Prior Use and Global Trademark Strategy
Introduction: The case of Products and Ideas (India) Pvt. Ltd. Vs. Nilkamal Limited represents a significant legal battle in the realm of intellectual property law, specifically concerning trademark infringement and the principle of international exhaustion under the Trade Marks Act, 1999. The dispute centers around the use of the trademark "STELLADEXIN" and related marks, involving a plaintiff seeking to protect its registered trademark rights in India and defendants asserting prior use and authorization from the original trademark owner. This case study delves into the factual matrix, procedural developments, core legal issues, judicial reasoning, and the law settled by the High Court of New Delhi, offering insights into the complexities of trademark law in the context of international trade and agency agreements.
Factual Background: The plaintiff, Products and Ideas (India) Pvt. Ltd., is an Indian company engaged in the sale of commercial kitchen and bakery equipment, including commercial induction cooktops marketed under the brand name "STELLADEXIN." The trademark "STELLADEXIN" was originally adopted by Stella Industrial Co. Ltd., a Chinese company established in 1983, specializing in electromagnetic household appliances. The plaintiff began its business relationship with Stella Industrial in 2015, entering into an Exclusive Agency Agreement on April 1, 2017, which appointed the plaintiff as the exclusive agent for distributing, selling, and promoting induction cookers under the "STELLA" brand in India. This agreement was renewed in 2018 for three years and again in 2022 for a five-year term ending March 31, 2027. The plaintiff successfully registered the "STELLADEXIN" trademark in India as a word mark in classes 7, 9, and 11, and also applied for registration of the "STELLA" mark, which faced objections from the Trade Marks Registry. Additionally, the plaintiff obtained copyright registration for the artistic representation of the mark.
The defendant, Nilkamal Limited, along with other parties including Stella Industrial (defendant no. 5), contested the plaintiff’s claims. Stella Industrial, as the original equipment manufacturer (OEM), had been supplying products to the plaintiff under the agency agreements. However, it was also selling products bearing the "STELLA" marks in India through other entities, including M/s Mittal International since 2013, predating the plaintiff’s use and registration. Defendant no. 2, another importer of Stella Industrial’s products, was authorized to distribute these products in India through a verified arrangement facilitated by Ningbo Asgun Electronics Co., Ltd., supported by letters dated March 5, 2024, and June 5, 2024. The plaintiff alleged that the defendants’ use of the "STELLA" mark, which it claimed was deceptively similar to "STELLADEXIN," constituted trademark infringement.
Procedural Background: The case, filed as CS(COMM) 715/2024, was brought before the High Court of New Delhi, with several interim applications (I.A. 37339/2024, I.A. 41504/2024, I.A. 49076/2024) under Order XXXIX of the Code of Civil Procedure, 1908. The plaintiff sought interim injunctions under Rules 1 and 2 to restrain the defendants from using the "STELLA" marks, while defendant no. 2 sought to vacate an ex parte ad interim injunction order dated August 27, 2024, under Rule 4. Hearings were conducted on October 25, 2024, October 28, 2024, March 25, 2025, April 15, 2025, and May 13, 2025, with the judgment reserved on the last date. The plaintiff’s counsel, led by Mr. J. Sai Deepak, argued for the protection of its registered trademark rights, while the defendants, represented by Mr. Arvind Nigam and others, defended their use based on prior adoption and authorization by Stella Industrial.
Core Dispute: The central issue in this case was whether the defendants’ use of the "STELLA" marks constituted trademark infringement under the Trade Marks Act, 1999, given the plaintiff’s registered trademark "STELLADEXIN" and its claim of exclusive rights in India. The plaintiff argued that it had been authorized by Stella Industrial to use and register the "STELLADEXIN" mark, and that the defendants’ use of similar marks infringed its rights. Conversely, the defendants contended that Stella Industrial, as the original owner and prior user of the "STELLA" marks since 2002 in China and 2013 in India, held superior rights under Section 34 of the Act, which protects prior users. Additionally, defendant no. 2 asserted that it was an authorized reseller of Stella Industrial’s genuine products, and thus its actions did not amount to infringement, invoking the principle of international exhaustion under Section 30(3).
