Passing Off Requires Goodwill Prior to Defendant’s First Use; Long Non‑Use and “Abandonment” Cannot, at Interim Stage, Defeat a Prior User with Subsisting Registration

Case: SANA HERBALS PRIVATE LIMITED v. MOHSIN DEHLVI & ANR. (2026 DHC 7-DB)
Court: Delhi High Court (Division Bench: C. Hari Shankar, J. & Om Prakash Shukla, J.)
Date: 05-01-2026
Proceeding: Appeal against dismissal of interim injunction under Order XXXIX Rules 1 and 2 CPC in a passing-off/infringement suit.

Contents

1. Introduction

The appellant, Sana Herbals Private Limited, sued Mohsin Dehlvi and Dehlvi Remedies Pvt Ltd alleging (i) infringement of its registered mark NOKUFSYRUP and (ii) passing off by the respondents’ proposed/renewed use of NOKUF / “KufNo Syrup”. The suit was framed as a quia timet action—Sana Herbals sought to restrain threatened market entry, relying on alleged long-standing use and goodwill in “NOKUF/NOKUFSYRUP”.

A central factual dispute concerned whether an Assignment Deed dated 19 September 1999 transferred rights in “NOKUF” from the respondents to the appellant and whether the respondents, despite earlier adoption, had ceased use for decades (alleged abandonment/acquiescence).

The Commercial Court refused interim relief; the Division Bench affirmed, but in doing so laid down a pointed doctrinal clarification: in passing off, the plaintiff’s goodwill must predate the defendant’s first use; subsequent long non-use by a prior user does not, by itself, allow a later user to injunct revival, particularly when the defendant holds a subsisting registration and “abandonment” is a rectification issue.

2. Summary of the Judgment

  • The Court declined to examine infringement because the respondents held a registered mark NOKUF (effective from 3 June 1996). Following Supreme Court law, no infringement action lies against a registered proprietor; only passing off can survive.
  • On passing off, the Court held that the respondents’ commencement of use (1994) preceded the appellant’s existence and any alleged goodwill; therefore, the appellant could not satisfy the core passing-off requirement that its goodwill pre-existed the defendant’s adoption/use.
  • The appellant’s arguments based on long non-use, abandonment, and acquiescence were found legally insufficient at the interim stage, especially in the face of a subsisting registration and the statutory scheme for removal for non-use.
  • The Court additionally found the 1999 assignment, being pre-2003, prima facie vulnerable under the 1958 Act as it did not expressly transfer goodwill (assignment “in gross” concern), making it unreliable for interim relief.
  • Result: Appeal dismissed; denial of interim injunction upheld.

3. Analysis

3.1 Precedents Cited and Their Role

A. Infringement vs. passing off between registered proprietors

The Court’s first move was jurisdictional/doctrinal: it removed infringement from the table once it found the respondents’ registration for “NOKUF” subsisting. This flowed directly from:

  • S. Syed Mohideen v. P. Sulochana Bai. Bai — relied upon for the proposition that, given Section 28(3), one registered proprietor cannot sue another registered proprietor for infringement, though passing off remains available due to Section 27(2). The Bench treated this as binding and determinative.
  • Vaidya Rishi India Health (P) Ltd v. Suresh Dutt Parashar — cited as this Court’s recent reiteration that injunction for infringement cannot be granted against a registered proprietor, but passing off can lie.
  • Raj Kumar Prasad v. Abbott Healthcare (P) Ltd — noted only to record that Vaidya Rishi expressed inability to follow it in view of S. Syed Mohideen, cementing the Bench’s approach of excluding infringement here.

B. The “first user” principle and why Neon did not help the appellant

The appellant leaned heavily on:

  • Neon Laboratories v. Medical Technologies Ltd — the appellant cited it to argue that prior user trumps later registration and that long dormancy can indicate abandonment. The Division Bench, however, treated Neon as favouring the respondents on its own terms, emphasizing para 11: if the defendant’s user is prior, then (once registration exists with retrospective effect) the defendant’s position is “unassailably” favourable. Here, the respondents’ user (1994) predated the appellant’s.

