Mere Inclusion Of A Mark In Trading Name Does Not By Itself Constitute 'Trademark': Delhi High Court
The Delhi High Court has made it clear that mere inclusion of a mark in a trading name does not, by itself, constitute a protected 'trademark'.Single bench of Justice Sanjeev Narula though conceded that many brands derive their commercial identity through consistent and public-facing use of their trading name, it held that to give rise to protectable rights, such use must be of a kind...
The Delhi High Court has made it clear that mere inclusion of a mark in a trading name does not, by itself, constitute a protected 'trademark'.
Single bench of Justice Sanjeev Narula though conceded that many brands derive their commercial identity through consistent and public-facing use of their trading name, it held that to give rise to protectable rights, such use must be of a kind that identifies the source of the goods and serves to distinguish them from those of others – a concept often referred to by Courts as “use in the trademark sense”.
The bench observed,
“The usage must manifest in the public domain and not remain confined to internal documentation or preparatory business activity. Trademark rights do not arise in abstract or as we say, the law does not confer proprietary rights in a vacuum; rather, those rights accrue through tangible trading and commercial activities that identify origin of products or services to the consumers.”
It added, “It is through such market facing activities that a mark gains its distinctiveness, functions as a source identifier and acquires enforceable proprietary character. Moreover, sporadic, incidental, or isolated use, particularly when not directed toward the market or divorced from actual commercial engagement, cannot qualify as trademark use in law.”
The observation was made while rejecting the 'prior use' claim of a firm in trademark suit, only based on the manufacturing licence obtained by it.
The Court held that while the license indicates statutory permission, it does not by itself, establish the use of a trademark.
“The test under Trademark law is actual use of the mark in the course of trade, in a manner that builds goodwill and distinguishes goods in the marketplace…What must be shown is that the product was actually introduced into commerce under the asserted trademark, and that consumer association was established through such use…A manufacturing licence may reflect intent or preparedness to produce goods under a particular mark, it does not demonstrate that such goods were, in fact, manufactured, marketed, or placed in the stream of commerce under that mark,” the bench said.
It added that a mark must be used as part of a trading name, actively deployed in the course of trade and recognised by consumers. Only then it can perform the same source-identifying function as a mark affixed directly to goods.
It relied on Laxmikant V Patel v. Chetanbhai Shah (2002) wherein the Supreme Court held that a trading name used consistently in the course of trade may acquire goodwill and be protectable under the common law doctrine of passing off.
However, the bench added that a trading name can be recognized as a trademark only when it is capable of establishing goodwill and proprietary association, particularly supported by corroborative evidence such as sales, advertising, and public recognition.
As such, it rejected the party's claim of prior use.
Appearance: Mr. Sachin Gupta, Mr. Adarsh Agarwal, Mr. Rohit Pradhan and Ms. Prashansa Singh, Advocates for Plaintiffs; Mr. M.K. Miglani, Mr. Hardik Gogia and Mr. Akash Singh, Advocates for Defendants
Case title: Vikas Gupta And Anr v. M/S Sahni Cosmetics
Citation: 2025 LiveLaw (Del) 594
Case no.: CS(COMM) 207/2023