Indian trademark act

Section 9 - The Registrar shall not require as a condition for determining

whether a trade mark is a well-known trade mark, any of the following,
namely----
(i) that the trade mark has been used in India: (ii) that the trade mark has been
registered: (iii) that the application for registration of the trade mark has been
filed in India: (iv) that the trade mark--- (a) is well-known in : or (b) has been
registered in; or (c) in respect of which an application for registration has been
filed in. any jurisdiction other than India: or (v) that the trade mark is well-
known to the public at large in India.
Section 11 - Registration in the case of honest concurrent use. etc.
Section 21 - Opposition to registration
Section 27- No action for infringement of unregistered trade mark
Section 29 - Infringement of registered trademarks. Infringement of registered
trademarks.
Section 47 - Removal from register and imposition of limitations on ground of
non-use
Section 57- Power to cancel or vary registration and to rectify the register.
 
In a Civil Suit proceeding pertaining to Intellectual Property Right in India,
whenever matter is listed before the Joint Registrar or Court for purpose of
evidence of the parties, there is normal tendency to summon the registrar of
trademark under Order 16 Rule 1 and 2 CPC in order to prove the registered
trademark of the parties or orders passed in relation to a trade mark application

Section 76 in The Indian Evidence Act, 1872

“76. Certified copies of public documents
Explanation. Any officer who, by the ordinary course of official duty, is
authorized to deliver such copies, shall be deemed to have the custody of such
documents within the meaning of this section.�

By virtue of said provision, it is submitted that mere filing the certified copies
of the documents or orders pertaining to Trade Marks in a Suit proceeding is
sufficient and Registrar of Trade Marks is not required to be summoned.
In the case of Nandhini Deluxe (\"Appellant\") vs. Karnataka Co- Operative
Milk Producers FederationLtd (\"Respondent\")[1], the Supreme Court of India
(\"SC\") whilst setting aside the order of Karnataka High Court (\"HC\") and
Intellectual Property Appellate Board (\"IPAB\"), held that the proprietor of a
trademark cannot enjoy monopoly over the entire class of goods particularly,
when the proprietor is not using the said trademark in respect of certain goods
falling under the same class

The Judgement’s Impact on Businesses

This judgment can either be a boon or curse for a particular business, depending
on how their trademark is currently poised. If the business’ trademark is facing
opposition from a registered trademark in the same class, but for a different set
of goods, then this judgment may come to their rescue provided they meet the
other criteria for e.g. distinctiveness, different trade circles, etc. Similarly, a
registered Trademark cannot oppose the registration of other phonetically
similar trademark, merely because it is in the same class as its Trademark.

Mere similarity of words would now be inadequate for proving infringement;

registration of a mark in one class would give no assurance that similar marks
cannot be registered in the same class for different goods/services.  

Notably, earlier this year, the full bench of the Bombay High Court in Cipla
Limited vs Cipla Industries Pvt Ltd[3] has held that mere use of a well-known
mark as a part of a corporate name in respect of a business relating to goods/
services for which the mark is not registered would not constitute infringement.

The judgement in Nandhini Deluxe also makes it clear that no person can have
exclusive rights or monopoly over the entire class of goods, especially when the
trademark is not being used with respect to all the goods falling under the said
class. The decision clearly reads that two visually distinct and different marks
cannot be called deceptively similar, when they are being used for different
goods.

Reasons why the Judgement may set a precedent for future legal matters

Generally, it has been observed, the use of phonetically similar trademarks in

the same class has not been readily accepted by the Registry.

This judgment will come as a relief to the traders, businessmen who have been
in business for long and have similar trademarks to those of the already existing
registered trademarks albeit in the same class, but for different goods

Order 39 of CPC – Temporary injunctions and interlocutory orders

Section 151 of CPC – Saving of inherent powers of court

Vishnudas Trading Company v. Vazir Sultan, 1996 SCALE (5) 267

Jayanta Lamps, on its part relied on the case of Vishnudas Trading v Vazir
Sultan Tobacco Co. Ltd, where the Supreme Court had held that the classes
mentioned in the fourth schedule to the Rules framed under the Trade and
Merchandise Marks Act, 1958 may consist of goods or articles which could be
separately identified and all goods bunched in a class were not goods of the
same description as commonly understood in the trade.

Is prior use of a trademark an absolute defence

Prior use even if in a particular locality is a good defence in an infringement suit
for trademark. A person with prior use of the mark is given preference .The
Trademarks Act does not say that prior user of a mark has to demonstrate
considerable sales. What is relevant is prior use supported by clear evidence. So
even when prior use is limited to a particular locality it is taken as a serious
defence by courts
Prior use in a particular locality is a defence under Section 11(3) TMA. The
burden is on the defendant to show that, prior to either the use by the trade
mark owner or the date when the owner filed to register the mark, the
defendant had itself se- cured unregistered or passing off rights in the mark
Exide Industries Limited vs. Exide Corporation, U.S.A. & Ors.

