Sana Herbals Private Limited Vs. Mohsin Dehlvi

Introduction: This dispute revolves around competing claims over the trademarks "NOKUFSYRUP" and "NOKUF," both associated with cough remedies, highlighting tensions between registration rights, prior usage, assignment deeds, and the common law tort of passing off. 

The appellant, Sana Herbals Private Limited, sought to protect its registered mark "NOKUFSYRUP" by alleging infringement and passing off by the respondents, who held an earlier registration for "NOKUF." The High Court of Delhi, in its appellate jurisdiction, delved into whether an injunction could be granted against a registered trademark holder on grounds of passing off, emphasizing that statutory infringement claims fail against registered marks but passing off actions may persist under common law. 

This judgment underscores the primacy of prior user in passing off claims, the invalidity of unregistered assignments without goodwill transfer, and the rejection of abandonment pleas where historical use is established, even if interrupted. 

By affirming the lower court's denial of interim relief, the decision reinforces that goodwill must predate the defendant's use and that long disuse alone does not entitle a later user to enjoin the original proprietor, providing clarity on balancing equitable considerations with legal principles in trademark disputes.

Factual Background:The factual matrix of this case traces back to the mid-1990s in the Unani medicine sector, where the respondents, Mohsin Dehlvi and Dehlvi Remedies Pvt Ltd, claimed to have adopted and used the trademark "NOKUF" for cough syrup since October 20, 1994, with sales through the second respondent company. They applied for registration of "NOKUF" on June 3, 1996, claiming user from 1994. 

The appellant, Sana Herbals Private Limited, was incorporated on October 21, 1997, by relatives of the first respondent, including his cousins Shakeel Jamil and Jamul ul Rehman. Shortly thereafter, on November 3, 1997, a manufacturing agreement was executed, permitting the appellant to produce cough syrup under the "NOKUF" mark for three years on behalf of the respondents. The appellant contends that in 1998, the first respondent granted manufacturing rights, and subsequently, the respondents began purchasing "NOKUF"-branded products from the appellant for retail sale, a practice allegedly continuing until 2006-2007. 

Central to the dispute is an Assignment Deed dated September 19, 1999, which the appellant asserts transferred all intellectual property rights in "NOKUF" from the second respondent to itself, though the respondents vehemently deny its execution and validity, arguing it was unregistered and failed to transfer goodwill as required under Section 42 of the Trade Marks Act. Between 2000 and 2009, the respondents purportedly purchased "NOKUF" syrup from the appellant. In 2003, a fire destroyed the respondents' manufacturing unit, leading to financial distress.

Consequently, in 2007, the second respondent was struck off the Register of Companies for non-compliance. The appellant, claiming exclusive rights post-assignment, applied for registration of "NOKUFSYRUP" on May 15, 2015, securing it effective from that date on February 13, 2020. Meanwhile, the second respondent was reinstated in 2019 by the National Company Law Tribunal, revived its 1996 application, and obtained registration for "NOKUF" effective from June 3, 1996, on September 22, 2020. In 2024, the second respondent acquired a drug license, signaling intent to resume production under "NOKUF" or "KufNo Syrup." 

The appellant opposed the "NOKUF" registration in 2015, but the opposition was rejected in 2019, with an appeal pending before the Intellectual Property Appellate Board at the suit's institution. The appellant alleged continuous use, advertisement, and goodwill buildup in "NOKUF" since 1999, supported by invoices, while the respondents claimed prior authorship, extensive pre-1997 use, and that any appellant use was licensed and on their behalf. The respondents further asserted that post-fire, they outsourced production to a related entity, denying abandonment, and accused the appellant of fraudulently registering "NOKUFSYRUP" during their dormancy, claiming user from April 1, 1998, after the respondents' commencement.

Procedural Background: The procedural journey began with the appellant filing Commercial Suit No. 1776/2020 before the District Judge, Commercial Court-03, Tis Hazari, Delhi, seeking permanent injunction against the respondents' use of "NOKUF" or "KufNo Syrup," alleging infringement of its registered "NOKUFSYRUP" mark and passing off. Alongside the suit, the appellant applied for interim injunction under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908. 

The respondents filed a written statement denying the claims, asserting prior adoption and registration of "NOKUF," invalidity of the 1999 Assignment Deed, and no abandonment despite the company strike-off and fire incident. After hearing arguments, the learned Commercial Court dismissed the interim injunction application on December 21, 2024, finding no prima facie case for infringement or passing off, given the respondents' registration and prior user. 

Aggrieved, the appellant appealed to the High Court of Delhi under Section 13 of the Commercial Courts Act, 2015, vide FAO (COMM) 77/2025, along with an application for stay. The court pronounced its judgment  upholding the lower court's order and dismissing the appeal, emphasizing that no infringement lay against a registered mark and no passing off was established due to the respondents' prior use and lack of abandonment.

