Sanchayita Lahkar

 A Division Bench of the High Court of Delhi, comprising Justice C. Hari Shankar and Justice Ajay Digpaul, has referred significant questions of law to a Larger Bench concerning the maintainability of trademark infringement suits and the grant of interim injunctions against proprietors of registered trademarks. The referral arose from an appeal where the Bench found itself unable to concur with the view expressed in a prior coordinate Bench decision, stating that the resolution of these questions could pivot the final outcome of the appeal. The court deferred passing final orders in the appeal, which challenges a Single Judge's refusal to grant an interim injunction in a trademark dispute, and directed the Registry to place the matter before the Chief Justice for the constitution of a Larger Bench. The appeal is scheduled to be re-notified on 7 July 2025.  

The genesis of the appeal lies in a suit, CS (Comm) 702/2022, where Abros Sports International Pvt. Ltd. (ASIPL), the appellant, sought an injunction against Ashish Bansal and others (respondents). ASIPL contended that the respondents' use of the mark NEBROS for footwear infringed ASIPL's registered trademark ABROS and amounted to passing off.  

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ASIPL's case, as presented before the learned Single Judge and reiterated in the appeal, was built on several factual assertions. ASIPL stated it was incorporated on 14 February 2020, taking over the business run by Anil Sharma under a proprietorship, who had conceived and adopted the ABROS mark in March 2017. The mark ABROS was described as a portmanteau of 'A' (from Anil Sharma) and 'BROS' (signifying the business run with his brothers). Through an assignment deed dated 15 January 2021, Anil Sharma assigned all rights in the trademark ABROS to ASIPL. Consequently, ASIPL claimed proprietorship of several registered trademarks for ABROS in Class 25 (Footwear and sole for footwear) and Class 35 (Import, export, wholesale, retail marketing, and online trading of footwear), with registration dates as early as 3 March 2017. ASIPL also operated the domain name www.abrosshoes.com since June 2018 and presented sales figures of ₹7,84,51,193.05 for 2020 and ₹2,16,45,97,734.00 for 2021, along with substantial advertising expenses, to demonstrate its market reputation.  

ASIPL alleged that Respondent 1 was using the mark NEBROS for identical products (footwear) sold in the same price range of ₹1500-₹2000. It was noted that Respondent 1 also held a registration for the mark NEBROS for clothing and footwear effective from 25 September 2019, applied for on a "proposed to be used" basis. Respondent 2 was stated to produce footwear using the NEBROS trademark for Respondent 1, while Respondents 3 to 6 were traders dealing in these goods. ASIPL asserted priority of registration, with its device mark registration dating back to 3 March 2017, predating Respondent 1's NEBROS registration. A specific challenge to the validity of Respondent 1's NEBROS registration was raised in the plaint, alleging it was wrongly granted, deceptively similar to ABROS, and liable for cancellation under various sections of the Trade Marks Act, 1999, including Sections 9, 11, 12, 18, and 57. ASIPL argued that the marks ABROS and NEBROS were phonetically deceptively similar and, given the identical goods, trade channels, and customer segment, there was a likelihood of confusion.  

The respondents contested the suit, asserting that NEBROS was a coined term, a portmanteau of "Nice" (from Nice Footwear, a business of Respondent 1's paternal uncle) and "BROS" (for Brothers), and not an imitation of ABROS. They argued that ASIPL could not plead infringement as NEBROS was also a registered trademark since September 2020, with sales figures exceeding ₹8.5 Crores in 2021-22. The respondents claimed priority of user, with invoices for NEBROS dating back to 1 September 2020, while ASIPL's earliest invoice for ABROS shoes was from 2021. They contended that any prior use by ASIPL's predecessor, Narmada Polymers, was for soles, not shoes. Furthermore, they argued that ABROS and NEBROS were not phonetically similar and were visually distinct, presenting a comparative table of the product packaging. They also submitted that "BROS" was a common generic suffix over which no exclusivity could be claimed.  

The learned Single Judge, by judgment dated 2 May 2024, dismissed ASIPL's interim injunction application. The reasons included no distinct phonetic similarity between ABROS and NEBROS; no structural or visual similarity in their logo presentation; respondents' user of NEBROS from September 2020 versus ASIPL's earliest shoe invoice from February 2021; insufficient evidence of ABROS mark user by Narmada Polymers since 2017 for shoes; balance of convenience against ASIPL due to Respondent 1's sales since 2020; no opposition by ASIPL to NEBROS registration; and the Trade Marks Registry Examination Report for NEBROS not citing ABROS as a similar mark. The Single Judge found no visual, structural, or phonetic similarity when comparing the marks holistically and stated that the common suffix "BROS" was insufficient to cause confusion. As Respondent 1 was a registered proprietor, the issue was viewed primarily as one of passing off, requiring a higher threshold, which ASIPL failed to meet, especially given the respondents' priority of user for shoes and the distinct labels/logos. The absence of proof of actual confusion was also noted. Aggrieved by this dismissal, ASIPL filed the present appeal.  