Discussion on Judgments:The court’s analysis referenced two significant judgments cited by the defendants to support their position on international exhaustion and prior use. The first was Kapil Wadhwa v. Samsung Electronics Co. Ltd. (2012:DHC:616:DBB), decided by a Division Bench of the Delhi High Court. In this case, the court recognized the principle of international exhaustion under Section 30(3) of the Trade Marks Act, holding that the import and resale of genuine goods bearing a trademark by an authorized reseller does not constitute infringement, as the trademark rights are exhausted once the goods are lawfully placed in the market anywhere in the world. This precedent was directly relevant to the defendants’ argument that their importation and sale of Stella Industrial’s genuine products in India, with proper authorization, did not infringe the plaintiff’s trademark rights.
The second judgment cited was Seagate Technology LLC v. Daiichi International (2024:DHC:4193), decided by a Coordinate Bench of the Delhi High Court. This case reaffirmed the principles laid down in Kapil Wadhwa, emphasizing that the resale of genuine products by an authorized importer does not violate the trademark owner’s rights under the principle of exhaustion. The defendants relied on this judgment to argue that defendant no. 2’s activities as an authorized reseller of Stella Industrial’s products were protected under the law. These judgments provided a robust legal foundation for the defendants’ defense, highlighting the significance of prior use and the legitimacy of importing genuine goods in trademark disputes.
Reasoning and Analysis of the Judge: The court noted that Stella Industrial (defendant no. 5) was the prior adopter and user of the "STELLA" marks in China since 2002 and in India since 2013 through M/s Mittal International, as evidenced by invoices. This predated the plaintiff’s use of the mark in 2015 and its trademark registrations in India. Under Section 34 of the Trade Marks Act, a prior continuous user of a trademark is protected against infringement claims, even by a subsequent registered proprietor. The court found that Stella Industrial’s prior use in India established its rights over the "STELLA" marks, rendering the plaintiff’s infringement claim untenable.
Furthermore, the court examined the relationship between the parties. The plaintiff and defendant no. 2 were both resellers of Stella Industrial’s products, importing and selling them in India. The court observed that defendant no. 2’s activities were authorized by Stella Industrial through documented arrangements, as evidenced by letters dated March 5, 2024, and June 5, 2024. The termination of the plaintiff’s Exclusive Agency Agreement on November 13, 2024, further weakened its claim to exclusivity. Applying the principle of international exhaustion under Section 30(3), the court held that the import and sale of genuine products by an authorized reseller, such as defendant no. 2, did not constitute infringement, as the goods were original and sourced from Stella Industrial.
The court also considered the balance of convenience, concluding that granting an interim injunction would unfairly restrict the defendants’ lawful use of the "STELLA" marks, which had been in use since 2013, while creating a monopoly for the plaintiff, who was merely an importer. The plaintiff failed to establish a prima facie case for an injunction, as its rights were subordinate to those of Stella Industrial, the prior user and original proprietor.
Final Decision: The High Court of New Delhi, in its judgment reserved on May 13, 2025, vacated the ex parte ad interim injunction order dated August 27, 2024. The court allowed I.A. 41504/2024, filed by defendant no. 2 to vacate the injunction, and dismissed I.A. 37339/2024 and I.A. 49076/2024, filed by the plaintiff for interim relief. The defendants were permitted to sell goods under the marks "STELLA," "STELLADEXIN," and related marks in India. The court clarified that its observations were limited to the adjudication of the interim applications and would not influence the final outcome of the suit. The matter was listed for further proceedings before the Joint Registrar on August 11, 2025.
Law Settled in This Case: This case reinforces the principle of prior use under Section 34 of the Trade Marks Act, 1999, affirming that a continuous prior user of a trademark holds superior rights over a subsequent registered proprietor. It also underscores the application of international exhaustion under Section 30(3), which protects the import and resale of genuine goods bearing a trademark by authorized resellers, provided the goods are lawfully placed in the market. The judgment clarifies that trademark infringement claims cannot succeed against authorized resellers dealing in original products, particularly when the original proprietor has prior use. This decision aligns with established precedents and strengthens the legal framework governing trademark rights in the context of international trade and agency agreements.
Case Title: Products and Ideas (India) Pvt. Ltd. Vs. Nilkamal Limited and Ors
Date of Order: May 13, 2025
Case Number: CS(COMM) 715/2024
Neutral Citation: 2025:DHC:5052
Name of Court: High Court of New Delhi
Name of Judge: Hon'ble Justice Shri Amit Bansal
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
