Summary
In the case of ITC Limited and Anr. bbbbv. Adyar Gate Hotels Limited, the Delhi High Court refused to grant an interim injunction against Adyar Gate Hotels Limited's use of the DAKSHIN mark for its restaurant. The Court held that ITC could not maintain an infringement action against AGH because AGH was also a registered proprietor of the mark, though a passing off action could still lie. The Court found that ITC failed to establish a prima facie case of passing off, its claim was hit by acquiescence, and its copyright claim in the logo was not sustainable at the interim stage.
Background
Trademark and Copyright Dispute
The dispute began in Chennai. AGH owned the building in which the Welcomgroup Park Sheraton Hotel was set up under an Operating Service Agreement with ITC in 1985. On 14 April 1989, a South Indian restaurant named Dakshin started operating in the hotel. The restaurant continued under the agreement until the agreement expired on 31 March 2015.
After the agreement ended, ITC withdrew from the hotel. AGH continued to run the Dakshin restaurant in the same premises, which later became Crowne Plaza Chennai Adyar Park. The judgment recorded that ITC did not object to AGH’s use of the DAKSHIN mark for that restaurant until 2023. After the building was demolished in 2024, AGH opened another restaurant under the DAKSHIN name on the same road. ITC then filed a suit and sought an interim injunction against AGH’s use of the mark and logo.
ITC relied on trademark infringement, passing off, and copyright infringement. AGH resisted the injunction by relying on its own registration for DAKSHIN, its long use of the mark, ITC’s silence, and the absence of documents proving ITC’s ownership of copyright in the logo. The Single Judge refused interim injunction. The Division Bench agreed that no interim injunction could be granted, though it differed from the Single Judge on territorial jurisdiction.
Questions Before the Court
The main questions before the Court on the selected issues were:
- Could ITC maintain an infringement action against AGH when AGH was also a registered proprietor of the DAKSHIN mark?
- Could ITC maintain a passing off action despite AGH’s registration?
- Did the goodwill in the DAKSHIN mark belong only to ITC under the Operating Service Agreement?
- Did ITC’s silence from 2015 to 2023 amount to acquiescence?
- Did ITC establish ownership of copyright in the DAKSHIN logo at the interim stage?
Arguments Presented By the Parties
ITC argued as follows:
- ITC claimed that it was the first adopter and owner of the DAKSHIN mark.
- ITC relied on its registrations in Classes 29 and 30 and on its copyright registration for the DAKSHIN logo.
- ITC argued that Article XIII of the Operating Service Agreement covered present and future trade marks, trade names, signs, logos and identifying symbols, and that the DAKSHIN mark belonged to ITC.
- ITC submitted that AGH’s use of DAKSHIN was only permissive during the agreement.
- ITC stated that AGH’s right to use DAKSHIN ended when the agreement expired in 2015.
- ITC argued that AGH’s continued use of DAKSHIN after 2015, and later for a standalone restaurant, amounted to passing off.
- ITC claimed that AGH’s use of the DAKSHIN logo also infringed ITC’s copyright.
AGH argued as follows:
- AGH stated that it was also a registered proprietor of the DAKSHIN mark for restaurant services.
- AGH argued that no infringement action could lie against another registered proprietor of the same or similar mark.
- AGH submitted that ITC’s claim could only be considered as a passing off claim.
- AGH stated that passing off required goodwill, misrepresentation and damage, and that ITC had not established any of these ingredients.
- AGH argued that Dakshin had been used by AGH from 14 April 1989, when the restaurant started in Park Sheraton.
- AGH submitted that ITC was a service provider under the Operating Service Agreement, and that AGH was also entitled to the goodwill generated by the restaurant.
- AGH relied on ITC’s silence from 2015 to 2023 and invoked acquiescence under Section 33(1) of the Trade Marks Act.
- AGH argued that the copyright registration certificate did not prove ITC’s ownership of copyright in the logo, particularly when the author was an employee of HTA and no written assignment in favour of ITC was produced.
Court’s Analysis
The Court first separated infringement from passing off. It stated that no infringement action could lie against the proprietor of a registered trademark in view of Sections 28(3) and 30(2)(e) of the Trade Marks Act. Since AGH also had a registration for DAKSHIN, ITC could not stop AGH by relying on infringement. The Court, however, clarified that a passing off action could still lie against a registered proprietor. Registration was therefore not the end of the dispute, but it changed the nature of the case.
