LOTUS HERBAL (P) LTD. v. DPKA UNIVERSAL CONSUMER VENTURES (P) LTD & ORS

Case Name	Lotus Herbals (P) Ltd v. DPKA Universal Consumer Ventures (P) Ltd & Ors.
Citation	CS (COMM) 454/2023, I.A. 12308/2023.2024 SCC OnLine Del 498
Court	High Court of Delhi.
Decided On.	25th January 2024
Plaintiff	Lotus Herbal
Defendatns	DPKA universal

INTRODUCTION

The dispute involved the alleged violation of the registered trademark ‘LOTUS’ by the defendants, who sold a face cleanser under the brand name “Lotus Splash.” Lotus Herbals argued that the defendants’ use of ‘Lotus’ confused consumers and took advantage of the goodwill that Lotus had built over many years through its wide range of cosmetic and personal care products. 

The main legal question was whether the use of “Lotus Splash” constituted trademark infringement or passing off, and if the defendants’ reference to “lotus” was protected as a description of product ingredients under Section 30(2)(a) of the Trade Marks Act, 1999.

IMPORTANT PROVISIONS 

• Section 2(2)(c), Trade Marks Act, 1999: this provision deals with infringement where an identical or deceptively similar mark is used for identical or similar goods/services with a presumption of confusion. 
• Section 29, Trade Marks Act, 1999: outlines various forms of trademark infringement, covering unauthorized use that causes confusion, encompasses similar or dissimilar goods/services, and addresses misuse in advertising, packaging, and business contexts, also discusses ‘use’ and protects against unfair advantage.  
• Section 29(1), Trade Marks Act, 1999: Prohibits the unauthorized use of a registered trademark in a way that is likely to cause confusion. 
• Section 29(4), Trade Marks Act, 1999: addresses the use of a registered mark for dissimilar goods or services which takes unfair advantage of or is determined to be detrimental to the distinctive character or reputation of the trademark.
• Section 30(2)(a), Trademarks Act, 1999: Provides exceptions to infringement where the use of the mark is necessary to indicate the kind, quality, quantity, intended purpose, value, geographical origin, or other characteristics of goods or services, making descriptive or fair use permissible.  

BRIEF FACTS – 

The plaintiff in this case, Lotus Herbals (P) Ltd., is a leading Indian manufacturer and seller of cosmetics, skin care, hair care, and personal care products. They have approached the Hon’ble Delhi High Court seeking injunctive relief against alleged trademark infringement. 

Lotus Herbals has operated in India for decades and commands significant recognition and goodwill in the beauty and wellness industry, and its products are marketed and sold extensively under the umbrella trademark of “Lotus” and its stylized variants, which are registered across multiple classes under the Act of 1999.

Over the year, it has built a significant market presence with a diverse product portfolio comprising over 1,000 items, where “Lotus” is the dominant and identifying mark. 

The cause of action emerged when the plaintiff became aware that the defendants DPKA Universal Consumer Ventures Pvt. Ltd., and others had launched a new cosmetic product called “Lotus Splash” and this product a face cleanser and face wash was promoted as part of the defendants beauty and skincare line under the broader brand name “82*E” which is a wellness brand co-founded by a prominent celebrity, the impugned product was described as containing lotus extract which was highlighting as one of its primary active ingredients in both the advertisement and the product packaging.

The plaintiff opposed the name “Lotus Splash,” claiming that the use of the word “Lotus” by the defendants violated its registered trademarks and led to passing off, they had argued that the prominent use of “Lotus” with similar products, including facial cleansers and beauty items, created a significant chance of confusion among reasonably informed consumers, the plaintiff stated that it had strong rights to the “Lotus” mark and that this association should not be weakened or used commercially by competitors. 

They believed “Lotus Splash” was misleadingly similar to their registered mark and constituted unauthorized use under Sections 29(1), 29(2), and 29(3) of the Trade Marks Act.

Additionally, ‘Lotus Herbals’ claimed that the use was not merely descriptive but had been adopted with the intent to derive mileage from the goodwill attached to the “Lotus” was used to truthfully and the reference of one of the key natural ingredients in the face wash was namely the extract of the lotus flower, known for its skin cleansing properties, the defendants in this instance clarified that their primary and distinctive brand was “82*E” which was prominently displayed on all packaging and advertisements, while “Lotus Splash” was only the name of the product variant based on its formulation. 