Before the Division Bench, ASIPL, represented by Mr. Ranjan Narula, argued that the Single Judge erred in finding that Respondent 1 enjoyed priority of user. ASIPL asserted its registration from 3 March 2017, claiming user from 1 March 2017, and argued that use on soles (by Narmada Polymers) constituted use under the Trade Marks Act for allied goods. Reference was made to Sections 2(2)(b) and 2(2)(c) of the Act, contending that the appearance of ABROS on ASIPL's Certificate of Incorporation and PAN card (dated 14 February 2020) also constituted 'use'. Thus, ASIPL claimed priority of both registration and user, entitling it to an injunction. Deceptive phonetic similarity between ABROS and NEBROS was reasserted, along with the satisfaction of the Triple Identity Test (identical goods, price range, trade channels, customer segment). ASIPL criticized the Single Judge for bisecting the marks and stated it was not claiming exclusivity over the "BROS" suffix. The explanation for NEBROS's adoption was termed "ludicrous". ASIPL also challenged the evidentiary value of Respondent 1's invoice dated 1 September 2020, stating it did not reflect the NEBROS mark.  

Mr. Sanchay Mehrotra, for the respondents, largely adopted the Single Judge's reasoning, stating his client's priority of user of NEBROS for shoes since September 2020 against ASIPL's lack of substantial documentary evidence for ABROS use since March 2017. He reiterated the lack of likelihood of confusion due to visual dissimilarity and argued that Sections 28(1) and 28(3) of the Trade Marks Act precluded an infringement claim against a registered proprietor. The suffix "BROS" was maintained to be publici juris.  

The Division Bench, after setting out the facts and submissions, identified the core issues as whether the respondent infringed the plaintiff's trademark and whether there was passing off. However, the Bench found itself "handicapped from finally deciding this appeal" due to a disagreement on a "fundamental question of law" with a coordinate Bench, the decision on which could "pivot the final outcome of this appeal".  

The Bench embarked on a detailed analysis of the Trade Marks Act, 1999. It observed that Section 29, which elucidates circumstances of infringement, in its sub-sections (1), (2), and (4), begins with the words “a registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark …”. The court stated, “In other words, infringement by the registered proprietor of a trade mark, or by a person who has been permitted to use the mark, by the registered proprietor thereof, is foreign to the concept of infringement under the Trade Marks Act. Plainly said, there can be no infringement by the proprietor of a registered trade mark”.  

This interpretation was further supported by Section 30(2)(e) of the Act, which states that the use of a registered trademark, being one of two or more identical or nearly resembling registered trademarks, in exercise of the right to use that trademark given by registration, does not constitute infringement. The Bench recorded, “This provision is as plain as it can be, and needs no explanation or elucidation. The fact that his trademark is registered, therefore, affords the defendant an absolute defence against infringement, by virtue of Section 30(2)(e)”.  

Analysing Section 28(1), which confers upon a registered proprietor the exclusive right to use the trademark and to obtain relief in respect of infringement, the court noted it is "subject to the other provisions of this Act". This, the Bench opined, means the right cannot be exercised contrary to other statutory rights, including the defendant's rights if their mark is also registered. “By virtue of Section 28(1), the registration of the impugned trademark in favour of the defendant would confer, on the defendant, the exclusive right to use the said mark in relation to the goods or services in respect of which the trademark is registered”. Therefore, Section 28(1) cannot be used to injunct a defendant from using their own registered trademark.  

Section 28(3) further clarifies this, stating that where two or more persons are registered proprietors of identical or nearly resembling trademarks, the exclusive right to use any of those trademarks is not acquired by one against the other merely by registration. Each proprietor has the same rights against other persons as if they were the sole registered proprietor, but not against each other in terms of exclusive use based on registration alone.  

The sequitur, the Bench stated, is that “There can be no infringement by a registered trademark. An unregistered trademark alone can infringe”. Consequently, “an action for infringement cannot lie against a registered proprietor of a trademark”.  

The Division Bench then turned to the judgment of a coordinate Bench in Raj Kumar Prasad v Abbott Healthcare Pvt. Ltd., 2014 SCC OnLine Del 7708, which held that an infringement action can lie against a registered proprietor and an injunction can be granted. The present Bench respectfully disagreed with this proposition, stating that such a view “would violate Section 29(1) to (4), Section 28(1), Section 28(3) and Section 30(2)(e) of the Trade Marks Act”.  

The Bench noted that Raj Kumar Prasad relied entirely on Section 124 of the Trade Marks Act. Section 124 deals with the stay of infringement proceedings where the validity of registration is questioned. Sub-section (1)(b) refers to a scenario where the defendant raises a defence under Section 30(2)(e) (i.e., their mark is registered) and the plaintiff pleads invalidity of the defendant's registration. Section 124(5) allows the court to make interlocutory orders, including injunctions, during the period of stay. Raj Kumar Prasad interpreted this to mean that a suit for infringement against a registered proprietor is maintainable if the plaintiff pleads invalidity of the defendant's registration, and the court can grant an interim injunction before staying the suit for rectification proceedings.  

