VIP Industries Ltd v. Carlton Shoes Ltd & Anr.
A Landmark Ruling on Passing Off and Trademark Coexistence
The case of VIP Industries Ltd v. Carlton Shoes Ltd & Anr., decided by the Division Bench of the Delhi High Court, is a significant pronouncement in the domain of trademark law, particularly in determining the parameters of passing off where multiple registered proprietors of an identical mark co-exist. It presents a complex legal conflict involving cross-suits by two entities, each asserting goodwill and prior user rights over the trademark “CARLTON” in respect of goods under Class 18. The judgment settles the essential question of whether goodwill in a mark can be claimed generically or must be tied specifically to the goods/services concerned.
Factual Background
Carlton Shoes Ltd (CSL), a footwear brand, claimed adoption and use of the trademark “CARLTON” in India since 1994 through its registration for various goods under Class 18, including bags and luggage, although its use had been predominantly for footwear and accessories.
VIP Industries Ltd (VIP), a reputed manufacturer of luggage products, acquired rights over the CARLTON mark from a UK-based entity (Carlton International PLC) via an Assignment Agreement in 2004. Since then, VIP asserted that it had been using the CARLTON mark exclusively for travel luggage, suitcases, and related goods, accruing considerable goodwill in the Indian market.
The dispute arose when CSL initiated plans to extend its use of the CARLTON mark to travel luggage. VIP objected, claiming exclusive goodwill in the luggage segment under that mark, which led to cross-suits asserting rights and seeking injunctive reliefs against each other’s use of “CARLTON”.
Procedural Background
CSL filed CS (Comm) 730/2019 seeking a permanent injunction against VIP from using “CARLTON” for goods in Class 18, relying on its prior registration and user in India. VIP responded with CS (Comm) 52/2020, requesting a similar injunction to prevent CSL from using “CARLTON” for bags and luggage. Both parties filed applications under Order XXXIX Rules 1 and 2 CPC seeking interim reliefs pending trial.
By the impugned order dated 17 July 2023, the learned Single Judge dismissed VIP’s interim injunction application and granted interim relief to CSL, restraining VIP from using the CARLTON mark for luggage and allied goods. VIP preferred two appeals: FAO(OS)(COMM) 151/2023 and FAO(OS)(COMM) 152/2023 before the Division Bench of the Delhi High Court.
Legal Issue
The central issue before the Court was whether goodwill for the purpose of a passing off action attaches to the mark generally or to the mark as used for particular goods? Additionally, the Court examined whether VIP, as a later user in India, could restrain CSL from using the mark for luggage, when CSL was the first user in India, albeit in a different product category.
Discussion on Judgments
The parties referred to various precedents to buttress their respective positions on trans-border reputation, territoriality of trademark rights, and the essentials of a passing off claim.
- VIP cited Milmet Oftho Industries v. Allergan Inc., (2004) 12 SCC 624, and Neon Laboratories Ltd v. Medical Technologies Ltd, (2016) 2 SCC 672, to emphasize the principle of “first in the market.”
- They also relied on Beiersdorf AG v. Ajay Sukhwani, 2008 SCC OnLine Del 1226, and Mittal Electronics v. Sujata Home Appliances Pvt. Ltd., 2020 SCC OnLine Del 2658, to argue that goodwill must be shown in the mark specifically for the goods concerned.
- CSL placed reliance on Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd., (2018) 2 SCC 1, and S. Syed Mohideen v. P. Sulochana Bai, (2016) 2 SCC 683, to assert the precedence of territorial use in passing off actions.
The Court also referenced the principles laid down by Lord Diplock in Erven Warnink BV v. J. Townend & Sons (Hull) Ltd., [1979] 2 All ER 927, concerning misrepresentation, damage to goodwill, and consumer deception.
Reasoning and Analysis of the Judge
The Division Bench agreed with the learned Single Judge’s findings. It held that since both parties were registered proprietors of the CARLTON mark under Class 18, neither could claim exclusive rights against the other under Section 28(3) of the Trade Marks Act, 1999. Thus, the case was to be decided solely on passing off principles.
On trans-border reputation, the Court reiterated the territoriality principle as laid down in Toyota Jidosha, finding VIP’s foreign-based recognition insufficient to establish goodwill in India prior to 2004.
CSL, on the other hand, demonstrated commercial use from 2003 with supporting evidence—Indian advertisements, e-commerce listings, and invoices—which the Court found sufficient to establish goodwill.
The Court emphasized that passing off is rooted in protecting goodwill from misrepresentation, and VIP’s use—even if innocent—was likely to cause confusion.
VIP’s allegations of CSL’s dishonest intent were rejected. CSL’s rights predated VIP’s actual commercial use, which reportedly began only in 2010–11 according to VIP’s own annual reports.
The Bench also rejected VIP’s claim based on delay or balance of convenience, noting that VIP failed to prove superior goodwill at the relevant time.
Final Decision
The Division Bench upheld the decision of the learned Single Judge. It dismissed VIP’s appeals (FAO(OS)(COMM) 151/2023 and FAO(OS)(COMM) 152/2023), thereby maintaining the interim injunction against VIP. Consequently, VIP is restrained from marketing or selling bags and related goods under the CARLTON mark in Class 18, while CSL is permitted to continue its use.
Law Settled in This Case
This judgment reinforces the principle that in a passing off action between proprietors of the same registered mark under Section 28(3), priority of goodwill and territorial use in India determines the right to injunctive relief.
The Court clarified that goodwill in a mark need not be confined to a narrow sub-category if a likelihood of confusion exists. It affirmed that trans-border reputation must be supported by proof of recognition in India and that even innocent misrepresentation can constitute passing off.
Case Details
- Case Title: VIP Industries Ltd Vs. Carlton Shoes Ltd & Anr.
- Date of Order: 1 July 2025
- Case Numbers: FAO (OS) (COMM) 151/2023 & FAO (OS) (COMM) 152/2023
- Neutral Citation: 2025:DHC:5042:DB
- Court: High Court of Delhi at New Delhi
- Coram: Justice C. Hari Shankar and Justice Ajay Digpaul
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor – Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539
