Prior User Prevails: Delhi High Court Cancels Fraudulent Trademark Registration

Introduction

In this rectification petition, the Delhi High Court reaffirmed the primacy of prior user rights in trademark law, cancelling a deceptively similar mark registered by the respondent. The decision highlights that trademark registration obtained in bad faith, even if valid on the Register, cannot override the rights of a first user, particularly when the goods and class are identical.

Facts

• Petitioner: Bhalla Sports Pvt. Ltd., incorporated in 1988, engaged in manufacturing and marketing sports goods.
• Adopted the trademark “SOFT TOUCH” in 2001 for sports goods (Class 28).
• Applied for registration on 17 April 2009 (Application No. 1807977), claiming use since 07 August 2001; subsequently registered.
• Respondent No. 1: Ashutosh Bhalla, Director of M/s Vinex Enterprises Pvt. Ltd., incorporated in 2003.
• Respondent applied for a similar/identical trademark on 17 March 2009 (Application No. 1796255) in Class 28, claiming use since 1 September 2003, and obtained registration.
• Petitioner filed a rectification/cancellation petition before the IPAB in 2017; matter transferred to the Delhi High Court upon IPAB’s abolition.

Issues

• Whether the petitioner is the prior user of the trademark “SOFT TOUCH” for sports goods under Class 28.
• Whether the respondent’s registered mark is identical or deceptively similar to the petitioner’s mark.
• Whether the registration was obtained in bad faith and is liable to be removed under Sections 9, 11, 47, and 57 of the Trade Marks Act, 1999.

Arguments

Petitioner

• Continuous use of “SOFT TOUCH” since 2001, substantiated with invoices, price lists, brochures, and registration certificates.
• Respondent was aware of petitioner’s mark and adopted the impugned mark mala fide.
• Respondent’s claimed use from 2003 was false; registration obtained through misrepresentation.
• The impugned mark is identical/deceptively similar for identical goods, creating a likelihood of confusion.
• Registration is contrary to Sections 9 (absolute grounds), 11 (relative grounds), 47 (removal for non-use), and 57 (rectification) of the Trade Marks Act.

Respondents

• No appearance or reply despite due service; proceeded ex parte.

Judgment

• Prior User Established: Court found petitioner’s evidence proved adoption and use of the mark since 2001—predating respondent’s claimed use.
• Legal Principle: Applied the first in the market test from Neon Laboratories Ltd. v. Medical Technologies Ltd., affirming that prior user rights override registration rights of a subsequent user.
• Similarity of Marks: Held the respondent’s mark visually, phonetically, and deceptively similar to petitioner’s mark, for identical goods in the same class, likely to cause public confusion.
• Bad Faith: Non-appearance and lack of rebuttal from respondent, coupled with similarity of marks, indicated an element of ‘bad faith’ in adoption.
• Order: Directed the Registrar of Trade Marks to cancel the respondent’s registration (No. 1796255) in Class 28.

Conclusion

This case is a textbook application of the first user prevails rule in Indian trademark law. The Delhi High Court’s firm stance against bad faith adoption protects genuine market pioneers and deters opportunistic registrations. For trademark owners, it reiterates the importance of early registration and maintaining historical evidence of use.