The Court then moved to passing off. It stated that the three ingredients of passing off are goodwill of the plaintiff, misrepresentation by the defendant, and damage to the plaintiff. The Court also stated that the plaintiff must establish goodwill before the defendant’s use begins. This point hurt ITC’s case. AGH’s use of DAKSHIN was treated as having commenced on 14 April 1989, when the Dakshin restaurant started operations. ITC had no goodwill in the DAKSHIN mark before that date. According to the Court, what mattered was not ITC’s general reputation, but goodwill in the DAKSHIN mark itself.
ITC tried to meet this difficulty through the Operating Service Agreement. It argued that all use of DAKSHIN during the agreement must be treated as ITC’s use, and that the goodwill earned during that time must belong only to ITC. The Court did not accept this reading at the interim stage. It read the agreement as one under which ITC rendered services to AGH. The Court noted that ITC provided operational, marketing, advertising, reservation and technical services for a service fee and incentive fee. It also noted that allowing the hotel to benefit from ITC’s own names and goodwill was itself one of the services ITC agreed to provide.
The Court found it important that DAKSHIN was not a pre existing ITC mark when the Operating Service Agreement was signed in 1985. The restaurant started only in 1989. The goodwill in DAKSHIN therefore arose from the running of the restaurant under the agreement. The judgment recorded that AGH funded the operation and could not be denied the benefit of the goodwill generated by use of the mark. The Court therefore held that AGH was also entitled, at least prima facie, to the benefit of goodwill earned in DAKSHIN during the currency of the agreement.
The Court then considered misrepresentation. According to the Court, passing off requires material showing that the defendant represented its goods or services as those of another, or that the public was misled into believing so. The Court found no material to show that AGH represented its Chennai Dakshin restaurant as being associated with ITC. AGH was using the mark independently in Chennai. Whether any consumer confusion existed was a matter for trial.
On damage, the Court again found the material insufficient for interim relief. ITC argued that customers visiting its Dakshin outlet in Delhi would assume a connection with AGH’s Chennai restaurant. The Court said there was no material at the interim stage to show damage to ITC or to the reputation of its Dakshin outlet because of AGH’s use in Chennai.
Acquiescence then became a strong reason to refuse injunction. ITC did not object to AGH’s use of DAKSHIN after the Operating Service Agreement ended in 2015. AGH continued using the mark at Crowne Plaza with ITC’s knowledge until 2023. The Court held that Section 33(1) of the Trade Marks Act barred ITC from seeking to injunct such use at this stage. This was not treated as a mere delay case. It was treated as knowing silence while AGH continued to use a registered mark and build business around it.
The copyright claim also failed. The Court noted that the copyright registration certificate named Indu Balachandran as the author of the logo, and that she was an employee of HTA. Therefore, HTA was the first owner of copyright under Section 17, unless there was an agreement to the contrary. ITC did not place any written assignment from HTA on record. As Section 19 requires assignment of copyright to be in writing, the Court held that ITC had not established copyright ownership at the interim stage. The Court also distinguished copyright registration from trademark registration. Copyright registration proved the particulars entered in the register, but did not by itself prove ownership when the title chain was disputed.
Findings
The findings of the Court are as follows:
- ITC could not maintain an infringement action against AGH because AGH was also a registered proprietor of the DAKSHIN mark.
- ITC could maintain a passing off action in law, but had to prove goodwill, misrepresentation and damage.
- AGH’s use of DAKSHIN commenced on 14 April 1989.
- ITC did not prove goodwill in the DAKSHIN mark before AGH’s use began.
- The Operating Service Agreement did not establish, at the interim stage, that goodwill in DAKSHIN belonged only to ITC.
- AGH was also entitled, prima facie, to the goodwill generated in DAKSHIN during the currency of the Operating Service Agreement.
- No prima facie case of misrepresentation by AGH was made out.
- The issue of injury or damage was at best arguable and required trial.
- ITC’s silence from 2015 to 2023 attracted the statutory bar of acquiescence under Section 33(1) of the Trade Marks Act.
- ITC did not establish ownership of copyright in the DAKSHIN logo at the interim stage.
- No written assignment of copyright from HTA to ITC was placed on record.
- No case for interim injunction was made out.
