'AL KAMDHENU GOLD' Belongs To Kamdhenu, Not Ashiana: Delhi HC Finds 2002 Agreement Was A Licence, Not An Assignment — Grants Injunction Against Steel Rival

"AIL Will Become Exclusive And Absolute Owner Only Upon Final Registration — No Registration Was Ever Obtained", In a significant ruling on trade mark law, the Delhi High Court has held that a steel manufacturer cannot claim ownership of the mark 'AL KAMDHENU GOLD' under a 2002 agreement that was, in substance and effect, a licence user arrangement and not an assignment — and that all goodwill generated under such permitted use enured to the benefit of the licensor, Kamdhenu Limited, not the licensee.

Justice Tejas Karia granted an interim injunction in favour of Kamdhenu Limited against Ashiana Ispat Limited and simultaneously dismissed Ashiana's own injunction application, holding that Kamdhenu had established a prima facie case for both trade mark infringement and passing off while Ashiana had failed to demonstrate any independent prior user or goodwill in the impugned mark.

Background of the Case

The dispute between Kamdhenu Limited (KL) and Ashiana Ispat Limited (AIL) is rooted in a relationship spanning nearly three decades and three successive agreements. KL, adopting the 'KAMDHENU' mark in 1994, is the registered proprietor of 'KAMDHENU', 'KAMDHENU GOLD' and 'KAMDHENU GOLD TMT'. In 1997, KL permitted AIL to use the KAMDHENU mark under a formal licence. In 2002, a new agreement was executed under which AIL was, among other things, permitted to use and seek registration of the mark 'AL KAMDHENU GOLD' — a mark constructed by prefixing 'AL' (the acronym for Ashiana (Ispat) Limited) to 'KAMDHENU GOLD'. In 2021, a further agreement was entered for TMT bars under the marks 'KAMDHENU'/'KAMDHENU NXT'. In September 2024, KL issued a termination letter. AIL then filed suit claiming ownership of 'AL KAMDHENU GOLD', and KL filed a counter-suit alleging infringement and passing off. Both parties sought interim injunctions, which the Court heard together.

Legal Issues

Three principal legal questions arose. First, whether the 2002 Agreement constituted a trade mark assignment or a licence user arrangement. Second, whether the 2021 Agreement novated and superseded the 2002 Agreement. Third, whether AIL had established independent prior user and goodwill in the impugned mark sufficient to sustain a passing off action or resist KL's infringement claim.

Court's Observations and Judgment

Assignment vs. Licence — The Foundational Question

AIL's entire case rested on the proposition that the 2002 Agreement was a trade mark assignment under which KL unequivocally relinquished rights over 'AL KAMDHENU GOLD' and recognised AIL as its absolute owner. The Court dismantled this argument with precision.

Drawing on the established distinction between assignment and licence, the Court noted that assignment is a permanent transfer of proprietary rights whereas a licence is a permitted use without any transfer of ownership. It examined Clause 5 of the 2002 Agreement, which expressly stated that AIL acknowledged KL's exclusive proprietary rights and that any goodwill arising from use of the trade mark "shall be deemed to be held by the Licensee for the absolute benefit of licensor."

The Court then examined Clauses 22 to 26 of the 2002 Agreement. Clause 24 stated plainly that AIL "will become exclusive and absolute owner" of the impugned mark only upon its final registration. Clause 26(b) provided for automatic termination of the agreement upon such registration, indicating the parties envisaged a transition from licence to ownership only at that future point. No such registration was ever obtained by AIL — its 2002 application was abandoned in 2008 and no fresh application was filed until December 2024.

"Clauses 22 to 26 of the 2002 Agreement, when read conjointly, do not provide for any present transfer of proprietary rights, but merely contemplate a future and contingent possibility of such transfer upon registration of the Impugned Mark in favour of AIL."

The Court held that the pervasive control retained by KL over the manner, scope and continuance of use, including termination rights, confirmed the arrangement was in substance and effect a licence user arrangement and could not be construed as an assignment of the impugned mark.

All Goodwill Under Permitted Use Belongs To The Licensor

Having found the 2002 Agreement to be a licence, the Court proceeded to examine the significance of AIL's advertisements and use of the impugned mark. AIL had placed on record several advertisements dated 2004, 2005, 2011, 2014 and 2025 bearing the 'AL KAMDHENU GOLD' mark.