The dispute dates back to 1997 when the US based Company ‘Exide
Technologies’ entered the Indian market post Liberalisation, where Indian
company ‘Exide Industries’ was already present over the decades in the local
market selling automobile batteries under the trademark “EXIDE”. As soon as
the US based company started its operation in India, Indian company “Exide
Industries” filed a suit for infringement of trademark in Delhi High Court. After
a significantly long and much converse legal conflict, the Court in 2012
restrained Exide Technologies from using “Exide” trademark in India. Exide
Technologies further filed an appeal to Division Bench against the judgement of
2012, which was though dismissed but the Division Bench held that there was
neither infringement nor passing off done by Exide Technologies as both the
commercial ventures were genuine users of the mark. Further to this decision,
Exide Industries filed an appeal before the Hon’ble Supreme Court, which was
disposed off by the court, as the parties to the dispute opted for an out of court
settlement. The foremost dispute of the case was as to who is the real owner of
the mark EXIDE.
The case is important as it includes the aspect of prior-use of identical
trademark by two commercial entities and its legitimate ownership. The case
involves a significant concept of trademark law according to which the prior use
and adoption of trademark show distinctiveness of the trademark on account of
sale of the goods in market which makes the seller, owner of the trademark. The
Delhi High Court single judge held that the trans-border use of the trademark by
the registered owner of a mark in a particular jurisdiction does not make him the
owner in another jurisdiction where the similar mark is in simultaneous use by
other local registered proprietors with proven prior use of that trademark. But
subsequently the Division Bench declared the judgement to be impugned and
thus held that the trans-national use of the trademark is one of the significant
aspects to look for the ownership of the trademark and also the goodwill of the
trademark continues to be with the assignor of the trademark even if it is
assigned to some other company for use in another jurisdiction.
The Delhi High Court in 2012 through Valmiki Mehta, J. restrained Exide US
from using the Exide mark in India and held the plaintiff as the legitimate user
and owner of the mark in India due to its prior use by plaintiff. Both,
infringement and passing off by US Company Exide Technologies were
confirmed by the court. The Defendant’s plea of non-use of trademark in India
due to special circumstances was also rejected as Court observed that the
Defendant failed to establish any special circumstances.
However, the case came up as an appeal to the Division Bench of Delhi High
Court which considered both the issues, the prior use of the trademark by Exide
Industries and whether Exide Technologies is liable for the infringement and
passing off. Relying on the landmark Supreme Court judgement like Cadila
Healthcare, Dyechem v Cadbury and Durga Das Sharma v Navratan
Pharmaceutical laboratories, the court inferred that passing off and infringement
are both different concepts wherein, an impression of deception or confusion
relating to the manufacture or origin of the goods is created in the minds of the
buyers. Court observed that the trademark ‘Exide’ used by both the parties is
identical, and both were genuine users of the mark. 
The judgement of the court was quite inventive and only one of its kind wherein
the court outlined that US based Company was kept out of the Indian market
due to trade restrictions but however on record of evidence Exide Batteries
manufactured by Exide US was substantially known in India as well. Another
point that the Court illustrated was that though, through an assignment deed, the
mark was assigned to Exide India, yet the goodwill in the mark was retained by
Exide US because the agreement did not specifically transfer the goodwill.
Thus, the transnational reputation was highlighted and the court allowed Exide
US to be in possession of the goodwill of the trademark ‘EXIDE’ despite of
transfer of rights of ownership of the trademark. At the end, the court confirmed
that there was no circumstance of passing off or infringement by the Exide US
as it had legitimate rights to the mark. The court termed the use of the mark by
Exide Technologies as “bona fide and legitimately concurrent”. Moreover, the
counterclaim against Exide India was not maintainable since they were the
registered owners of the mark in India.
The order of the division bench was further stayed by the Supreme Court after
an appeal was filed by Exide Industries. The apex court restrained the Exide
Technologies (defendant) from using the mark until the final adjudication of the
matter but the parties before the decision of the court brought about an out of
court settlement.
Registration and Defence of Prior Use

Section 34 of the Act stipulates that a registered user or proprietor cannot

interfere with or restrain a third person from using a mark identical or
resembling the registered mark which the third party has continuously used
from a date prior to the registered mark user's first use of the mark or from the
date of registration, whichever is earlier. The provision in effect is an overriding
provision preventing a proprietor or registered user of a trademark from
interfering with the honest use of an identical trademark or a mark nearly
resembling with the registered mark.

The fundamental requirements under the provision are – (1) the use of a mark
identical or nearly resembling the registered mark, by a third person, must be in
relation to the goods and services for which the first mentioned mark is
registered; (2) the use must be a continuous use of the trademark; (3) the
trademark must be used by the proprietor in order to avail the protection; (4) the
mark must have been used from a date prior to the use of the registered
trademark or the date of registration whichever is earlier.

'Use' under Section 34 of the Act mandates notion of continuous use. It is a test
of a high order fulfilling the requirement of a commercially continuous use of
the mark in relation to goods and services. The expression "continuously used
that trade mark" has the specific connotation of vesting of a right in a person
when he puts his goods with the mark in the market. A continuous use being
distinct from a stray, isolated and a disjointed use, also establishes that a mere
adoption of a mark is not sufficient.

