Use It or Lose It: Delhi High Court clarifies Trademark Registration is not always enough

Summary: Is a registered trademark enough to stop a rival? It may not be if you are not using it. The Delhi High Court recently directed the removal of the ‘SOCIAL HOUSE’  mark, handing a win to Impresario’s chain of 50+ ‘Social’ pubs and cafes. Despite an earlier registration date, the defendant could not prove genuine use. This ruling comes as a warning to trademark owners that commercial presence is likely to trump dormant registration.

Introduction

When there are competing trademark rights over the same word, dealing with the same goods or services, but with different patterns of use, whose rights are considered superior? This was the question facing the Delhi High Court in Impressario Entertainment and Hospitality Pvt. Ltd. Vs. Vardhaman Choksi & Ors. [C.A. (COMM.IPD-TM) 12/2023, decision dated 10 April 2026]. In this case, both parties had filed rectification petitions against the other over competing rights over trademarks containing the term ‘Social’, in relation to hospitality services.

Although the services were the same, the Respondent, Vardhaman Choksi, was the prior registrant of the trademark ‘Social House’. But it was not able to demonstrate use of its trademark in relation to the services for which it had received registration. On the other hand, the Court found that the Appellant, Impressario, had established strong and continuous use of its trademark ‘Social’ and its variants with respect to cafes and had acquired distinctiveness. Re-affirming that trademark rights are use-based, the Court directed that the Respondent’s trademark be removed from the Register, and dismissed the rectifications filed against the other side.

Legal Issues

The key issues examined by the Court included the following:

• Is the term ‘Social’ generic or suggestive with respect to trademarks in Class 43 (hospitality services)?
• Can a trademark registration be sustained in the absence of use, or when the mark is used in relation to goods or services for which it is not registered?
• What is the scope of “special circumstances” that may justify non-use and the balance between prior registration and actual use in determining rights?

Distinctiveness

A primary issue in this matter was whether the term ‘Social’ is generic or descriptive in the context of hospitality services under Class 43. To answer this, the Court applied the Imagination Test. (This test entails determining whether a consumer must imagine or indulge in a mental leap to form an association between the mark and the product, in which case, the mark is considered to be a suggestive mark.)

Here, the Court concluded that use of the term ‘Social’ in relation to hospitality services does not describe the services being provided, and thus, falls within the category of suggestive marks that are inherently distinctive and capable of protection.

The Court explained that a mark is suggestive if it requires consumers to exercise mental effort, creativity, or insight to understand what is the product or service being provided. It said that a term may be generic in one trade but not necessarily in another. Here, the term has become associated with the Appellant through extensive and continuous use. This is a significant finding, for it implies that even common words can acquire distinctiveness in trade, if used in a manner that creates a unique brand identity.

Non-use

On a reading of Section 47 of the Trade Marks Act, 1999 (“the Act”), the Court concluded that registration alone does not confer rights in the absence of use. In this case, the Respondent had failed to furnish any evidence regarding use of its mark for restaurant services in Class 43. Instead, the Respondent admitted that the mark had been used for conducting certain entertainment events at a restaurant with another name. This was a clinching factor for the Court, which noted that arranging and conducting entertainment events falls under Class 41 and not Class 43. The Court clarified that use must correspond to the class in which the mark is registered. Due to the statutory period of non-use being satisfied, the Court said that the mark ‘Social House’ should be removed from the Register.

‘Special Circumstances’ for non-use

A brief defence was mounted by the Respondent under Section 47(3), under which non-use cannot be a ground to remove a trademark due to special circumstances beyond the proprietor’s control. The Respondent argued that multiple litigations between the parties led it to stop using its trademark as a precautionary measure. But the Court’s interpretation of Section 47(3) was narrower. It held that only external, industry-wide constraints, qualify as ‘special circumstances’, and any litigation or business decisions taken during litigation were insufficient to excuse non-use. Effectively, the Court has reinforced that trademark rights must be supported by continuous and bona fide use. The exception for non-use cannot shield inactivity or strategic non-use.

Trademark squatting

From the facts and submissions on record, the Court concluded that the Respondent had registered several globally renowned trademarks in India, with the purported intent to later sell these rights at a premium to genuine trademark proprietors. These actions clearly pointed to trademark squatting. In this context, the Court was of the opinion that the Respondent’s registration of ‘Social House’ was not in good faith, and that the Respondent is a trademark squatter.

This position is aligned with recent trends of courts condemning trademark squatting, and discouraging speculative trademark filings generally. These reflect conscious efforts being made by courts and other stakeholders to protect the Trademarks Registers from frivolous trademark applications.

Conclusion

This decision reinforces that trademark rights in India are primarily use-based, and prior registration alone does not confer protection in the absence of genuine and continuous use for the registered goods or services. Importantly, the use so demonstrated must be in relation to the class in which the proprietor has registered the trademark; use in another class cannot support those rights.

This decision also adopts a strict approach toward trademark squatting by discouraging speculative filings with no bonafide use. This strengthens the position of bonafide / actual proprietors, and could also indicate a shift towards stricter checks or regulations related to non-use. For applicants and trademark proprietors, this could mean a higher burden of proving cogent use, along with corroborative evidence and documentation. For the Trademarks Registry, it could mean being more cautious on granting precautionary or defensive trademark applications or registrations.