Inder Raj Sahni Vs Neha Herbal

Introduction: This case study examines a trademark dispute adjudicated by the High Court of Delhi, centered on the use of the trademark "NEHA" by two entities operating in the personal care sector. The plaintiffs, Vikas Gupta and Neha Herbals Pvt. Ltd., claimed prior adoption and registration of the "NEHA" mark for henna and allied herbal products, alleging that the defendant, Inder Raj Sahni of M/s Sahni Cosmetics, infringed their trademark and engaged in passing off by using the same mark for face creams. The defendant countered with claims of prior use since 1990 and sought cancellation of the plaintiffs’ trademark registrations.

Detailed Factual Background

The dispute revolves around the trademark "NEHA," a common Indian forename, used by both parties in the personal care industry. Vikas Gupta, Plaintiff No. 1, claimed to have adopted the mark in 1992, inspired by his sister’s name, for henna (mehandi) powder and ubtan (face packs) under his proprietorship, M/s Neha Enterprises. In 2007, he incorporated Neha Herbals Pvt. Ltd. (Plaintiff No. 2), which took over the business in 2012 via an assignment deed dated May 1, 2012. The plaintiffs expanded their product line to include mehandi cones, hair dyes, and other herbal products, securing trademark registrations for "NEHA" (Registration No. 1198061, dated May 12, 2003) and "NEHA HERBALS" (Registration No. 3752588, dated February 13, 2018) in Class 3, covering henna and related goods. They also applied for a device mark "Neha" (Application No. 4182573, dated May 21, 2019) for creams and other cosmetics on a proposed-to-be-used basis, which remained pending.

The defendant, Inder Raj Sahni, sole proprietor of M/s Sahni Cosmetics, claimed to have adopted the "NEHA" mark in 1990 for creams, asserting honest and concurrent use. He supported his claim with a 1990 manufacturing license and invoices demonstrating continuous use. The defendant’s attempts to register the "NEHA" mark (Applications No. 1462077 and 2153566) were refused or abandoned due to objections under Sections 9 and 11 of the Trade Marks Act, 1999, and non-compliance with examination reports. The plaintiffs initiated legal action in May 2019 after discovering cold creams bearing the "NEHA" mark sold by a retailer in Sadar Bazar, Delhi, alleging trademark infringement and passing off. The defendant countered that the plaintiffs were aware of his use since 2003 through a common wholesaler and accused them of delay and acquiescence, arguing that their suit was an opportunistic attempt to enter the creams market.

Detailed Procedural Background: The dispute unfolded through multiple legal proceedings, which were eventually consolidated. The plaintiffs filed a suit, CS(COMM) 1833/2019 (later renumbered as CS(COMM) 207/2023), before the District Court, seeking a permanent injunction against the defendant’s use of the "NEHA" mark, along with reliefs for passing off, delivery up, and rendition of accounts. On August 23, 2019, an Additional District Judge granted an ex-parte ad interim injunction, which was vacated on November 1, 2019, after the defendant’s application. The plaintiffs’ appeal (FAO (COMM) 144/2021) and review petition (No. 176/2021) were dismissed by the Delhi High Court on October 4, 2021, and December 16, 2021, respectively. The plaintiffs then approached the Supreme Court via SLP(C) No. 2493-2494/2022, which, on February 28, 2022 (amended April 4, 2022), directed the Trial Court to expedite the suit within 12 months, uninfluenced by prior interim orders.

Parallelly, the defendant filed two cancellation petitions, C.O. (COMM.IPD-TM) 355/2021 and C.O. (COMM.IPD-TM) 455/2022, before the Intellectual Property Appellate Board (IPAB), seeking removal of the plaintiffs’ "NEHA" and "NEHA HERBALS" registrations. Following the IPAB’s abolition in April 2021, these petitions were transferred to the Delhi High Court. On March 22, 2023, the High Court, with the parties’ consent, transferred the suit to itself and tagged it with the cancellation petitions, agreeing that evidence in the suit would apply to the cancellation proceedings. On April 17, 2023, the Supreme Court noted the transfer and directed the High Court to dispose of all proceedings within six months. On January 3, 2024, the parties agreed to hear the suit and cancellation petitions together, leading to a consolidated hearing and a common judgment delivered on May 19, 2025.

Issues Involved in the Case: The court framed the following issues on September 21, 2020, to resolve the dispute: Whether Plaintiff No. 1 is the proprietor of the trademark "NEHA" for the goods mentioned in the plaint? Whether the plaintiff has been in continuous use of the mark since 1992 or any other date thereafter? Whether the defendant is a prior user and adopter of the trademark "NEHA," and if so, its effect? Whether the plaintiff is guilty of concealment and suppression as alleged by the defendant? Whether the suit is barred by delay, laches, and acquiescence? Whether the plaintiff’s registration of the trademark "NEHA" is invalid and deserves cancellation? Whether the defendant’s use of the "NEHA" mark is likely to cause confusion or deception, leading to passing off? Whether the defendant’s use of the "NEHA" mark infringes the plaintiff’s registered trademark?