Hence, section 34 thus provides for specific requirements which relate to (i) the
nature of goods or services in relation to which the mark is used; (ii) the nature
and character of use; (iii) the person who must use; and (iv) the date from which
the mark should have been used.

Royal Orchid Hotels Limited is prevented by a court's order to name its new
hotels 'The Orchid'. Bombay High Court, in an interim order, has restrained
Bangalore based Royal Orchid Hotels from using the trademark "The Orchid"
on its new hotels or line of business, however, the court has allowed the Royal
Orchid Hotels to continue using the mark on its existing hotel properties. The
High Court order follows a suit (Kamat Hotels (India) Limited versus Royal
Orchid Hotels Limited & Anr. Notice of Motion No. 2552 of 2008 in Suit No.
2224 of 2008; High Court of Bombay)filed by Mumbai based Kamat Hotels
(India) Ltd (plaintiff) against Royal Orchid Hotels (defendant) alleging
infringement and passing off its trademark "The Orchid". Kamat Hotels is the
owner of the registered trademark "The Orchid" used upon and in relation to its
five star hotel continuously, as claimed, since 1997.

The Court prima facie arrived at the conclusion that Kamat Hotels is the
proprietor of the mark "Orchid" coupled with the device of a flower and that the
Royal Orchid Hotel's use of its mark infringes Kamat Hotel's mark. Further, the
Court held categorically that Royal Orchid Hotel's failure in showing any, even
prima facie, cogent material supporting continuous use of the mark "Orchid"
prior to Kamat Hotel's use is an unsuccessful attempt to establish defence under
sec 34 of the Act. However, the Court, led by the consideration weighing in this
case that Royal Orchid Hotels had already commenced business by the date on
which the proceedings were instituted, moulded the relief in terms of injunction
granted not operational in respect of the hotels and business already commenced
prior to the date of the order. The interlocutory injunction restrained the Royal
Orchid Hotels from any infringing activity in respect of any new hotel or line of
business.

It is now well settled that the Trade Marks Act, 1999, has territorial operation
within the territory of India. Whereas, the rapid expansion of the Indian
economy and the fact which cannot be denies is that the Indian economy is an
ever growing effective as well as efficient platform for various well known and
other foreign brands which ensures huge returns at lower investment. Though
the Act has a territorial operation but the recognition of the right of a well
known trade marks having cross border reputation is already discussed and
fairly accepted by the Hon'ble Supreme Court in its landmark case of N.R.
Dongre and others versus Whirpool Corporation and others” reported as
1996 5 SCC 714.
However, when it comes to Section 34 and interpretation of the word prior use,
Indian courts have held that the prior use must be understood to refer to “use”
within the territory of India and not abroad. The Hon'ble High Court of Calcutta
in a case titled “Aktiebolaget Jonkpoing Vulcan versus V.S.V. Palancichamy
Nadar (reported as AIR 1969 Cal 43) while considering the provisions of the
Trade and Merchandise Marks Act, 1958 observed and held the similar view
while holding that the provisions of the Act must be understood to refer to use
within the territory of India and not abroad.
What comes out from the above is that the Trade Mark law is not extraterritorial
that use of trademark in foreign countries under foreign registration can be
“use” within the meaning of the Trade Marks Act. Moreover, the preamble of
the Act confined its operation to the territorial limits of India. Section 1(2) of
fg’/the Act extends it to the whole of India. All the above referred principles
makes it amply clear that the word “use” employed in Section 34 of the Act is
use within India. Therefore, if a proprietor of a trade mark set up a case of prior
use of outside India under Section 34, then such defence is of no avail to him.
In Kores (India) Ltd versus Whale Stationary Products Ltd. reported as
2008(36)PTC 463(Bom) the Plaintiff which was a Company incorporated in the
year 1936 in India filed a suit for infringement and passing off agaisnt the
Defendant therein i.e. a Company incorporated in Austria and selling products
in India through a dealer. The case of the Defendant was that it was set up in the
year 1887 (i.e. prior to the Plaintiff) outside India and later on the distribution
activities were expanded into Europe, Asia and Africa inculding in countries
like Spain, Mexico, Frnace, Austria, Netherlands, China and Romania among
other countries. The Defendant further claimed to be in the process of moving
an Application for rectification of the trade mark registered in the name of the
Plaintiff. The Defendant clearly established the prior use of the trade mark than
the Plaintiff though outside India. However, rejecting the contention and not
providing any benefit of savings provision stipulated in Section 34 the Court
held that the Section applies to a situation where a person has continously used
a trade mark from a date prior to the use of the registered trade mark in relation
to those goods or services by the proprietor of the mark prior to the date of
registration of the mark within the territory of India. The Court while noting the
absence of any record of prior use of the trade mark by the Defendant in the
territory of India held that the Defendant is not entitled to the protection of
savings provision under Section 34.

