Introduction:

In the case of Vikas Gupta and Anr v. M/S Sahni Cosmetics (CS(COMM) 207/2023), the Delhi High Court, presided over by Justice Sanjeev Narula, addressed a pivotal issue in trademark law. The plaintiffs, Vikas Gupta and Neha Herbals Pvt. Ltd., claimed prior use of the trademark “NEHA” for their henna products, asserting that the defendant’s use of the same mark for cosmetics constituted infringement. The defendant, M/S Sahni Cosmetics, countered by highlighting their manufacturing license for products under the “NEHA” mark. The court’s analysis centred on whether mere inclusion of a mark in a trading name or possession of a manufacturing license suffices to establish trademark rights.

Arguments:

Plaintiffs’ Arguments:

The plaintiffs contended that they had adopted the “NEHA” mark in 1992, inspired by a family member’s name, and had consistently used it in commerce, thereby accruing substantial goodwill. They argued that the defendant’s use of the same mark for similar products would likely confuse consumers, amounting to passing off and trademark infringement.

Defendant’s Arguments:

The defendant argued that their use of the “NEHA” mark was legitimate, supported by a manufacturing license obtained for products under that name. They maintained that this license indicated their intent and preparedness to use the mark in commerce, thereby establishing their rights over it.

Court’s Analysis and Judgment:

Justice Narula emphasised that trademark rights are not established merely by including a mark in a trading name or obtaining a manufacturing license. The court stated:

“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… rather, those rights accrue through tangible trading and commercial activities that identify the origin of products or services to the consumers.”

The court further elaborated that sporadic or incidental use, especially when not directed toward the market or divorced from actual commercial engagement, cannot qualify as trademark use in law. It highlighted that a manufacturing license reflects intent or preparedness but does not demonstrate that goods were manufactured, marketed, or placed in the stream of commerce under the mark.

In rejecting the defendant’s claim of prior use based solely on the manufacturing license, the court underscored the necessity of actual market-facing activities that build goodwill and consumer association with the mark. The court concluded that the plaintiffs had established their rights over the “NEHA” mark through consistent and public-facing use, thereby entitling them to protection under trademark law.