In response, the defendants argued that their use of “Lotus Splash” was purely descriptive and genuine and they claimed that the word “Lotus” referred honestly to one of the main natural ingredients in the face wash, the extract of the lotus flower, known for its skin-cleansing benefits. The defendants explained that their main brand was “82°E,” which was clearly shown on all packaging and ads, while “Lotus Splash” referred only to the product variant based on its formula. Further, the defendants argued that using the word “Lotus” in relation to “Splash” did not suggest any brand connection with the plaintiff. 

They highlighted clear differences in trade dress, packaging design, brand positioning, celebrity endorsement, and pricing between their product and the plaintiff’s, also claiming protection under Section 30(2)(a) of the Trade Marks Act, 1999, this particular section allows for the use of registered marks if it is necessary to describe a feature of the goods, provided the use is honest.

The case before the Court raised a complex legal issue and it questioned whether a term like “Lotus,” even though it is registered and recognized as a brand, can be legitimately used by someone else in a descriptive way, especially within the same market segment, this use must not infringe on trademark rights or confuse consumers and the matter required balancing the protection of trademark rights with allowing descriptive or fair use in a competitive market.

ISSUES INVOLVED – 

1. Whether the use of “Lotus Splash” by the defendants constituted infringement of the plaintiff’s registered “Lotus” trademark under S. 29 of the Trade Marks Act, 1999? 
2. Whether the use of “Lotus” in “Lotus Splash” was descriptive of the product’s ingredients or characteristics and thus protected by S. 30(2) (a) of the Act? 
3. Whether a prima facie case for passing off made out against the defendants? 
4. Whether Lotus Herbals entitled to an injunction restraining the defendants from using the mark “Lotus Splash”? 

ARGUMENTS ADVANCED BY APPELLANTS – 

• According to the counsels representing ‘Lotus Herbal’, in their suit for infringement and passing off they have advanced a series of detailed and layered arguments that underscored the alleged unauthorized use of their registered and well-established ‘Lotus’ trademarks, their case was framed on the idea that the defendant’s product under the name of “Lotus Splash” not only infringed upon their registered intellectual property but also diluted their brand’s distinctiveness and trade reputation in the highly competitive personal care industry. 
• The counsel for ‘Lotus Herbals’ stated that “Lotus” is a well-known trademark that is legally protected. It has multiple registrations under the Trade Marks Act, 1999, including Class 3, which includes cosmetic and personal care products, the plaintiff has been in business since 1993, the “LOTUS” mark has gained a strong secondary meaning and is identified solely with its beauty and wellness products and the plaintiff argued that because of its continuous and widespread use, “LOTUS” has become synonymous in the minds of average consumers with Lotus Herbals and no one else.
• According to the counsels representing the plaintiff that the use of defendant’s for a facial cleanser was likely to create confusion or association in the minds of the consumer regarding a trade connection between the two entities and under section 29(1), 29(2)(c), and 29(3) of the Act, 1999 the plaintiff is not required to prove actual confusion and only a likelihood of the confusion between the two marks. 
• They had argued that facial cleansers are an important part of the plaintiff’s product lineup and that the products in question are not just similar but identical, because the plaintiff had used the “Lotus” name for face washes and skincare for a long time, a consumer who sees a product named “Lotus Splash” would likely think it is a version of an existing Lotus Herbals product or that there is some sort of endorsement or licensing deal between the two. 
• The plaintiff emphasized how this confusion affects consumer trust, misdirects goodwill, and dilutes the uniqueness of the original trademark.
• A main point made by the plaintiff was to challenge the defendant’s claim of descriptive fair use under Section 30(2)(a) of the Trade Marks Act and the plaintiff argued that “Lotus” is not used descriptively in the industry they had also stated that including lotus flower extract in the product does not warrant naming it “Lotus Splash” and further highlighted that there is no proof that lotus is a common or necessary term in the cosmetics industry, nor do average consumers view it this way.
• The plaintiff also argued that using “Lotus” as the main part of the mark “Lotus Splash” went beyond simply describing the ingredients and it gave the mark a unique character, making it a trademark rather than a fair description, since “Lotus” was the most prominent part of the mark and had strong brand recall, this use could not be defended under the descriptive use exceptions.
• Counsel’s for Lotus Herbals argued that the defendants’ use of the term “Lotus” in “Lotus Splash” was not accidental or innocent and they claimed it was a deliberate attempt to take advantage of the plaintiff’s established brand reputation the plaintiff maintained that the name was chosen to draw consumers in the skincare market by using the premium image and recognition of the “Lotus” mark. 
• Additionally, the plaintiff pointed out that the branding, including the use of “Lotus” with face wash, references to herbal ingredients, and minimalist packaging, resembled their brand identity; this similarity suggested clear bad intent by the defendant.
• In addition to statutory infringement claims, the plaintiff argued common law passing off. They claimed that the defendant’s use of the prefix “Lotus” misrepresented its products as being associated with or endorsed by the plaintiff and this misled consumers and took unfair advantage of the plaintiff’s goodwill, based on established principles of misrepresentation, goodwill, and chance of harm. 
• The plaintiff noted that even unregistered brand elements are protected, though this is especially important in an industry where brand reputation and visual appeal strongly affect consumer choices. Even small similarities can potentially harm their market identity.
• Finally, the plaintiff argued that they clearly demonstrated a basic case of infringement and passing off, and therefore, they believed an interim injunction was necessary to prevent further damage, the counsel’s for ‘Lotus Herbal’ also stated that once confusion enters the market, particularly through a competitor’s use of the same term in the same industry, the harm to reputation and market share is hard to measure in monetary terms and is therefore irreparable.
• They also emphasized that the balance of convenience leaned heavily in their favor, and they had pointed out that they had a long, legal history of use, while the supposed infringement was recent and completely avoidable by the defendants. Letting the defendants keep using “Lotus Splash” would only increase public confusion and weaken trademark exclusivity.

