{"id":5830,"date":"2025-07-05T10:47:42","date_gmt":"2025-07-05T10:47:42","guid":{"rendered":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/?p=5830"},"modified":"2025-07-05T10:47:50","modified_gmt":"2025-07-05T10:47:50","slug":"territorial-goodwill-and-the-limits-of-passing-off","status":"publish","type":"post","link":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/","title":{"rendered":"Territorial Goodwill and the Limits of Passing Off"},"content":{"rendered":"<h2><span class=\"ez-toc-section\" id=\"VIP_Industries_Ltd_v_Carlton_Shoes_Ltd_Anr\"><\/span>VIP Industries Ltd v. Carlton Shoes Ltd &amp; Anr.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"A_Landmark_Ruling_on_Passing_Off_and_Trademark_Coexistence\"><\/span>A Landmark Ruling on Passing Off and Trademark Coexistence<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The case of <strong>VIP Industries Ltd v. Carlton Shoes Ltd &amp; Anr.<\/strong>, 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 \u201cCARLTON\u201d 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.<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #0c0c0c;color:#0c0c0c\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #0c0c0c;color:#0c0c0c\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/#VIP_Industries_Ltd_v_Carlton_Shoes_Ltd_Anr\" >VIP Industries Ltd v. Carlton Shoes Ltd &amp; Anr.<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/#A_Landmark_Ruling_on_Passing_Off_and_Trademark_Coexistence\" >A Landmark Ruling on Passing Off and Trademark Coexistence<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/#Factual_Background\" >Factual Background<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/#Procedural_Background\" >Procedural Background<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/#Legal_Issue\" >Legal Issue<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/#Discussion_on_Judgments\" >Discussion on Judgments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/#Reasoning_and_Analysis_of_the_Judge\" >Reasoning and Analysis of the Judge<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/#Final_Decision\" >Final Decision<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/#Law_Settled_in_This_Case\" >Law Settled in This Case<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/territorial-goodwill-and-the-limits-of-passing-off\/#Case_Details\" >Case Details<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n<h3><span class=\"ez-toc-section\" id=\"Factual_Background\"><\/span>Factual Background<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Carlton Shoes Ltd (CSL), a footwear brand, claimed adoption and use of the trademark \u201cCARLTON\u201d 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.<\/p>\n<p>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.<\/p>\n<p>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\u2019s use of \u201cCARLTON\u201d.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Procedural_Background\"><\/span>Procedural Background<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>CSL filed <strong>CS (Comm) 730\/2019<\/strong> seeking a permanent injunction against VIP from using \u201cCARLTON\u201d for goods in Class 18, relying on its prior registration and user in India. VIP responded with <strong>CS (Comm) 52\/2020<\/strong>, requesting a similar injunction to prevent CSL from using \u201cCARLTON\u201d for bags and luggage. Both parties filed applications under Order XXXIX Rules 1 and 2 CPC seeking interim reliefs pending trial.<\/p>\n<p>By the impugned order dated <strong>17 July 2023<\/strong>, the learned Single Judge dismissed VIP\u2019s 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: <strong>FAO(OS)(COMM) 151\/2023<\/strong> and <strong>FAO(OS)(COMM) 152\/2023<\/strong> before the Division Bench of the Delhi High Court.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Legal_Issue\"><\/span>Legal Issue<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>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.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Discussion_on_Judgments\"><\/span>Discussion on Judgments<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>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.<\/p>\n<ul>\n<li><strong>VIP<\/strong> cited <em>Milmet Oftho Industries v. Allergan Inc.<\/em>, (2004) 12 SCC 624, and <em>Neon Laboratories Ltd v. Medical Technologies Ltd<\/em>, (2016) 2 SCC 672, to emphasize the principle of \u201cfirst in the market.\u201d<\/li>\n<li>They also relied on <em>Beiersdorf AG v. Ajay Sukhwani<\/em>, 2008 SCC OnLine Del 1226, and <em>Mittal Electronics v. Sujata Home Appliances Pvt. Ltd.<\/em>, 2020 SCC OnLine Del 2658, to argue that goodwill must be shown in the mark specifically for the goods concerned.