Smart strategies to protect your marks inside and outside the courts. Vandana Chatlani reports

Last July, the Supreme Court observed “a disturbing trend” of intellectual property (IP) disputes failing to reach the disposal stage due to lengthy interim orders. The Supreme Court’s remarks were sparked by Delhi High Court’s 50-page interim order in AZ Tech India v Intex Technologies (India) & Anr, which it said appeared to be “virtually a decision on merits of the suit”.

“We wonder whether the high court has thought it proper to write such an exhaustive judgment only because of acceptance of the fact that the interim orders in intellectual property rights matters in Delhi High Court would govern the parties for a long duration of time and disposal of the main suit is a far cry,” observed Justices Ranjan Gogoi and Navin Sinha.

“Decisions that run over 50 pages are expected to reckon not only a thorough analysis of evidence but also offer, at the very least, some finality of an outcome,” says Sujata Chaudhri, the founder of Sujata Chaudhri IP Attorneys. “While granting interim injunctions, courts are expected to take only a first impression view on the merits of the case and not delve into a detailed analysis of evidence.”

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Determined to crack down on this culture of delay, the Supreme Court directed Delhi High Court’s registrar-general to report back with the total number of pending IP lawsuits, informing it of the stage of each suit and the period for which injunction and interim orders were issued. The goal was to ensure the speedy disposal of IP disputes.

“The Supreme Court … addressed special areas that contributed most to lawsuits being delayed in the lower courts,” says Vaishali Mittal, a partner at Anand and Anand in Delhi. “For example, it identified trial proceedings and final hearing stages as those more responsible for delaying the life of a lawsuit [and so] … sought very specific data on Delhi High Court’s treatment of lawsuits during these stages.”

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Jolted into action, Delhi High Court recently amended its rules and the Delhi High Court (Original Side) Rules, 2018, came into effect on 1 March. “These rules have brought about comprehensive changes in the governing procedure of suits filed under the original jurisdiction of Delhi High Court, all aimed at expeditious disposal of the suits,” says Nirupam Lodha, a partner at Luthra & Luthra in Delhi.

Some of the key changes include:

  1. Stricter timelines for completion of pleadings and the stipulation that framing of issues, which takes place after completion of pleadings and admission/denial of documents, should not be delayed on account of pendency of interim applications;
  2. Speeding up the progress of trial by allowing parties to record evidence in premises outside Delhi High Court;
  3. Allotting parties a fixed time to argue their cases, keeping in mind other matters listed for hearing in a given day;
  4. Granting the court power to dispose of a suit, once issues are framed, if it is satisfied that no further argument or evidence is required for a decision in the suit;
  5. The introduction of rules stating that adjournments will be the exception rather than the norm, with consent of parties considered insufficient grounds for an adjournment; and
  6. Imposition of heavy costs upon a party whose actions cause a delay in the proceeding of suits.

The statute has also made amendments to civil procedural law. As Sudeep Chatterjee, a Delhi-based partner at Singh & Singh, explains, the amended order XV-A of the Code of Civil Procedure, 1908, requires the court to conduct a case management hearing within four weeks from the date on which issues are framed. “The case management hearing sets a timetable for trial as well as for the final hearing, thus speeding up the disposal rate of trademark suits,” says Chatterjee.

This new framework offers a starting point for oiling other cogs within the court system by creating a benchmark so that a model for the disposal of civil suits may be replicated across the rest of the country.

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QUICK TIPS FOR TRADEMARK OWNERS

Sudeep Chatterjee, partner, Singh & Singh: Conduct a proper search of the mark. Most agents do a “word” search. However, many times a “phonetic” search reveals a large number of marks closer to a mark that you may have intended to use.

Suhrita Majumdar, trademark attorney, S Majumdar & Co: Register and use your trademark in India. You can obtain registration in less than 10 months. If you do not use your trademark within five years, it will be cancelled owing to non-use.

Rajesh Ramanathan, partner, Factum Law: Be proactive; keep monitoring by using watch services and take immediate steps to initiate action against infringers to nip it in the bud even if they are small players. Prius failed on account of delays.

Manisha Singh, partner, LexOrbis: If you have knowledge of infringing use, start with an on-the-ground investigation to identify the target businesses and all its subsidiaries, agents, etc. It is common practice in India to engage a private investigator to uncover the nature and extent of passing off/infringement. Gather and file all the relevant evidence along with the complaint, as this can play a vital role in the determination of proceedings.

Nirupam Lodha, partner, Luthra & Luthra: Include strong contractual provisions in any agreements entered into with third parties (including distributers, retailers, etc.) who will be using your trademark. Such provisions could include an obligation on the concerned party to refrain from using and applying for registration of a trademark that is identical or similar to yours.

Shiraz Patodia, senior partner, Dua Associates: Make use of the IPR (Imported Goods) Enforcement Rules, 2007, in conjunction with the Customs Act, which allows rights holders to register their IP with the customs authorities to restrain and combat the import of infringing products.

Anshul Sunil Saurastri, associate, Krishna & Saurastri: Disputes relating to licensed marks and franchised businesses are rising and therefore it is important to be careful while drafting clauses relating to dispute resolution, governing law and jurisdiction in such businesses to avoid undesirable scenarios.

Rajendra Kumar, senior partner and head of trademarks practice, K&S Partners: Wherever possible, try and file actions before the high courts of Delhi, Mumbai, Kolkata and Chennai, as they exercise original jurisdiction in IP matters and are well conversant with IP laws. If the defendant is based in a remote jurisdiction where courts are generally not conversant with IP laws, issuing a desist letter and negotiating a settlement is a better option than filing a court action.

Sujata Chaudhri, founder, Sujata Chaudhri IP Attorneys: The importance of putting the infringing party on notice of your trademark rights shortly after you learn of them cannot be emphasized enough. It is also good practice to always send a cease and desist letter, as judges tend to look favourably upon parties that try to settle a matter before coming to court.

Vaibhav Vutts, partner, Vutts & Associates: In IP matters, use the provision for summary judgment under order 13A of the Civil Procedure Code as leading evidence, cross-examination and final hearing are not required. Summary judgments are also useful as the court has the powers to grant damages.

Vaishali Mittal, partner, Anand and Anand: While filing a claim in court and in the run-up to trial, a litigant must calculate the damages that it actually suffered at the hands of the defendant, otherwise they risk walking away without any damages being awarded. You can showcase actual damages through the defendant’s sales and revenues based on the infringing trademark, your own lost profits, or loss of market share as a result of counterfeiting or infringement.

 

The appellate court’s purview