Relevant Paras
Para 76
No action for infringement can lie against the proprietor of a registered trade mark, in view of Section 28(3) and Section 30(2)(e) of the Trade Marks Act. This position also stands settled by the judgment of the Supreme Court in S. Syed Mohideen v. P. Sulochana Bai42 and the judgment of the Division Bench of this Court in Vaidya Rishi India Health Pvt Ltd v. Suresh Dutt Parashar43. However, an action for passing off does lie against the proprietor of a registered trade mark. This position was not, in fact, seriously disputed by either side.
Para 128
The onus to establish the existence of these three ingredients is on the plaintiff. Existence of goodwill in the mark has to be established by the plaintiff prior to commencement of user of the mark by the defendant.
Para 141
To repeat, the issue to be addressed is the date from which AGH commenced user of the DAKSHIN/ mark. If AGH’s user is to commence from 14 April 1989, when the Dakshin restaurant in the Park Sheraton commenced operations, ITC’s plea of passing off has necessarily to fail, as, admittedly, there is no user, by ITC, of the DAKSHIN/ mark prior to 14 April 1989. What matters, here, is not the reputation or goodwill that ITC commanded, but the reputation or goodwill that the DAKSHIN/ mark commanded. This is clear from, inter alia, the judgment of the Supreme Court in Toyota, in which the Supreme Court negatived the plea of passing off, by Toyota, of its PRIUS mark by the opposite party, on the ground that the PRIUS mark, individually, had not acquired the necessary goodwill and reputation, in India, as could sustain a claim for passing off.
Para 149
ITC was, therefore, merely a service provider under the OSA, engaged by AGH of providing services against service fee. Mr. Nigam’s contention that AGH was merely the owner of the real estate in which the Park Sheraton was being run, and that ITC was the prime mover under the OSA is, therefore, clearly unacceptable.
Para 161
In the wake of such extensive financial input, by AGH, into the funds using which the Hotel was run in terms of the OSA, AGH cannot, quite obviously, be denied the benefit of the goodwill earned using the DAKSHIN/ mark till the expiry of the OSA. Apart from the fact that the covenants of the OSA do not contain anything to the effect that the goodwill earned in the DAKSHIN/ mark would enure to the benefit of ITC, AGH, being the prime financier under the OSA, would be entitled to claim the benefit of the said goodwill.
Para 167
The very essence of the tort of passing off, which is manifest even from the simple etymological understanding of the expression “passing off”, is representation of the goods or services of one person as those of another. Confusion is not, therefore, the essence of the tort of passing off, though it is one of the channels by which the tort is committed. Classically, passing off is a tort of deceit, as it embodies the intent of the tortfeasor to represent, to the consumer public, that its goods or services are those of another. With the passage of time and evolution of the law in that regard, the requirement of mala fides or mens rea is no longer a sine qua non for a case of passing off to sustain. Nonetheless, the misrepresentation by the tortfeasor remains one of the essential ingredients of the tort and, to be satisfied, requires material to indicate that the tortfeasor is misrepresenting his goods or services to be those of another or, at the very least, that the consumer public has been misled into believing the goods or services of the tortfeasor to be those of the other.
Paras 180 to 182
180. The silence on the ground of ITC amounts to tacitly allowing AGH to continue to use the mark till 2023 and, thereby, build up a reputation therein. In such circumstances, Section 33(1) specifically proscribes grant of any injunction against the continued use of the mark, at the instance of such an indolent plaintiff, who has sat back and allowed the mark to be used by the defendant for a continued length of time, much above the statutorily envisaged period of five years.
181. Significantly, even after the registration of the mark in favour of AGH, ITC has not chosen, till date, to file any application seeking rectification of the register of trademarks by removal, therefrom, of the registered mark of AGH. ITC has also, therefore, allowed the registration to continue, unchallenged.
182. We, therefore, agree with the learned Single Judge that ITC’s prayer for injunction against AGH has also to fail on the ground of acquiescence.
Paras 183 to 187
183. ITC also pleaded that, by use of the logo, AGH had infringed the registered copyright of ITC therein. Reliance was placed, by ITC, in this context, on the certificate of registration dated 15 November 1989, issued under the Copyright Act.
