ARQ Providores Vs. Schloss HMA Private Limited

Brief Introductory Head Note and Summary of the Case

The case ARQ Providores v. Schloss HMA Private Limited & Anr., decided on 17 November 2025 by the High Court of Delhi, centres on a dispute involving alleged infringement, passing off, dilution and unfair competition concerning the use of the mark ARQ. The plaintiff, operating in the premium sweet and hospitality segment, claimed that the defendant hotel chain adopted deceptively similar marks such as “THE ARQ”, “ARQ THE LEELA”, and “ARQ by THE LEELA” for their luxury villas and hospitality services, thereby causing consumer confusion and improperly capitalising on the goodwill associated with the plaintiff. The Court was required to assess whether an ad-interim injunction should be granted to prevent the defendants from using the impugned marks.

Factual Background

The plaintiff adopted the mark ARQ in October 2018 and began business under the brand in the sweet and confectionery segment, later entering premium catering and hospitality services. It opened a flagship outlet at DLF Emporio Mall in 2019, which reinforced the brand’s luxury positioning. Over time, the plaintiff expended promotional efforts, built collaborations with high-end hotels, and achieved recognition in national and luxury media. Evidence pointed to significant goodwill, strong consumer association, and exclusive identity of the mark ARQ with the plaintiff.

In September 2025, the plaintiff learned that the defendants had launched a luxury hospitality brand under the marks “THE ARQ” and “ARQ by THE LEELA”. The launch included premium villa services under “Arq at Pichola” at the defendant’s luxury Udaipur property. A comparative analysis showed consistency in the usage of ARQ as the dominant feature. The plaintiff argued that the adoption was dishonest because prior interactions between the parties indicated that the defendants had full knowledge of the plaintiff’s existing brand identity and operations.

Procedural Detail

Upon receiving information about the launch of the defendant’s brand, the plaintiff approached the High Court seeking permanent injunction for trademark infringement, passing off, dilution, and related reliefs. The plaintiff also filed an interlocutory application under Order XXXIX Rules 1 & 2 CPC seeking urgent ad-interim relief.

Given the urgency, the Court exempted the plaintiff from undergoing pre-institution mediation under Section 12A of the Commercial Courts Act, consistent with the Supreme Court’s ruling in Yamini Manohar v. T.K.D. Krithi, 2023 SCC OnLine SC 1382.

Summons were issued and the defendants accepted appearance. Both sides argued their positions on whether interim injunction should be immediately granted prior to exchange of pleadings.

Core Dispute

The primary issue was whether the defendant’s adoption and use of ARQ-based marks amounted to infringement and passing off. The plaintiff emphasised long-standing prior use and brand attachment in the premium sweet and hospitality sector. The defendants argued that since they were the registered proprietor of “THE ARQ” in Class 43 (hospitality services), no infringement action lay against them under trademark law. The thrust of the dispute therefore centred around whether a case of passing off was made out despite their valid registration.

Detailed Reasoning and Discussion by the Court

The Court observed that the plaintiff had been using the ARQ mark consistently and publicly since 2018 in the sweets, confectionery, and hospitality space. The plaintiff’s nationwide reputation was supported by industry collaborations, celebrity appreciation, features in the defendants’ own magazine in 2021, and multiple luxury media publications. The defendants’ knowledge of the plaintiff’s mark was therefore firmly established.

The Court accepted the defendants’ submission that, since the defendants were the registered proprietors of the mark “THE ARQ” in Class 43, no infringement claim could be maintained against them, in light of the rulings of the Delhi High Court in Vaidya Rishi India Health (P) Ltd. v. Suresh Dutt Parashar, 2025 SCC OnLine Del 6147 and Suparshva Swabs India v. AGN International, 2025 SCC OnLine Del 8239. These judgments affirm that when a party is a registered proprietor of a mark in a specific class, infringement under that class cannot be alleged until the registration is invalidated.

However, the Court clarified that passing off is a separate cause of action and remains available even where the alleged infringer holds registration for the mark. Passing off depends not on proprietary right alone, but on whether one party’s goodwill is injured or diluted due to misrepresentation causing confusion among consumers.

The Court found that both parties catered to a high-end and overlapping customer base. Even though the plaintiff was registered in Classes 30 and 35 (sweets and retail services) and the defendants operated primarily in Class 43 (hospitality services), their offerings were “allied and cognate”, serving similar clients with luxury experience expectations. The defendants adopted the marks only after 2024 while the plaintiff had been using its brand since 2018, confirming priority of use.

