Trademark Infringement | Jeopardisation Of IPO Due To Interim Injunction Not Grounds To It Set Aside: Delhi High Court
The Delhi High Court has made it clear that an entity cannot seek to set aside an interim injunction passed against it in a trademark infringement suit, merely because its business or IPO launch is jeopardized due to such injunction.
A division bench of Justices Navin Chawla and Harish Vaidyanathan Shankar held,
“In the present case, while the Appellant has strenuously contended that the injunction has brought its business operations to a standstill and jeopardized its IPO plans, we are not persuaded by this line of argument. The Appellant cannot be permitted to continue deriving commercial benefit from a mark that, in our considered view, is similar to that of the Respondent and clearly warrants restraint through injunctive relief.”
The observation comes in an appeal preferred by Newgen IT Technologies, against a District Court order restraining it from infringing Respondent’s Newgen trademark, with user claim since 1992 in software product development business.
As per factual matrix of the case, the Appellant also operated in the same field as VCARE InfoTech Solutions and Services in India. It had entered into a Partnership Agreement with the Respondent. However, after termination of the agreement, the Appellant changed its name to NewGen IT Technologies.
Respondent then approached the District Court, which held that in view of the fact that the name as adopted by the Appellant was exactly similar to that of the Respondent, and would be sufficient enough to cause confusion and suspicion in the minds of the general public at large, an ex-parte ad-interim injunction is to be granted.
Before the High Court, Appellant claimed that it used the mark ‘NEWGEN IT’ in India and internationally since 2017 and despite knowledge, the Respondent did not raise any objection to it.
At the outset, the High Court agreed with the District Court that the two marks are “strikingly similar” and both entities operate within the same business domain.
“Coupled with this is their association as partners under the Partnership Agreement. This similarity is capable of causing confusion in the minds of an average consumer, thereby justifying the grant of an ex-parte ad-interim injunction in favour of the Respondent/Plaintiff,” it said.
The High Court further observed that the Appellant had adopted branding containing the term “NEWGEN”, which closely resembles the Respondent’s Mark immediately after or around when the Partnership Agreement was terminated by the Respondent. Therefore, prima facie, the said adoption cannot be considered as a bona fide adoption, it held.
So far as knowledge of Respondent regarding Appellant’s use of Newgen mark is concerned, the High Court noted that the Appellant was operating in India under the name VCARE and not NEWGEN. Thus it held,
“It must be remembered that trademark protection is territorial in nature; the use of the mark in one jurisdiction does not ipso facto lead to the generation of goodwill or protection in the other jurisdiction. The protection of the trademark in the other jurisdiction can be obtained only if it is shown that the trademark has been used in the other jurisdiction or there is a transborder reputation of the subject mark. In the present case, the Appellant has failed to meet this test.”
As such, the appeal against interim relief was dismissed.
Appearance: Mr. Rajiv Nayar and Ms. Malvika Trivedi, Sr. Advocates with Mr. Anirudh Bakhru, Ms. Vaishali Mittal, Mr. Siddhant Chamola, Mr. Saurabh Seth, Mr. Prabhav Bahuguna, Ms. Pallavi Bhatnagar and Ms. Saijal Arora, Advocates for Appellant; Mr. Sandeep Sethi and Mr. Ankit Jain, Senior Advocates with Mr. J.V. Abhay, Mr. Dhruv Grover, Mr. Abhineet Kalia, Ms. Riya Kumar and Mr. Rishabh Jain, Advocates for Respondent
Case title: Newgen IT Technologies Limited v. Newgen Software Technologies Limited
Case no.: FAO (COMM) 73/2025
