The dispute arose from a commercial falling-out between Arpita Agro and ITC over the use of trademarks and trade dress associated with the herbal floor cleaner brand “NIMYLE,” originally owned and marketed by Arpita Agro but sold to ITC in 2018 for a consideration exceeding INR 100 crores. The Delhi High Court was tasked with determining whether Arpita Agro’s post-sale activities, specifically the launch and marketing of a floor cleaner under the name “POWRNYM,” amounted to trademark infringement, copyright violation, and passing off, thereby breaching its earlier contractual undertakings with ITC.
The factual background begins with Arpita Agro’s business history of manufacturing and selling neem-based floor cleaners under the brand “NIMYLE” and related marks like “NIMGLO,” “NIMKLIN,” and “JOR-POWR.” In 2018, all rights—including trademarks, associated copyrights, goodwill, and proprietary manufacturing information—were assigned to ITC through a suite of agreements: an Asset Purchase Agreement, two Brand Assignment Agreements, and a Deed of Copyright Assignment. Post-assignment, Arpita Agro continued to manufacture these products exclusively for ITC under a supply agreement that was twice renewed, up until 2021. During this period, ITC invested substantially in expanding the visibility and distinctiveness of the “NIMYLE” family of trademarks, including offshoots like “NIMEASY” and “NIMWASH.”
The controversy arose when, in August 2023, ITC discovered that Arpita Agro had launched a new floor cleaner branded “POWRNYM,” advertised in newspapers and on television, and packaged in a bottle design strikingly similar to that of “NIMYLE.” ITC viewed this as a direct violation of its contractual and intellectual property rights and filed a suit seeking an injunction against Arpita Agro’s use of the “POWRNYM” mark. The Single Judge, on October 8, 2024, granted an interim injunction restraining Arpita Agro from using “POWRNYM” or any mark deceptively similar to ITC’s registered trademarks and trade dress. Arpita Agro appealed this order, which led to the present judgment.
In its defence, Arpita Agro argued that the trademark “POWRNYM” was neither deceptively similar to “NIMYLE” nor “JOR-POWR.” It contended that the name was inspired independently, as a creative expression of “power” and “synonym,” and was adopted only after the expiry of a four-year non-compete clause in the Asset Purchase Agreement. It also claimed the product was not being marketed in Delhi, thereby challenging the territorial jurisdiction of the Delhi High Court. Further, Arpita Agro contended that the words “NIM” or “NEEM” are generic to neem-based products and are in widespread use across the industry.
However, the Division Bench of the Delhi High Court found these arguments unconvincing. The judges noted that Arpita Agro had assigned its rights in the disputed trademarks—including rights to develop derivative marks—and was bound by covenants preventing it from using deceptively similar marks. The court found that “POWRNYM” was clearly a portmanteau drawing from “JOR-POWR” and “NIMYLE,” both of which had been assigned to ITC. Furthermore, the bottle’s shape, label design, and packaging were substantially similar to those used by ITC for its “NIMYLE” products. These similarities, coupled with the prior relationship between the parties and the assignment of IP rights, led the court to view Arpita Agro’s adoption of “POWRNYM” as dishonest and mala fide.
The Court also referred to settled jurisprudence from the Supreme Court and Delhi High Court, emphasising that even partial appropriation of a trademark’s essential features could constitute infringement. In this case, the use of “POWR” and “NYM”—both integral to ITC’s existing brands—was held to be more than coincidental. The court emphasised that when a trademark assignment includes both word marks and associated trade dress, the assignor has a higher duty to avoid any confusingly similar branding in the future.
On the issue of passing off, the court rejected Arpita Agro’s argument that ITC was not currently using the “JOR-POWR” mark, stating that trademark registration and ownership were sufficient grounds for protection under Section 29 of the Trade Marks Act. The court also dismissed the plea of delay, accepting ITC’s position that it only discovered the infringing activity in August 2023. The initial interest confusion likely to be caused among consumers, especially those familiar with the older “NIMYLE” branding, was seen as an unacceptable exploitation of ITC’s goodwill.
The court also clarified that the expiry of the non-compete clause did not authorise Arpita Agro to infringe upon ITC’s trademarks. The purpose of a non-compete clause is distinct from the obligations stemming from a trademark assignment. Even after the non-compete period, the assignor is legally bound to refrain from using marks that are identical or deceptively similar to those transferred. Hence, arguments based on constitutional rights to trade or Section 27 of the Indian Contract Act were deemed inapplicable.
The Division Bench thus upheld the Single Judge’s interim injunction in its entirety, restraining Arpita Agro from manufacturing, marketing, or advertising products under the “POWRNYM” mark or any other derivative of “NIMYLE” or “JOR-POWR.” The court noted that the test for deceptive similarity was even more stringent in this case because of the parties’ historical relationship, the nature of the assignment agreements, and the evident attempt to capitalise on the reputation of the assigned trademarks. The case is a cautionary tale for businesses seeking to re-enter markets post-divestment and illustrates the judiciary’s readiness to clamp down on brand mimicry in the name of competition.