<\/li>\n<li><strong>CSL<\/strong> placed reliance on <em>Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd.<\/em>, (2018) 2 SCC 1, and <em>S. Syed Mohideen v. P. Sulochana Bai<\/em>, (2016) 2 SCC 683, to assert the precedence of territorial use in passing off actions.<\/li>\n<\/ul>\n<p>The Court also referenced the principles laid down by Lord Diplock in <em>Erven Warnink BV v. J. Townend &amp; Sons (Hull) Ltd.<\/em>, [1979] 2 All ER 927, concerning misrepresentation, damage to goodwill, and consumer deception.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Reasoning_and_Analysis_of_the_Judge\"><\/span>Reasoning and Analysis of the Judge<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Division Bench agreed with the learned Single Judge\u2019s 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 <strong>Section 28(3) of the Trade Marks Act, 1999<\/strong>. Thus, the case was to be decided solely on passing off principles.<\/p>\n<p>On trans-border reputation, the Court reiterated the <strong>territoriality principle<\/strong> as laid down in <em>Toyota Jidosha<\/em>, finding VIP&#8217;s foreign-based recognition insufficient to establish goodwill in India prior to 2004.<\/p>\n<p>CSL, on the other hand, demonstrated commercial use from 2003 with supporting evidence\u2014Indian advertisements, e-commerce listings, and invoices\u2014which the Court found sufficient to establish goodwill.<\/p>\n<p>The Court emphasized that <strong>passing off is rooted in protecting goodwill from misrepresentation<\/strong>, and VIP\u2019s use\u2014even if innocent\u2014was likely to cause confusion.<\/p>\n<p>VIP\u2019s allegations of CSL\u2019s dishonest intent were rejected. CSL&#8217;s rights predated VIP\u2019s actual commercial use, which reportedly began only in 2010\u201311 according to VIP\u2019s own annual reports.<\/p>\n<p>The Bench also rejected VIP\u2019s claim based on delay or balance of convenience, noting that VIP failed to prove superior goodwill at the relevant time.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Final_Decision\"><\/span>Final Decision<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Division Bench upheld the decision of the learned Single Judge. It dismissed VIP\u2019s appeals <strong>(FAO(OS)(COMM) 151\/2023 and FAO(OS)(COMM) 152\/2023)<\/strong>, 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.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Law_Settled_in_This_Case\"><\/span>Law Settled in This Case<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>This judgment reinforces the principle that in a passing off action between proprietors of the same registered mark under Section 28(3), <strong>priority of goodwill and territorial use in India determines the right to injunctive relief<\/strong>.<\/p>\n<p>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.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Case_Details\"><\/span>Case Details<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><strong>Case Title:<\/strong> VIP Industries Ltd Vs. Carlton Shoes Ltd &amp; Anr.<\/li>\n<li><strong>Date of Order:<\/strong> 1 July 2025<\/li>\n<li><strong>Case Numbers:<\/strong> FAO (OS) (COMM) 151\/2023 &amp; FAO (OS) (COMM) 152\/2023<\/li>\n<li><strong>Neutral Citation:<\/strong> 2025:DHC:5042:DB<\/li>\n<li><strong>Court:<\/strong> High Court of Delhi at New Delhi<\/li>\n<li><strong>Coram:<\/strong> Justice C. Hari Shankar and Justice Ajay Digpaul<\/li>\n<\/ul>\n<p><b>Disclaimer:\u00a0<\/b>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.<\/p>\n<p><b>Written By: Advocate Ajay Amitabh Suman<\/b>, IP Adjutor &#8211; Patent and Trademark Attorney<br \/>\nEmail: ajayamitabhsuman@gmail.com, Ph no: 9990389539<\/p>\n","protected":false},"excerpt":{"rendered":"<p>VIP Industries Ltd v. Carlton Shoes Ltd &amp; Anr. A Landmark Ruling on Passing Off and Trademark Coexistence The case of VIP Industries Ltd v. Carlton Shoes Ltd &amp; 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<\/p>\n","protected":false},"author":56,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"two_page_speed":[],"_jetpack_memberships_contains_paid_content":false,"_joinchat":[],"footnotes":""},"categories":[21],"tags":[],"class_list":{"0":"post-5830","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-intellectual-property"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts\/5830","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/comments?post=5830"}],"version-history":[{"count":0,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts\/5830\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/media?parent=5830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/categories?post=5830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/tags?post=5830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}