Plaintiffs’ Submissions: The plaintiffs argued that Vikas Gupta adopted the "NEHA" mark in 1992 and used it continuously for henna and allied products, establishing proprietary rights. They relied on trademark registrations (Nos. 1198061 and 3752588) and an assignment deed dated May 21, 2019, transferring rights from Neha Herbals Pvt. Ltd. to Vikas Gupta, followed by a license back to the company. The plaintiffs contended that their prior use and registration conferred exclusive rights under Section 28 of the Trade Marks Act, 1999, and that the defendant’s use of "NEHA" for creams infringed their mark under Sections 29(2)(a) and 29(4). They argued that the similarity of goods (both in Class 3), overlapping trade channels, and consumer base created a likelihood of confusion, supporting their passing off claim. The plaintiffs dismissed the defendant’s prior use claim, noting his failed registration attempts and lack of registration, and argued that their delay in filing the suit was due to discovering the defendant’s use only in May 2019. They opposed the cancellation petitions, asserting the validity of their registrations and continuous use since 1992.

Defendant’s Submissions: The defendant claimed prior adoption of the "NEHA" mark in 1990 for creams, supported by a manufacturing license and invoices. He invoked honest concurrent use and prior use under trademark law, arguing that his long-standing use predated the plaintiffs’ adoption. The defendant challenged the plaintiffs’ continuous use, alleging non-compliance with the Drugs and Cosmetics Act, 1940, for lacking a manufacturing license from 1992 to 2010. He accused the plaintiffs of acquiescence, claiming they were aware of his use since 2003 through a common wholesaler but initiated litigation only in 2019 to opportunistically enter the creams market. The defendant questioned the plaintiffs’ proprietorship, citing the timing and nominal consideration (INR 1,000) of the 2019 assignment deed, and sought cancellation of the plaintiffs’ registrations under Sections 47 and 57, arguing non-use, false claims, and lack of distinctiveness of the mark "NEHA" as a common name.

Detailed Discussion on Judgments Cited by Parties and Their Context: The court relied on several precedents to adjudicate the issues, each cited in specific contexts to elucidate trademark principles:

1. Nandhini Deluxe v. Karnataka Co-operative Milk Producers Federation Ltd., (2018) 9 SCC 183: Cited in the context of Issue No. 8 (infringement), this Supreme Court decision addressed the use of the common name "NANDHINI"/"NANDINI" for different goods within the same class. The court held that registration in one class does not confer exclusive rights over all goods in that class, especially for non-distinctive marks. In this case, it supported the finding that the plaintiffs’ registration for henna did not extend to creams, given the functional dissimilarity and lack of evidence of brand spillover.
2. Osram Gesellschaft Mit Beschrankter Haftung v. Shyam Sunder, 2002 SCC Online Del 423:  Delhi High Court decision clarified that a registered trademark holder cannot claim monopoly over all goods in a class based on a single product. The court applied this to hold that the plaintiffs’ goodwill in henna did not extend to creams, as the goods were distinct in function and trade channels.
3. Renessaince Hotel Holdings Incorporated v. B. Vijaya Sai, 2001 SCC Online Del 1051: For Section 29(4) infringement, this case outlined the three cumulative requirements for infringement involving dissimilar goods: identical/similar mark, reputation in India, and unfair advantage or detriment. The court found that the plaintiffs failed to prove reputation in creams, rendering Section 29(4) inapplicable.
4. Reckitt & Colman Products Ltd. v. Borden Inc., 1990 (1) All ER 873 (HL): Referenced in Issue No. 7 (passing off), this House of Lords decision established the classic trinity test for passing off: goodwill, misrepresentation, and damage. The court applied this test to assess whether the defendant’s use of "NEHA" for creams misrepresented an association with the plaintiffs’ henna products, concluding it did not.
5. Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., (2001) 5 SCC 73: Supreme Court case provided factors for determining deceptive similarity in passing off, emphasizing the nature, character, and trade channels of goods. The court used this to evaluate the likelihood of confusion, finding that the distinct packaging and product functions negated confusion.
6. Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories, 1965 (1) SCR 737: Supreme Court decision distinguished trademark infringement (statutory) from passing off (common law), emphasizing that passing off protects goodwill from misrepresentation. The court applied this to assess the plaintiffs’ passing off claim, focusing on misrepresentation.
7. Marico Ltd. v. Agro Tech Foods Ltd., 2010 SCC Online Del 3806:  Delhi High Court decision held that overlapping trade channels and consumer bases alone do not establish confusion if packaging is distinct. The court used this to conclude that the plaintiffs’ green packaging for henna versus the defendant’s distinct cream packaging reduced confusion.
8. Colgate Palmolive Company v. Anchor Health and Beauty Care Pvt. Ltd., 2003 SCC Online Del 1005: Delhi High Court case emphasized that passing off depends on overall presentation, not exact similarity. The court applied this to find that the distinct trade dress of the parties’ products negated misrepresentation.
9. People Interactive (India) Pvt. Ltd. v. Vivek Pahwa, 2016 SCC Online Bom 7351: Bombay High Court decision held that common names or dictionary words have a narrower scope of protection. The court used this to reason that "NEHA," a common forename, required strong secondary meaning for broad protection, which the plaintiffs failed to prove.

