Licensing Isn’t Assignment: Supreme Court Stays Modified Injunction Against Kirloskar Trademark Licensing Within Group Companies

“Prima facie, the modified restraint expands beyond the original order without examining prior internal licensing practices” –  In a significant development impacting trademark usage within corporate conglomerates, the Supreme Court of India stayed the effect and operation of a modified injunction order that had barred Kirloskar Proprietary Limited (KPL) from licensing the ‘Kirloskar’ trademark to other Kirloskar group companies, even in overlapping lines of business.

The Bench comprising Justice Manoj Misra and Justice Ujjal Bhuyan, while issuing notice in Special Leave Petition (Civil) Nos. 29662–29663 of 2025, held that the High Court's modified order dated 10.10.2025, which expanded an earlier interim injunction, appeared excessive and unjustified at the interlocutory stage.

“We are of the prima facie view that the order dated 10th October 2025… ought not to have been passed when the appeal is pending for consideration and full facts in respect of any earlier licensing… have not been discussed,” the Court observed.

The matter is now posted for hearing on November 4, 2025, and the parties have been permitted to exchange affidavits and written submissions.

“High Court Went Beyond Its Earlier Order Without Factual Findings” – Supreme Court Pulls Up Expansion of Injunctive Relief

“Assignment involves transfer of rights; licensing merely creates a privilege. Injunction against both, without analysis, is excessive at interim stage”

The dispute centres around a trademark infringement suit filed by Kirloskar Brothers Limited (KBL) against Kirloskar Proprietary Limited (KPL), seeking to prevent KPL from assigning or licensing the ‘Kirloskar’ trademark to other group companies, particularly where such companies operate in overlapping business domains.

A trial court injunction dated January 9, 2025, had granted this restraint. KPL challenged it before the High Court. In partial relief, the High Court by its order dated July 25, 2025, allowed KPL to continue licensing the trademark to group companies, provided there was no assignment to group entities operating in similar businesses as KBL.

However, by a subsequent modification order dated October 10, 2025, the High Court prohibited even licensing of the mark to group entities in similar or overlapping business, effectively expanding the scope of restraint.

KPL approached the Supreme Court against this expansion.

“Though the original order dated 25th July 2025 allowed limited licensing within group companies, the modified order now prohibits even that — without adjudicating the history or practice of internal licensing,” submitted KPL’s counsel, led by Senior Advocates Mukul Rohatgi and Balbir Singh.

It was argued that the High Court conflated assignment with licensing, even though ownership of the trademark remained undisputed, and licensing does not amount to alienation of ownership.

“Pending Appeal Before High Court Does Not Justify Expanded Interim Restraint”

The respondent, Kirloskar Brothers Limited, represented by Dr. A.M. Singhvi and Mr. C. Aryama Sundaram, opposed the grant of relief, arguing that intra-group competition was historically avoided, and the modification merely reinforced that long-standing norm. They further submitted that the matter was still pending before the High Court, and therefore any intervention by the Supreme Court may be premature.

However, the Supreme Court found the High Court’s modification problematic, especially as it imposed a broader restraint during the pendency of an appeal, without engaging in factual findings or historical analysis of trademark licensing.

“We do not deem it necessary to express any opinion on the merits… However, we are of the prima facie view that the order dated 10th October 2025… ought not to have been passed,” the Court observed.

Accordingly, the Court stayed the operation and effect of the 10.10.2025 order, restoring the position as per the earlier order of 25.07.2025, which had allowed limited licensing to member companies under the Articles of Association, with certain safeguards.

Key Legal Issue: Is Licensing the Same as Assignment? Supreme Court Says ‘No’ — At Least at Interim Stage

The crux of the petitioner’s argument was the legal distinction between ‘assignment’ and ‘licensing’ under trademark law. While assignment involves transfer of ownership rights, licensing creates a permission or privilege to use the mark without altering ownership.

The Supreme Court appeared to concur with this line of reasoning — at least for purposes of interim relief — noting that licensing within the group, especially if it had occurred previously, could not be restrained without considering factual context.

“The term ‘assignment’ may imply transfer of rights, whereas licensing is limited to creating a privilege. The modified order appears harsher than the original and was passed without proper analysis,” the Bench noted.

Next Hearing on November 4 – Parties Free to File Affidavits and Responses

Issuing notice and fixing the matter for hearing on 04.11.2025, the Supreme Court allowed both parties to file responses and affidavits, including in relation to the pending interlocutory application (I.A. No. 264927/2025).

Until then, the order of the High Court dated 10.10.2025 stands stayed, allowing the petitioner to license the ‘Kirloskar’ trademark to group companies, as permitted earlier under the High Court’s July 25 order.