Introduction
The batch of appeals decided by the Division Bench of the Delhi High Court, represents a watershed moment in Indian trademark jurisprudence. For the first time, an Indian court has directly confronted and resolved the theoretical “impasse” identified by Kerly’s authoritative treatise on trademarks, where a validly registered proprietor who commences use belatedly faces a prior continuous user who has built substantial goodwill before such commencement.
The Court recognised that in such circumstances the registered proprietor can restrain the prior user on infringement while the prior user can simultaneously restrain the registered proprietor on passing off, resulting in mutual restraint.
This nuanced, equitable outcome preserves the sanctity of registration under the Trade and Merchandise Marks Act, 1958 while protecting common law rights in goodwill, without allowing one to wholly trump the other absent the specific conditions of Section 33.
Factual Background
The dispute centres on the word mark Fieldmarshal / Field Marshal in Class 7.
- Jain Industries secured registration of Field Marshal with effect from 13 May 1965 for goods including centrifugal pumps, though it never commercially used the mark on centrifugal pumps.
- On 30 May 1986 Jain assigned the mark along with goodwill to Thukral Mechanical Works, which commenced use on centrifugal pumps only in 1988.
- PM Diesels Pvt. Ltd., registered proprietor of Fieldmarshal since 1964 for diesel oil engines, commenced use of the identical mark on centrifugal pumps from 1975.
By 1988 PMD had amassed enormous reputation and goodwill in Fieldmarshal for centrifugal pumps, evidenced by crores in sales, extensive advertising, nationwide dealer networks and banking approvals.
Key Parties and Trademark Timeline
| Party | Trademark | Registration / Use Details |
|---|---|---|
| Jain Industries | Field Marshal | Registered from 13 May 1965; no commercial use on centrifugal pumps |
| Thukral Mechanical Works | Field Marshal | Assignment with goodwill on 30 May 1986; use commenced in 1988 |
| PM Diesels Pvt. Ltd. | Fieldmarshal | Registered since 1964; use on centrifugal pumps from 1975 |
Procedural Background
Litigation commenced in 1985 when PMD instituted suit against Thukral alleging passing off and infringement, obtaining an ex-parte injunction that was later modified permitting Thukral to use the mark with disclaimers.
- PMD also sought rectification of Jain / Thukral’s registration under Section 46 for non-use.
- Thukral countered with suit seeking injunction against PMD for infringement.
Prolonged proceedings included a Supreme Court judgment clarifying that non-use by the assignor Jain could not invalidate Thukral’s registration absent challenge to the assignment and impleadment of Jain.
After the Single Judge largely favoured PMD by cancelling Thukral’s registration, decreeing PMD’s passing-off suit and allowing PMD’s writ petitions for further registrations, multiple appeals and LPAs were preferred, culminating in the present Division Bench decision.
Reasoning and Decision of Court
The Division Bench analysed the Kerly impasse, holding that the Supreme Court’s finding of infringement by PMD was binding and the Single Judge erred in cancelling Thukral’s registration contrary to that mandate.
Non-use by Jain could not be attributed to bona fide assignee Thukral without impleading Jain and proving speculative assignment, neither of which occurred. Thukral’s registration thus remained valid, entitling it to restrain PMD under Section 28(1) read with Section 29 for infringement.
Simultaneously, PMD’s continuous unchallenged use from 1975 to 1988 generated substantial trans-border reputation and goodwill protectable under common law passing off.
Applying principles from Neon Laboratories, S. Syed Mohideen, N.R. Dongre and Whirlpool, PMD was entitled to restrain Thukral.
The Court held that goodwill, while foundational to passing off, is no defence to statutory infringement absent Section 33 protection, which did not apply as PMD’s use post-dated Jain’s 1965 registration.
Section 27(2) preserves passing-off rights but does not erode infringement remedies under Section 28(1).
Final Outcome
- Both suits were decreed to the extent of permanent injunctions against the opposite party using the mark for centrifugal pumps.
- Rectification was dismissed.
- PMD’s applications for registration in regional languages were rejected under Section 12(1).
- No accounts or damages were awarded.
- Parties bore their own costs.
Point of Law Settled in the Case
The judgment authoritatively settles the application of the Kerly Impasse in Indian law.
Where a valid registration predates the defendant’s use but the plaintiff’s own use commences after the defendant has built substantial goodwill through continuous prior use, both parties possess concurrent enforceable rights.
Concurrent Enforceable Rights
- The registered proprietor is entitled to injunction for infringement as goodwill is no defence thereto except under Section 33.
- The prior user with goodwill is entitled to injunction for passing off as registration is no defence thereto by virtue of Section 27(2).
The equitable consequence is mutual permanent restraint from using the mark for the disputed goods, preventing either party from exploiting the mark while preserving the integrity of both statutory and common law protections.
This balanced approach ensures neither registration nor goodwill achieves absolute supremacy absent statutory priority of use, providing definitive guidance for future concurrent rights conflicts.
Case Details
| Case Title | Thukral Mechanical Works v. PM Diesels Private Limited & Anr. |
|---|---|
| Date of Order | 6 February 2026 |
| Case Numbers | LPA 320/2024 |
| Neutral Citation | 2026:DHC:966-DB |
| Court | High Court of Delhi (Division Bench) |
| Hon’ble Judges | Mr. Justice C. Hari Shankar & Mr. Justice Om Prakash Shukla |
Disclaimer: Readers are advised not to treat this as substitute for legal advice as it may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
