Dealer Importing & Selling Trademarked Goods Cannot Sue Authorised Distributor For Infringement: Delhi High Court

The Delhi High Court has made it clear that when a trader imports and sells goods bearing the trademark of another company, such trader cannot sue another authorized dealer of the trademark holder for infringement.Justice Amit Bansal observed, “Any person in India has the right to legally import goods from abroad bearing the trademarks of an entity and sell the same in India. Such sale of original goods by an authorized reseller/importer would not amount to trademark infringement.”In the case at hand, plaintiff claimed to have entered into an Exclusive Agency Agreement with Defendant no. 5, the original equipment manufacturer, in respect of its induction cookers under the brand 'STELLA'.It sought an injunction to restrain the Defendant no. 2 from selling induction cooktops under the same mark.Plaintiff claimed exclusive usage since the year 2015 and that it had successfully registered the trademark.Defendant no. 2 on the other hand submitted that the Exclusive Agency Agreement only granted a license to the plaintiff to use the mark 'STELLA' and not the permission to apply for registration of the same.It further submitted that both the defendant no. 2 and plaintiff are importing the products bearing the impugned mark from defendant no. 5 company, who is the original owner and proprietor of the said marks and therefore, no case of infringement can be made out.Defendant no. 5 concurred, stating that plaintiff is one of its resellers in India like defendant no. 2 and that it has no exclusive contractual relationship with the plaintiff.At the outset, the High Court found that Defendant no. 5 had been selling goods in India under the Stella Marks much before the plaintiff's use of the impugned mark in India or its trademark registrations in India.“Accordingly, the defendant no. 5 would be entitled to the defence under Section 34 of the Trade Marks Act being a continuous prior user since 2013, before the use by the plaintiff or the date when the plaintiff obtained registration,” it held.The Court then proceeded to note that the Plaintiff has been one of the re-sellers of defendant no. 5's products in India, similar to the defendant no. 2. Since, the sale of the products bearing the impugned marks by the defendant no. 5 cannot amount to infringement, axiomatically, the sale of the said goods by defendant no. 2, who is nothing but an authorized re-seller of the defendant no. 5, cannot amount to infringement, it held.“It is not the case of the plaintiff that the defendant no. 2 is using the impugned mark in its own right. Like the plaintiff, the defendant no. 2 is also importing goods from the defendant no. 5, through the authorized distributors of defendant no. 5 and selling the same in India. The goods sold by the defendant no. 2 are genuine and original products of the defendant no. 5, imported and resold with full authorization from the defendant no. 5,” the Court observed and vacated the stay granted earlier against Defendant no. 2.The main suit is now listed on August 11.Appearance: Mr. J. Sai Deepak, Sr. Advocate with Mr. Aditya Yadav, Mr. Vijay Kasana, Mr. Luv Virmani, Mr. Lakshay Kaushik, Mr. Chirag Verma, Mr. Gaurav Chaudhary and Mr. Vishal Chaudhary, Advocates for Plaintiff; Mr. Arvind Nigam, Sr. Advocate with Mr. Rohit Kumar Singh, Mr. Sajid Mohammad, Mr. P.R. Mala, Mr. Mitesh Mutha, Ms. Rajlakshmi Singh, Ms. Vidushi Srivastava and Ms. Rambha Singh, Advocates for D-2. Mr. Sanjeev Kr. Singh, Mr. Rahul Chitnis, Mr. Devansh Shekhar and Mr. Jitendra Pandey, Advocates for D-5.Case title: M/S Products And Ideas (India) Pvt. Ltd v. Nilkamal Limited And OrsCitation: 2025 LiveLaw (Del) 735Case no.: CS(COMM) 715/2024Click here to read order

Dealer Importing & Selling Trademarked Goods Cannot Sue Authorised Distributor For Infringement: Delhi High Court

Kapil Dhyani

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