By Vohra & Vohra
The Delhi High Court’s decision in Ashiana Ispat Limited v. Kamdhenu Limited & Ors. (Judgment dated 1 July 2026) is one of the most significant trademark decisions delivered this year, not because it introduces a new principle of trademark law, but because it harmonises three distinct legal regimes that frequently intersect in commercial disputes—contract law, trademark ownership, and common law goodwill.
The dispute presented an unusual factual matrix. A trademark had been contractually permitted for use between two commercial entities under a long-standing business arrangement. Years later, after termination of that relationship, both parties asserted competing rights over the same mark. The Court was therefore required to answer an important question:
Can a party continue to claim rights over a trademark merely because an earlier agreement permitted its use, despite having neither secured statutory ownership nor established independent goodwill?
The Division Bench answered this question decisively in the negative while simultaneously recognising that contractual conduct of both parties would remain relevant for adjudication at trial. The judgment provides valuable guidance on the distinction between contractual permission to use a trademark and proprietary rights under the Trade Marks Act, 1999.
The Genesis of the Dispute
The litigation arose from a long-standing commercial relationship between Ashiana Ispat Limited (“AIL”) and Kamdhenu Limited (“KL”), governed initially by a 2002 Agreement.
Under Clause 22 of that agreement, the parties contemplated adoption of the mark “AL KAMDHENU GOLD”, with the understanding that Ashiana would seek registration of the mark and thereby acquire proprietary rights. The arrangement, however, was never fully implemented.
Although Ashiana filed a trademark application in 2002, it allowed the application to lapse and ultimately abandoned it in 2008. Equally significant was the absence of evidence demonstrating continuous commercial use of the mark over the following two decades. The Court noted that, after 2015, virtually no material existed to establish use of the impugned mark in relation to goods.
Following termination of the commercial arrangement in September 2024, both parties initiated litigation asserting competing claims over the mark “AL KAMDHENU GOLD.”
Contractual Permission Does Not Create Proprietary Rights
Perhaps the most important contribution of the judgment lies in its reaffirmation of a fundamental principle of trademark law—that permission to use a trademark is not synonymous with ownership.
Ashiana argued that Clause 22 of the 2002 Agreement effectively conferred upon it rights over the mark. The Court accepted that the agreement contemplated such an arrangement but observed that the agreement itself imposed a corresponding obligation upon Ashiana to secure registration of the trademark and thereby perfect its proprietary rights.
That obligation was never fulfilled.
The Court held that the appellant failed to take appropriate steps to acquire either statutory rights through registration or common law rights through commercial use. Consequently, upon issuance of the termination notice dated 19 September 2024, the contractual consent previously granted under the 2002 Agreement stood prima facie revoked.
The judgment thus reinforces an important commercial lesson. Agreements may authorise use of a trademark, but unless that permission is converted into legally recognised proprietary rights through registration or substantial goodwill, the user’s position remains inherently fragile.
Registration Alone Is Not Everything—But Inaction Can Be Fatal
Another noteworthy feature of the decision is the Court’s examination of Ashiana’s prolonged inactivity.
Trademark law rewards diligence.
Although Ashiana initially sought registration in 2002, it abandoned the application in 2008 and thereafter remained largely inactive for almost sixteen years before filing another application only after disputes had arisen between the parties. The Court regarded this delay as highly significant while evaluating the appellant’s claim for interim protection.
The judgment sends a clear message that businesses cannot indefinitely postpone the protection of valuable commercial assets. Delay in securing registration, coupled with absence of demonstrable commercial exploitation, substantially weakens subsequent claims of exclusive ownership.
Goodwill Cannot Be Assumed
Equally significant is the Court’s treatment of passing off.
Ashiana argued that even if statutory rights were disputed, it had independently acquired goodwill in the mark “AL KAMDHENU GOLD.”
The Court rejected this submission at the interim stage.
It observed that the appellant had failed to produce material demonstrating that consumers associated the impugned mark with its business. Limited references in statutory notices or corporate filings could not substitute for evidence of actual commercial use capable of generating market recognition. The Court therefore held that no prima facie goodwill had been established sufficient to sustain a passing off claim.
