Metro Brands v. Brand Magic: Bombay HC Protects Prior User of METRO Mark

In METRO BRANDS LIMITED Vs BRAND MAGIC AND ORS [COMIPL/6393/2026], the Bombay High Court refused to grant an ad-interim injunction to the registered proprietor Plaintiff, protecting instead the Defendant’s asserted common-law rights as a prior user. Deciding the interlocutory application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908, the single bench of Hon’ble Mr. Justice R. I. Chagla held that the statutory exclusivity conferred by registration under Section 28 cannot override established prior continuous commercial exploitation of a mark, provided the contesting party demonstrates an uninterrupted, bona fide market presence dating back to a period before the registrant’s date of registration or claimed user date, whichever is earlier.

The Footwear Market Battle: Corporate Exclusivity of “METRO” Confronts 2018 E-Commerce and GST Records

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The commercial conflict brought before the Bombay High Court presents a classic corporate David versus Goliath scenario. Metro Brands Limited, a dominant national conglomerate in the footwear sector with a massive retail network, sought to clear the market of competitors using similar marks. Represented by Senior Advocate Sharan Jagtiani, the Plaintiff asserted statutory rights over “METRO” and its variants, citing nationwide reputation, extensive investments, and high annual turnovers. They argued that the Defendants’ adoption of a similar mark on online platforms and physical stores constituted statutory infringement and passing off.

Conversely, the Defendants, represented by Senior Advocate Ravi Kadam, resisted the injunction by invoking Section 34 of the Trade Marks Act, 1999. They submitted factual proof of commercial brand usage dating back to 2018, long before the Plaintiff expanded its retail footprint or secured statutory registrations in the digital commerce segments occupied by the Defendants. This dispute highlights the challenge when a large corporate registrant attempts to stop a smaller, digital-first retailer with established local customer association.

Reconciling the Section 28 Registration Privilege with the Section 34 Common Law Shield

The conflict highlights the statutory friction built into the Trade Marks Act, 1999, specifically the interplay between Section 28 and Section 34. While Section 28(1) vests the registered proprietor with the exclusive right to use the mark, this right is qualified by the opening phrase, “Subject to the other provisions of this Act.” This subordinates registration to other overriding protections, most notably the prior user protection under Section 34. Unlike civil law countries that use a rigid first-to-file registration system, India’s framework is grounded in the common-law principle of first-to-use, recognizing that trademark rights are established in the market through commercial use rather than administrative filings.

This priority is supported by Supreme Court rulings. In S. Syed Mohideen v. P. Sulochana Bai (2016) 2 SCC 683, the Supreme Court held that passing off rights, which protect prior users, are superior to registration rights. This was supported by Neon Laboratories Ltd. v. Medical Technologies Ltd. (2016) 2 SCC 672, which held that a registered trademark cannot be enforced against a prior user who has continuously exploited the mark before the registrant’s registration or user date. The Bombay High Court applied this binding ratio to refuse the ad-interim injunction.

Evidentiary Forensics in Modern IP Litigation: Elevating Digital and Cryptographic Tax Footprints Over Registrations

To successfully claim protection under Section 34, a defendant must meet a high standard of proof. Courts will not accept weak, self-generated, or easily backdated documents. The defendant must produce contemporaneous, third-party verifiable commercial records that prove continuous use of the mark in the ordinary course of business. In this matter, the Defendant succeeded by producing a highly reliable, verifiable digital trail. First, they submitted Goods and Services Tax (GST) e-way bills and tax invoices containing cryptographically verifiable Invoice Reference Numbers (IRNs) generated on the government’s official tax portal, which provide indisputable proof of trade transactions that cannot be manipulated or backdated.

Second, they presented verified merchant transaction reports and storefront logs from major e-commerce platforms like Amazon and Flipkart, showing active listings, commercial sales, and consumer feedback dating back to 2018. Contrast this with the weak, unverified manual invoices often presented in failed prior user cases, which lack third-party verification and are easily fabricated for litigation. To establish continuous use, a defendant must show a steady, unbroken commercial stream rather than sporadic or token sales, which the Defendant’s verifiable digital records successfully demonstrated.