184. The learned Single Judge has correctly dealt with this submission, by noting that the certificate of registration identified the author of the copyrighted artistic work as Indu Balachandran. Indu Balachandran was an employee of HTA and, therefore, by operation of clause (c) of the proviso to Section 17 of the Copyright Act, HTA was the first owner of copyright in the mark.
185. Though Mr. Nigam sought to contend that, in so holding, the learned Single Judge failed to note that the mark had been assigned to ITC by HTA, no written document of assignment is on record. Section 19(1)78 of the Copyright Act requires any document of assignment of copyright to be in writing. Section 91 of the erstwhile Evidence Act, 1872, requires that, where the law requires any matter to be reduced to the form of a document, no evidence shall be given of such matter except by way of the document itself. In the absence of any such written document assigning copyright in the mark, by HTA in favour of ITC, we find no reason in exercise of our appellate jurisdiction to interfere with the finding of the learned Single Judge that ownership of copyright in the mark cannot, prima facie, be said to vest in ITC.
186. The learned Single Judge has also correctly noted, in this context, the distinction between Section 48 of the Copyright Act and Section 31(1) of the Trade Marks Act. While Section 31(1) deems the very fact of the registration of a trademark to operate as prima facie evidence of the validity of such registration, no such presumption arises under Section 48 of the Copyright Act. Section 48 of the Copyright Act merely treats the register of copyright to be prima facie evidence of the particulars entered in the register. The existence of the certificate of registration cannot, therefore, amount to proof of ownership, by ITC, of the copyright in the mark.
187. We, therefore, agree with the learned Single Judge that ITC has not made out a prima facie case for injunction even on the ground of infringement of copyright.
Para 188
188. We may summarize our findings thus:
(i) There is no infirmity in the learned Single Judge proceeding to pronounce prima facie on the merits of the dispute before him, even after having held, again prima facie, that he had no territorial jurisdiction.
(ii) On the aspect of territorial jurisdiction, while Section 134 of the Trade Marks Act would not apply, the suit would lie within this Court under clause (a) and clause (c) of Section 20 of the CPC.
(iii) Under the OSA, ITC was merely a service provider, providing service for a pre-determined service fee. Providing, to AGH, the benefit of the goodwill in its trade marks and trade names was, in fact, itself envisaged as among the services which ITC would provide to AGH under the OSA.
(iv) No prima facie case of passing off is made out, as
(a) the user of the DAKSHIN/ mark, by AGH, commenced on 14 April 1989, prior to which there was no goodwill of ITC in the said mark,
(b) even otherwise, AGH is also entitled to the benefit of the goodwill in the DAKSHIN/ mark, as earned during the currency of the OSA, and
(c) the aspects of misrepresentation and injury and damage are, at the very best, arguable and warrants a trial.
(v) Having chosen to maintain silence during the entire currency of the OSA from 1989 to 2015 and even thereafter from 2015 to 2023, when AGH was using the DAKSHIN/ mark, in the full knowledge of ITC at the Crowne Plaza Hotel, ITC was statutorily barred, by Section 33(1) of the Trade Marks Act, from seeking to injunct such use at this stage.
(vi) The plea of copyright infringement was also, prima facie, not sustainable, as the Copyright Registration certificate was in the name of Indu Balachandran, who was an employee of HTA. HTA was, therefore, by operation of clause (c) of the proviso to Section 17 of the Copyright Act, the first owner of copyright therein. No written document by HTA assigning the copyright to ITC being on record as required by Section 19(1) of the Copyright Act.
(vii) No case for grant of interim injunction, as sought by ITC against AGH is, therefore, made out.
Paras 189 to 191
189. For all the above reasons, while we are not in agreement with the learned Single Judge with respect to his findings on the aspect of territorial jurisdiction, we agree with the learned Single Judge that no case for grant of interlocutory injunction against use of mark by AGH, pending disposal of the suit, exists on merits.
190. We, therefore, do not find this to be a case deserving of interference.
191. The appeal is accordingly dismissed.
Case Citation
ITC Limited and Anr. v. Adyar Gate Hotels Limited, FAO(OS) (COMM) 207/2025 and CM APPL. 79554/2025, High Court of Delhi, decided 1 July 2026, available at https://indiankanoon.org/doc/145972925/ (last visited July 5, 2026).
Disclaimer
This case blog is based on the author’s understanding of the judgment. Understandings and opinions of others may differ. An AI application was used to generate parts of this case blog based on user inputs and prompts.