before it.

Detailed Factual Background:

The plaintiffs, Nippon Paint Holdings Co. Ltd and Nippon Paint (India) Pvt. Ltd., had obtained trademark registration for "NIPPON PAINT" from the Trade Marks Registry, Chennai. They alleged that the defendants, Suraj Sharma and M/S Nippon Paints & Chemicals, had copied their trademark and wrongfully obtained registration from the Trade Marks Registry, New Delhi.

Before filing the infringement suit, the plaintiffs filed a rectification petition before the Trade Marks Registry, New Delhi, challenging the defendants' trademark. However, since the plaintiffs had already initiated an infringement suit before the Madras High Court, they sought transfer of the rectification proceedings to the Madras High Court to ensure a comprehensive adjudication.

The defendants contested this application, arguing that the Madras High Court lacked territorial jurisdiction over a rectification petition pending before the New Delhi Trade Marks Registry. They also claimed that the plaintiffs should have pursued rectification before the Delhi High Court, which has appellate jurisdiction over the New Delhi Trade Marks Registry.

Detailed Procedural Background:

1. The plaintiffs obtained registration for "NIPPON PAINT" from the Chennai Trade Marks Registry.

2. The defendants obtained a separate trademark registration from the New Delhi Trade Marks Registry.

3. The plaintiffs discovered the defendants' registration and filed a rectification petition before the New Delhi Trade Marks Registry.

4. The plaintiffs then filed an infringement suit before the Madras High Court, alleging that the defendants were selling infringing products in Chennai.

5. The plaintiffs subsequently filed an application before the Madras High Court, seeking transfer of the rectification proceedings to its jurisdiction.

6. The defendants opposed this transfer, arguing that the rectification petition should be decided by the Delhi High Court, as per jurisdictional norms under the Trade Marks Act, 1999.

Issues Involved in the Case:

1. Whether the Madras High Court had jurisdiction to transfer the rectification proceedings from the Trade Marks Registry, New Delhi, to itself.

2. Whether Rule 14 of the Madras High Court Intellectual Property Rights Division Rules, 2022, allowed consolidation of proceedings.

3. Whether the defendants’ objection based on territorial jurisdiction was valid.

4. Whether Section 124 of the Trade Marks Act, 1999, required the infringement suit to be stayed pending rectification.

5. Whether transferring the rectification petition would prevent conflicting judgments.

Detailed Submission of Parties:

Plaintiffs (Nippon Paint Holdings Co. Ltd) argued that:The Madras High Court had jurisdiction to hear the rectification petition because the defendants were infringing their trademark in Chennai.Rule 14 of the Madras High Court Intellectual Property Rights Division Rules, 2022, allowed the court to consolidate related proceedings.Since the defendants' trademark registration affected the plaintiffs' rights in Chennai, the dynamic effect of the impugned registration was felt within the Madras High Court’s jurisdiction.The plaintiffs cited the Supreme Court’s judgment in Shah Newaz Khan v. State of Nagaland (2023 SCC Online SC 203) to argue that restrictive interpretations of jurisdiction should be avoided when access to justice is at stake.

Defendants (Suraj Sharma) argued that:The rectification petition was pending before the New Delhi Trade Marks Registry, meaning that only the Delhi High Court had appellate jurisdiction over it.Section 124 of the Trade Marks Act, 1999, required that the infringement suit be stayed until the rectification proceedings were concluded.Allowing the transfer would deprive them of their statutory right to appeal before the Delhi High Court.The Delhi High Court, in The Hershey Company v. Dilip Kumar Bacha (2024 MANU/DE/0904/2024), had referred the issue of jurisdiction to a Larger Bench, indicating that the matter was unsettled.

Detailed Discussion on Judgments Cited by Parties:

The court examined several precedents:Dr. Reddy's Laboratories Ltd. v. Fast Cure Pharma (2023 SCC Online Del 5409) – Held that if the dynamic effect of a trademark registration is felt within a High Court’s jurisdiction, that High Court has jurisdiction over rectification petitions.Asia Match Co. Pvt. Ltd. v. Deputy Registrar of Trademarks (2023:MHC:5361, W.P.(IPD)/30/2023, Madras High Court) – Held that the Registrar of Trade Marks should exercise discretion in transferring rectification petitions where infringement suits are pending.Jumeirah Beach Resort LLC v. Designarch Infrastructure Pvt. Ltd. (2022 MANU/DEOR/194894/2022, Delhi High Court) – Held that if the Registrar can refer a matter to the High Court, the High Court can also direct the transfer of the matter to itself.

Detailed Reasoning and Analysis of Judge:

The court ruled in favor of the plaintiffs, holding that:There was no statutory bar under the Trade Marks Act, 1999, preventing the Madras High Court from hearing a rectification petition.The dynamic effect of the defendants’ trademark registration was felt in Chennai, where the plaintiffs were facing infringement.The Registrar of Trade Marks had the power under Section 125(2) of the Trade Marks Act to transfer rectification proceedings to the High Court.Consolidating the rectification petition and the infringement suit would prevent conflicting decisions.

Final Decision:The Madras High Court allowed the transfer application and directed the Trade Marks Registry, New Delhi, to transfer the rectification petition to the Madras High Court within four weeks.

Law Settled in This Case:A High Court hearing a trademark infringement suit can also entertain a related rectification petition, even if it was originally filed before a different Trade Marks Registry.The "dynamic effect" principle allows a High Court to assert jurisdiction over a rectification petition if the registration affects businesses within its territorial limits.Consolidating related trademark proceedings in a single court prevents conflicting judgments and ensures comprehensive adjudication.The Registrar of Trade Marks has the power under Section 125(2) to transfer rectification proceedings to a High Court.Restrictive interpretations of jurisdiction should be avoided when access to justice is at stake.

Case Title: Nippon Paint Holdings Co. Ltd Vs Suraj Sharma

Date of Order: 21 March 2024

Case No.: A.No.556 of 2024 in C.S.(Comm.Div.) No.7 of 2024

Name of Court:High Court of Madras

Name of Judge: Hon’ble Mr. Justice Abdul Quddhose

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