Section 124 Stay in Non-Use Cancellation: HC Split Deepens

High Courts Diverge on Section 124 Stay in Non-Use Cancellation

A growing divergence between the Calcutta and Delhi High Courts on the applicability of Section 124 of the Trade Marks Act, 1999 to Section 47 cancellation proceedings has created uncertainty for trademark litigators. Section 124 provides that infringement suits shall be stayed if rectification proceedings are pending before the Registrar or IPAB. The key issue is whether non-use cancellation under Section 47 qualifies as 'rectification proceeding' under Section 124.

Conflicting Judicial Interpretations

The Calcutta High Court has held that Section 47 proceedings, being a challenge to trademark registration, fall within the scope of 'rectification' and thus trigger an automatic stay under Section 124. In contrast, the Delhi High Court has ruled that Section 124 stay applies only when rectification is sought before a statutory authority and not when both actions are pursued in parallel in civil court.

The term 'rectification proceedings' must be read in context of the forum and nature of challenge—whether administrative or judicial.

Academics Arushi Bisht and Snehal Singh note that this divergence affects litigation strategy, with defendants in infringement suits in Calcutta preferring to file early cancellation petitions to secure a stay, while those in Delhi may seek alternative adjournments.

Need for Clarification

Until the Supreme Court settles the issue, practitioners must evaluate jurisdiction-specific precedents when advising clients. The inconsistency impacts timing, forum selection, and settlement dynamics. A unified interpretation of 'rectification proceedings' under Section 2(1)(zg) is essential to avoid procedural manipulation.