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Introduction

The Madras High Court, in C.S. (COMM DIV) No. 116 of 2023, examined the distinction between statutory trademark infringement under the Trade Marks Act, 1999 and the common law remedy of passing off. The dispute arose following the termination of franchise arrangements between Sangeetha Caterers and Consultants LLP, a well‑known restaurant chain operating under the “Sangeetha” brand, and Rasnam Foods Pvt Ltd along with its associate entities. The Plaintiff alleged that the Defendants, after exiting the franchise relationship, continued operating restaurants under the name “Geetham” in a manner that infringed its trademark rights and misrepresented a continuing association. By its judgment dated 25 March 2026, the Court drew a clear demarcation between infringement and passing off, granting reliefs while also taking note of corrective steps undertaken pursuant to interim orders.

Facts of the Case

The Plaintiff has been in the restaurant business since 1985 and has built considerable goodwill under the name “Sangeetha.” Over the years, it secured several trademark registrations, including “SVR SANGEETHA” and “SANGEETHA VEG. RESTAURANT.” The Defendants were franchisees of the Plaintiff, operating restaurants in Chennai under the Sangeetha brand.

In February 2022, the Defendants requested permission to shift one of their branches due to construction work. This request was rejected, and discussions in March and April 2022 led to the mutual termination of the franchise agreements effective May 31, 2022. The termination was accompanied by acknowledgments from the Defendants that the Plaintiff was the owner of the intellectual property rights in the Sangeetha marks.

From June 1, 2022, the Defendants began operating restaurants under the name “Geetham” at the same locations. They adopted a red and green color scheme similar to that used by Sangeetha and promoted their outlets with statements such as “everything is the same except the name.” The Plaintiff alleged that this amounted to infringement and passing off.

The Plaintiff issued a lawyer’s notice in January 2023 and filed the suit in May 2023. On September 22, 2023, a Single Judge granted an interim injunction restraining the Defendants. On appeal, the Division Bench modified the order on November 2, 2023, directing the Defendants to adopt a dissimilar trade dress in orange and ochre and to use uppercase lettering for “GEETHAM.” The Division Bench also required the Defendants to issue public notices clarifying that Geetham was not connected to Sangeetha.

Argument in Favour

The Plaintiff argued that it was the registered proprietor of the Sangeetha marks and that the Defendants, as former franchisees, had acknowledged their exclusive rights. The adoption of the mark “SANGEETHAM” by the Defendants, though later withdrawn, and the use of the same red‑green trade dress demonstrated dishonest intent to capitalize on the Plaintiff’s goodwill.

Evidence of actual confusion was presented through news reports that described the change as “only the name has changed” and customer reviews where patrons believed they were still dining at a Sangeetha outlet. During cross‑examination, a Google search for “Sangeetha” showed Geetham branches, which the Plaintiff argued was proof of deception. The Plaintiff maintained that the Defendants’ conduct amounted to both infringement and passing off.

The Plaintiff relied on case law to support its arguments. In S. Syed Mohideen v. P. Sulochana Bai, 2015 SCC OnLine SC 1084, the Supreme Court held that passing off is a broader remedy than infringement and can succeed even where infringement fails. In Midas Hygiene Industries (P) Ltd v. Sudhir Bhatia, (2004) 3 SCC 90, the Court emphasized that dishonest adoption warrants injunction. The Plaintiff also referred to Shree Nath Heritage Liquor Pvt Ltd. v. Allied Blender & Distillers Pvt Ltd., 2015 SCC OnLine Del 10164, which set out principles for assessing deceptive similarity.

Argument Against

The Defendants contended that Geetham was not phonetically, visually, or conceptually similar to Sangeetha, both being common Indian names. They emphasized that the Plaintiff did not hold a standalone registration for the word “Sangeetha,” but only for composite marks such as “SVR SANGEETHA.”

