Beyond Class Boundaries: When Trademark Protection Meets Commercial Reality

The law of trademarks is a complex field; it is hard to raise more commercial alarm than this. Does registration in one class confer monopoly over all goods in that classification, even though they may have no real relationship in the market? This question, which was not only answered by the Delhi High Court in the case of RSPL Health Pvt. Ltd. v. Sun Pharma Laboratories Limited and Anr., but also has significant implications for the businesses operating in this Indian competitive market. The decision of June 12, 2025, by the Division Bench of Justices Navin Chawla and Shalinder Kaur, amounts to a re-negotiation of the protection of trademarks, one with a preference to commercial reality rather than classification systems.

Fundamentally, this is a paradigm case that resonates throughout the business world: a sanitary napkin manufacturer trying to stop a pharmaceutical corporation from using a purportedly similar mark as a constipation medicine, which is also in the umbrella Class 5 of the Nice Classification.

The decision has an echo much broader than the litigants of the action, providing a valuable lesson on the allied and cognate goods, the evidentiary burden of an established likelihood of confusion, and the extent of speculative future growth as a foundation of trademark protection. The fact that the Delhi High Court focuses on actual commercial context, as opposed to administrative classification, in a world where firms are rapidly turning to expansive IP portfolios as a competitive moat, is an important corrective measure that must be carefully studied as a scholarly matter.

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The Contours of the Dispute

The factual matrix is an opposite study. In 2012, RSPL Health Pvt. Ltd., which is a firm in the feminine hygiene industry, registered the brand name PRO-EASE (alternatively named as PROEASE) with sanitary napkins and the associated products. The firm registered several trademarks according to Class 5 of the Trade Marks Act, 1999, in relation to several menstrual hygiene products, deodorising agents and allied goods. By making long-term marketing campaigns and spending a lot of money on advertising, RSPL established goodwill in its niche market segment.

The mark was independently developed by Sun Pharma Laboratories Limited, a pharmaceutical giant, in 2017 to use as a prescription drug to treat chronic constipation. The mark was coined intentionally by using a combination of PRU (a name of the active drug ingredient Prucalopride) and EASE (denoting therapeutic relief). In 2022, Sun Pharma filed a trademark registration under bona fide use and commercial use since 2017.

After learning about the use of Sun Pharma, RSPL filed a suit demanding a permanent injunction, stating that it was infringing a trademark and passing off. The case against RSPL was based on three pillars, which include, first, deceptive similarity between the name " PRO-EASE " and the name " PRUEASE " and, second, the fact that both products are classified as Class 5 goods and, third, the fact that in the future the company might also engage in pharmaceutical products, hence pre-emptive protection.

The District Judge Commercial Court denied an interim injunction and decided that the goods were completely dissimilar even though they were of the same classification. This was questioned in RSPL by the Division Bench and created a platform on which a conclusive ruling was to be made on the extent of the trademark protection under one class.

Contextual Commercialism over Formalism

The So-called Fallacy of Class-Wide Monopoly

The Delhi High Court commenced its discussion by overturning the main argument of RSPL that the registration in Class 5 added rights to the registration of all pharmaceutical and hygienic products. It is based on the landmark ruling of the Supreme Court in Nandhini Deluxe v. Karnataka Co-operative Milk Producers Federation Ltd., wherein the Court stated an important principle according to which a monopoly on the trademark is limited not to the whole category of goods but to particular goods that have been utilised.

The Supreme Court in Nandhini Deluxe had noted that the monopoly under Trademark can only be extended to the goods that fall in a certain class and not the complete class of goods. This concept, which is based on the principle laid down in Vishnudas Trading Co. v. Vazir Sultan Tobacco Co. Ltd, is the acknowledgement that trademark rights are dependent on the product and use other than classification. By the court of Delhi, it is observed that the assets of class-wide monopolies would allow the practice of trafficking in the trademarks, where the proprietors of the trademarks may hoard the registration of the goods of which they have no intentions to manufacture and therefore will impede the legitimate commerce.

There are important doctrinal implications of this holding. It recognises that the Nice Classification system is a useful administrative tool to organise the trademark applications, but it is essentially an administrative tool and not a legal tool. Groups Pharmaceuticals, contraceptives, sanitary products, and dietary supplements are classified together based on broad similarity, but not taking into account competitive relations and market trends.

