Trademark Ownership, Goodwill and the Doctrine of Reversion
Introduction: The dispute arises between Uto Nederland B.V., a Dutch entity, and Tilaknagar Industries Ltd., an Indian spirits manufacturer, over the trademarks 'MANSION HOUSE' and 'SAVOY CLUB'. At the heart of the conflict lies the question of whether a conditional ceding of these marks in 1987 resulted in a permanent transfer of ownership to Tilaknagar or whether the trademarks automatically reverted to UTO upon breach of conditions as stipulated in the ceding arrangement. The High Court of Bombay’s Commercial Appellate Division, in a detailed judgment delivered on 16 July 2025, adjudicated upon this multifaceted controversy, examining the doctrines of passing off, transborder reputation, and the impact of Section 31 of the Transfer of Property Act, 1882 on trademark ownership.
Factual Background: UTO Nederland B.V. and its group companies are Dutch entities engaged in the global manufacture and distribution of alcoholic beverages. UTO originally registered the trademark 'MANSION HOUSE' in the Netherlands in 1922 and 'SAVOY CLUB' in 1967, and subsequently obtained registration in multiple jurisdictions, including India. On 7 July 1983, UTO entered into a License and Manufacturing Agreement with Tilaknagar Industries Ltd. (Tilaknagar) for the manufacture and sale of liquor under the said trademarks in India, on the condition that Tilaknagar would procure specified quantities of concentrates from UTO. In February 1987, following litigation between UTO and the Scotch Whisky Association in the Netherlands regarding misleading use of the term "Scotch", UTO conditionally ceded the trademarks to Tilaknagar via two interlinked letters dated 23 February 1987. The cession was subject to Tilaknagar’s continued compliance with procurement obligations, failing which the trademarks would revert to UTO. Although Tilaknagar continued to use the trademarks, it stopped procuring concentrates from UTO by 1994, and began using self-developed substitutes.
Procedural Background: UTO initiated Commercial Suit No. 2 of 2009 (originally Suit No. 632 of 2009) before the High Court of Bombay, seeking a permanent injunction against Tilaknagar for passing off and infringement of copyright in the artistic works associated with the trademarks 'MANSION HOUSE' and 'SAVOY CLUB'. The suit also sought mandatory relief for cancellation of registrations obtained by Tilaknagar and damages. UTO filed Notice of Motion No. 993 of 2009 for interim relief, which was dismissed by a Single Judge on 22 December 2011. UTO preferred Commercial Appeal No. 66 of 2012 challenging this order. In response, Tilaknagar filed Cross Objection No. 3 of 2012 disputing the finding that UTO enjoyed transborder reputation.
In parallel, Tilaknagar filed Counterclaim No. 6 of 2010 with Notice of Motion No. 1287 of 2010 seeking to restrain UTO from using the marks. In 2014, UTO transferred part of its rights to Allied Blenders and Distillers (ABD), who moved Interim Application No. 16999 of 2023 seeking permission to introduce products in West Bengal under the trademark 'MANSION HOUSE'. By order dated 7 February 2025, a Single Judge rejected Tilaknagar’s motion and allowed ABD’s application. Tilaknagar then filed Commercial Appeal (L) Nos. 6617 and 6622 of 2025. All three appeals were adjudicated together in a common judgment dated 16 July 2025.
Core Dispute:The central controversy revolved around the legal status of the 1987 ceding arrangement and whether the trademarks 'MANSION HOUSE' and 'SAVOY CLUB' reverted to UTO upon breach by Tilaknagar. UTO contended that the ceding was conditional and that Tilaknagar’s failure to procure concentrates as agreed caused automatic reversion of ownership under Section 31 of the Transfer of Property Act. Conversely, Tilaknagar argued that the transfer was absolute, that any breach merely gave rise to damages, and that UTO had waived any such condition through prolonged inaction and acquiescence.