Taking a departure from the general rule in context of Section 34 the High
Court of Delhi through Hon'ble Justice Sanjiv Khanna (presently Judge of
Supreme Court) in Lowenbrau AG and Others versus Jagpin Breweries Ltd.
and Others (reported as 157(2009)DLT791) keeping in view the peculiar
facts and circumstances of the case took into consideration the prior use of the
trade mark by the Defendant outside India. In that case, both the companies i.e.
Plaintiff and Defendant were foreign companies and both of them were using
the trade mark all over the world and wanted to expand in India and in these
circumstances the position as it exists abroad and usage abroad were held to be
important in terms of Section 34 of the Act.

Prior use as a defence in a suit for passing off

In a suit for passing off, a mark claiming prior use is given the benefit over a
later user or prior registrant due to former’s earlier existence in the market. This
principle has been upheld in various cases of passing off in India. In the case
of Consolidated Foods Corporation v. Brandon and Co., Private Ltd, it was
observed that “Priority in adoption and use of a trade mark is superior to
priority in registration”.

1.2 Century Traders Vs. Roshan Lal Duggar Co.[7]

The High Court of Delhi in the instant case held that “Further, that in order to
succeed in an application for temporary injunction the appellant had to
establish user of the aforesaid mark prior in point of time than the impugned
user by the respondents. The registration of the said mark or similar mark prior
in point of time to user by the appellant is irrelevant in an action for passing off
and the mere presence of the mark in the register maintained by the trade mark
registry did not prove its user by the persons in whose names the mark was
registered and was irrelevant for the purposes of deciding the application for
interim injunction unless evidence had been led or was available of user of the
registered trade marks.”

1.3 L.D. Malhotra Industries Vs. Ropi Industries[8]

The High Court of Delhi observed that prior use of a distinctive mark will
acquire the right of property without considering extent of such use, “That a
trader acquires a right of property in a distinctive mark merely by using it upon
or in connection with his goods irrespective of the length of such user and the
extent of his trade. The trader who adopts such a mark is entitled to protection
directly, the article having assumed a vendible character is launched upon the
marker. Registration under the statute does not confer any new right to the
mark claimed or any greater rights than what already existed at common law
and at equity without registration.”

1. The general principle adopted to determine prima facie case in some of

the cases of passing off is through the "first past the post" principle.
Interpreting the judgement of Supreme Court of India in Milmet Oftho
 Industries vs. Allergan, the Delhi High Court in the case of Austin
Nicholas & Seagram vs. Arvind Behl, held:

"42. I am of the view that the decision of the Supreme Court in

Milmet is fully applicable to the facts of the present case and merely
being first past the post in India is not enough. The Plaintiffs were
first past the post worldwide and this is of crucial importance."

The length of user by the Defendant, the scale of user by the

Defendant, acquiescence by the Plaintiff, nature of the trade mark,
honesty in adoption of the mark, nature of the goods / services will
play significant role in the evaluation scale. If use of the mark by the
Defendant has been very large even though in a shorter period, it may
tilt the scale in favour of the Defendant even though he is a
subsequent user. When the use by the Defendant is much larger, it
would indicate lethargy or inaction or consent on the part of the
Plaintiff. Prior user is an important factor to start with but it cannot
be the sole factor in the determination process.

Defences of passing off

The field of activities of the parties are completely different – Dunlop vs
Dunlop

In passing off action it is seen who out of the plaintiff and the defendant prior
user of the trademark is. If the defendant is prior user, then he cannot be
injuncted from using the trademark even if the plaintiff is registered proprietor
of the trademark. In the Sensor Laboratories Limited Case480 the dispute
pertained to the trademark “Seflox”. As the defendant was prior user, interim
injunction was refused.
Bata vs pyarelal
More or less on similar allegations application for the grant of temporary injunction was
made and contested. The matter came up before the 1st Additional District Judge,
Meerut, who by his order dt. 24th Dec., 1983 held that for a passing off action it was not
necessary that the trade mark should necessarily be registered. Even if it was not
registered but had been extensively in use even earlier was sufficient to invoke 'passing
off action. However, the court below held that the only thing that the injured party had
to prove is that the mark used by the other party was so close either visually or
phonetically that the court comes to the conclusion that there was an imitation. In such
a case, it was not necessary for the plaintiff to establish that its right had been violated.
The court below observed that the trade mark 'Bata' of the plaintiff was not registered in
relation to the goods manufactured, sold and offered for sale by the defendants.
Further, since there was nothing on the record to establish that the plaintiff dealt in
manufacture and sale of mattresses, cushions and bus seats etc. and further since the
registered trade mark 'Bata' did not appear to be identical to the word 'Batafoam', the
question of passing off by the defendants did not arise in the case. The court further
opined that the plaintiff-Company had failed to establish a prima facie case for the grant
of temporary injunction and as such the question of balance of convenience and
irreparable loss did not arise for consideration. Consequently, the application for
temporary injunction was rejected.

Para 45 in BK engineering vs ubhi enterprises

Indian Arbitration Act 1996

It needs no gainsaying that the enactment of the Arbitration and Conciliation

(Amendment) Act, 2015 (Act) has brought about a sea-change in the independence
and impartiality requirements for arbitrators in India. The appointment of an arbitrator
is now subject to scrutiny under the detailed parameters that exist under the Fifth
and Seventh schedules of the Act.

