Source: Delhi High Court

Why in News? 

A bench of Justice Sanjeev Narula held that not all forms of use of a mark amount to “use” in the legal sense contemplated under trademark law. 

• The Delhi High Court held this in the case of Inder Raj Sahni Proprietor v. Neha Herbals Pvt. Ltd. (2025). 

What was the Background of Inder Raj Sahni Proprietor v. Neha Herbals Pvt. Ltd. (2025) Case?   

• Nature of Dispute: 
  • The suit involves a trademark dispute over the use of the mark “NEHA” in the personal care sector, where both parties claim prior commercial use in different but overlapping product categories. 
• Plaintiff's Background: 
  • Vikas Gupta (Plaintiff No. 1) is the Director of Neha Herbals Pvt. Ltd. (Plaintiff No. 2), a company incorporated in 2007, engaged in the manufacture and trade of Mehandi and allied herbal products. 
• Initial Use of Mark “NEHA”: 
  •  Plaintiff No. 1 began using the trademark “NEHA” in 1992 through a proprietorship named M/s Neha Enterprises. In 2012, the business was transferred to Plaintiff No. 2 through an assignment deed. 
• Trademark Registrations by Plaintiffs: 
  • The Plaintiffs hold a registration for the word mark “NEHA” (Registration No. 1198061 in Class 3) claiming use since April 1, 1992. 
  • They also own a registration for “NEHA HERBALS” (Registration No. 3752588) claiming use since April 1, 2012. 
  • An earlier registration for “NEHA RACHNI MEHANDI” was removed due to non-renewal. 
• Expansion Attempts: 
  • Plaintiffs applied for registration of “NEHA” in 2019 for various cosmetic and personal care goods (Application No. 4182573), which remains pending. 
• Cause of Action: 
  • In May 2019, the Plaintiffs discovered cold creams bearing the “NEHA” mark being sold by a third party and alleged infringement by the Defendant. 
• Defendant’s Background: 
  • The Defendant, Mr. Inder Raj Sahni, is the proprietor of M/s Sahni Cosmetics and claims to have adopted the trademark “NEHA” for creams since 1990. 
• Defendant’s Trademark Applications: 
  • The Defendant does not have any valid trademark registration for “NEHA”. His applications were either refused or abandoned and were not contested further. 
• Defendant’s Claims: 
  • The Defendant asserts honest and concurrent use since 1990, supported by a manufacturing license and invoices. He also challenges the Plaintiff’s use from 1992 to 2010 due to lack of a valid manufacturing license. 
• Allegation of Acquiescence: 
  • The Defendant alleges that the Plaintiff was aware of his use of “NEHA” since 2003 and accuses the Plaintiff of belatedly initiating litigation to disrupt a long-standing business. 
• Legal Proceedings: 
  • The Plaintiffs filed suit CS(COMM) 1833/2019 (renumbered CS(COMM) 207/2023) seeking injunction, passing off, and damages. 
  • An initial interim injunction was granted but later vacated by the District Court in November 2019. 
  • The Plaintiffs challenged this vacation order up to the Supreme Court, which directed the Trial Court to dispose of the suit on merits. 
• Cancellation Petitions: 
  • The Defendant filed two petitions to cancel the Plaintiff’s trademark registrations. 
• Transfer and Consolidation: 
  • Following the abolition of the IPAB in 2021, the cancellation petitions were transferred to the High Court. The suit was also transferred and consolidated with the petitions for joint hearing. 
• Final Proceedings: 
  • All three matters were heard together before the Delhi High Court. The evidence from the suit was agreed to be used in the cancellation petitions. Final arguments concluded, and the matters were reserved for judgment. 

What were the Court’s Observations? 

• The Court in this case discussed the following issues: 
  • Defence of Prior Use: 
    • Not all uses of a mark qualify as legal trademark use. To be protectable, the mark must be used in a manner that identifies the source of goods and distinguishes them in the marketplace. 
    • Courts require actual use in the public domain—not just internal or preparatory activity. Rights arise from commercial and trading activities that link the mark to a specific source. 
    • Merely including a mark in a business name doesn't constitute trademark use. However, consistent and public use of a trade name can lead to proprietary rights under the common law of passing off. 
    • Laxmikant V. Patel v. Chetanbhai Shah (2001): This case establishes that a trade name used in commerce can acquire protectable goodwill. 
    • Although early invoices or product packaging from 1992 are missing, other evidence like tax returns, advertisements, and turnover records from 1994 support the Plaintiffs’ use of the mark “NEHA.” 
    • A licence under the D&C Act to manufacture cosmetics doesn’t prove trademark use. Trademark law requires proof of goods being sold under the mark, not just licensed for manufacture. 
    • The Defendant’s witness admitted that goods were manufactured only under 5-6 out of 18–20 licensed marks, and not under the “NEHA” mark as claimed. 
    • The earliest invoices showing use of the mark “NEHA” are from 2003. No documents show commercial use of the mark from 1990 to 2002, despite the Defendant’s claims. 
    • The Defendant filed for registration only from 2006 onwards, with inconsistent and conflicting claimed first-use dates. None of the applications succeeded. 
    • As per Sudir Engineering Co. v. Nitco Roadways Ltd. (1995), a document must not only be admitted but also formally proved. Court evaluation requires contextual analysis. 
    • Conclusion: The Plaintiffs demonstrated prior and consistent use of the mark “NEHA” from at least 1994 and are the registered proprietors. The Defendant failed to prove earlier commercial use, and its defence under Section 34 of the Trade Marks Act, 1999 (TM Act) is rejected.
  • Infringement and Passing off Action: 
    • The Court held in this case that neither passing off nor trademark infringement has taken place. 
    • The goods—herbal mehendi and cosmetic creams—are dissimilar in nature, purpose, and consumer perception. 
    • The Plaintiffs failed to prove reputation across categories or likelihood of confusion. 
    • Thus, the Defendant's use of "NEHA" does not violate the Plaintiffs’ trademark rights. 

What Constitutes Trademark? 

• Section 2(zb) of the Trade Mark Act, 1999 (TM Act) defines a trademark as a mark capable of graphical representation that distinguishes goods or services and indicates a trade connection with the proprietor or permitted user. 
• Section 2(m) of the TM Act defines a "mark" to include a wide range of identifiers like devices, names, labels, signatures, numerals, packaging, and combinations of colors. 
• Not all use of a mark qualifies as legal "use" under trademark law; only use that identifies the source of goods or services and distinguishes them from others is protected. 
• Such "use in the trademark sense" must be public and connected to actual commercial or market-facing activity, not merely internal or preparatory use. 
• Trademark rights do not arise in the abstract; they are created through tangible trade and consumer-facing actions that establish a mark’s distinctiveness and source-identifying function. 
• Sporadic, incidental, or isolated uses that lack commercial context or market intention do not qualify as valid trademark use.