ARGUMENTS ADVANCED BY RESPONDENTS – 

• The counsels for the defendants argued that at the center of the defendants’ case was the claim that “Lotus Splash” was not used as a trademark, instead, they argued that the phrase simply described the main characteristics of the face wash and specifically, it highlighted that the product contained lotus extract as a key ingredient, the defendants pointed out that the Trade Marks Act, 1999 (particularly Section 30(2)(a)), allows the use of registered marks to indicate the type, quality, or features of goods, as long as it is honest and necessary.
• In their statements, they stressed that “82*E” was the only brand name on their products, clearly displayed on all packaging and advertising, and the word “Lotus” was included only to inform consumers about the presence of lotus extract, clearly separating commercial branding from factual description.
• The counsel for defendants vehemently argued that there was no possibility of confusion or misrepresentation that could mislead an average consumer of reasonable intelligence and while conceding that the shared word ‘Lotus’ they pointed to a host of differentiating factors, and the first one being the trade dress, overall packaging and aesthetic of the product especially the clear and modern “82*E” brand which significantly distinguished their face wash operated at a different market segment from ‘Lotus Herbal’s’ offerings, combined these cumulative elements according to the defendants fully obviated any misapprehension as to trade origin and undermined the plaintiff’s claim of passing off or dilution, further emphasizing that the sophisticated nature of today’s skincare consumers who considers multiple factors including branch and product line when making a purchasing decision.
• The defendants firmly denied any intent to take advantage of the goodwill or reputation of Lotus Herbal. They argued that their use of “Lotus Splash” followed honest business practices and referred to a genuine product characteristic, the use of lotus flower extract. This feature was highlighted in both the product’s marketing and its ingredients list. 
• The defense relied on Section 30(2)(a) as protection, claiming that their use was genuine and not an attempt to imply any business connection with the plaintiff and they also noted that there is no industry-wide ban on using the word “lotus” simply because it appears in a registered trademark, especially when it is used naturally to describe an ingredient.
• The defendants firmly rejected any claims of bad faith. They emphasized the clear marketing message behind “Lotus Splash.” Every mention of “lotus” was backed by the product’s ingredients and third-party certifications, and argued that there was no attempt to copy Lotus Herbals’ look, nor was there any misleading indication of a connection, the defense maintained that all advertising, packaging, and promotional materials clearly identified the product as an “82°E” item, separate and distinct from the plaintiff’s products.
• By grounding their case in honesty and full disclosure, they responded to the plaintiff’s claims about brand dilution and unfair competition, citing precedents such as Amritdhara Pharmacy v. Satya Deo Gupta and relying on both statutory and judicial authority the defendants argued that courts have repeatedly drawn a doctrinal distinction between words used as indicators of source and those that serve a descriptive function, and to reinforce their position they had submitted that, where the totality of branding and market presentation rules out a likelihood of confusion and the challenged use is a reasonably necessary for descriptive purposes the threshold for injunction is not met. 
• On the issue of relief, the defendants claimed that the plaintiff’s argument about irreparable loss was overstated. They argued that as a newcomer with a distinct primary brand, “82*E,” and a clear product name, their product did not seriously threaten the long-standing market position of Lotus Herbals. 
• The balance of convenience did not support extraordinary interim relief, and an injunction would stop them from accurately describing their product ingredients, which they asked the court to understand the right limits of trademark protection and the need for honest communication in competitive markets like cosmetics and skincare. 