What the Act had seemingly left untouched, however, was the power of a party
under an arbitration agreement to nominate the arbitrator in question, if the
agreement otherwise bestowed such a power upon the party concerned. The only
caveat was that the person so nominated by the party concerned would need to
confirm to the requirements of independence and impartiality as set out in the Act.[1]

Such a reservation of power seems unproblematic in cases where the agreement

provides for a three member arbitral tribunal, with each party appointing a nominee
arbitrator, and the presiding arbitrator being further chosen by the two nominee
arbitrators.

However, the situation is somewhat different in a contract which provides for

arbitration by a sole arbitrator to be nominated by one party to the agreement. There
has been certain, and not entirely misplaced, disquiet around the continuance of
such a power after the enactment of the Act, in as much as it preserves the
significant power granted to an interested party to the dispute to appoint an arbitrator
who on paper would seem to meet the requirements of independence and
impartiality.

The counter-argument, of course, is that such a power is expressly protected under

the principles of party autonomy which underlie arbitration and that Section 12 of the
Arbitration and Conciliation Act, 1996 is only concerned with the qualifications of the
person ultimately appointed and not with the process or mode of appointment.

In a recent judgment of a three judge bench of the Supreme Court in TRF Ltd. v.
Energo Engineering Projects Ltd. (Civil Appeal No. 5306 of 2017 decided on
03.07.2017), this very question has been considered, and far reaching findings have
been arrived at by the Apex Court. The controversy before the Court stemmed from
the appointment of an arbitrator by the Managing Director of one of the parties to the
arbitration agreement, who claimed to possess such a power by dint of the following
clause in the agreement:

“Unless otherwise provided, any dispute or difference between the parties in

connection with this agreement shall be referred to sole arbitration of the Managing
Director of Buyer or his nominee. Venue of arbitration shall be Delhi, and the
arbitration shall be conducted in English language.”

The decision of the High Court, which was under challenge before the Supreme
Court had endorsed the continuance of such a power of appointment post the
enactment of the Act. Before the Supreme Court, the appellant argued that the
arbitrator could not have been nominated by the Managing Director as the said
authority had been itself statutorily disqualified under the Act. The submission of the
respondent, on the other hand was that even though the Managing Director may be
disqualified to act as an arbitrator, however there was no consequential
extinguishment of the right to nominate an arbitrator who did not suffer any
disqualification under the Act.

After an exhaustive survey of the applicable law on the subject, the Supreme Court
held as under:

“57. In such a context, the fulcrum of the controversy would be, can an ineligible
arbitrator, like the Managing Director, nominate an arbitrator, who may be otherwise
eligible and a respectable person. As stated earlier, we are neither concerned with
the objectivity nor the individual respectability. We are only concerned with the
authority or the power of the Managing Director. By our analysis, we are obligated to
arrive at the conclusion that once the arbitrator has become ineligible by operation of
law, he cannot nominate another as an arbitrator. The arbitrator becomes ineligible
as per prescription contained in Section 12(5) of the Act.

It is inconceivable in law that person who is statutorily ineligible can nominate a

person. Needless to say, once the infrastructure collapses, the superstructure is
bound to collapse. One cannot have a building without the plinth. Or to put it
differently, once the identity of the Managing Director as the sole arbitrator is lost,
the power to nominate someone else as an arbitrator is obliterated. Therefore, the
view expressed by the High Court is not sustainable and we say so.”
The Supreme Court therefore extended the disqualification of the appointing
authority under the provisions of the Act, to his or her very power to nominate a
person even if the said person being nominated was not so disqualified to act as an
arbitrator. This is a significant and far-reaching finding which would impact the
interpretation of a large number of arbitration clauses in the country with similar
appointment provisions.

It requires to be noted that the clause in question before the Supreme Court provided
that the Managing Director would himself/herself act as an arbitrator or nominate
another person to do so. An argument could possibly be made that when the
arbitration agreement simpliciter provides the right to appoint to a designated
authority without simultaneously providing the right to such an authority to act as an
arbitrator, then in such cases such a power would continue to subsist despite the
aforesaid judgment of the Supreme Court. However, the judgment itself expressly
seems to confine any such continuation of the power of appointment only to
arbitration agreements where both parties can nominate their respective arbitrators.

[1] Reference in this regard may be made to the decision of the High Court of Delhi
in Virender Kumar Jain v. Grand Venezia Commercial Towers Pvt. Ltd. and
Anr. [Arb. P. No. 194/2016 decided on 3.10.2016] and the recent decision of the
High Court of Bombay in DBM Geotechnics & Constructions Pvt. Ltd. Vs. Bharat
Petroleum Corporation Ltd. MANU/MH/0977/2017.

IN THE SUPREME COURT OF INDIA AT NEW DELHI

Bharat Broadband Network Limited. v United Telecoms Limited
[C.A. No. 3973 of 2019]
Arising out of Special Leave Petition (Civil) No.1644 of 2018) dated: 16.04.2019

FACTS
The Appellant had floated a tender dated 05.08.2013 inviting bids for a turnkey project for
supply, installation, commissioning and maintenance of GPON equipment and solar power
equipment.