This aspect of the judgment reiterates a settled yet often overlooked proposition: goodwill is a question of evidence, not assumption.
Passing off protects reputation built through commercial use. Mere contractual entitlement or historical association cannot replace proof of consumer recognition.
Registered Rights Continue to Receive Judicial Primacy
While declining relief to Ashiana, the Court simultaneously upheld the interim injunction granted in favour of Kamdhenu.
The reasoning was straightforward.
Kamdhenu remained the registered proprietor of the trademarks “KAMDHENU,” “KAMDHENU GOLD,” and “KAMDHENU GOLD TMT.” Since the impugned mark “AL KAMDHENU GOLD” incorporated the dominant feature of these registered marks, the Court held that continued use by Ashiana prima facie constituted infringement.
Importantly, the Court recognised that similarity must be assessed from the perspective of the overall commercial impression created by competing marks.
The addition of the prefix “AL” was insufficient to dilute the dominance of “KAMDHENU GOLD,” particularly where identical goods were involved and the parties had historically collaborated in the marketplace.
The Court Also Examined Kamdhenu’s Conduct
Interestingly, the judgment does not unconditionally endorse Kamdhenu’s position.
The Division Bench expressed serious reservations regarding Kamdhenu’s conduct in pursuing trademark registrations contrary to the understanding reflected in the 2002 Agreement. It observed that the registrations for “KAMDHENU GOLD” and “KAMDHENU GOLD TMT” appeared, prima facie, to have been obtained despite an earlier commitment to withdraw the relevant trademark applications. The Court further noted that Kamdhenu itself had produced little evidence of independent commercial use of those marks before 2025.
For this reason, while maintaining the injunction in Kamdhenu’s favour on the strength of its registrations, the Court clarified that any use of “KAMDHENU GOLD” and “KAMDHENU GOLD TMT” during the pendency of the suit would remain subject to the final outcome of the litigation and would not create equities in Kamdhenu’s favour.
The Court also restrained Kamdhenu from using the mark “AL KAMDHENU GOLD,” observing that its attempt to seek registration of that mark after termination of the agreement appeared prima facie lacking in good faith.
Limited Scope of Appellate Review
An equally valuable aspect of the judgment concerns appellate procedure.
Relying upon the Supreme Court’s landmark decisions in Wander Ltd. v. Antox India Pvt. Ltd. and Pernod Ricard India Pvt. Ltd. v. Karanveer Singh Chhabra, the Division Bench reiterated that appellate courts should exercise considerable restraint while reviewing discretionary interim injunctions.
Unless the Single Judge has acted arbitrarily, perversely, or contrary to settled legal principles, an appellate court ought not to substitute its own view merely because another conclusion may also have been possible.
This reaffirmation is particularly significant for intellectual property litigation, where interim orders often determine the commercial fortunes of competing businesses.
Commercial Lessons for Brand Owners
The decision carries several practical implications.
First, contractual permission to use a trademark should never be mistaken for ownership. Businesses must ensure that agreements permitting use are accompanied by timely registration wherever proprietary rights are intended.
Secondly, trademark registration should not be viewed as a procedural formality. Delay or abandonment may permanently undermine future claims.
Thirdly, goodwill cannot be established through assertions alone. Continuous commercial use, advertising, consumer recognition, and documentary evidence remain indispensable for maintaining passing off actions.
Finally, businesses must recognise that intellectual property strategies should be reviewed whenever commercial relationships undergo restructuring or termination. Rights dependent upon contractual arrangements may disappear once the contractual framework itself comes to an end.
Conclusion
The Delhi High Court’s ruling in Ashiana Ispat Limited v. Kamdhenu Limited & Ors. is an important reminder that trademark law protects ownership, reputation, and diligence—not merely contractual expectations.
By distinguishing contractual consent from proprietary rights, emphasising the necessity of registration and commercial use, and balancing statutory protection with equitable considerations, the Court has delivered a nuanced judgment likely to influence future disputes involving trademark licensing, collaboration agreements, and post-termination brand ownership.
For businesses, the judgment reinforces a simple but commercially vital lesson: a trademark derives its legal strength not merely from an agreement permitting its use, but from timely registration, consistent commercial exploitation, and the goodwill painstakingly built in the marketplace.