The Court held that goodwill and brand recognition of the plaintiff had been established, and there existed likelihood of consumer confusion and dilution of identity. Therefore, a prima facie case of passing off was clearly made out.

At the same time, the defendants had been offering services under the impugned marks since November 2024. The Court reasoned that immediately restraining them could create disproportionate hardship. To balance equities, the Court devised an interim mechanism relying on the defendants’ proposals.

Decision

The Court ordered that until the next date of hearing, the defendants shall comply with the following:

They may use the word ARQ only when accompanied with BY THE LEELA, with BY placed between ARQ and THE LEELA, and with identical font, size, and colour.

They must discontinue the logo resembling the plaintiff’s mark by 15 December 2025 and instead adopt the modified logo incorporating “BY THE LEELA”.

They must not use the mark ARQ concerning sweets, confectioneries, savouries, catering services, room service, or any restaurant operating in their hotel properties.

The defendants were permitted to file their reply, after which the matter will be heard on 16 March 2026.

Concluding Note

This judgment reflects an evolving trend in Indian trademark jurisprudence that distinguishes clearly between infringement and passing off. Even where a defendant holds registration for a mark, courts may still intervene to protect longstanding goodwill and prevent consumer deception if brand adoption appears commercially opportunistic. The decision also illustrates the modern judicial preference for balancing commercial realities rather than issuing absolute interim prohibitions, particularly when major hospitality and luxury brands are involved. At its heart, the case emphasises that goodwill built through sustained use is a legally protectable commercial asset, and reputation cannot be encroached merely by obtaining trademark registration in a different class.

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Case Details

Case Title: ARQ Providores v. Schloss HMA Private Limited & Anr.

Case Number: CS(COMM) 1227/2025

Order Date: 17 November 2025

Neutral Citation: 2025:DHC:_____ (as reflected on the digital order header)

Court: High Court of Delhi

Hon’ble Judge: Justice Tejas Karia

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Suggested Titles for Publication

1. Passing Off vs Trademark Registration: The Legal Struggle for the Mark ARQ

2. Brand Identity Beyond Classes: Delhi High Court on Allied and Cognate Goods

3. Goodwill as a Legal Asset: Judicial Recognition in ARQ Providores v. Schloss HMA

4. Balancing Equities in IP Disputes: A Case Study on Interim Relief in Hospitality Branding

5. Consumer Confusion and Brand Dilution: The Expanding Scope of Passing Off in India

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The High Court of Delhi, in CS(COMM) 1227/2025 titled ARQ Providores Vs. Schloss HMA Private Limited & Anr., decided on 17 November 2025 by Hon’ble Justice Tejas Karia, passed an interim order in a trademark dispute concerning the luxury hospitality and confectionery brand name “ARQ”. The plaintiff, a premium sweets and catering brand using ARQ since 2018, alleged that the defendants—operators of The Leela Palace hotels—launched hospitality services under marks such as “THE ARQ”, “ARQ THE LEELA”, and “ARQ by THE LEELA”, which caused widespread confusion among consumers and constituted passing off and dilution of brand identity.

The defendants argued that they were the registered proprietors of the mark “THE ARQ” in Class 43 and therefore could not be sued for trademark infringement. While the Court accepted that infringement cannot lie against a registered proprietor, it held that a case of passing off was nevertheless made out because the plaintiff had prior use, established goodwill, and both parties catered to overlapping high-end consumers. The Court also took note of earlier interactions and collaborations between the parties, indicating defendant’s prior knowledge of the plaintiff’s mark.

To balance equities, the Court declined to grant a complete injunction but imposed controlled usage conditions. Until further orders, the defendants may use the word ARQ only when accompanied by the house mark as “ARQ BY THE LEELA” in the same font, size and colour. The defendants must discontinue their earlier logo by 15 December 2025, adopt the modified logo, and are restrained from using ARQ for sweets, confectioneries, catering, or room-service operations, either at The Leela Palace Udaipur or at any other property.

The matter will next be heard on 16 March 2026 after exchange of reply and rejoinder.

Disclaimer: This is for general information only and should not be construed as legal advice as it may contain human errors in perception and presentation: Advocate Ajay Amitabh Suman, IP Adjutor (Patent & Trademark Attorney), High Court of Delhi.

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