Reasoning and Decision of Court:The High Court's reasoning commenced by clarifying that no infringement action could sustain against the respondents, as their "NOKUF" mark was registered effective from June 3, 1996, predating the appellant's "NOKUFSYRUP" registration. Relying on the Supreme Court's ruling in S. Syed Mohideen v. P. Sulochana Bai, the court held that Section 28(3) of the Trade Marks Act, 1999, grants concurrent rights to registered proprietors of identical or similar marks, barring infringement claims between them, though passing off actions remain viable under Section 27(2) as a common law remedy. Following its own precedent in Vaidya Rishi India Health (P) Ltd v. Suresh Dutt Parashar, the court declined to entertain infringement allegations, focusing solely on passing off. 

On facts, the court accepted the respondents' prior user from 1994 to 1999, undisputed by the appellant except for the starting date, and noted the 1997 Manufacturing Agreement's clauses acknowledging the respondents' ownership, estopping the appellant from denying pre-1997 use. 

The 1999 Assignment Deed was deemed prima facie invalid for not expressly transferring goodwill, as required under Section 42, and for non-registration within the stipulated period, rendering it unenforceable at the interim stage, though potentially triable.

Turning to passing off, the court outlined its tripartite test—goodwill, misrepresentation, and damage—stressing that the plaintiff's goodwill must predate the defendant's use, as per Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd and Pernod Ricard India (P) Ltd v. Karanveer Singh Chhabra. Since the respondents' use from 1994 predated the appellant's incorporation, no prior goodwill accrual was possible, ipso facto ruling out passing off. 

The court rejected the appellant's abandonment plea, distinguishing it from acquiescence, and held that the respondents' disuse from 1999 to 2024, due to fire and strike-off, did not constitute abandonment under Hardie Trading Ltd v. Addisons Paints & Chemicals Ltd, as there was no intent to relinquish rights, evidenced by outsourcing to a related entity and revival efforts. 

Non-use by the plaintiff is a defense in infringement but irrelevant in a passing off suit against the defendant, as clarified in Veerumal Praveen Kumar v. Needle Industries (India) Ltd. The appellant's evidence of goodwill—limited invoices, minimal advertisements—was deemed insufficient under Brihan Karan Sugar Syndicate Pvt Ltd v. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana, failing to prove distinctiveness or public association. 

Equitable arguments of the appellant's 25-year use were dismissed as unsound in law, per Laxmikant V. Patel v. Chetanbhai Shah, emphasizing prior continuous use for passing off success. Concluding no prima facie case, balance of convenience, or irreparable injury, the court dismissed the appeal, denying injunction and allowing the respondents to resume use under their registered mark.

Point of Law Settled in the Case:This judgment settles that in trademark disputes involving registered marks, no statutory infringement action lies against another registered proprietor under Section 28(3) of the Trade Marks Act, 1999, but passing off remains actionable under common law via Section 27(2), provided the plaintiff proves prior goodwill predating the defendant's use, misrepresentation, and damage. 

It clarifies that assignment deeds without explicit goodwill transfer and timely registration are prima facie invalid under Section 42, unenforceable at interim stages. 

Prior user, even sporadic, suffices to defeat passing off claims if commencing before the plaintiff's, without requiring continuity for defensive purposes under Section 34.

Abandonment demands proven intent to relinquish, not mere disuse due to extenuating circumstances like business disruptions, and non-use by the defendant cannot ground an injunction in passing off, distinguishing it from infringement defenses. Goodwill evidence must be robust, including sales, advertisements, and public distinctiveness, with long subsequent use by the plaintiff insufficient to enjoin the prior user reviving the mark. 

Case Title: Sana Herbals Private Limited Vs. Mohsin Dehlvi & Anr.

Date of Order: 5 January 2026

Case Number: FAO (COMM) 77/2025

Neutral Citation: 2026:DHC:7-DB

Name of Court: High Court of Delhi at New Delhi

Name of Hon'ble Judge: Hon'ble Mr. Justice C. Hari Shankar and Hon'ble Mr. Justice Om Prakash Shukla

Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Suggested Titles:

"Prior User Triumphs: Delhi High Court Upholds Denial of Injunction in Trademark Dispute"

Suggested Tags:

Trademark Infringement, Passing Off, Prior User, Assignment Deed, Goodwill in Trademarks, Trade Marks Act 1999, Delhi High Court, Pharmaceutical Trademarks, Abandonment of Mark, Interim Injunction, Intellectual Property Law, Unani Medicine, Commercial Courts Act, Section 27(2), Section 28(3), Quia Timet Action, Supreme Court Precedents, IP Appellate Board.