Allied and Cognate Goods: A Market-Based Enquiry

At the centre of the analysis of the Court was the issue as to whether sanitary napkins and constipation medication were allied or cognate goods. Indian jurisprudence has evolved a complex test for this determination, which is based on the domestic and international trademark principles.

The Court applied the established test for allied and cognate goods: that they were so frequently dealt in by the same trader that his customers, who were aware of his mark upon one set, and who beheld that mark in being applied to the other, would be likely to think that it was also applied to show that they belonged to the same lot of his. The issue must be considered in business and commercial perspective.

The Court found that there were extreme differences in respect to applying this commercial view:

1. Nature and Purpose: The Sanitary napkin is a product that covers a medical need of a limited group (menstruating women), and Prucalopride pills cover a medical need of a wide variety of population (regardless of gender), but constipation as a medical condition.

2. Consumer Base: The former is aimed at consumers who are involved in routine personal care acquisition; the latter has to be prescribed by the qualified medical workers and dispensed in the controlled pharmaceutical networks.

3. Trade Channels: Sanitary napkins are marketed in retail stores, supermarkets, and e-commerce stores as an over-the-counter product. Prescription drugs have absolutely different distribution channels, which include hospitals, licensed pharmacies, and medical dispensaries that are highly regulated.

4. Application: One of the products is for physiological hygiene; the other is a pathological medical condition, which is to be treated therapeutically.

These differences made the Court come to unequivocal conclusions: the nature of goods, trade channel, and purposes, and the type of consumers that goods ought to reach are different, and there is no probable confusion caused by the use of the marks to such goods. This observation is in line with the existing principles in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., wherein the Supreme Court made it clear that the likelihood of confusion may be determined by the nature and type of purchasers, rather than phonetic or visual resemblance in marks.

Speculative Expansion Rejected

A commercially important part of the judgment was, perhaps, the way the Court handled the argument by RSPL that it could potentially venture into the pharmaceutical products in the future. This argument aimed at extending trademark protection by extending it on the basis of business hypothetical plans instead of their real existence in the market.

The Court dismissed this argument since it was purely hypothetical. Due to the implicit support of the use it or lose it philosophy that is the foundation of the Indian trademark law, the judgment pointed out that the rights to the trademark were pegged to business reality, rather than business ambition. This philosophy is embodied in Section 47 of the Trade Marks Act, 1999, which allows cancellation due to non-use, which states that trademarks should be used in a commercial sense in order to maintain their protection.

This is a holding with far-reaching consequences. Frequently, when brand extension strategies and corporate diversification play a central role within an economy, firms often purport to extend their activities into neighbouring markets to support infringement claims. The fact that the Delhi High Court categorically mentions that such speculation is not the basis of restraining another person from utilising their property legitimately sets a significant restriction. One such commentator said that it provides warnings about basing brand protection purposes on future business strategies that are speculative and should rely on a more specific market focus.

In addition, the Court also observed that Sun Pharma had given a clear commitment that it had no plans of expanding PRUEASE to sanitary napkins, which also erased any reasonable fear of actual competition or confusion.

Visual Dissimilarity and Distinctiveness

Although it was not the focus of its argument, another aspect that the Court discussed concerning the competing marks is the visual and contextual representation of such marks. RSPL had a logo known as PRO-EASE with certain logo elements, colour scheme and feminine hygiene suffixes. PRUEASE offered by Sun Pharma was labelled differently, and the pharmaceutical package, dosage and medical indications were different.

The Court used the principle in Amritdhara Pharmacy v. Satya Deo Gupta, which must be judged through the eyes of an average man of common intelligence.

Insights into Analytics: Doctrinal and Commercial Connotations

Redeciding the Borderline between Registration and Use

The case upholds an important difference that frequently goes unappreciated in the modern trademark practice, which is that registration creates prima facie rights, but the rights are limited by actual use. This is the principle stated in Nandhini Deluxe and restated here, and which serves as an essential safeguard against excessive assertions of IP rights.