The Respondent was the successful L1 bidder for the tender and hence the Appellant issued
an Advance Purchase Order dated 30.09.2014.

The contractual relationship between the parties was governed by the Genaral

(Commercial) Conditions of Contract (hereinafter referred to as GCC) which contained an
Arbitration Clause.

Disputes arose between the parties and hence, by a letter dated 03.01.2017, the
Respondent invoked the Arbitration Clause in GCC and as per the said clause, called
upon the Appellant's Chairman to appoint an independent and impartial arbitrator for
adjudication of disputes between the parties.

Vide letter dated 17.01.2017, the Chairman and Managing Director of the Appellant, in terms
of the Arbitration Clause, nominated one Shri K.H. Khan as the sole arbitrator to adjudicate
and determine disputes between the parties.
On 03.07.2017 the Hon'ble Supreme Court in TRF Ltd. v. Energo Engineering Projects
Ltd. (2017) 8 SCC 377, held that since a Managing Director of a company which was one of
the parties to the Arbitration proceedings, was himself ineligible to act as the Arbitrator, such
ineligible person could not appoint an Arbitrator and any such Appointment would be null
and void.

In the light of above judgment, the Appellant, who had itself appointed Shri K.H. Khan as the
sole arbitrator, made a prayer before the sole Arbitrator that since he was de jure unable
to perform his function as Arbitrator, he should withdraw from the proceedings and allow the
parties to approach the High Court for Appointment of a substitute arbitrator in his place.

However, by an order dated 21.10.2017, Shri K.H. Khan, the sole arbitrator, rejected the
Appellant's prayer after hearing both the parties, without giving any reason thereof.

Hence, the Appellant filed a petition in the Hob'ble Delhi High Court, under Section 14 and
15 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'), to
substitute a new Arbitrator in the place of Shri K.H. Khan since he was de jure incapable of
acting as an Arbitrator.

The said petition was rejected vide order dated 22.11.2017 while stating that the person who
has appointed an Arbitrator is stopped from raising a plea that such an Arbitrator cannot be
appointed after participating in the proceedings.

Further, the Hon'ble Court also referred to the proviso to Section 12(5) of the Act and stated
that filing of statement of claim by the Appellant herein amounted to waiver of the
applicability of Section 12(5) of the Act.

Hence, the Appellant had filed the present Civil Appeal before the Hon'ble Supreme Court of
India against the impugned order of the Hon'ble Delhi High Court dated 22.11.2017.

The Hon'ble Court, in TRF Ltd. v. Energo Engineering Projects Ltd. (2017) 8 SCC 377,
held that an ineligible person could not himself appoint an Arbitrator since such an
appointment would be void ab initio. Further, it was also held that such an
appointment goes to the "eligibility", that is, the root of the matter, it would be void.

The appointment of the Arbitrator, in the present case is that of after the implementation of
the Arbitration and Conciliation (Amendment) Act, 2015. In the case of TRF Ltd. as well, the
appointment of the Arbitrator, which was non-est in law due to his incapacity to be appointed
as an Arbitrator in the said case, was after the said Amendment Act.

Hence, the Hon'ble Court observed that TRF Ltd. v. Energo Engineering Projects
Ltd. (2017) 8 SCC 377 would apply to the current case, thereby making the appointment of
the Arbitrator by the Managing Director of the Respondent herein, and therefore is liable to
be set aside and is void ab initio.

CONCLUDING VIEW

The Hon'ble Court held:

"We thus allow the appeals and set aside the impugned judgment. The mandate of
Shri Khan having terminated, as he has become de-jure unable to perform his
function as an arbitrator, the High Court may appoint a substitute arbitrator with the
consent of both the parties.
... ... ...

Since there was no order of stay, the arbitral proceedings continued even after the date of
the impugned judgment, i.e., 22.11.2017, and culminated in two awards dated 11.07.2018
and 12.07.2018. We have been informed that the aforesaid awards have been challenged
by the appellant by applications under Section 34 of the Act, in which certain interim orders
have been passed by the Single Judge of the High Court of Delhi. These awards, being
subject to the result of this petition, are set aside. Consequently, the appellant's Section 34
proceedings have been rendered infructuous. It will be open to the appellant to approach the
High Court of Delhi to reclaim the deposit amounts that have been made in pursuance of the
interim orders passed in the Section 34 petition filed in the High Court of Delhi."

