It is not uncommon to see Defendants in trademark infringement law suits challenge the validity of the trademark registration(s) relied upon by Plaintiffs. For a trademark infringement claim to lie, the Plaintiff must have a trademark registration. Challenging the very validity of such a registration, in effect, threatens the claim of trademark infringement in the suit. This post discusses the utility of filing a cancellation action as a defensive strategy to a pending law suit.
Parallel proceedings before two forums
While suits of trademark infringement and/or passing off are tried by Civil Courts, petitions for cancellation/ rectification of trademarks fall within the exclusive domains of the Trade Marks Registry and the Intellectual Property Appellate Board (“IPAB”). Notably, a cancellation action must necessarily be filed before the IPAB when the validity of a trademark registration is challenged during the pendency of a trademark infringement suit. Owing to such a clear demarcation of powers, Indian trademark law makes it possible for the infringement suit and the cancellation action to proceed simultaneously.
Until recently, High Courts were divided in their stance on whether seeking permission of the court trying the infringement suit was necessary before filing a cancellation action before the IPAB. The Delhi High Court, in a momentous decision rendered this year, clarified that such an action by a party to a suit may be initiated without the prior permission from such court.
Keeping a Lawsuit in Abeyance by Filing a Cancellation Action
Although proceedings before the Civil Court and the IPAB can run parallel without one affecting the other, trademark law also provides the party to a suit seeking to rectify the other’s party trademark, the choice of having the suit stayed and kept in abeyance until the cancellation action is decided by the IPAB. For the suit to be stayed as such, however, such a party to the suit must demonstrate to the court trying the suit that a prima facie case in respect of the invalidity of the trademark exists. Keeping a suit in abeyance until the cancellation action is decided inevitably delays the trial of the suit.
Even though the suit may be stayed until the decision in the cancellation action is rendered by the IPAB, under the Indian trademark law, the court trying the suit can still pass interim orders, including injunctions, during the period of the stay of the suit. Therefore, the motion to keep the suit in abeyance, owing to a party opting for a cancellation action, plays only a limited role in stalling the trial of the suit.
There may be also situations where a registered trademark owner sues another registered trademark owner for infringement, or a Defendant’s trademark matures to registration during the pendency of the suit. In all practicality, filing a cancellation action against the Defendant’s registration becomes inevitable in such cases. Typically, in situations such as these, where one registered owner is suing another registered owner, the court before which the suit is filed will suspend further action in the suit until the cancellation action is decided. Thus, such a suit cannot proceed independently of a cancellation action.
Extent to which a Successful Cancellation Action serves as a Defense to a Lawsuit
Succeeding in a cancellation action necessarily means that the once-registered mark is annulled from the Trade Marks Register. Thus, insofar as the suit is based on the ground of trademark infringement, success in a cancellation action is a complete defense. Having said that, it is pertinent to mention that the succeeding in a cancellation action may not be a complete defense to the suit as a whole, in as much as the suit may be based on the additional ground of passing-off. Trademark infringement suits in India are, more often than not, accompanied by the common law ground of passing-off. Thus, even if the Defendant succeeds in annulling the Plaintiff’s registered trademark(s), the Plaintiff may still be able to succeed in the suit based on the passing-off ground.
A trademark cancellation action may well be an effective defense to the claim of trademark infringement in a law suit. It, however, has no bearing on the claim of passing-off, and is to that extent, merely a limited defense.