Introduction: This case revolves around a dispute concerning the alleged infringement of the registered trademark "STEELCASE" by the defendants, who were operating under the name "M/s. Steel Case India Private Limited". The plaintiff, Steelcase Inc., sought permanent injunction and other reliefs under trademark and copyright law, asserting that the defendants' use of an identical or deceptively similar mark amounted to infringement and misrepresentation. The case further saw a plea by the defendants seeking stay of the suit under Section 124(1)(b)(ii) of the Trade Marks Act, 1999, on the ground that they intended to challenge the validity of the plaintiff’s trademark registration.
Factual Background: Steelcase Inc., a US-based entity, has been operating under the mark "STEELCASE" since 1920 and entered the Indian market in 2000, providing office furniture and architectural products. It owns registered trademarks for “STEELCASE” under Classes 9, 11, 16, and 20 since 1995. Defendant no.1, Mr. K.J. Bhuta, operated "M/s. Steel Case India Private Limited" and was alleged to have adopted a deceptively similar name and domain (“www.steelcaseindia.com”) for commercial gain. The plaintiff alleged that this use infringed its trademark rights and amounted to passing off, causing confusion among consumers and harming the plaintiff’s goodwill.
Procedural Background: The present order arose from an interlocutory application under Section 124 of the Trade Marks Act, 1999, filed by the defendant no.1. The defendant sought a stay of proceedings in the main suit to allow for rectification of the trademark register, contesting the validity of the plaintiff’s registered trademark “STEELCASE”. The defendant asserted prior use of the mark since 1981 and challenged the bona fides of the plaintiff’s registration.
Legal Issue:The primary legal issue was whether the defendant’s plea of invalidity regarding the plaintiff’s trademark was “prima facie tenable” under Section 124(1)(b)(ii) of the Trade Marks Act, 1999, and whether this justified a stay of the trial proceedings in the main suit pending rectification proceedings?
Discussion on Judgments: The defendant relied upon the decision in Lupin Ltd. v. Johnson and Johnson, 2015(1) Mh.L.J, where the Bombay High Court held that a court may assess the invalidity of a registered trademark at the interlocutory stage with a lower threshold of scrutiny. The purpose was to allow challenges to questionable registrations that may have been fraudulently obtained or are legally infirm.
Additionally, reliance was placed on Franco India Pharmaceuticals v. Corona Remedies Pvt. Ltd., COMMERCIAL IP SUIT NO. 105 OF 2022, where the Bombay High Court permitted a rectification challenge based on detailed pleadings showing invalidity.
In contrast, the plaintiff cited Burger King Corporation v. Ranjan Gupta and Others, 2023 SCC OnLine Del 1383, where the Delhi High Court clarified that mere allegations do not entitle a party to seek rectification unless the plea of invalidity is shown to be prima facie tenable. The Court in Pepsico Inc. v. Parle Agro Pvt. Ltd., CS(COMM) 268/2021, further clarified that "prima facie tenability" means the plea must be arguable and not frivolous or based on bald assertions.
The plaintiff also relied upon McCarthy on Trademarks & Unfair Competition, 5th Ed., Vol. 2, which distinguishes between "descriptive" and "suggestive" marks, arguing that "STEELCASE" required interpretive imagination and was therefore not descriptive.
Reasoning and Analysis of the Judge:Court held that the defendant’s pleadings failed to raise a prima facie tenable issue regarding the invalidity of the plaintiff’s trademark. The alleged descriptiveness of the mark "STEELCASE" was not supported by substantive evidence or analysis in the pleadings. Rather, the assertion was made in passing and lacked the detailed reasoning necessary for raising a legal issue under Section 124(1)(b)(ii).
The Court emphasized that not all suggestive marks are descriptive. The test, as per McCarthy, requires that a mark be immediately informative without interpretive effort to qualify as descriptive. The Court found that "STEELCASE" did not directly describe the plaintiff’s products and thus could not be dismissed as descriptive.
The judge further noted that abandonment of the plaintiff’s earlier 1968 application for the trademark did not, by itself, render the subsequent 1995 registration invalid. The mere fact that objections were raised by the Examiner or that the mark was initially proposed to be used did not establish fraud or illegality.
Thus, the Court held that there was no prima facie tenable plea of invalidity that could justify staying the suit or granting liberty for rectification proceedings.
Final Decision: The High Court of Delhi dismissed the application under Section 124(1)(b)(ii) of the Trade Marks Act, 1999. The Court found no justification to stay the trial proceedings or to entertain the rectification plea. The matter was listed for framing of issues on the next date of hearing.
Law Settled in This Case: This judgment reinforces that a party invoking Section 124(1)(b)(ii) of the Trade Marks Act, 1999 must demonstrate a prima facie tenable plea of invalidity through detailed and reasoned pleadings. Mere assertions, absence of cogent evidence, or prior use claims unsupported by documentary proof will not suffice to invoke the protection of rectification proceedings or to stall trademark enforcement suits. The judgment affirms the principle that the discretion under Section 124 lies with the Court and is not a matter of right.
Case Title: Steelcase Inc. Vs. Mr. K.J. Bhuta and Anr.: Date of Order: May 28, 2025: Case Number: CS(COMM) 1180/2018: Neutral Citation: 2025:DHC:4521:Name of Court: High Court of Delhi:Name of Judge: Hon’ble Mr. Justice Saurabh Banerjee
