Effect of Dynamic Effect:Part-4 [Trade Mark Cancellation]
Introduction:
The case concerns a rectification petition filed under Section 57 of the Trade Marks Act, 1999, challenging the registration of the trademark "HARSHY", which was alleged to be deceptively similar to "HERSHEY", a well-known trademark of The Hershey Company. The key issue before the Delhi High Court was whether it had jurisdiction to entertain the rectification petition when the trademark was registered at the Mumbai Trade Marks Registry. The case raised critical questions about territorial jurisdiction, the concept of dynamic effect in trademark law, and the applicability of earlier precedents on this issue. Ultimately the Court referred this question to be decided to Larger Bench.
Factual Background:
The Petitioner, The Hershey Company, is a multinational corporation and the proprietor of the trademark "HERSHEY", registered in multiple jurisdictions, including India. The Respondent, Dilip Kumar Bacha, trading as Shree Ganesh Namkeen, had obtained registration for the trademark "HARSHY", which the petitioner claimed was phonetically, structurally, and visually similar to its well-known mark.
The impugned trademark "HARSHY" was registered under Application No. 3897902 on July 25, 2018, at the Mumbai Trade Marks Registry. The petitioner contended that the respondent’s mark was deceptively similar and likely to cause confusion among consumers. The rectification petition was filed before the Delhi High Court under Section 57 of the Trade Marks Act, 1999, seeking cancellation of the mark.
The Respondent challenged the jurisdiction of the Delhi High Court, arguing that the appropriate High Court for a rectification petition should be the Bombay High Court, as the registration was granted at the Mumbai Trade Marks Registry. This led to the primary legal question—whether the Delhi High Court could assume jurisdiction based on the “dynamic effect” of the trademark registration.
Procedural Background:
July 25, 2018 – The respondent's mark "HARSHY" was registered under Application No. 3897902 at the Mumbai Trade Marks Registry.
August 2023 – The petitioner filed the rectification petition before the Delhi High Court under Section 57 of the Trade Marks Act, 1999, seeking cancellation of the respondent’s mark.
The respondent objected to the jurisdiction of the Delhi High Court, arguing that the case should have been filed before 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.
Issues Involved:
Whether the Delhi High Court had jurisdiction to entertain a rectification petition under Section 57 of the Trade Marks Act, 1999, when the impugned trademark was registered at the Mumbai Trade Marks Registry?
Whether the dynamic effect of a trademark registration—which impacts business interests beyond the place of registration—could be a valid basis for jurisdiction?
Whether the term “the High Court” in Section 57 of the Trade Marks Act should be interpreted to mean only the High Court that has territorial jurisdiction over the Trade Marks Registry where the mark was registered?
Submissions of the Petitioner (The Hershey Company):
The Delhi High Court had jurisdiction because the impact of the respondent’s mark was felt in Delhi due to the wide commercial presence of the petitioner’s brand. The concept of dynamic effect, recognized in Girdhari Lal Gupta v. K. Gian Chand Jain & Co., AIR 1978 Delhi 146, should apply, allowing rectification petitions to be filed where the trademark affects business. Section 57 of the Trade Marks Act, 1999, does not define "High Court," meaning there is no statutory restriction confining jurisdiction to the High Court governing the Trade Marks Registry where the mark was granted.The Tribunal Reforms Act, 2021, transferred jurisdiction to High Courts without limiting jurisdiction to the Registry location.
Submissions of the Respondent (Dilip Kumar Bacha):The Delhi High Court lacked jurisdiction, as the correct forum was the Bombay High Court, which had territorial juris
diction over the Mumbai Trade Marks Registry.Rule 4 of the Trade Marks Rules, 2017, explicitly links jurisdiction for rectification petitions to the Trade Marks Registry where the mark was registered.The earlier judgment in Girdhari Lal Gupta should not apply to the present case because it dealt with designs, not trademarks, and trademark laws follow different principles.
How and Why the Court Differed from Earlier Judgments on Dynamic Effect:
The Delhi High Court differed from earlier judgments such as Girdhari Lal Gupta by holding that dynamic effect does not apply to rectification petitions under Section 57 of the Trade Marks Act.
The court distinguished trademark law from patent and design law, stating that dynamic effect may apply in patent cases, but trademark rectification has a specific jurisdictional rule under Rule 4 of the Trade Marks Rules, 2017.
Patents and designs confer monopolistic rights, meaning their impact is nationwide and justifies broader jurisdictional principles like dynamic effect.
Trademarks function differently because they are tied to specific goods and services, and their rectification process is linked to the place of registration, as per statutory rules.
The earlier judgments did not consider Rule 4, which explicitly links rectification jurisdiction to the Registry where the mark was granted.
The court held that allowing rectification petitions in any High Court would lead to forum shopping, creating uncertainty for trademark owners.
Final Decision:
The Delhi High Court differed from earlier judgments such as Girdhari Lal Gupta by holding that dynamic effect does not apply to rectification petitions under Section 57 of the Trade Marks Act and referred the matter to larger Bench for adjudication.
Case Title: The Hershey Company Vs. Dilip Kumar Bacha, Trading as Shree Ganesh Namkeen & Anr.
Date of Order: 9 February 2024
Case No.: C.O. (COMM.IPD-TM) 179/2023
Court: Delhi High Court
Judge: Hon'ble Justice Mrs. Prathiba M. Singh
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
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