Delhi Court Frames Invalidity Issue, Allows Challenge to ‘5 STAR’ Trademark Under Section 124

Delhi Court Frames Invalidity Issue, Allows Challenge to ‘5 STAR’ Trademark Under Section 124

Introduction

A Delhi District Court has permitted herbal hair product manufacturer Izuk Impex to challenge the validity of the “5 STAR” trademark owned by Five Star Health Care LLP, holding that the objection to the mark is prima facie tenable. The Court formally framed an issue on trademark invalidity and stayed the infringement suit to enable rectification proceedings.

Factual Background

Izuk Impex instituted a trademark infringement suit alleging that Five Star Health Care had copied its “Moon Star” trademark and allied brand elements. In defence, Five Star relied on its registration for the “5 STAR” mark. Izuk Impex disputed the legality of that registration, contending that the mark was vulnerable to cancellation and could not be relied upon to defeat the infringement claim.

Procedural Background

Invoking Section 124 of the Trade Marks Act, 1999, Izuk Impex sought framing of an issue on the validity of the “5 STAR” trademark and a stay of the infringement proceedings pending rectification. Five Star opposed the request, arguing that Izuk Impex had earlier withdrawn cancellation petitions and was barred from re-agitating the issue, besides alleging inordinate delay of nearly eight years.

Issues

1. Whether Izuk Impex has raised a prima facie tenable challenge to the validity of the “5 STAR” trademark under Section 124 of the Trade Marks Act.

2. Whether the prior withdrawal of cancellation petitions or alleged delay bars Izuk Impex from raising the invalidity plea in the infringement suit.

Contentions of the Parties

Izuk Impex contended that Five Star’s reliance on registration necessarily opened the door to an invalidity challenge and that Section 124 does not prescribe any limitation period for raising such a plea in an infringement action. It further argued that its earlier withdrawal was expressly “without prejudice.”

Five Star Health Care argued that the withdrawal of earlier cancellation petitions amounted to abandonment of the challenge and that the long delay disentitled Izuk Impex from reopening the issue.

Reasoning and Analysis

The Court rejected Five Star’s objections, noting that the Delhi High Court had permitted Izuk Impex to withdraw its earlier cancellation petitions without prejudice, thereby preserving its right to challenge the mark subsequently. The Court further held that Section 124 of the Trade Marks Act does not impose any limitation period for raising an invalidity plea once a defendant relies on registration in an infringement suit.

Finding that Izuk Impex’s challenge to the “5 STAR” mark was prima facie credible, the Court concluded that the statutory threshold for framing an issue on validity stood satisfied.

Decision

The District Judge Pritam Singh allowed Izuk Impex’s application, formally framed an issue on whether the “5 STAR” trademark registrations are liable to be cancelled, and stayed the infringement proceedings for three months to enable Izuk Impex to approach the High Court for rectification. The matter will proceed further after the rectification process is initiated.

In this case the plaintiff was represented by Mr. Arpit Singh, Advocate. Meanwhile the defendant was represented by Mr. Mohona Sarkar, Advocate.