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Supreme Court Declines To Interfere With HC Order Refusing ITC In 'DAKSHIN' Dispute
In a significant trademark battle between hospitality giants, the on Friday refused to disturb an of the that denied any relief against (AGH) over the use of the mark “DAKSHIN” for a standalone restaurant in Chennai. A bench comprising Justices B.V. Nagarathna and R. Mahadevan dismissed ITC’s , observing that the suit was still pending and the impugned order was merely in nature.
“As the suit is at large and the impugned order is only an , we do not find any reason to interfere with the impugned order. Hence, the Special Leave Petition is dismissed,” the Court stated. The ruling effectively upholds the High Court’s finding that AGH had built its own reputation in the mark over decades and that no case of or had been made out.
The Origins of the ‘DAKSHIN’ Mark
The dispute traces back to , when the “DAKSHIN” restaurant began operations at the in Chennai under a commercial arrangement between ITC and AGH. The relationship between the two entities governed by an operating services agreement that contained specific clauses on intellectual property rights, trademarks, and trade names. That agreement came to an end in , after which AGH continued to use the DAKSHIN mark, eventually opening a standalone restaurant under the same name.
ITC, which claims to own a for DAKSHIN in relation to restaurant services, moved the seeking an against AGH’s use. The company argued that the marks were “absolutely identical” and that AGH’s continued use constituted both and . Senior Advocates , , and , appearing for ITC, pointed to the operating services agreement to underscore that the parties had specifically bargained over trademark rights.
“Now, what was the bargain between the parties when we were together? And we remained together till ,” Divan submitted before the Supreme Court, referring to the agreement’s provisions on intellectual property.
High Court’s Reasoning
The Single Judge of the had earlier rejected ITC’s plea for , holding that AGH had used the DAKSHIN mark since , while ITC failed to establish in the mark. The court noted that AGH had built its own reputation through long-standing and continuous use, and that ITC’s failure to object after the separation weighed against its claim of exclusivity. On appeal, the Division Bench affirmed these findings.
Importantly, the High Court held that Delhi courts had over the dispute because AGH maintained an interactive presence on the online food delivery platform , thereby reaching consumers in Delhi. However, on the merits, it found no case of or . The court emphasized that AGH’s use was not among consumers, given that the two restaurants operated in different market segments—one as part of a luxury hotel chain and the other as a standalone eatery.
Supreme Court’s Observations
During the hearing before the Apex Court, the bench appeared skeptical of ITC’s claim of likely confusion. Justice Nagarathna questioned, “A person who's accustomed to going to an ITC hotel... He sees another... He won't go to Dakshin.” The observation underscored the court’s view that a diner would not be misled into thinking that AGH’s standalone restaurant was connected to ITC’s hotel chain.
Senior Advocate responded by clarifying that ITC’s case was not limited to or consumer confusion but also concerned of its . “It's a trademark matter, , not a ,” he submitted. Nevertheless, the bench was unconvinced that was warranted, especially given AGH’s extensive prior use and the fact that the suit remains pending for trial.
Legal Implications
The Supreme Court’s decision, while , carries important lessons for trademark holders. It reaffirms that a claim of based on a registered mark may not automatically entitle the owner to , particularly when the alleged infringer can demonstrate a long history of . The ruling also highlights the significance of the “standalone” nature of the defendant’s business—a factor that can diminish the likelihood of confusion even when marks are identical.
From a procedural standpoint, the Court’s reluctance to interfere with interim orders unless there is a glaring error or jurisdictional flaw is consistent with its established practice. The dismissal of the SLP leaves the High Court’s discretion intact and allows the trial to proceed on its merits.
Impact on Legal Practice
For legal practitioners, this case underscores the critical importance of building a record of prior use and goodwill when defending against claims. It also serves as a reminder that a does not confer an absolute right to exclude others, especially where the defendant has used the mark in a distinct geographical or market context.
The finding, based on an interactive website and presence on platforms like , may encourage more litigants to seek forum in courts beyond the defendant’s physical location, particularly in the digital age. However, the substantive outcome here shows that jurisdictional advantages do not automatically translate into injunctive relief.
Conclusion
The Supreme Court’s refusal to grant ITC in the DAKSHIN trademark dispute does not end the legal battle—it merely defers the final determination to the trial court. The case will now proceed to a full hearing where both sides will have the opportunity to present evidence on the strength of their respective claims. For now, AGH can continue to operate its standalone restaurant under the DAKSHIN brand, while ITC must wait for a final adjudication. The decision serves as a cautionary tale for trademark owners: even a registered mark cannot be wielded as a weapon without regard for the rights and reputations built by others through long-standing use.
