Bombay High Court Grants Injunction Protecting Registered Trade Mark SAPAT in Tea Business Dispute
[Case Title] : SAPAT International Private Limited Vs. NIRAVI Consumer LLP and Ors.
Date of Judgment: 21.07.2026
Case No.: Interim Application No. 6387 of 2025 in Commercial IP Suit No. 612 of 2025
Neutral Citation : 2026:BHC-OS:16227
[Court Name] : High Court of Judicature at Bombay (Ordinary Original Civil Jurisdiction in its Commercial Division)
Name of Hon'ble Judge: Hon'ble Mrs. Justice Sharmila U. Deshmukh
Factual and Procedural Background
The applicant/plaintiff, SAPAT International Private Limited (formerly known as Sapat Packaging Industry Private Limited), filed a commercial suit claiming trademark infringement and passing off regarding its registered trademark SAPAT under Class 30 (tea). The history traces back to a business started by Late Ramashankar Haribhai Joshi, which was subsequently assigned in 1995. Under the family arrangement/assignment in 1995, the tea business with Class 30 registrations was assigned to the plaintiff, while the healthcare business with Class 3 and Class 5 registrations went to an affiliate entity, now known as Sapat Global Health Private Limited. The defendants (NIRAVI Consumer LLP and others) operated retail outlets selling NIRAVI tea and healthcare products. Until June 2024, Defendant No. 2 procured tea from the plaintiff and sold it under SAPAT signages. Following the cessation of supply, the defendants began displaying signages bearing the mark SAPAT alongside NIRAVI, using adhesive tapes marked SAPAT on NIRAVI packaged tea, issuing invoices using the trade name Sapat & Co. Nashik, and listing SAPAT mixture on their price cards for tea. The plaintiff sought temporary injunctive relief.
Dispute before Court
The primary issue before the court was whether the plaintiff, as a registered proprietor of the trademark SAPAT in Class 30 (tea), was entitled to an injunction restraining the defendants from using the mark SAPAT or deceptively similar marks for selling tea, operating outlets, or displaying signages. The defendants resisted the injunction by alleging prior user rights, continuous use of the trade name Sapat & Co. Nashik for several decades, acquiescence by the plaintiff, and entitlement to use SAPAT as permitted users of Sapat Global Health Private Limited for Class 3 and 5 goods.
Reasoning of Judge
The Court observed that the plaintiff is the registered subsequent proprietor of the trademark SAPAT in Class 30 (tea) following the valid 1995 assignment. It held that an assignor or parties deriving rights through the assignor cannot claim prior user rights to defeat the effect of a valid trademark assignment. The Court found that the defendants failed to prove an independent right to the mark SAPAT for tea, as their past usage was under a common law license/commercial procurement arrangement with the plaintiff that ceased in June 2024. Furthermore, the court applied the principle of initial interest confusion, holding that displaying SAPAT signages at outlets selling NIRAVI tea draws consumers under the belief that SAPAT tea is available, creating actionable confusion regarding product origin.
Decision
The High Court allowed Interim Application No. 6387 of 2025 in terms of prayer clauses (a) and (d), granting a temporary injunction restraining the defendants from manufacturing, marketing, advertising, or selling tea under the mark SAPAT, operating tea counters using SAPAT, or using the mark to pass off their tea business as that of the plaintiff. A separate application filed by the plaintiff under Order 39 Rule 2A of the CPC alleging contempt of a previous ad-interim statement was dismissed for lack of concrete evidence. Operation of the injunction order was stayed for four weeks on the defendants' request.
One Important legal principle held in the case
Once a trademark has been validly assigned, the assignor or entities claiming through the assignor cannot assert a defense of prior user or prior adoption to defeat the statutory rights of the registered assignee.
[Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation ]
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Analysis of Trade Mark Assignment and Initial Interest Confusion in Family Business Disputes
Introduction:
The enforcement of intellectual property rights within family-owned businesses that split operations across different product categories often presents complex legal challenges. When trademark rights are divided by mutual consent or assignment deeds, conflicts frequently arise if one group entity attempts to leverage the common brand equity in overlapping trade channels. A prominent decision rendered by the High Court of Judicature at Bombay thoroughly examines the statutory protections available to registered trademark owners, the limitations of prior user defenses post-assignment, and the application of the doctrine of initial interest confusion in commercial transactions.
Factual and Procedural Background:
The origin of the trade name traces back to 1897 when a foundational business started marketing products under the name Sapat, followed by the establishment of tea outlets around 1905. Over decades, trademark registrations were secured across multiple classes, including early registrations in Class 30 for tea and Class 5 for healthcare preparations. In 1995, a structural division took place among the partners of the parent firm. Pursuant to explicit assignment documentation dated in January 1995, the tea business together with the registered trademarks under Class 30 was exclusively assigned to the entity now functioning as the plaintiff company. Concurrently, the healthcare and personal care business along with Class 3 and Class 5 registrations was assigned to a separate entity, now known as Sapat Global Health Private Limited. Both entities were duly recorded as subsequent proprietors in the records of the Trade Marks Registry in their respective classes.