As academics have been aware of, this has been a pronounced conflict between encouraging brand building and deterring an unwarranted foreclosure of the market. In his examination of the trademark theory, Professor Dev Gangjee observes that the end goal of trademark law is consumer protection that allows buyers to trust the information provided by the marks as a source and quality indicator. Consumer protection issues are eliminated when marks are placed on actually different goods in different markets, and the protection rationale goes along with it.

The working orientation of the Delhi High Court fits into this functional point of view. The Court did not consider Class 5 a monolithic category; by not doing so, it acknowledged the fact that sanitary napkins and prescription drugs are in completely different commercial spaces. The consumers buying either of the products use different decision-making processes, different sources of information and cannot have any reasonable anticipation that they may have the same origin.

The Allied and Cognate Goods Doctrine in Action

The Indian courts have elaborated an extensive system of evaluating whether there is an allied or cogent nature of goods based on the cases that involve the various industries. The test was expressed in Assam Roofing Ltd. v. JSB Cement LLP and Today Tea Ltd. v. Today Foods Pvt. Ltd. Some of the factors that are put forward are:

1. Common Trade: Do the trading of goods commonly belong to the same traders? Tea and biscuits, which were usually sold together, were found allied. Cement and asbestos sheets, which were employed in the construction industry and marketed by the building materials retailers, were also allied.

2. Complementary Use: Do the goods go hand in hand, or do they go with each other? The same factor has been the reason why the courts have found some of the products allied, though they differ, but are a part of an integrated consumption pattern.

3. Consumer Association: Would the similarity in the marks on goods made by different manufacturers justify this similarity? This test is subjective and is aimed at the perception of the market and not necessarily the properties of the product.

4. Overlap in Distribution: Are the goods distributed through the same retail stores, channels or buying demographics?

Using such factors, sanitary napkins and constipation medication do not pass any test.

Expansion Future: Meaning versus Fact

Speculative expansion by the Court should be given specific consideration since it may have an impact on strategic IP management. Firms are more and more registering defensive trademarks on possible future products in an effort to create a "brand architecture" that can be extended. The question is as follows: when does legitimate brand planning become unacceptable monopolisation?

The response, which this verdict hints at, is the difference between the good faith intent with the help of practical steps and the speculation of the kind that remains hypothetical. Section 18(1) of the Trade Marks Act allows a proposal to be used to be registered in an application, and it is understood that a business might wish to have protection before it is launched in the market. Nonetheless, these applications should be grounded in good intentions as they have to be underpinned with business planning, market research and resource allocation.

The Standard of the Prima Facie Case

Trademark interim injunctions involve fulfilling three conditions, namely, the prima facie case, the balance of convenience and irreparable harm. RSPL did not pass the first prong simply because the Court did not see a prima facie case of infringement. After all, the products were distinct.

This decision shows how strict the courts are in cases involving trademark owners who wish to restrain the rivalry. Even the infusion of same-class registration by mere phonetic similarity is not sufficient to constitute infringement. Plaintiffs should be able to prove that they are likely to become confused in the very market where the marks would be used.

The ruling, therefore, confirms that preliminary injunctions that could have radical competitive outcomes must be shown to have a legal claim. The standard safeguards strategic IP litigation to stall or discourage legitimate entry into the market, a problem that is particularly acute in cases of pharmaceutical markets where generic competition offers the vital benefits of public health.

Policy Reflections: Innovation, Competition and Consumer Welfare

In addition to the doctrinal analysis, the judgment involves the basic policy issues that energise the intellectual property law. Three considerations are worth mentioning:

1. Promoting Competitive Markets: Unreasonable trademark protection obstructs market access and decreases competitive levels. The Court maintains a space of service in related but separate segments of the market by insisting on actual market relationships, instead of the overlap of classification. This strategy is especially important when it comes to pharmaceutical markets, where generic competition leads to large consumer welfare benefits.

2. Fostering Innovation and Brand Development: Ironic, the restriction of the trademark can, in fact, promote innovation. As businesses are aware that they should make truly unique brands, not depending on the classification-based monopolies, there is more impetus towards inventive marketing and brand differentiation. This ruling, therefore, directs competitive spirit to innovation, as opposed to lawsuits.

