Asian Paints v. Babita Aggarwal: Bombay HC Protects Prior User Rights

In ASIAN PAINTS LIMITED Vs Babita Aggarwal [COMIPL/23472/2026], the Bombay High Court refused the ad-interim injunction sought by the plaintiff, reaffirming that the statutory rights afforded to a registered proprietor under Section 28 of the Trade Marks Act, 1999 are inherently qualified by the common law protections extended to prior users under Section 34 of the same Act.

The Doctrinal Tension: Section 28 Registration Versus Section 34 Equitable Priority

Looking to master Indian Trademark Law jurisprudence? Read our full Trademark Law Guide.

The core of this dispute lies in the doctrinal friction between Section 28 and Section 34 of the Trade Marks Act, 1999. Section 28 confers upon the registered proprietor the exclusive right to the use of the trademark in relation to the goods or services in respect of which the trademark is registered. However, this exclusivity is not an absolute, vacuum-sealed grant. It functions within a statutory framework that explicitly recognizes the survival of common law rights. Section 34 acts as a substantive proviso to the rights of the registered owner, prohibiting the interference with a trade mark used continuously by another party from a date prior to the use or registration of the plaintiff’s mark.

The Bombay High Court correctly navigated this by prioritizing the historical reality of trade over the administrative act of registration. In the Indian context, as affirmed by the Apex Court in S. Syed Mohideen v. P. Sulochana Bai, the registration of a trademark does not extinguish the rights of a prior user. The registration certificate serves as evidence of ownership, but it remains susceptible to the superior, antecedent rights of a party who has established genuine market goodwill. Consequently, when a defendant invokes Section 34, the Court is obligated to conduct a forensic inquiry into the chronology of use. The plaintiff here sought to utilize the procedural weight of an interlocutory injunction to effectively ignore the defendant’s established business history, a move that the High Court rightly rejected as being inconsistent with the underlying philosophy of the Act.

Evidentiary Rigor: The Forensic Weight of Statutory Compliance Documents

The success of the defendant in this matter underscores the evolving requirement for high-level evidentiary standards in trademark litigation. In an era where digital footprints are easily manipulated, the Court demanded more than self-serving affidavits or unverified sales registers. The defendant provided GST e-way bills featuring cryptographically verified Invoice Reference Numbers. This documentation creates an immutable link between the entity, the mark, and the commercial activity. Such records represent the gold standard for proving continuous use at the interlocutory stage.

The bench placed heavy reliance on this objective evidence, noting that the qualitative value of the documents provided a clear timeline that eclipsed the plaintiff’s reliance on their registration certificate alone. The Court articulated the importance of these findings as follows:

The defendant has placed on record substantial, third party verified documentation in the form of GST returns and e-way bills which demonstrate a consistent and uninterrupted commercial stream of operations since the year 2018, which significantly predates the filing and registration claim of the plaintiff in this particular category of trade.

Hon’ble Mr. Justice, Bombay High Court

This observation highlights a shift in judicial expectations. It is no longer sufficient to merely assert “long use.” Defendants must offer a comprehensive evidentiary trail that withstands cross-examination. For in-house counsel, this necessitates a more rigorous approach to record-keeping. If a brand is to be defended in court, its commercial history must be documented with the same precision as a corporate audit.

Evaluating the Triple Test: Order XXXIX and the Doctrine of Balance of Convenience

The application of the triple test under Order XXXIX, Rules 1 and 2 of the Civil Procedure Code requires a demonstration of a prima facie case, the balance of convenience, and irreparable injury. The plaintiff’s argument for an injunction failed primarily on the balance of convenience. Where a defendant has established a consistent, long-standing market presence, the court must weigh the potential for irreparable damage to that business against the alleged harm to the plaintiff’s registration.

The Court correctly concluded that an injunction would cause the defendant more harm than the lack of one would cause the plaintiff, particularly given that the defendant’s market presence is demonstrable and not speculative. By mandating the maintenance of audited quarterly accounts, the Court effectively mitigated the risk of financial loss to the plaintiff while simultaneously ensuring that the defendant’s business was not shuttered prior to a full trial on the merits. This is the sophisticated, balanced approach required in modern intellectual property adjudication. The Court observed the core of this judicial reasoning:

The judicial principle of balance of convenience dictates that we must avoid the disruption of an ongoing business enterprise when the defendant has demonstrated a credible, long standing prior user defense, provided that the financial interests of the plaintiff are protected through a continuous and strict regime of record keeping and auditing of all accounts.

Hon’ble Mr. Justice, Bombay High Court

Corporate Strategy: Due Diligence Beyond the Register

This case serves as a vital lesson for corporate legal teams. Relying exclusively on registry searches is a significant strategic oversight. The register is a reflection of formal filings, not an exhaustive map of market reality. A company may obtain a registration that is technically clean, yet potentially vulnerable to challenge by localized, unregistered players who have been active for years. This creates an unacceptable level of commercial risk, especially when launching a brand or entering a new geographic market.

To avoid similar litigation outcomes, in-house counsel must adopt a proactive, multi-disciplinary due diligence protocol. This should include:

• Performing deep-dive searches across e-commerce platforms and niche social media channels where local businesses often establish their presence.
• Commissioning boots-on-the-ground investigations to identify unregistered users who may not appear in national databases but hold significant local brand loyalty.
• Consulting with supply chain and taxation departments to detect any potential overlap in the use of the mark, as state-level GST and trade records often reveal usage long before a trademark application is filed.
• Reviewing the company’s own historical archives, as large enterprises often accidentally infringe upon their own prior regional campaigns that were never formally registered.

Failure to execute this depth of inquiry invites the scenario where an entity spends heavily on brand acquisition and registration, only to be stopped at the gate by a prior user. The costs associated with such litigation, including the risk of public failure to obtain an injunction, far exceed the cost of thorough pre-launch due diligence.

Also Read: Bombay HC Restrains ‘Pune Mirror’ Dispute: Rules on Section 124 Delay

The Strategic Utility of Section 57 Counter-Claims

The litigation trend seen here, where the defendant moves to challenge the validity of the plaintiff’s registration under Section 57 of the Trade Marks Act, represents a significant shift in defensive tactics. By initiating rectification proceedings, the defendant transforms the litigation from a simple infringement suit into a fundamental challenge of the plaintiff’s intellectual property assets. This tactical pivot is essential in modern IP practice.

When faced with an infringement suit, legal teams must immediately assess the validity of the plaintiff’s mark. If the registration is overly broad or improperly obtained, the Section 57 counter-claim serves as a powerful deterrent. It forces the plaintiff to defend the core of their IP assets rather than merely asserting their rights against a competitor. For the defendant, this changes the settlement landscape entirely, as the threat of losing a trademark registration is a powerful lever in negotiating an exit from litigation or a commercial settlement.

The Court’s refusal to grant an injunction in this matter confirms that the judiciary is increasingly wary of plaintiffs attempting to use the court system as a blunt instrument to stifle competition. When a plaintiff relies on the technicality of registration to ignore the common law rights of others, the Court will look to the substance of the market reality. The legal framework of India is designed to protect genuine, continuous commercial activity, and this judgment reinforces the principle that the register is a servant of trade, not its master.

In summary, the decision is a validation of the equitable principles that govern trade mark law. It warns that while the registry provides a shield, it is not an offensive weapon that can be used to erase the rights of those who have invested in building a brand through continuous, verifiable use. Counsel must ensure that their litigation strategies are as sophisticated as the evidentiary standards now required by the Court, moving beyond mere reliance on certificates to a holistic presentation of market facts.