C. Passing off requires goodwill prior to defendant’s adoption/use

To anchor the core passing-off requirement, the Court relied on:

  • Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industris Ltd — used to emphasize that goodwill/reputation must be shown in the relevant market at the relevant time; critically, the Bench extracted the principle that the plaintiff’s goodwill must exist before the defendant’s relevant use.
  • Pernod Ricard India (P) Ltd v. Karanveer Singh Chhabra — cited as reiterating that passing off requires the plaintiff to show “prior and continuous use” and distinctiveness.
  • Laxmikant V. Patel v. Chetanbhai Shah — cited for the classic framing: whether the plaintiff’s business/name came into existence prior to the defendant’s use and acquired goodwill sufficient to restrain the defendant.
  • Brihan Karan Sugar Syndicate Pvt Ltd v. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana and Vishal Gupta v. Rahul Bansal — invoked in submissions to underline the evidentiary burden for goodwill in passing off; the judgment references these authorities while reiterating the “three ingredients” approach.

D. Non-use/abandonment: rectification logic, not an interim passing-off shortcut

The appellant’s abandonment/acquiescence argument drew on:

  • Hardie Trading Ltd v. Addisons Paint & Chemicals Ltd — both sides relied on it. The Bench clarified that Hardie Trading dealt with removal/rectification for non-use (Section 46 of the 1958 Act) and that “intention to abandon” is a relevant inquiry in that statutory context. The Bench held it was being invoked “out of context” as a basis to secure interim injunction in a passing-off suit against a registered proprietor.

E. Authorities pressed before the Commercial Court (limited role on appeal)

  • Corn Products Refining Co. v. Shangrila Food Products Ltd . Ltd, Virumal Praveen Kumar v. Gokul Chand Hari Chand, Rajveer Food Marketing (I) Pvt Ltd v. Amrit Banaspati Co. Ltd — cited by the appellant below to support acquiescence/abandonment arguments. The Division Bench did not treat them as altering the fundamental prerequisite of passing off: plaintiff’s goodwill must predate defendant’s first use.
  • Veerumal Praveen Kumar v. Needle Industries (India) Ltd and Oxygun Health Pvt Ltd v. Pneumo Health Care Pvt Ltd — discussed to clarify that Veerumal concerned non-use as a defence in infringement, not passing off; hence irrelevant to the present posture.

3.2 Legal Reasoning

(i) Why infringement was taken off the table

The Court treated the respondents’ registration for “NOKUF” (effective 3 June 1996) as conclusive against an infringement claim by the appellant, given the statutory design (Sections 27(2), 28(3)) and the binding interpretation in S. Syed Mohideen v. P. Sulochana Bai. Bai. The suit thus survived—if at all—only as passing off.

(ii) The decisive passing-off flaw: chronology of first use

The Bench held that passing off is structurally impossible where the defendant’s use predates the plaintiff’s accumulation of goodwill. On the record, respondents used “NOKUF” from 1994–1999; the appellant was incorporated in 1997 and claimed later build-up. Since the appellant could not show goodwill existing prior to 1994, the “misrepresentation” element could not logically operate: the defendant could not be misrepresenting its goods as the plaintiff’s at a time when the plaintiff had not yet established protectable market goodwill.

Importantly, the Court rejected the appellant’s attempt to convert later extensive use by the plaintiff + later disuse by the defendant into a passing-off restraint against the defendant’s “revival”. The Bench called the argument “sound on equity, but unsound in law”.

(iii) “Sporadic” use vs “commencement” of use

The appellant argued that the respondents’ early evidence was thin and that use must be “continuous”. The Court’s answer was doctrinal: for the relevant inquiry (including the Section 34 “prior user” logic discussed through Neon Laboratories v. Medical Technologies Ltd), what mattered was commencement of use, not whether early use was continuous enough to build the plaintiff’s goodwill case. Continuity/goodwill primarily concerns the plaintiff’s case—not as a tool to erase the defendant’s earlier adoption at the interim stage.