JUDGMENTS RELIED UPON

The Hon'ble Court put reliance upon the following decisions in forming the view:

1. TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377.

2. HRD Corporation v. GAIL (India) Ltd., (2018) 12 SCC 471.
3. Voestalpine Schienen GmbH v. Delhi Metro Rail Corporation Ltd., (2017) 4 SCC
665

Conclusively, this judgment of the Apex Court has established that intention of the legislation
is only inclined toward the appointment of independent, fair and impartial arbitrators who can
conduct the Arbitration proceedings in all fairness and in consonance with the principles
of natural justice as well as the said Act, so that the object of the legislation always remains
paramount.
Indian Patent Act
Section 8

Provisions mandating the disclosure of such information are made under

Section 8 of the Indian Patent Act 1970[1], read with Rule 12 of the Indian
Patent Rules 2003.
As per Section 8(1) (a). The Applicant is required to provide ‘a statement
setting out detailed particulars of such application(s)’ in Form 3 as prescribed
under Rules 12(1) and 12(1A) of the Patent Rules. This formality must be
fulfilled either at the time of filing a patent application for the invention in India
or within the subsequent six months of such filing in India.
The Patent Act also makes provisions for apprising the Patent Office of new
foreign application. Section 8(1) (b) read with Rule 12(2) requires the applicant
to furnish information in respect to ‘any other application’ if any, as filed in
any other country. If such a foreign application is filed subsequent to the
application filing in India, the statements (in Form 3) in respect of such foreign
application should be filed within six months of the foreign application’s filing.
Section 8(2) read with Rule 12(3) provides for discretionary powers for the
Controller. In case the applicant is to ‘furnish details, as may be prescribed,
relating to the processing of the application in a country outside India’ as per a
requisition by the Controller[2], the applicant must do so under Form 3 within
six months of the said request.
Consequently, in this way, the Indian Patent Act, 1970 mandates that the
disclosure of information relating to a foreign application can be made in 3
distinct ways.
a. When a patent application is already filed in a foreign country for the same or
substantially same as the one seeking patent protection in India.
The statements in Form 3 in respect to such a foreign application should ideally
be filed together with the Indian patent application in India.
b. When Form 3 containing statements disclosing information in respect to
already existing applications in foreign countries could not be filed together
with the Indian patent application.
The statements in Form 3 with respect to such a foreign application must be
filed within the subsequent six months from filing the Indian patent application.
c. When a foreign application is filed after the lapse of six months from the
filing of the Indian patent application.
The statements disclosing information in Form 3 in respect to such foreign
application must be filed within the subsequent six months from the filing of
such foreign application.
*The time limits may be extended by a month at the discretion of the Controller.

After the requisite information as statements has been provided for in the
prescribed Form 3, to fulfill the aforementioned reasons (a) (b) and (c), there is
no stated requirement for resubmission of an updated Form 3, to merely update
changes in the status of the foreign patent applications which have been
previously disclosed. The change in the status can subsequently be shown in
any new application that may be filed at a later date to reflect a foreign
application in Form 3 which enumerates the previously disclosed foreign
applications.
In the previously decided Chemtura case, the Delhi High Court had ruled that
the requirement to disclose information regarding pending foreign applications
was a mandatory requirement under Section 8, and in case of failure to disclose
information under Section 8, a patent can be revoked as per the provisions of
Section 64(1)(m).
A changing trend is observed in the implementation of Section 8 from the
Chemtura judgement to Koninklijke Philips Vs Sukesh Behl case. Such a
dilution in the implementation of Section 8, bring a huge sigh of relief to patent
applicants/owners who find it challenging to comply with Section 8 and a
revocation threat even on extremely valid patents.
However, the fact that the word “may” is used in Section 64(1) itself indicates
the intention of the legislature that the power conferred there under is
discretionary. The mere fact that the requirement of furnishing information
about the corresponding foreign applications under Section 8(1) is mandatory,
in our opinion, is not the determinative factor of the legislative intent of Section
64(1). The language of Section 64(1) is plain and unambiguous and it clearly
confers discretion upon the authority/Court while exercising the power of
revocation.

The interpretation of the provisions of Section 64(1) as discretionary, does not

result in absurdity nor in any way effect the rigour of the mandatory
requirements under Section 8 of the Act. The revocation under Section 64(1)(m)
would follow only if the Court is of the view that the omission to furnish the
information was deliberate. It is ruled that a patentee’s non-compliance with
Section 8 of the Patent Act will not lead to an automatic revocation of its patent
under Section 64(1)(m) of the Act.”

Tata Chemicals vs. Hindustan Lever2

In this case the petitioner argued that the respondent had not filed the
International Preliminary Examination Report (IPER) and hence not full filled
the section 8 obligations. The Intellectual Property Appellate Board (IPAB)
held that the IPER is related to the processing of an application in country
outside India and the word processing is an all encompassing word, it would
take within it a series of actions to be taken in order to achieve a particular
result. Therefore the respondent is required to file the IPER in order to comply
with the requirements of section 8(2).

Fresenius Kabi Oncology Limited v. Glaxo Group Limited and The Controller
of Patents3

In this case Fresenius, the petitioner argued that the respondent Glaxo failed to
disclose information sought under section 8 (2) viz Korean patent application,
divisional applications in US, European, Australian, Canadian and New
Zealand, final denial of US application.

The IPAB noted that sections 8 of the Act can destroy a patent which is
otherwise patentable on the ground which has nothing to do with the invention.
As per the Board, section 8 must be carefully applied and it was never intended
to be a bonanza for all those who want an inconvenient patent removed.

