Kirloskar Proprietary Limited Vs Kirloskar Brothers Limited

Facts & Background:

The ongoing dispute in the Kirloskar Group concerns the ownership and use of the “KIRLOSKAR” trademark, a mark historically used by various companies within the group across diverse business sectors. Kirloskar Proprietary Limited (KPL) is the registered proprietor of the “KIRLOSKAR” mark and the entity responsible for granting user licences to group companies.

Kirloskar Brothers Limited, another prominent group company, filed a commercial suit before the Bombay High Court alleging that KPL was acting contrary to long-standing group understandings by granting or proposing to grant licences or assignments of the “KIRLOSKAR” mark to other group companies operating in similar or overlapping businesses.

KBL sought a temporary injunction restraining KPL from creating any third-party interest, granting licences, or assigning the “KIRLOSKAR” trademark during the pendency of the suit. The Commercial Court granted the injunction on 9 January 2025, restraining KPL from licensing or assigning the mark.

Aggrieved, KPL filed an appeal before the Bombay High Court, which on 25 July 2025, partly stayed the trial court’s order allowing KPL to issue licences to group member companies under its Articles of Association, but preventing assignment to other group entities engaged in similar or competing businesses.

Subsequently, the Bombay High Court modified its order on 10 October 2025, further restraining KPL even from licensing the “KIRLOSKAR” mark to group companies involved in similar business activities. KPL challenged this modification before the Supreme Court of India.

Issues:

1. Whether the Bombay High Court was justified in modifying its earlier order to expand the scope of the injunction when the appeal against the trial court’s order was still pending.
2. Whether a trademark proprietor (KPL) can be restrained from licensing its own mark to group companies, particularly when such licensing had been part of established group practice.
3. Whether the High Court’s order failed to distinguish between Assignment and licensing.

Judgment:

The Supreme Court heard senior counsels Mr. Mukul Rohatgi for the petitioner (KPL) and Dr. A.M. Singhvi for the respondent (KBL).

The Court noted that the order dated 10 October 2025 of the Bombay High Court expanded the earlier restraint imposed by the 25 July 2025 order, without adequate consideration of the facts or the pending appeal. The Supreme Court observed that the modification restrained KPL from even licensing the mark within the group, though earlier licensing arrangements had existed.

The Bench held that such a modification ought not to have been made while the appeal was still pending before the High Court and without full examination of the group’s licensing practices.

Accordingly, the Supreme Court stayed the effect and operation of the High Court order dated 10 October 2025, thereby restoring the position under the 25 July 2025 order, which permitted licensing to group member companies but prohibited assignment of the mark for overlapping business areas.

Key Findings:

• The Supreme Court recognized that the High Court had exceeded its interim jurisdiction by expanding the injunction beyond its earlier order, even though the main appeal was pending.
• The Court emphasized the distinction between “assignment” and “licensing” holding that while assignment transfers ownership rights, licensing merely creates a limited right of use, and restraining licensing without hearing the parties fully was unjustified at the interim stage.
• The Bench underlined that status quo must be maintained when the appellate court is still seized of the matter, and any modification that changes the balance of convenience between parties should be avoided.
• The order reaffirms the need for judicial restraint when dealing with family or group-brand disputes, especially where complex internal arrangements and commercial understandings exist.

Significance:

This interim order is an important development in Indian trademark jurisprudence, especially for group and family-run business structures that share a common brand identity.

The Supreme Court’s reasoning highlights that a trademark proprietor’s right to license its mark is an integral part of ownership, and such rights cannot be curtailed without a detailed factual inquiry. The decision also strengthens the principle that appellate courts must not alter the nature or scope of interim relief while the main matter remains sub judice.

For corporate groups and brand owners, the ruling highlights the importance of maintaining clear intra-group trademark use agreements and adhering to consistent business practices to prevent allegations of misuse or brand dilution.

By staying the modified injunction, the Supreme Court has ensured temporary relief to the trademark owner (KPL) and preserved the status quo until the High Court fully adjudicates the dispute.