(iv) The 1999 Assignment Deed: prima facie unenforceability under the 1958 Act

Because the Assignment Deed (19 September 1999) preceded the 1999 Act’s coming into force (15 September 2003), its validity was tested against the Trade and Merchandise Marks Act, 1958. The Court accepted the respondents’ legal objection: under the 1958 regime (as argued via Section 38(1) principles), assignment of an unregistered mark without goodwill was not permissible, and the deed did not expressly transfer goodwill. The Court therefore treated the deed as prima facie unenforceable (at least for interim relief), leaving any deeper interpretive rescue (goodwill implied by circumstances) as a trial issue.

(v) Abandonment/non-use: the statutory route (rectification), not an interim injunction substitute

The Court treated “abandonment by long non-use” as belonging to the rectification/removal machinery (non-use removal), not as an independent interim basis to restrain a registered proprietor from use. Until the mark is removed/limited by the competent forum, the registration stands and the registrant’s entitlement remains.

3.3 Impact

  • Passing-off litigation will become more strictly chronological. Plaintiffs who built goodwill during a defendant’s “gap years” cannot assume that the defendant’s earlier adoption becomes legally irrelevant merely because the defendant was absent from the market for long.
  • Reinforces separation of remedies: arguments premised on “non-use”, “abandonment”, or “hoarding” are pushed toward rectification/non-use removal proceedings rather than interim passing-off injunctions—especially where the defendant holds a subsisting registration.
  • Strengthens the practical importance of early adoption evidence. Even limited early use, if accepted as “commencement”, may defeat later goodwill-based passing-off claims.
  • Assignments executed under the 1958 Act era are vulnerable if goodwill transfer is not demonstrably part of the transaction. Parties relying on legacy assignments must expect scrutiny, at least at interim stages.
  • Quia timet passing off faces a heightened hurdle where the threatened user is by a prior adopter/registrant: the plaintiff must still satisfy the foundational goodwill chronology, not merely prove current market association.

4. Complex Concepts Simplified

  • Infringement vs. Passing Off: Infringement is a statutory claim tied to registration; passing off is a common-law claim protecting goodwill against misrepresentation. A registered proprietor may be immune from infringement claims by another registered proprietor, but can still face passing off in appropriate cases.
  • Quia timet action: A preventive suit filed when harm is threatened but not fully materialised; the plaintiff must still satisfy the substantive legal test for the relief sought.
  • Goodwill (for passing off): The attractive force that brings customers to a business under a mark/name. Passing off requires that this goodwill exists before the defendant’s relevant adoption/use that is alleged to mislead.
  • “First user” principle: Trade mark priority typically flows from who used the mark first in the market, not merely who registered first—yet the principle does not help a party whose goodwill arose after the opponent’s first use.
  • Abandonment/non-use removal: A mark can be removed from the register for non-use through statutory proceedings; courts are cautious about treating “abandonment” as established without that structured inquiry, particularly at interim stages.
  • Assignment “with goodwill” (legacy issue): Under older statutory regimes, transfer of a mark often required transfer of the associated business/goodwill; a bare transfer of the mark alone could be legally ineffective (“assignment in gross” concern).

5. Conclusion

The Delhi High Court’s decision is significant not for its equities—indeed it acknowledged that equities “lean strongly” toward the appellant—but for its insistence that passing off is structurally anchored in chronology. Where the defendant’s first use predates the plaintiff’s existence or goodwill, the plaintiff cannot obtain an injunction for passing off merely because (a) the defendant later stayed out of the market for years, and (b) the plaintiff built strong contemporary association in the interim.

The judgment also consolidates two practical signals for trade mark litigants: (i) infringement claims will fail against a registered proprietor (leaving passing off as the only route), and (ii) non-use/abandonment arguments should be pursued through rectification/non-use removal mechanisms, not converted into interim passing-off restraints against a party with a subsisting registration.