Discussion on Judgments: UTO relied heavily on judicial precedents recognizing the enforceability of superadded conditions under Section 31 of the Transfer of Property Act. These included Nagindas Ramdas v. Dalpatram Ichharam, (1974) 1 SCC 242, for the proposition that judicial admissions in pleadings are conclusive unless withdrawn or explained. It also referred to Indu Kakkar v. Haryana State Industrial Development Corp., (1999) 2 SCC 37, and Harichand & Co. v. Gosho Kabushiki Kaisha, (1925) ILR 49 Bom 25, to assert the principle of automatic extinguishment of title upon breach of a superadded condition.
To support its passing off claim, UTO invoked N.R. Dongre v. Whirlpool Corporation, (1996) 5 SCC 714, and Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd., (2018) 2 SCC 1, affirming the doctrine of transborder reputation and the ability to maintain passing off claims even in the absence of local sales.
On the contrary, Tilaknagar placed reliance on Madanlal Fakirchand Dudhediya v. Shree Changdeo Sugar Mills Ltd., 1962 (3) SCR 973, and Devendra Prasad Sukul v. Surendra Prasad Sukul, 1935 SCC OnLine PC 54, to argue that no automatic reversion can take place without a suit for declaration and that Section 31 does not displace this requirement. For the defence of delay, waiver and acquiescence, Tilaknagar cited Amritdhara Pharmacy v. Satya Deo Gupta, 1962 SCC OnLine SC 13, and Ramdev Food Products v. Arvindbhai Rambhai Patel, (2006) 8 SCC 726, asserting that UTO had sat on its rights for over a decade after the breach and thus lost entitlement to injunctive relief.
Reasoning and Analysis of the Judge: The Division Bench of the High Court examined the 1987 ceding letters closely and concluded that the two letters formed a composite transaction. The second letter explicitly stipulated that the trademarks would revert to UTO if Tilaknagar failed to comply with the procurement obligations. The Court rejected Tilaknagar’s contention that the two letters constituted independent contracts, holding that the absence of consideration in the first letter necessitated its reading alongside the second. The judges emphasized that Section 31 of the Transfer of Property Act permits insertion of superadded conditions in transactions and enables automatic reversion on occurrence of the stipulated event.
The Bench was particularly critical of the long delay in judicial relief, but held that repeated correspondence from Tilaknagar seeking to resume procurement, along with UTO’s consistent assertions of ownership, negated the elements of waiver or abandonment. The Court reaffirmed that an owner of a mark with established transborder reputation is entitled to protect the mark against misappropriation in India, irrespective of local sales. The findings of the Single Judge in 2011 and 2025 were carefully scrutinized, with the Court concluding that the former failed to adjudicate the reversion issue adequately, while the latter rightly found in favour of UTO and ABD.
Final Decision: The Court allowed UTO’s Commercial Appeal No. 66 of 2012, set aside the order dated 22 December 2011, and granted interim injunction restraining Tilaknagar from using the trademarks ‘MANSION HOUSE’ and ‘SAVOY CLUB’ pending the suit. It also upheld the order dated 7 February 2025 granting leave to ABD to introduce products in West Bengal. Tilaknagar’s Commercial Appeals (L) No. 6617 and 6622 of 2025 were dismissed.
Law Settled in This Case: This judgment settles several important propositions in Indian trademark law. First, a conditional transfer of trademark rights, if coupled with a superadded condition clearly embedded in the same transactional framework, can result in automatic reversion of ownership upon breach, without the need for a separate declaratory suit. Second, a claim for passing off can be sustained even by a foreign proprietor with no physical presence in India, provided transborder reputation is established. Third, long delays in asserting rights may not amount to waiver if there is continuing assertion of ownership and absence of detrimental reliance. Fourth, the scope of Section 31 of the Transfer of Property Act extends to intellectual property transactions, and if properly invoked, operates as a defeasance clause.
Case Title: Uto Nederland B.V. & Anr. v. Tilaknagar Industries Ltd. & Ors.
Date of Order: 16 July 2025
Case Number: Commercial Appeal No. 66 of 2012
Neutral Citation: 2025:BHC-OS:10958-DB
Name of Court: High Court of Bombay
Name of Judge: Hon’ble Chief Justice Alok Aradhe and Hon’ble Mr. Justice Sandeep V. Marne
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