The Defendants argued that they had lawfully terminated the franchise agreements and were entitled to start their own business. They maintained that after the Division Bench’s order, they had changed their trade dress to orange and ochre and issued public notices clarifying that Geetham was independent of Sangeetha. These steps, they argued, eliminated any likelihood of confusion.

They also raised the defense of delay, pointing out that the Plaintiff filed the suit in May 2023 despite knowing of Geetham’s operations since June 2022. The Defendants argued that the Plaintiff had acquiesced in their use of the Geetham mark and that the suit was motivated by their commercial success.

Court’s Decision

The Court distinguished between infringement and passing off. Infringement, the Court referred to Sections 29, 134, and 135 of the Trade Marks Act, 1999. Section 29 defines infringement as unauthorized use of a registered trademark that is identical or deceptively similar. Section 134 provides jurisdiction for infringement suits, while Section 135 sets out remedies such as injunctions and damages. The Court held that the Plaintiff’s registrations were composite marks and that “Sangeetha” was not registered as a standalone word mark. Viewed as a whole, “Geetham” was not deceptively similar to the registered marks. The infringement claim was therefore rejected.

On passing off, the Court applied the “classical trinity” of goodwill, misrepresentation, and damage. For the period between June 1, 2022 and November 2, 2023, the Court found that the Defendants were liable for passing off. The use of the identical red‑green trade dress, continuity of business in the same premises, and public representations that “everything remains the same” constituted misrepresentation intended to divert customers.

The Court cited S. Syed Mohideen v. P. Sulochana Bai, 2015 SCC OnLine SC 1084 to emphasize that passing off is a broader remedy than infringement and can succeed even where infringement fails. It referred to Midas Hygiene Industries (P) Ltd v. Sudhir Bhatia, (2004) 3 SCC 90 to underline that dishonest adoption warrants injunction. It also relied on Shree Nath Heritage Liquor Pvt Ltd. v. Allied Blender & Distillers Pvt Ltd., 2015 SCC OnLine Del 10164 for principles of assessing deceptive similarity.

For the period after November 2, 2023, the Court held that there was no passing off. The modified trade dress and public notices were sufficient to prevent confusion. The Court granted a permanent injunction restraining the Defendants from using the old red‑green trade dress. The Defendants were ordered to render accounts and pay profits earned between June 1, 2022 and November 2, 2023 to the Plaintiff, along with costs of Rs. 10,00,000. However, the Defendants were permitted to continue using their modified trade dress.

Conclusion

This case demonstrates the distinction between trademark infringement and passing off. Infringement requires unauthorized use of a registered mark, while passing off protects the goodwill of a business against misrepresentation. The Court emphasized that although the Plaintiff did not hold a standalone registration for “Sangeetha,” its goodwill was protected during the period when the Defendants used a deceptively similar trade dress.

The judgment reinforces several principles of trademark law. Composite registrations limit the scope of infringement claims, but passing off remains a powerful remedy to protect goodwill. Dishonest adoption of trade dress or branding will attract liability, even if the name itself is not identical. At the same time, corrective measures such as adopting a distinct trade dress and issuing public notices can eliminate confusion and allow fair competition.

By balancing the Plaintiff’s rights with the Defendants’ freedom to operate independently, the Court safeguarded consumer interests while permitting legitimate business activity once deception was removed. The decision provides valuable guidance in franchise disputes and rebranding cases, highlighting the importance of protecting goodwill without stifling fair competition. It underscores that courts will intervene to prevent misrepresentation but will also recognize genuine efforts to distinguish a new brand from its predecessor.

The ruling also illustrates the practical application of the “classical trinity” of passing off. Goodwill built over decades cannot be appropriated by former franchisees through misleading continuity. Misrepresentation, even subtle, can cause injury to the original brand. Yet, once the Defendants adopted a distinct identity and clarified their independence, the Court acknowledged their right to compete fairly. This balanced approach ensures that intellectual property law serves both to protect established businesses and to encourage honest enterprise.