Recently, a division bench of the Delhi High Court set-aside the decision of the single judge in Sana Herbals Pvt. Ltd. v. Mohsin Dehlvi [2022 SCC On Line Del 4482] (Sana Herbals) and held that the obligation to stay the proceedings in a suit for infringement, pending the outcome of a rectification petition, is mandatory and does not change post the abolition of the Intellectual Property Appellate Board (IPAB).
In our earlier post on Mr. Amrish Aggarwal, trading as M/s Mahalaxi Product v. M/s Venus Home Appliances Pvt. Ltd. & Anr., we had reported that a judge of the Delhi High Court, sitting singly, had referred the issue for consideration to a two-judge bench as to whether the view taken in Sana Herbals that post the abolition of the IPAB, there is no requirement of staying a civil suit during the pendency of the rectification petition, can sustain.
Counsels, including the Petitioner/Defendant (“Mahalaxmi”) and the Respondent/Defendant
(“Venus”) and other members of the bar assisting the court made substantial submissions on this legal issue. The court also extensively perused all past and present provisions relating to the stay of civil suits, pending a rectification petition and framing of issues, after being prima facie satisfied as to tenability of the challenge to a registered mark.
Placing reliance on the decision of a two-judge bench in Puma Stationer P. Ltd. v. Hindustan Pencil Ltd [(2010) 43 PTC 479] and the seminal decision of the Supreme Court in Patel Field Marshal v. P.M. Diesels [(2018) 2 SCC 112], the court held that the law necessities the stay of suit proceedings pending the outcome of a rectification proceeding. The court observed that this position further finds strength by the binding nature of the outcome of such rectification petition on the suit court.
Additionally, the assumption that a suit as well as the rectification petition would necessarily be come to be filed before the same High Court and can always be clubbed and tried together is incorrect and misses several other circumstances, obviating any option to club the proceedings together.
For the above said reasons, the court answered the reference in negative and set aside the decision of Sana Herbals as being incorrect to the extent it held that there is no need to stay proceedings in a civil suit pending outcome of a rectification petition owing to the abolition of IPAB.
Mr. Amrish Aggarwal, trading as M/s Mahalaxmi Product v. M/s Venus Home Appliances Pvt. Ltd. & Anr. [C.O.(COMM.IPD-TM) – 258/2022], Order dt. 17 May 2024