Will a trademark invalidity plea in response to an interim application count for Section 124?

The Madras High Court was recently called upon to decide whether the word ‘plea’ used in Section 124 would be limited to a plea in the written statement. A case before the Delhi High Court had earlier held that Section 124 stay to file a trademark rectification petition would be possible only if a plea for invalidity is made in the written statement.

The trademark in question was ‘Varam’ for medical and healthcare services. The plaintiff in the case acquired a registration over the trademark in class 44, and filed an infringement suit. It also filed an interim application asking the Court to injunct the defendant from using the ‘Varam’ mark while the case was pending. The defendant filed a counter affidavit against the interim application in which it took a plea of plaintiff’s trademark invalidity based on prior use. The Single Judge agreed with the defendant and refused the interim injunction, which was later upheld by the Division Bench.

However, after that, the defendant failed to meet the 120 day timeline for filing the written statement. As a result, the opportunity to file a written statement stood forfeited. The defendant had however filed an application under Section 124 seeking a stay of the suit to enable it to file a rectification petition. The question before the Court therefore was whether the suit can be stayed based on the plea of invalidity in the counter affidavit.

After reviewing Section 124 and facts of the case, the Madras High Court held that the word ‘plea’ in Section 124 is not limited to a plea in the written statement. As per the Court, this plea can form part of pleadings and submissions in interim applications and related counter affidavits as well. The Court came to this conclusion primarily based on the fact that Section 124 is a right given under the statute, and because the Section does not specify that the plea has to be made in the written statement. The Court differentiated between a written statement being filed, a plea of invalidity not being taken within it, and a written statement being forfeited due to stringent timelines. In the second situation, the Court observed that the right to file for rectification of a trademark would not be lost as long as the plea exists in other documents filed before the Court.

Citation: VARAMM Healthcare Private Limited vs MGM Healthcare Private Limited, Madras High Court, 19th February, 2024, Application Nos.2028 & 2029 of 2023 in C.S.(Comm.Div.)No.2 of 2023

Reviewed and verified by Ms. Naika Salaria, Trademark & Copyright Team, BananaIP Counsels.



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