Goodwill Lies In 'Mark' Itself, Not In Particular Category: Delhi High Court In VIP v. Carlton London

In stating so, a division bench of Justices C. Hari Shankar and Ajay Digpaul upheld a single judge order restraining luggage and travel accessories manufacturer VIP from making use of the mark 'CARLTON' with respect to any kind of bags.

It thus dismissed VIP's appeal against Carlton Shoes Ltd. (CSL), a UK-based lifestyle brand.

VIP had argued that goodwill has to be of the brand of the mark as used in respect of particular goods.

It was submitted that CSL was essentially a footwear brand and did not commence use of the mark CARLTON for luggage for 13 years after use of the same mark for luggage, by VIP in 2004.

In respect of bags therefore, it was contended that it is VIP which possesses goodwill in the CARLTON mark rather than CSL.

Rejecting this contention, the High Court held,

“The concept of “goodwill”, for the purposes of passing off, is in the name under which the business is carried out…even if the goodwill ultimately attaches to the goods or services in respect of which the mark is used, that goodwill is attributable, not to the goods or services, but to the mark or name under which the goods or services are provided…It is a well-known fact that, with the passage of time, one mark may be used for a variety of goods or services. ”

The bench illustrated this with the example of Mercedes Benz which has established such goodwill that one may purchase anything from automobiles to perfumes under the said mark.

“It would be facile, therefore, to suggest that the reputation that the market carries is only when used with a particular category of goods or services,” the High Court said.

The counsel appearing for VIP at this juncture suggested that there are degrees of goodwill, and the character of the goodwill would be dependent on the degree of goodwill which applies in a particular case.

The Court however found no legal basis for this submission and held that it cannot distinguish between goodwill as applicable to “reputed” marks, as compared to goodwill as applicable to less reputed marks, for the purposes of passing off.

“The law does not recognise, or envisage, such distinct categories of goodwill. Goodwill either exists, or it does not exist…the goodwill that is required to be established is in the mark, or name, no doubt when used in connection with the goods or services which the plaintiff provides. This principle applies, as much to marks such as Mercedes-Benz or Mont Blanc, as to “humbler” marks.”

The High Court relied on Laxmikant V Patel v Chetanbhai Shah (2023) where the Supreme Court held that the name of a business (a trading business or any other) will normally have attached to it a goodwill that the courts will protect.

As such, VIP's appeal was dismissed.

Appearance: Mr Akhil Sibal, Sr. Adv. with Mr. Nishad Nadkarni, Mr. Ankur Sangal, Mr. Ankit Arvind, Mr. Aasif Navodia, Ms. Khushboo Jhunjhunwala, Mr. Shaurya Pandey, Ms. Rakshita Singh and Ms. Ridhie Baja, Advs for Appellant; Mr. Sandeep Sethi, Sr. Adv. with Mr. Peeyoosh Kalra, Mr. C.A. Brijesh, Mr. Ishith Arora, Mr. Sumer Dev Seth and Ms. Simranjot Kaur, Advs for Respondent

Case title: VIP Industries Ltd v. Carlton Shoes Ltd & Anr.

Case no.: ​​FAO(OS) (COMM) 151/2023

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