The Board referred to the Ayyangar Committe Report, which states that:

"It would be of an advantage therefore if the applicant is required to state

whether he has made any application for a patent for the same or substantially
the same invention as in India in any foreign country or countries, the
objections, if any, raised by the Patent offices of such countries on the ground of
novelty or unpatentability or otherwise and the amendments directed to be made
or actually made to the specification or claims in the foreign country or
countries."

The Board specifically stated that Controllers cannot ignore the requirements of
Section 8 just because information relating to the corresponding foreign
applications is available on the Internet. In particular, the Board stated-
"For good reasons, S. 8 is there in the Act. The Controllers cannot ignore it and
condone the breach. The patentee cannot tell the Examiners, 'We are filing
applications nineteen to the dozen, compliance is very difficult, and in any case
there is the Super Kamadhenu, the Internet which will give you what you want.'
We cannot wish S.8 a relieved farewell. Tough for Inventors, but they must
comply with requirements of S. 8. When George Mallory was asked 'Why do
you want to climb Mount Everest?' he is supposed to have replied, 'Because it is
there.' To the question 'Why should we comply with S.8?' The answer is
'Because it is there.'

Referring to the present case the Board held that the divisional application
would be considered as "same or substantially the same application" and the
information regarding the same and amendments in the same would be an
information required to be submitted under section 8 of the Act.

Ajanta Pharma Limited v. Allergan Inc., Allergan India PVT. LTD4

Ajanta Pharma Limited filed a revocation petition action against Allergan's

patent arguing that the patent should be revoked for obviousness and for failing
to comply with the requirements set out under Section 8 of the Act.

In its decision, Board reminded the appellants and respondents that with respect
to Section 8 the following should be remembered:

1. Section 8 must be complied with.

2. Non compliance must be pleaded and accordingly proved that the lapse
was with respect to same or substantially same invention.
3. Documents related to the non compliance should be filed at the earliest,
otherwise cost should be imposed to belated filings.
4. Section 8 is introduced to facilitate examination, thus applicants must be
candid and fair.
5. Controller should not deal casually and must adhere to the law.
6. Patentee cannot say that the documents are available on the website nor
can the examiner condone the non disclosure on the same reason.
7. Section 8 is not a penalizing provision and the purpose of the law is to
provide obvious disclosure to the Patent Office.

Conclusion

Recently IPAB has revoked the patents for noncompliance with Section 8 (2).
Under Indian Patents Act, Section 8(2) has great importance from the filing of
Patent application till the grant of patent in India. This provision has the
obligation of filing information about corresponding foreign patent applications
in relation to the same or substantially the same invention. Noncompliance of
this provision is a valid ground for invalidation under pre-grant opposition,
post-grant opposition and revocation of a patent.

The purpose of submitting documents under Section 8 is to support the

examiner in examining the patent application. Indian Patent office should
ideally approach with clear supervision as to what is needed to be submitted and
when to comply with the prerequisites of Section 8. Applicant should diligently
scrutinize all the documents before submitting them to the patent office. We
would suggest that the applicant should not wait for issuance of First
examination report (FER) to comply with Section 8(2) but submit information
at regular intervals so that no details are unintentionally gone missing which
would otherwise offer a chance to an opponent to raise objections on granting
the patent in India.

Any irregularity in the compliance with Section 8 at the pre-grant stage when an
application is challenged in a pre-grant opposition is easier to cure by filing a
request with the Controller seeking condonation of the irregularity. Condoning
of an irregularity is within the discretion of the Controller.

A patent granted in breach of Section 8 is vulnerable to revocation in post-grant

opposition/revocation proceedings. However, discretion lies with the concerned
officer based on whether such breach was intentional or whether it was a mere
clerical and bonafide error.

In case an applicant misses out on any of the above mentioned deadline, he can
file a petition under Rule 137 of the Patent Rules, 2003 to condone the delay in
filing Form-3. However, the condonation depends on the discretion of the
Controller.

If the Applicant does not disclose the information required by Section 8 or

furnish information which is false to his knowledge then it can be a ground of

 Pre-grant Opposition under Section 25(1)(h) of the Patent Act, 1970; or

 Post-grant Opposition under Section 25(2)(h) of the Patent Act, 1970; or
 Revocation of Patent under Section 64(1) (m) of the Patent Act, 1970.

What is the Patent Cooperation Treaty (PCT)?

The PCT is an international treaty with more than 150 Contracting States which
are bound with certain formal requirements set out in the Treaty and
Regulations. The PCT makes it possible to seek patent protection for an
invention simultaneously in a large number of countries by filing a single
―international‖ patent application instead of filing several separate national or
regional patent applications however, granting of patents remains under the
control of the national or regional patent offices after the corresponding
―national phase‖ application has been filed and the national phase application
is assessed as per patent law of that jurisdiction. As per Indian Patent Act 1970
as amended and the Patents Rules 2003 as amended by (amendment) rules
2016, any PCT international application may be filed designating India and it
shall deemed to be an application if the corresponding national phase
application has also been filed.