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In the ever-evolving landscape of trademark law, disputes often arise over brand identity, market presence, and the rights of users. The case of “Neha Herbals Pvt. Ltd. v. Sahni Cosmetics CS (COMM) 207/2023” is a notable example that highlights the complexities involved in trademark ownership, prior use, and the differentiation between products within the same class. Examining this case offers insight into how the judiciary interprets trademark rights under the Trade Marks Act and addresses issues related to passing off and infringement. This detailed analysis delves into the facts, procedural history, legal issues, court findings, and the implications of the judgment, thereby providing a comprehensive understanding of the case.

Case Identification

In a notable case presented before the High Court of Delhi at New Delhi, presided over by Justice Sanjeev Narula, the judgment was delivered on May 19, 2025. This case involved a few connected matters, including CS (COMM) 207/2023, which pertains to an infringement and passing off suit, alongside two cancellation petitions, C.O. (COMM.IPD-TM) 355/2021 and C.O. (COMM.IPD-TM) 455/2022. It's always interesting to see how these connected cases can influence each other in the realm of legal proceedings.

Parties Involved

Plaintiffs/Respondents in Cancellation Petitions:

·         Vikas Gupta: Proprietor of “M/s Neha Enterprises”

·         Neha Herbals Pvt. Ltd.: Incorporated in 2007, took over the business of M/s Neha Enterprises in 2012.

·         Products: Henna (mehendi) powder, mehendi cones, herbal hair dyes/colors, and allied herbal hair products under the mark “NEHA.”

Defendant/Petitioner in Cancellation Petitions:

·         Inder Raj Sahni: Sole proprietor of “M/s Sahni Cosmetics”

·         Products: Face creams (cold cream, turmeric cream, fairness cream, vanishing cream) using the mark “NEHA.

Procedural History

The journey of this trademark dispute began in “2019” when Neha Herbals initiated a suit against Sahni Cosmetics for infringement and passing off due to the latter's use of the mark "NEHA" on its creams. Initially, an interim injunction was granted but was subsequently vacated by the Trial Court. Appeals from this decision were dismissed, directing the parties towards an expedited trial process. Sahni Cosmetics then filed two cancellation petitions with the Intellectual Property Appellate Board (IPAB) to challenge the validity of Neha Herbals’ registrations for “NEHA” and “NEHA HERBALS.” Following the dissolution of IPAB, these matters were transferred to the Delhi High Court, where they were consolidated for trial alongside the infringement suit.

Material Facts

The central conflict of this case revolves around the adoption and use of the trademark "NEHA." Key material facts include:

·         Adoption of Mark by Neha Herbals: Vikas Gupta first adopted the "NEHA" mark in “1992” for mehendi and related products under his proprietorship “M/s Neha Enterprises.” Neha Herbals was incorporated in “2007” and took over the business in “2012”.

·         Trademark Registration: Neha Herbals holds valid registrations in Class 3 for “NEHA,” covering products such as Kali Mehandi, Ritha, Amla, and various herbal formulations. It also registered “NEHA HERBALS” for henna and herbal hair color products.

·         Sahni Cosmetics’ Claims: Inder Raj Sahni claims to have adopted the "NEHA" mark as early as “1990”, primarily supporting his position with a cosmetics manufacturing license and invoices dated from “1999”.

·         Discovery of Infringing Products: Neha Herbals discovered Sahni’s NEHA-branded cold cream being sold in “2019”, prompting the suit.

·         Trademarks and Applications: Sahni’s trademarks for "NEHA" and its variants in Class 3 were continuously refused or abandoned, further complicating his position.

Legal Issues

The case presented the High Court with several pivotal issues, including:

·         Proprietorship and Prior Use: Whether Neha Herbals and Vikas Gupta are the valid proprietors and continuous users of "NEHA" for the goods in question.

·         Prior Adoption by Sahni Cosmetics: Whether Sahni Cosmetics can claim prior user rights for "NEHA."

·         Validity of Registrations: Whether Neha Herbals’ registrations are invalid and subject to cancellation.

·         Delay and Laches: Whether the suit is barred due to delay or acquiescence.

·         Infringement and Passing Off: Whether Sahni’s use of “NEHA” for creams infringes upon Neha Herbals’ registered marks and amounts to passing off.

·         Consequential Relief: Entitlements to injunctions, delivery up of goods, accounts, and costs.

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Court’s Holdings

The High Court, in its judgment, made several significant findings:

·         Proprietorship and Continuous Use: It affirmed that Neha Herbals, through Vikas Gupta, is the prior and continuous user and valid registered proprietor of the mark “NEHA” concerning henna-based products.

·         Sahni’s Defense Rejected: Sahni’s claim of prior use was dismissed due to a lack of convincing evidence proving continuous market presence since **1990**.

·         Cancellation Petitions Dismissed: The court concluded that Neha Herbals’ trademarks were valid and not subject to cancellation.

·         Infringement Considerations:

Ø  Section 29(2): No infringement was found as henna/mehendi products and face creams are recognized as commercially dissimilar despite being classified together.

Ø  Section 29(4): The court emphasized that "NEHA" is a common name and that Neha Herbals failed to establish sufficient reputation to warrant protection against dissimilar goods.

·         Passing Off Claim: The claim was unsuccessful due to a lack of demonstrated goodwill in relation to creams and insufficient evidence of misrepresentation or confusion.

·         Delay and Laches: The court rejected defenses based on delay or acquiescence, citing inadequate proof that the plaintiffs had knowingly tolerated Sahni's use of the mark.

·         Final Relief Granted: The Court dismissed the infringement and passing-off suit along with the cancellation petitions, ordering each party to bear its own costs.

Key Legal Reasoning

·         Prior Use and Proprietorship: The court underscored the principle established in the Trade Marks Act, where prior user rights hold precedence over mere registrations. Neha Herbals substantiated its claim with comprehensive evidence, which included income-tax records, historical trademark applications, promotional materials indicating development of the "NEHA" brand, and robust turnover figures that indicated market presence. In contrast, Sahni’s reliance on a cosmetics manufacturing license from “1990” and scattered invoices from subsequent years fell short of confirming continuous prior use.

·         Classification of Goods: A pivotal element of the court's reasoning involved the differentiation between the goods offered by both parties. The notion that face creams and mehendi products are functionally distinct led the court to conclude that the consumer was unlikely to be confused or misled by the concurrent use of the mark "NEHA."

·         Reputation and Distinctiveness: The court placed significant emphasis on the necessity of proving reputation for broader protection against dilution or unfair advantage. As "NEHA" did not demonstrate the requisite distinctiveness necessary at the time of Sahni's product launch, the claims of infringement were further undermined.

Conclusion

The judgment in “Neha Herbals Pvt. Ltd. v. Sahni Cosmetics CS (COMM) 207/2023” serves as a valuable reference point in the realm of trademark disputes, particularly in the context of prior use and the complexities of infringement and passing off claims. It reinforces the imperative for businesses to establish continuous market presence while evidencing distinctiveness in their trademarks to secure legal protection. Moreover, the decision delineates a clear distinction between different product categories, offering guidance on the determination of potential consumer confusion. The implications of this case extend beyond the immediate parties, influencing how businesses craft their branding strategies and navigate the intricacies of trademark law. In a competitive market landscape, understanding the nuances of trademark ownership, registration validity, and the importance of a strong evidential foundation is crucial for safeguarding brand identity and asserting legal rights effectively.