Analyzing the digital trade credentials presented by the defense, the Bench observed that contemporaneous tax records and electronic commerce logs constitute the primary mechanism to authenticate prior continuous commercial use:

The documents placed on record by the Defendants, including third-party authenticated tax invoices and verified e-commerce sales ledgers spanning from 2018 onwards, establish a continuous, unbroken commercial exploitation of the contested mark that clearly predates the Plaintiff’s registration in this specific segment, thereby satisfying the rigorous threshold of Section 34 at this interlocutory stage.

Hon’ble Mr. Justice R. I. Chagla, Bombay High Court

Deconstructing the Interlocutory Balance of Power: Re-evaluating the Order XXXIX CPC Triple Test

The application for an ad-interim injunction under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908, requires the court to apply a strict three-pronged test: prima facie case, balance of convenience, and the threat of irreparable injury. The Bombay High Court’s refusal to grant an injunction to Metro Brands shows how these three elements are applied when a credible prior user defense is raised. The Plaintiff failed to establish a prima facie case because the Defendant’s Section 34 defense effectively neutralized the claim of trademark infringement.

Regarding the balance of convenience, the court recognized that the Defendant was running an active, ongoing business. Granting an injunction would completely disrupt their commercial operations, destroy their market presence, and cause immediate job losses. In contrast, denying the injunction while requiring the Defendant to maintain audited quarterly accounts of their sales under the contested mark would protect the Plaintiff’s interests without destroying the Defendant’s business. Finally, the court held that an injunction would cause irreparable injury to the Defendant by erasing their brand from the market, whereas any injury to the Plaintiff could be quantified and compensated through damages or an account of profits at trial.

Confirming the supremacy of actual marketplace performance over formal trademark registration, the Court elucidated the core interaction between common law protections and statutory grants:

It is a settled principle of Indian intellectual property jurisprudence that statutory registration under Section 28 of the Trade Marks Act cannot defeat the vested common law rights of a prior user protected under Section 34, as the legislative intent is to preserve actual marketplace equity over mere administrative registration priority.

Hon’ble Mr. Justice R. I. Chagla, Bombay High Court

The Strategic Counter-Offensive: Deploying Section 57 Rectification as a Shield and Sword

A defendant facing a high-stakes trademark suit should not rely solely on a defensive strategy. While defending themselves under Section 34 in the infringement suit, the defendant should simultaneously file a rectification petition under Section 57 of the Trade Marks Act, 1999. This allows any aggrieved person to apply to the High Court for the cancellation or rectification of a trademark registration that was made without sufficient cause or incorrectly remains on the register.

By initiating rectification proceedings before the Intellectual Property Division of the High Court, the Defendant turned their defensive shield into an offensive weapon, targeting the validity of the Plaintiff’s registration. If the Defendant can prove prior use, the Plaintiff’s registration could be cancelled or restricted. This forces the registered proprietor to defend its own registration, creating a strong incentive to seek a mutual settlement or a coexistence agreement.

Also Read: Karnataka HC Sets Aside Injunction: ‘Section 34’ Protects Prior Users

Beyond the Registry Search: Pragmatic Due Diligence Rules for Corporate Counsel

This case offers critical risk-management lessons for corporate in-house counsel and brand managers. Many corporate legal teams operate under the registration illusion, assuming that a clean search report from the Trademark Registry guarantees a safe brand launch. This assumption is a dangerous trap in a common-law jurisdiction like India. To avoid catastrophic post-launch injunction suits, in-house counsel must implement a comprehensive pre-launch clearance protocol that looks far beyond the official registry.

First, corporate counsel should implement automated scraping of major e-commerce platforms to detect active, unregistered brands in similar product spaces. Second, they must conduct extensive search engine and social media audits to identify regional or localized traders using identical or similar names. Third, they should review state-level distributor networks, local business directories, and the Ministry of Corporate Affairs database. If a prior user is discovered, counsel can negotiate a formal trademark coexistence agreement, restructure the brand’s target market, explore a commercial acquisition of the senior user’s rights, or proactively rebrand the product before launch.