The conflict emerged when business relations deteriorated between the corporate entity controlling the registered tea trademark and allied retail operators. Defendant No. 2 had long operated retail outlets in regional locations and maintained a supply arrangement to procure tea directly from the registered proprietor until June 19, 2024. Following the termination of this commercial supply arrangement, Defendant No. 1 and Defendant No. 2 began marketing tea under a newly adopted mark, Niravi. However, the defendants continued to display prominent signages combining Sapat with Niravi at their retail outlets, affixed adhesive tapes bearing the mark Sapat on Niravi tea packages, issued sales invoices referencing Sapat, and listed Sapat mixture on their tea price cards. Aggrieved by these actions, the registered proprietor instituted a commercial IP suit seeking temporary and permanent injunctive relief against trademark infringement and passing off.
Dispute Before the Court
The principal legal question requiring adjudication was whether the plaintiff, as the exclusive registered proprietor of the trademark Sapat in Class 30, was entitled to restrain the defendants from utilizing the mark or trade name in connection with tea sales, advertising, and store signages.
The plaintiff contended that the statutory rights under Class 30 rested solely with it by virtue of the 1995 assignment. The plaintiff asserted that any past permission granted to the defendants to use the brand was a mere permissive user under a commercial supply arrangement, which ceased upon termination of supply. Continued display of signages and brand elements by the defendants constituted statutory infringement and passing off.
Conversely, the defendants argued that the trademark Sapat originated as a common family house mark used continuously across all product lines since the late nineteenth century. They asserted a defense of prior user and honest concurrent user, claiming an independent historic existence of their regional trading entity. They further submitted that since an allied group company legitimately owned Class 3 and Class 5 registrations for Sapat Niravi, displaying signages at their stores was a lawful exercise of permitted user rights for health beverages, which could not be restricted merely because tea was sold in the same store.
Reasoning and Analysis of the Court
The High Court undertook a structured statutory analysis governed by the provisions of the Trade Marks Act, 1999. The Court primary noted that Section 28 of the statute confers an exclusive right upon the registered proprietor to use the trademark in relation to the specific goods for which it is registered. Under Section 29, any unauthorized commercial use or application of an identical or deceptively similar mark for registered goods, including use in advertising, constitutes actionable infringement.
In evaluating the defense of prior user, the Court rejected the contention that an assignor or parties claiming through an assignor can set up a plea of prior adoption against the registered assignee. The Court reasoned that allowing an assignor to assert prior rights after executing a formal assignment deed in 1995 would render the assignment completely nugatory and defeat statutory registration protections.
The Court further addressed the practical realities of retail sales and consumer perception by applying the doctrine of initial interest confusion. The Court emphasized that trademark protection extends to preventing confusion that arises at the initial stage of consumer attraction. Even if counter-level notices or disclaimers exist inside a shop to clarify product origin, displaying Sapat signages outside retail stores selling tea entices consumers into the outlet under the impression that Sapat tea is available. This creates a state of transient wonderment and deceptive association between Niravi tea and the registered brand Sapat.
The Court found that the defendants failed to produce cogent evidence demonstrating an independent commercial right to use Sapat for tea sales outside the revoked supply arrangement. The defense of long acquiescence was also rejected, as the historical usage was deemed permissive during the subsistence of active trade relations.
Final Decision of the Court
The High Court granted temporary injunctive relief in favor of the plaintiff under Interim Application No. 6387 of 2025. The Court restrained the defendants, their partners, agents, and representatives from manufacturing, marketing, selling, advertising, or dealing in tea under the trademark Sapat or any deceptively similar mark. The defendants were further enjoined from operating stores or counters for selling tea using the mark Sapat or passing off their tea products as those of the plaintiff. An interim application filed by the plaintiff alleging contempt for breach of an ad-interim statement was dismissed due to insufficient evidence of willful non-compliance regarding packaged tea. To enable the defendants to seek appellate remedies, the Court granted a four-week stay on the operation of the injunction.
Point of Law Settled
This judgment reaffirms two fundamental tenets of Indian intellectual property jurisprudence. First, a party to a trademark assignment—or any entity deriving title through such a party—cannot defeat the assignee's statutory exclusivity by pleading prior user rights established before the assignment. Second, initial interest confusion caused by displaying a registered mark on storefront signages constitutes trademark infringement and passing off if it misleads consumers into entering a retail establishment, irrespective of disclaimers placed at the final point of sale.
Title of the Case:
SAPAT International Private Limited v. NIRAVI Consumer LLP and Ors.
Date of Judgment:
21.07.2026
Case Number:
Interim Application No. 6387 of 2025 in Commercial IP Suit No. 612 of 2025
Neutral Citation:
2026:BHC-OS:16227
Name of Court:
High Court of Judicature at Bombay (Ordinary Original Civil Jurisdiction in its Commercial Division)
Name of Hon'ble Judge:
Hon'ble Mrs. Justice Sharmila U. Deshmukh
Written By:Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation .
Headnote of the Judgment:
SAPAT International Private Limited v. NIRAVI Consumer LLP and Ors., High Court of Judicature at Bombay, Interim Application No. 6387 of 2025 in Commercial IP Suit No. 612 of 2025, Neutral Citation 2026:BHC-OS:16227. The plaintiff, registered proprietor of the trademark SAPAT in Class 30 (tea) pursuant to a 1995 assignment, sought a temporary injunction against the defendants for trademark infringement and passing off. The defendants displayed SAPAT signages and brand elements at retail outlets selling NIRAVI tea after commercial supply ceased. The High Court held that assignors cannot assert prior user defenses post-assignment and applied the doctrine of initial interest confusion. Interim Application allowed granting injunction against defendants.
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