Detailed Reasoning and Analysis of Judge: On Issue No. 1 (proprietorship), the court confirmed Vikas Gupta’s proprietorship of the "NEHA" and "NEHA HERBALS" marks based on registrations (Nos. 1198061 and 3752588) and assignment deeds, supported by certified records (Ex. PW-3/1 and PW-3/2). The defendant’s challenge to the 2019 assignment’s timing and nominal consideration (INR 1,000) was dismissed, as the court found the transaction valid despite Vikas Gupta’s inability to recall board resolution details, deeming such questions relevant but not fatal.

For Issue No. 2 (continuous use), the court found that the plaintiffs established use since 1992 through invoices, advertisements, and witness testimonies, rejecting the defendant’s claim of non-compliance with the Drugs and Cosmetics Act due to insufficient evidence. On Issue No. 3 (defendant’s prior use), the court held that the defendant failed to prove use since 1990, as his invoices and license lacked specificity, and his registration attempts were unsuccessful. Issue No. 4 (concealment) was decided against the defendant, as no material misstatement by the plaintiffs was proven. Issue No. 5 (delay and acquiescence) was also rejected, as the court found no evidence that the plaintiffs were aware of the defendant’s use before 2019, negating acquiescence.

On Issue No. 6 (validity of registration), the court upheld the plaintiffs’ registrations, finding no grounds under Sections 47 (non-use) or 57 (rectification) for cancellation, as the plaintiffs demonstrated continuous use and no false claims. Issue No. 8 (infringement) was decided against the plaintiffs. The court analyzed Section 29(2)(a), which requires similarity of goods and likelihood of confusion, and found that henna and creams were functionally dissimilar despite being in Class 3. Citing Nandhini Deluxe and Osram, the court held that registration does not confer class-wide monopoly, and the plaintiffs’ goodwill was limited to henna. For Section 29(4) (dissimilar goods), the court, referencing Renessaince Hotel, found no evidence of the plaintiffs’ reputation in creams or detriment to their mark, rendering the claim untenable.

Issue No. 7 (passing off) was central to the plaintiffs’ case. Applying the trinity test from Reckitt & Colman, the court assessed goodwill, misrepresentation, and damage. The plaintiffs established goodwill in henna but not in creams, as their application for creams was proposed-to-be-used, and no evidence showed brand extension. On misrepresentation, the court, citing Cadila, Marico, and Colgate, found no likelihood of confusion due to distinct packaging (green for plaintiffs’ henna, different colors for defendant’s creams) and functional differences. The court noted the defendant’s admission of overlapping trade channels but held it insufficient without evidence of confusion, such as market surveys. Referencing People Interactive, the court emphasized that "NEHA," a common name, required secondary meaning for broad protection, which was absent. Thus, no misrepresentation or damage was proven, defeating the passing off claim.

Final Decision: The court dismissed the plaintiffs’ suit (CS(COMM) 207/2023), finding no trademark infringement or passing off by the defendant’s use of "NEHA" for creams. The defendant’s cancellation petitions (C.O. (COMM.IPD-TM) 355/2021 and 455/2022) were also dismissed, upholding the plaintiffs’ registrations. No costs were awarded, and a decree was directed accordingly.

Law Settled in the Case: This case reinforces several trademark law principles:

1. Scope of Registered Marks: Registration in a class does not confer exclusive rights over all goods in that class, especially for common names (Nandhini Deluxe, Osram).
2. Functional Dissimilarity: Goods within the same class may be dissimilar in function, negating infringement under Section 29(2)(a) unless confusion is proven.
3. Section 29(4) Infringement: Claims for dissimilar goods require proof of reputation, unfair advantage, or detriment, with a high evidentiary threshold (Renessaince Hotel).
4. Passing Off Requirements: A passing off claim requires goodwill, misrepresentation, and damage. Common names need strong secondary meaning for broad protection (Reckitt & Colman, People Interactive).
5. Distinct Packaging: Distinct trade dress and packaging can negate confusion despite overlapping trade channels (Marico, Colgate).
6. Cancellation of Registration: Cancellation under Sections 47 or 57 requires clear evidence of non-use or invalidity, which the defendant failed to provide.
7. Prior Use and Acquiescence: Claims of prior use must be substantiated with cogent evidence, and acquiescence requires proof of knowledge and inaction.

Case Title: Inder Raj Sahni Vs. Neha Herbals Pvt. Ltd. :Date of Order: May 19, 2025:Case No.: C.O. (COMM.IPD-TM) 355/2021, C.O. (COMM.IPD-TM) 455/2022, CS(COMM) 207/2023: Neutral Citation: 2025:5HC:4037:High Court of Delhi: Hon’ble Mr. Justice Sanjeev Narula

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