Court’s decision
The Madras High Court allowed a rectification petition and directed the removal, expungement, and cancellation of a registered trademark from the Trademark Register. The Court held that the registration of the impugned trademark could not be sustained when it had been obtained after a judicial compromise decree that expressly required the respondent to abandon the mark.
The Court found that the registration was secured by suppressing material facts relating to prior litigation and a binding compromise decree. Consequently, the Registrar of Trademarks was directed to forthwith remove the impugned trademark bearing the relevant certificate and trademark numbers from the register.
Facts
The Petitioner is a limited liability partnership engaged in the restaurant business and is the successor-in-interest to earlier entities that had established and operated vegetarian restaurants under the name “Sangeetha” for several decades. Over time, multiple trademarks associated with the brand, including word marks and device marks, were registered in favour of the Petitioner.
The Petitioner alleged that the first Respondent adopted a deceptively similar trade name by adding the letter “M” to the word “Sangeetha” and operating a restaurant under the name “Sangeetham House of Veg,” along with a logo resembling the Petitioner’s registered device mark. This led to litigation before the High Court seeking injunctive relief.
Issues
The principal issue before the Court was whether a trademark registration obtained by the Respondent could survive when it was secured after a compromise decree in which the Respondent had expressly agreed to abandon the impugned mark.
A related issue was whether suppression of material facts regarding prior court proceedings and a binding compromise decree constituted sufficient ground for rectification and cancellation of a registered trademark under the Trade Marks Act, 1999.
Petitioner’s Arguments
The Petitioner contended that the Respondent had deliberately adopted a deceptively similar mark with the intention of passing off its services as those of the Petitioner. It was argued that the Respondent had agreed, through a joint compromise memo recorded by the High Court, to change the restaurant name and discontinue use of the impugned mark.
The Petitioner submitted that despite the compromise decree, the Respondent surreptitiously obtained registration of the same mark by suppressing the existence of the earlier suit and decree before the Trademark Registry. This, according to the Petitioner, rendered the registration illegal and liable to be cancelled.
Respondent’s Arguments
The Respondent argued that it had acted bona fide and had applied for trademark registration prior to the compromise decree. It was contended that the Trademark Registry had granted registration only after conducting due verification, indicating that there was no deceptive similarity between the marks.
The Respondent further submitted that it had closed the restaurant operating under the impugned name and was no longer using the trademark. According to the Respondent, cancellation of the trademark was unnecessary, as the business under the disputed name had already ceased.
Analysis of the law
The Court examined the scope of rectification proceedings under Sections 47 and 57 of the Trade Marks Act, 1999. These provisions empower the High Court to remove or cancel a registered trademark where the entry has been wrongly made or wrongly remains on the register.
The Court emphasised that trademark registration is not immune from judicial scrutiny, particularly where the registration has been obtained by suppressing material facts. A registration that undermines or contradicts a binding judicial decree cannot be allowed to subsist, as it would defeat the administration of justice and the integrity of the trademark system.
Precedent Analysis
While the judgment did not rely on external precedents, it applied settled principles of trademark law that equitable conduct is fundamental to maintaining statutory rights. The Court’s reasoning aligns with established jurisprudence that fraud, suppression, or misrepresentation vitiates even otherwise valid statutory registrations.
The decision reinforces the principle that compromise decrees passed by courts carry binding force and cannot be circumvented indirectly by approaching statutory authorities without full disclosure of material facts.
Court’s Reasoning
The Court found that a joint compromise memo had been entered into between the parties and that the High Court had decreed the earlier suit based on the Respondent’s undertaking to abandon the impugned mark and adopt a new trade name. Despite this, the Respondent proceeded to secure trademark registration of the very same mark.
The Court held that such registration was obtained by suppressing the existence of the compromise decree. Once a party has undertaken before a court to discontinue use of a mark, it cannot retain statutory rights over that mark. On this reasoning, the Court ordered rectification of the Trademark Register.
Conclusion
The Madras High Court conclusively held that the impugned trademark registration could not stand in light of the binding compromise decree and the suppression of material facts before the Trademark Registry. The Court allowed the rectification petition in full.
The Registrar of Trademarks was directed to forthwith remove, expunge, and cancel the impugned trademark from the register, thereby restoring the integrity of the trademark register and enforcing judicial discipline.
Implications
This judgment sends a strong message that trademark registrations obtained in violation of court orders or compromise decrees will not be protected. It underscores that statutory trademark rights are subordinate to judicial determinations and equitable conduct.
The ruling is particularly significant for trademark litigation involving settlement agreements, as it clarifies that parties cannot resile from court-recorded undertakings by quietly securing registrations behind the scenes.