3. Protecting Consumer Interests: The final reason why trademark law exists is to lower the costs of consumer searches and to avoid deception. In the case where products are totally different in their functions, they exist in different markets and are acquired by different means, the consumer has no significant risk of confusion. The extension of trademark to such a situation is a promotion of the interests of the proprietor without the benefits of consumer protection.

Conclusion

The ruling of the Delhi High Court in RSPL Health Pvt. Ltd. v. Sun Pharma Laboratories Limited is much more than a bilateral dispute resolution; it expresses principles that will govern the trademark practice in the various industries. The Court has created significant demarcations on the rights to trademarks by clearly rebelling against class-wide monopolies, giving commercial context significant weight in analysing allied goods, and rejecting speculative expansion as an insufficient reason to protect trademarks.

The importance of the judgment spans various levels. To trademark owners, it advises the use of tactical concentration on viable markets as opposed to mass registration portfolios that are out of business. To competitors, it gives an assurance that good faith adoption of marks to truly different products will not be haphazardly held back. To consumers, it maintains competition choice by ensuring that overly broad IP claims do not preclude an honest entry into the market. And to the legal system, it is a testimony to advanced participation in trademark policy, in the process of striking a balance between incentives to invest in brands and issues of competitive and consumer welfare.

With the development of Indian commerce as being more dynamic and diversified, there is bound to be greater tension between trademark protection and competition in the market. Firms will keep considering brand extension as an option, defensive registration, and competitive advantage by using IP. It is within the context of this that the principles stated in this judgment offer fundamental range rules that would be required to maintain the trademark law, abiding by its intended purpose of ensuring consumer confusion prevention and not anticompetitive market foreclosure.

That is where the message of the final decision by the Delhi High Court is best received: the rights to trademarks are no abstract rights that are not tied to the commercial performance, but are practical safeguards that have been based on the actual use in particular markets. Registration is valuable, but it does not turn the whole market of a type of classification into an asset. Companies have to achieve greater security by demonstrating presence in the market and not by hypothetical pronouncements of what they can grow in the future.

This ruling can therefore be considered a crucial addition to the law of trademarks, one that puts its weight on commercial reality rather than formalism, competition rather than monopolisation, and the utilitarian functions of trademark protection rather than mere imposture of proprietary right. Thus, it will set an intellectual, commercially reasonable, and appropriately balanced direction towards the Indian trademark law to the benefit of businesses, consumers, and the competitive economy. The modern-day courts and practitioners would do well listen to its teachings as they untangle the nexus of brand protection, market competition and the changing nature of Indian commerce.

Author: Medhavi Capoor, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

Notes

1.      RSPL Health Pvt Ltd v Sun Pharma Laboratories Ltd, FAO (COMM) 65/2025 (Delhi High Court, 12 June 2025).

2.      Trade Marks Act 1999 (India).

3.      Nandhini Deluxe v Karnataka Co-operative Milk Producers Federation Ltd (2018) 10 SCC 369.

4.      Vishnudas Trading Co v Vazir Sultan Tobacco Co Ltd AIR 1961 SC 1311.

5.      Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (adopted 15 June 1957, entered into force 8 April 1961) 550 UNTS 45.

6.      Cadila Health Care Ltd v Cadila Pharmaceuticals Ltd (2001) 5 SCC 73.

7.      Trade Marks Act 1999, s 47.

8.      Amritdhara Pharmacy v Satya Deo Gupta AIR 1963 SC 449.

9.      Dev S Gangjee, 'Paying the Price for Admission: Acceptable Use in Keyword Advertising' (2013) 17 Journal of Intellectual Property Rights 102.

10.    Assam Roofing Ltd v JSB Cement LLP 2020 SCC OnLine Del 1285.

11.    Today Tea Ltd v Today Foods Pvt Ltd 2019 SCC OnLine Del 9738.

12.    Trade Marks Act 1999, s 18(1).

13.    Council Regulation (EC) 207/2009 of 26 February 2009 on the Community trade mark [2009] OJ L78/1 (now replaced by Regulation (EU) 2017/1001).

14.    Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc (Case C-39/97) [1998] ECR I-5507.

15.    Polaroid Corp v Polarad Electronics Corp 287 F 2d 492 (2d Cir 1961).