Trademark Registrations obtained post institution of suit

Introduction

The Delhi High Court has once again underscored that courts must look at real-world developments even at the appellate stage when deciding trademark disputes. In this order, the court allowed Flipkart to place its fresh trademark registrations containing the word “MarQ” on record after the appeal arguments were over and judgment had been reserved. At the same time, the court strongly criticised the delay and imposed a substantial cost on Flipkart, sending a clear message that while justice requires considering important later events, parties cannot be careless with timelines.

Factual Background

Marc Enterprises had obtained an interim injunction from the trial court stopping Flipkart from using the mark “MarQ” on its products. Flipkart challenged that order in appeal before the Delhi High Court. While the appeal was pending and after final arguments were heard with judgment reserved, Flipkart secured official registration of two marks – one “Flipkart MarQ” and the other “MarQ by Flipkart”. These registrations gave Flipkart statutory rights over marks that included the very word it was restrained from using. Flipkart wanted the court to see these new registrations because they directly affected whether the injunction against it could continue.

Procedural Background

Flipkart filed an application under Order XLI Rule 27 of the Code of Civil Procedure seeking permission to bring the registration certificates on record as additional evidence. It argued that these were important later developments that had occurred after the original injunction order and that internal changes in the company caused the delay in producing them. Marc Enterprises strongly opposed the move, saying the documents did not fit the narrow conditions for additional evidence at the appellate stage, there was no proper pleading about the registrations in the appeal, and the application was filed far too late after judgment was already reserved. The court heard both sides on the same day and decided the application immediately without calling for a written reply.

Reasoning and Decision of Court

The court carefully balanced two competing ideas. On one hand, he accepted that Flipkart had been negligent. The registrations had been granted years earlier, yet Flipkart did not mention them during the entire hearing of the appeal. The explanation of management changes was not found satisfactory. On the other hand, the judge found the documents highly relevant. The entire appeal was about whether Flipkart could be stopped from using “MarQ”. Once Flipkart obtained valid registrations containing “MarQ”, those statutory rights had a direct bearing on the legality and continuation of the injunction. The court held that when subsequent events have a material impact on the rights of the parties, they should be taken into account to do complete justice, even at the appellate stage. Therefore, the court exercised its discretion and allowed the additional documents to be taken on record so that they could be considered while delivering the final judgment in the appeal. However, to penalise the delay and the lack of diligence, the court directed Flipkart to pay a cost of two lakh rupees to Marc Enterprises within four weeks.

Key Observations

• Courts must consider real-world developments even at the appellate stage.
• Subsequent trademark registrations can materially impact ongoing injunctions.
• Negligence in timely filing may attract monetary penalties.
• Discretion under Order XLI Rule 27 CPC is broad but not unregulated.

Point of Law Settled in the Case

This order settles that subsequent trademark registrations obtained during the pendency of an appeal, which directly touch upon the validity and sustainability of an existing injunction order, can be allowed as additional evidence under Order XLI Rule 27(1)(b) CPC even after final arguments are concluded and judgment is reserved. While the appellate court has wide discretion to admit such evidence when it is necessary to pronounce an effective judgment, unexplained delay in producing the documents may still attract costs so that the other side is not prejudiced by the laxity of the party seeking to rely on them.

Legal Principles at a Glance

Case Details

Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation.  
 
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi