New Parameters for Passing Off in Concurrent Trademark Use: Delhi High Court Ruling in BROAD PEAK Dispute

Introduction

The judgment in BROAD PEAK INVESTMENT HOLDINGS LTD. AND ANR. v. BROAD PEAK CAPITAL ADVISORS LLP AND ANR. from the Delhi High Court, pronounced on January 20, 2025, establishes a noteworthy precedent in trademark disputes involving passing off and concurrent use. The case arises from a dispute between the plaintiffs—an investment advisory firm with an international presence—and the defendants, who operate under a similar trade name, "BROAD PEAK," in India. At its core, the litigation revolves around allegations of trademark infringement and passing off, where the plaintiffs accuse the defendants of misrepresenting their business identity, thereby causing confusion in the market. Key issues include the timeline of trademark registration, prior usage, the adequacy of evidence regarding reputation and goodwill, and the applicability of the passing off claim under both statutory and common law principles.

Summary of the Judgment

The court examined the merits of the interim injunction application filed by the plaintiffs under Order XXXIX Rules 1 & 2 of the Civil Procedural Code, 1908. The plaintiffs sought a permanent injunction to restrain the defendants from using the “BROAD PEAK” mark, alleging that their earlier usage had generated significant goodwill and reputation in India. However, the Delhi High Court observed that:

The defendants had been using the mark continuously and in a bona fide manner since August 30, 2016.
Both parties later obtained registrations for identical trademarks in class 36, thereby creating a scenario of concurrent use.
The critical requirements for a passing off action—namely, proving substantial goodwill in the Indian market and demonstrating misrepresentation—were not adequately satisfied by the plaintiffs.
The balance of convenience favored the defendants, particularly as the evidence indicating actual confusion was not substantial or conclusive at this interlocutory stage.

Consequently, the interim injunction application was dismissed, with the court noting that the decision was made solely for the interim application and would not preclude further litigation on the merits of the dispute.

Analysis

Precedents Cited

The judgment extensively referred to several key precedents that illuminate the framework for passing off and trademark disputes:

S. Syed Mohideen v. P. Sulochana Bai: The Supreme Court’s "triple test" for passing off was reiterated, wherein the plaintiff must establish their goodwill, identify the misrepresentation by the defendant, and demonstrate resultant damage to goodwill.
Satyam Infoway v. Siffynet Solutions: This case underscored the importance of volume of sales, advertising, and evidence of market reputation when assessing whether sufficient goodwill has been built.
Brihan Karan Sugar Syndicate v. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana: The recent observations in this decision stressed the relevance of commercial evidence such as sales volume and advertising efforts in establishing a trademark’s reputation.
Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries and Toyota Jidosha Kabushiki Kaisha v. Tech Square Engineering: These cases provide insight into the territoriality principle, emphasizing that international reputation alone does not suffice to establish goodwill within the Indian market.

These precedents informed the Court’s approach by underscoring that the mere international recognition or sporadic use does not automatically create an enforceable right in India—especially when the evidence for in-market goodwill is tentative.

Legal Reasoning

The Court’s reasoning is rooted in a methodical application of existing trademark principles:

Concurrent Use and Registration Timing: The defendants had incorporated their entity and registered the mark prior to the plaintiffs’ trademark registration in India (which was filed on a “proposed to be used” basis). This chronological sequence significantly undermined the plaintiffs’ claim of exclusive rights.
Goodwill and Reputation in India: While the plaintiffs attempted to rely on their longstanding international reputation and sporadic use of the mark since 2008, the court noted that there was insufficient evidence of extensive commercial activity, broad advertising, or sustained consumer recognition within India. The assessment referenced the territoriality principle, making it clear that evidence of goodwill must be firmly established in the domestic market.
Bona Fide Adoption: The defendants’ proactive search of corporate and trademark databases before instituting the mark underscored their honest adoption of the terminology. This fact, combined with the continuous use since 2016, supported the view that their use of "BROAD PEAK" was legitimate and occurred without malafide intent.
Passing Off Analysis: The judge recapitulated the classic ingredients of passing off—goodwill, misrepresentation, and consequent damage—highlighting that the plaintiffs failed to sufficiently prove any market confusion or actual damage resulting from the defendants’ actions. Moreover, equivocal evidence such as alleged misdirected emails and disputed third-party website listings did not meet the threshold required to prove misrepresentation.

Overall, the legal reasoning balanced the statutory provisions of the Trade Marks Act with common law principles governing passing off, resulting in a decision that prioritized the defendants’ established use and the lack of convincing proof of consumer confusion.

Impact

This judgment is likely to have far-reaching implications across similar trademark disputes:

Clarification on Concurrent Use: The decision reinforces the view that when two parties secure registrations for an identical trademark—especially in identical classes—the acceptance of concurrent use is inevitable unless clear evidence of misrepresentation exists.
Emphasis on Local Goodwill: The ruling stresses that international reputation, while influential, does not automatically translate into domestic goodwill. Future litigants will be compelled to provide robust, India-specific evidence of market penetration and consumer recognition to succeed in passing off claims.
Burden of Proof: The verdict underscores the onus on plaintiffs to demonstrably prove genuine market confusion and damage, thereby potentially raising the evidentiary standards in trademark disputes.
Interim Relief Considerations: The balance of convenience in favor of defendants at the interlocutory stage may influence how courts assess injunctions in similar cases, particularly when one party has an established pattern of continuous use.

Complex Concepts Simplified

To aid understanding of some of the more intricate legal concepts involved:

Passing Off: A common law remedy that protects unregistered trademarks. It requires that the owner proves three elements: that they have built a reputation (goodwill), that the defendant’s use is misleading (misrepresentation), and that this causes damage to the owner’s business.
Concurrent Use: This occurs when two parties lawfully obtain registrations for the same or similar marks. In such cases, unless clear evidence of confusion or misuse is provided, both parties may be allowed to continue using the mark.
“Proposed to be used” Application: A trademark application filed on this basis indicates intent to use the mark in the future. It is generally subject to stricter scrutiny regarding the establishment of actual use and associated goodwill.
Territoriality Principle: Intellectual property rights, particularly in trademarks, are generally confined to a specific geographical area. A mark’s international reputation does not automatically grant protection within India unless there is substantial local use and recognition.

Conclusion

In conclusion, the Delhi High Court’s decision in the BROAD PEAK dispute underscores a shifting judicial perspective on trademark infringement and passing off. By highlighting the necessity for demonstrable, domestic goodwill and dismissing the potential for incidental confusion in a context of concurrent use, the judgment sets a critical precedent. It serves as an important reminder that, in trademark litigation, the nuances of local market presence and actual usage remain pivotal. The ruling not only refines the application of traditional common law principles but also emphasizes that robust evidence is indispensable in securing interim injunctions against alleged misrepresentations.

This comprehensive analysis provides clear guidance for future cases, where litigants must meticulously document and establish local market recognition to successfully invoke the doctrine of passing off in an environment of overlapping trademark registrations.