However, the Court found that AIL's own invoices from 1997 to as late as August 2024 did not bear the impugned mark at all — they bore KL's marks 'KAMDHENU'. More tellingly, one of AIL's own advertisements from 2005 contained the disclaimer "for 99 years as per agreement", acknowledging the contractual and dependent nature of the use.

Invoking Section 48(2) of the Trade Marks Act, 1999, the Court held that use of a trade mark by a licensee is deemed to be use by the proprietor for all purposes under the Act. Any goodwill generated by AIL's permitted use during the subsistence of the 2002 Agreement therefore enured exclusively to the benefit of KL as licensor.

"Any such use, or goodwill including by way of advertisements, would therefore, enure to the benefit of KL, being the licensor, in view of Section 48(2) of the Trade Marks Act and cannot be appropriated by AIL to independently establish prior user and goodwill."

AIL accordingly failed to establish a prima facie case on its passing off claim.

Family Arrangement Argument Rejected — Commercial Entities Cannot Rely On Family History

AIL had argued at length that the 'KAMDHENU' mark was jointly developed by the Jain family (controlling AIL) and the Agarwal family (controlling KL) and that this shared history should inform the Court's understanding of the 2002 Agreement. The Court rejected this submission firmly.

All three agreements — the 1997, 2002 and 2021 agreements — expressly stated that the parties were "totally unrelated" and "separate and distinct" entities operating on a "purely commercial and contractual" basis. The Court held that within this framework, all rights in trade marks and goodwill vest in corporate entities and not in individual directors or their families.

"Any claims based on purported family arrangements or collaborative development of KAMDHENU Mark do not impact the legal rights of the Parties."

The Court further held that as a licensee — and now ex-licensee — AIL was estopped under the doctrine of licensee estoppel from challenging KL's proprietary rights in the KAMDHENU mark and its formatives.

2021 Agreement Constitutes Novation of the 2002 Agreement

On the question of whether the 2021 Agreement superseded the 2002 Agreement, the Court found in KL's favour at the prima facie stage. Recital E of the 2021 Agreement expressly acknowledged the 2002 Agreement and recorded that the products covered thereunder — CTD bars/Tor Steel — had become obsolete, and that AIL wished to continue the arrangement for next-generation TMT bars under the mark 'KAMDHENU NXT'.

Applying Section 62 of the Indian Contract Act, 1872, the Court held that the mutual intention to substitute the earlier arrangement was discernible from the terms and commercial context of the 2021 Agreement. "Prima facie, 2021 Agreement constitutes a novation of the 2002 Agreement."

Safety of Steel Bars — Why Damages Are Inadequate

On the balance of convenience and irreparable harm, the Court found both decisively in KL's favour. KL had demonstrated substantial goodwill, with cumulative brand turnover of approximately ₹1,48,000 crores from 1995 to 2024 and advertising expenditure of over ₹870 crores by it and its franchisees. The Court noted that 'KAMDHENU GOLD' was the dominant and distinctive element of the impugned mark, and the prefix 'AL' did not alter its essential character.

The Court placed particular emphasis on the nature of the products at issue. Reinforcement steel bars used in transportation and infrastructure projects demand the highest standards of safety and structural integrity. Any defect associated with goods bearing the impugned mark would inevitably be associated with KL, causing reputational damage that no monetary award could adequately compensate. "The nature of these products makes monetary compensation insufficient for such injury."

Applying the framework laid down by the Supreme Court in Pernod Ricard India (P) Ltd. v. Karanveer Singh Chhabra, 2025 SCC OnLine SC 1701, the Court held that KL had established a prima facie case for both infringement and passing off, and that irreparable harm was established.

The Injunction

The Court issued a comprehensive injunction restraining Ashiana Ispat Limited, its directors, officers, dealers, distributors and all others acting on its behalf from manufacturing, marketing, selling, advertising or in any manner dealing in products bearing the mark 'AL KAMDHENU GOLD' or any mark bearing 'KAMDHENU' as an essential feature, including across physical markets, e-commerce platforms, social media and websites.

AIL's own application for injunction was dismissed.

Date of Decision: April 10, 2026