A recent decision of the Delhi High Court reiterates a fundamental principle of Indian trademark law, prior user rights prevail over statutory registration. In a dispute over the mark “ATHERMAL,” the Court set aside an injunction granted by the District Court and granted interim protection to the party claiming earlier use of the mark.

Background

The appeal arose from an order passed by the Additional District Judge-04, North-West District, Rohini Courts, Delhi. Aggrieved by the order restraining him from using the mark “ATHERMAL,” the Defendant, Amit Bansal, approached the High Court in appeal.

The Respondent/Plaintiff, Amit Garg, had instituted a suit before the District Court claiming that he carried on business under the name M/s Athermal Industries AG, engaged in the manufacture and marketing of various goods. It was further asserted that Respondent No. 2, a proprietorship concern run by his family members, marketed the same range of goods under the subject mark.

According to the Respondents, the mark “ATHERMAL” was honestly conceived and adopted in 2003 through a predecessor. An application for registration of the mark in Class 9 was filed in 2010, which was subsequently granted registration in 2017.

In response, the Appellant/Defendant asserted in the Written Statement that the mark “ATHERMAL” had been in use since 1985 by his predecessor-in-title, Rajinder Kumar Bansal, who carried on business as M/s Ambay Traders and Manufacturers from the same premises. Mr. Bansal, the Appellant’s father, was said to have adopted and used the mark, which the Appellant later continued to use after establishing his own enterprise in 2006 under the name M/s Ambay Industrial Corporation.

Both parties moved applications before the District Court seeking interim injunctions against the use of the mark “ATHERMAL.” By the impugned order, the Court allowed the Plaintiff’s application and rejected the Defendant’s application, thereby restraining the Appellant from using the mark.

Appellant’s Contentions Before the High Court

The Appellant argued that the mark “ATHERMAL” was coined and adopted in 1985 by his father, Mr. Rajinder Kumar Bansal, who extensively used it for welding-related goods, including welding apparatus, cables, regulators, transformers, machines, tools and welding safety glasses.

When the Appellant commenced his own business in 2006 under M/s Ambay Industrial Corporation, he continued using the mark with his father’s permission, operating from the same premises and issuing invoices under the mark.

The Appellant further contended that:

1. The Respondents had commenced business only in October 2011, making it improbable that they had used the mark earlier.
2. The Appellant had filed trademark applications for “ATHERMAL” in 2011 in Classes 9 and 7, which were still pending before the Trademarks Registry.
3. Several examination reports issued by the Registry cited the Appellant’s applications as conflicting marks against the Respondents’ applications.
4. In response to those examination reports, the Respondents argued that the Appellant’s mark was visually, structurally and phonetically different, thereby acknowledging the existence of the Appellant’s mark.

The Appellant also alleged that the invoices filed by the Respondents to establish prior use were forged and illegible.

Respondents’ Submissions

The Respondents maintained that Respondent No. 1 commenced business under the subject mark in 2003 through Respondent No. 2, M/s Shiva Traders, a family proprietorship run by his mother, Ms. Asha Rani. According to them, rights in the mark were transferred through an oral family settlement.

They further argued that:

1. The Appellant’s claim of use since 1985 was unsupported by documentary evidence.
2. No assignment deed existed transferring the mark from Mr. Rajinder Bansal to the Appellant.
3. The Appellant’s trademark applications claimed use only from 2006, indicating that the Appellant was neither the prior applicant nor prior user.
4. The Respondent had secured registration of the subject mark in 2017, while the Appellant’s applications remained pending.
5. The Appellant attempted to amend the user date from 2006 to 1985 in 2018, which is belated and a substantial change.

The Respondents also alleged that the Appellant’s invoices were fabricated and argued that there was no evidence of use after 1999, suggesting abandonment.

High Court’s Analysis and Findings

The High Court examined two principal issues: (i) alleged inconsistency in the Respondents’ stand before the Trademarks Registry and the Court, and (ii) the competing claims of prior use.

The Appellant contended that the Respondents had earlier asserted before the Trademarks Registry that the marks were dissimilar and therefore could not now claim deceptive similarity in the suit. However, the Court observed that although the Appellant’s mark had been cited against some applications of the Respondents, it had not been cited against the subject mark in Class 9, which formed the basis of the present suit. Consequently, the principle of approbate and reprobate did not apply in the circumstances.

The Court then examined the rival claims of prior use. The District Court had accepted the Respondents’ claim of use since 2003, while rejecting the Appellant’s claim on the ground that the Appellant had not produced a formal assignment deed from his predecessor and that his trademark applications were still pending.

The High Court found this reasoning erroneous. It noted that the Appellant had produced invoices dating back to 1990, showing use of the mark through his predecessor, Mr. Rajinder Kumar Bansal. At the same time, the Respondents’ claim of rights in the mark was based on an oral family settlement, which had been accepted by the Trial Court without similar scrutiny.

In view of the documentary material placed on record, the Court held that the Appellant had made out a prima facie case of prior use since at least 1990. The Court reiterated the settled principle that prior user rights prevail over registration, and therefore the Appellant’s earlier use was prima facie superior to the Respondent’s registered mark, which claimed user only from 2003.

Decision

In light of these findings, the High Court allowed the appeal and set aside the order of the District Court. The Court restrained the Respondent/Plaintiff from using the subject mark “ATHERMAL” or any mark deceptively similar to it in relation to welding goods during the pendency of the suit.

Comment

This ruling reinforces the well-established principle of trademark law that prior user rights prevail over statutory registration. By recognising the Appellant’s prima facie evidence of earlier use of the mark “ATHERMAL,” the Court emphasised that actual market use and commercial goodwill carry greater weight than mere registration, particularly at the interim stage.