The present Division Bench found this reasoning problematic. It stated that allowing an infringement action against a registered proprietor merely by pleading invalidity “can completely divest a defendant of his right to exclusive use of his registered trademark, conferred and sanctified by Sections 28(1), 28(3) and 30(2)(e)”. The Bench also observed that Raj Kumar Prasad did not refer to Section 29, which defines infringement as occurring only by an unregistered mark.  

The Bench interpreted Section 124(1)(b) differently: it envisages a suit where the plaintiff alleges infringement (implying the defendant's mark is unregistered), and the defendant then raises registration as a defence under Section 30(2)(e). If the plaintiff then pleads invalidity of the defendant's registration, and the court finds this plea tenable, an issue is framed, and the case is adjourned for three months for the plaintiff to apply for rectification. If rectification is sought, the trial is stayed. The power under Section 124(5) to pass interlocutory orders, including injunctions, according to the present Bench, applies only after the trial is stayed under Section 124(2). The Bench questioned whether Section 124(5) could empower a court to injunct the use of a registered trademark before its registration is invalidated, as this would “be in the teeth of Section 28(1), Section 28(3) and Section 30(2)(e)”.  

The Bench summarized its position: “(i) A registered trademark cannot infringe. Infringement can only be by an unregistered trademark. (ii) No infringement proceedings can, therefore, ordinarily lie against a registered proprietor of a trademark, alleging that the trademark is infringing… (vi) A suit alleging infringement by a registered trademark and seeking an injunction against the use of such registered trademark, by its proprietor is, therefore, fundamentally unsound”. It outlined a mandatory procedure under Section 124 when a defendant pleads registration and the plaintiff counters with invalidity, statingthat the court's power to pass interlocutory orders under Section 124(5) arises only after the sequence involving the tenability of the invalidity plea, framing of an issue, adjournment for rectification, initiation of rectification, and stay of trial is followed. The Bench stated, “it is highly debatable as to whether a Court can, till the registration of the defendant’s mark is declared invalid and the mark is removed from the register, injunct the use, by the defendant, of such mark”.  

Given that Respondent 1's NEBROS trademark is registered, and the plaintiff ASIPL has pleaded its invalidity, the Bench deemed these legal questions pivotal.  

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Due to its variance with the views expressed in Raj Kumar Prasad (followed in Corza International v Future Bath Products Pvt Ltd, 2023 SCC OnLine Del 153), the Division Bench framed the following questions for reference to a Larger Bench, to be constituted by the Chief Justice:  

“(i) Whether a suit for infringement can lie against the proprietor of a registered trademark, with respect to the use of such trademark?  

(ii) Whether, assuming such a suit can lie, the Court can pass any interlocutory order, injuncting the use, by the defendant, of the allegedly infringing registered trademark?

(iii) Assuming the Court can do so, whether such an order of injunction can be passed without, in the first instance, the proceedings going through the steps envisaged in para 19.1(viii) supra, i.e., without

• (a) the defendant raising a Section 30(2)(e) defence,

• (b) the plaintiff pleading invalidity of the defendant’s trade mark in response thereto,

• (c) the Court being satisfied that the plea of invalidity raised by the plaintiff is tenable,

• (d) an issue being framed by the Court in that regard,

• (e) the suit being adjourned by a period of three months in order to enable the defendant to initiate rectification proceedings, [sic, should be plaintiff]

• (f) rectification proceedings being initiated by the defendant within the said period and [sic, should be plaintiff]

• (g) trial of the suit being stayed, pending the outcome of the rectification proceedings? OR whether the mere incorporation, in the plaint, of a plea that the registration of the defendant’s trade mark is invalid, is sufficient to empower the Court to injunct the defendant from using its registered trade mark on the ground of prima facie infringement, without proceeding through steps (a) to (g) above?  

• (iv) Whether, therefore, the judgement in Raj Kumar Prasad v Abbott Healthcare (P) Ltd can be said to be laying down the correct legal position, particularly in para 18 thereof?”

The Court deferred passing final orders in the appeal pending resolution of these issues by a Full Bench. The appeal is to be re-notified on 7 July 2025. The Registry was directed to place the order before the Chief Justice expeditiously.

Advocates Representing the Parties

For the Appellant: Mr. Ranjan Narula, Mr. Shakti Priyan Nair, and Mr. Parth Bajaj, Advocates.

For the Respondents: Mr. Sanchay Mehrotra, Advocate.  

Case Title: Abros Sports International Pvt. Ltd. v. Ashish Bansal and Ors.

Neutral Citation: 2025: DHC:3606-DB

Case Number: FAO(OS) (COMM) 140/2024 & CM APPL. 38801/2024

Bench: Justice C. Hari Shankar, Justice Ajay Digpaul

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