[This post is authored by SpicyIP intern Shikhar Chauhan. Shikhar is a second-year law student at NALSAR University of Law, Hyderabad. He shares a keen interest in developments concerning IP Law.]
On May 18th of this year, the Delhi High Court in a long running trademark dispute between Resilient (proprietors of Bharatpe and Postpe) and Phonepe (see here and here) passed an order clarifying that intra court appeals arising out of Single Judge’s order rejecting a rectification petition, can be heard by a division bench of the same Court. This clarification was necessary since the Trademarks Act presently does not mention the provision of such an appeal. But how did the court read this appeal when the substantive law doesn’t talk about it? In this post I’ll elaborate on the dimensions of the prolonged case, and will do a bipartite analysis of the verdict. The analysis will deal with the issues of maintainability of the appeal and filing of the rectification application. Additionally, the post will throw light on the significance of the judgement for future trademark litigations.
Quick Background
The litigation between Phonepe and Resilient has been a pretty exciting journey so far. Readers will remember that in April 2021, the Delhi High Court had refused to grant an interim injunction to Phonepe and had prima facie held that the “Bharatpe” mark is not infringing the “Phonpe” mark. After this order, Resilient filed to register its “Postpe” mark which was opposed by Phonepe and the latter even filed an infringement suit in the Bombay High Court against Resilient “Postpe” mark. Consequently, Resilient filed rectification petitions against Phonepe’s marks, which were rejected by the Single Judge bench of the Delhi High Court, under Section 124 holding that the petitions were invalid without the court framing an issue regarding the Trademark’s validity. Aggrieved by the order, Resilient filed an appeal before the Division Bench of Delhi High Court.
Decoding the Position on the Maintainability of the Appeal
In the appeal before the double bench, PPL (defendant) raised objections against the maintainability of the appeal itself. PhonePe argued that the TM Act 1999 does not provide for intra-court appeals when the HC has already decided on the rectification application. PPL placed emphasis on Section 91 to contend that the TM Act is a self-contained code, making any out-of-the-statute remedy inapplicable to the case.
The double bench, while deciding on the issue of the maintainability of appeal, differed from the defendant’s submissions and allowed the appeals. The court’s rationale for this was two–fold- 1) the 1940 TM Act allowed an intra-court appeal under Section 76 and 2) Letters Patent talks about it in clause 10.
The court did a comparative analysis of the Trademarks jurisprudence and took precedence of the Apex Court’s decision in the National Sewing Threadcase. The High Court noted that Section 76 of the 1940 TM Act provided for the right of appeal to the High Court and when such jurisdiction is exercised by a single judge, an intra-court appeal can be made under clause 15 of the Letters Patent. Similarly, Section 108(3) under the 1958 Act also allowed an appeal against the decision of a Single judge order concerning a rectification application. The court thus countered PPL’s argument that the history of trademark legislation implies the exclusion of an intra-court appeals against the orders passed in rectification petitions, in the 1999 Act.
The court elucidated that given an intra-court appeal is allowed under Clause 10 of the Letters Patent, it cannot be implied that the 1999 TM Act expressly excludes such appeals. The bench noted that an appeal under the Letters Patent is a special provision, and unless the 1999 Act “explicitly” excludes an intra-court appeal (which is not the case), such appeals are allowed. The court, thus, allowed the appeal.
The court’s reasoning on the present issue can be appreciated for shedding light on the maintainability of appeals for which the 1999 TM Act provides no express provision. Considering that the scrapping of IPAB bestowed on the HC the sole authority to decide on rectification petitions and in the absence of any express provision under the TM Act for appeals, the judgement confers the required clarity. The court employed sound reasoning and due precedents to construe the maintainability of appeals. While upholding the primacy of the special provision under the Letters Patent Appeal, the court made a sound interpretation of Generalia Specialibus Non-Derogant (the general must not detract from the special/specific). This clarity will render a fruitful impact on future appeals, which otherwise would’ve been trapped in the web of uncertainty.
Decoding the Position on the Rectification Petition
Coming to the second prong of the judgement, the court dealt with the merits of the rectification application filed by RIPL. As discussed earlier, the appeal was against the single bench order of Delhi HC which was passed on the understanding that the essential requirements under Section 124 were not fulfilled.
First, let’s examine the rules governing rectification petitions, covered under Section 124 of the TM Act. Section 124 states that if there’s a suit pending for trademark infringement wherein the defendants have pleaded the trademark’s invalidity and the court is satisfied with the prima facie tenability of the plea, only then can a rectification petition be filed. This bar has been provided to prevent multiple similar suits from cropping up simultaneously. This has been discussed at length here and here.
The impugned single-judge order dismissed the rectification petitions based on Section 124 of the Act. The learned judge took note of PPL’s pending suit before the Delhi HC, wherein the defendants had pleaded the invalidity of PPL’s trademark to defend its position. Since the suit court did not frame an issue concerning the validity of PPL’s trademarks, the learned judge dismissed the rectification petitions in lamine (at the beginning), altogether.
In the appeal, though Resilient tried to argue that the rectification petition should be seen independent of the Bharatpe (earlier DHC) suit, the court held that in the Bharatpe suit, the remedy sought is against all the variants of Resilient’s pe marks, which includes BharatPe and PostPe. Therefore, the court held that since the suit court hasn’t yet decided to frame the issue regarding the trademark’s validity, the petitions shouldn’t be wholly dismissed. The Petitions must be kept in abeyance until the suit court decides to frame an issue and that’s how the court differed from the single bench order and clarified that the Single Judge’s In Limine dismissal of the rectification petitions was invalid.
Clarifying the position, the court stated that the single judge should have kept the rectification petitions in abeyance until the suit court decided whether to raise the issue of the trademark’s validity. This clarification was much required because the In Limine dismissal of the petitions would’ve affected the statutory rights of the parties. If the single judge order would’ve become the precedent, future litigations of rectification petitions would’ve suffered the burden of confusion and incorrect interpretation. All of these reasons highlight the significance of finally having clarity over the issue at hand.
Only after the court decides on framing the issue can a decision be taken on the validity of the application. Once an issue is framed, the court can then reject the application on merits, post which the rectification applications would be closed. Thus, the court set aside the impugned order and kept the rectification petitions in abeyance.
Conclusion
The court’s clarity on the incertitude behind the jurisdiction of the HC’s appellate court to entertain intra-court appeals, given the absence of a statutory appeal under the TM Act, was much needed. The judgement works to set forth the position on the maintainability of intra-court appeals from a single judge’s decision. Additionally, by setting aside the impugned judgement, the court has also shed light on the interpretation of Section 124 of the Act.