JUDGEMENT – 

• The Hon’ble High Court began its analysis by recognizing the longstanding and significant reputation of the “Lotus” trademark owned by the plaintiff across cosmetics and personal care products. It further acknowledged that “Lotus” is the dominant and distinctive component of the plaintiff’s suite of registered marks, extensively used for a diverse range of products. 
• However, the court underscored that the standard for infringement, particularly under section 29 of the Act, 1999, requires not merely the reproduction of an entire mark but an overall assessment of the disputed use, consumer impression, and market context. 
• The Court decided that “Lotus Splash” did not serve as a trademark; instead, it described an ingredient, and the main brand was “82*E,” The packaging, color scheme, and presentation were quite different from Lotus Herbals, hence the term “Lotus” was associated with lotus extract as an ingredient, not as a source identifier.
• In addressing the plaintiff’s claim of confusion, the Court referred to cases like Amritdhara Pharmacy v. Satya Deo Gupta, it decided that an average buyer was unlikely to be misled and although both marks included the word “Lotus,” the overall branding, product appearance, and clear display of “82°E” on the defendant’s item set it apart, the Hon’ble Court pointed out that the unique packaging, price ranges, and ingredient-based use of “Lotus” eliminated any genuine chance of consumer confusion.
• In examining the defense of descriptive use under Section 30(2)(a) of the Trade Marks Act, the Court emphasized that traders can use terms that honestly describe a product’s features, such as ingredients, unless they intend to mislead, the Hon’ble Court accepted the defendants’ evidence that lotus extract was a key ingredient and it found that “Lotus Splash” referred to the cleansing effect of the ingredient, not the product’s origin. 
• The Court ruled that the use was genuine and fell within the legal exception for descriptive use and noted that including a registered term in a product name does not prevent honest use when it is directly related to the product’s nature.
• In evaluating the passing off claim, the Court determined that liability needs actual misrepresentation that causes confusion or damages goodwill, which was not present in this case, further it found that the defendants clearly relied on their own “82*E” branding, used different packaging, and labeled lotus extract as an ingredient, that there was no intent to deceive or take advantage of the plaintiff’s reputation, and the Court confirmed that the defendants had the right to describe their product’s true qualities using common terms, as long as the use was honest, accurate, and did not suggest a different origin.
• On the issue of the interim injunction, the Court pointed out that Lotus Herbals had not shown a strong initial case of infringement or passing off, and they also did not provide evidence of actual or likely irreparable loss, and the potential harm to the defendants, if they were stopped from honestly describing product ingredients and variants, was considered. 
• The Hon’ble Court concluded that the balance of convenience did not support granting the interim injunction requested by the plaintiff.
• The Court held that the use of “Lotus” in “Lotus Splash” was genuine, it referred to an ingredient in the face wash and was protected by the descriptive use exception under Section 30(2)(a), the Hon’ble Court found no evidence of dishonesty, consumer confusion, or unfair exploitation of the plaintiff’s goodwill in the defendant’s use of the phrase.

CONCLUSION – 

In conclusion, the Delhi High Court’s ruling in Lotus Herbals (P) Ltd. v. DPKA Universal Consumer Ventures (P) Ltd. shows a fair application of trademark law, especially concerning the descriptive use of registered marks, the Court pointed out that trademark rights are not absolute. 

It supported the defendants’ genuine use of “lotus” to describe a natural ingredient, highlighting the clear branding differences and the absence of intent to mislead and by referencing Section 30(2)(a) of the Trade Marks Act, 1999, the judgment confirms that honest, descriptive use that does not serve as a source identifier does not lead to infringement or passing off, setting a key precedent for the cosmetics industry, strengthening the balance between protecting brands and allowing fair commercial expression.

This article has been written by Mayur Shrestha (Presidency University Bengaluru School of Law).