Fragmentation v. Centralization in Family Trademarks
Introduction
In India, the Hindu Undivided Families (HUFs) have had a persevering impact on the business sector since the beginning of market culture. The shift from traditional customary trade practice in family businesses to a significant framework governing exclusive trade by way of corporate governance and other related statutes has rendered both positive and negative implications on such family businesses, specifically the intangible assets owned by HUFs. These intangible assets, mainly trademarks, are governed by the Intellectual Property Law but when these collective assets become fragmented due to family partitions and dissolutions, the dispute becomes more complex. There exists a long steadfast conflict between the collective rights on assets owned by an HUF and the exclusive proprietary rights given to individual owners by the Trade Marks Act, 1999. Several case studies revolving around this transition from fragmented IP to a centralized structure of managing IPs shall thoroughly be examined in this article while directing the primary focus on landmark judgements and decisions put forward in the matter of Haldiram family name dispute. Further analysis shall be based on the centralized model adopted by Tata Sons and the hybrid approach of the Birla Group towards surname-based dispute.
Huf V. Modern Trademark Law Approach
There is a striking dissimilarity in how the HUF perceives their collective assets as compared to the individual owners’ rights solely under the Trademarks Act. In an HUF, all assets like trade names, marks etc are behave as a common business unit providing collective benefit and reputational status to all coparceners. This indicates that the hereditary position of such assets remains as such and is shared mutually among the members of the HUF simply by their birth in the family. However, Trademark law provides exclusivity by virtue of the individuality and the origin of the said mark or trade name. The main objective behind this is to ensure individual recognition of the goods or services provided to the consumers, thereby distinguishing them from other similar or identical goods or services. The Trade Marks Act, 1999 provides the proprietor exclusive rights over their registered marks and enables them to restrict others from using deceptively similar marks. this puts the members of an HUF at a crossroad when they seek individual rights arising out of dissolution of their family business unit. This shift from collective hereditary rights to individual rights puts the family reputation in question by virtue of internal family conflicts and competition.
Fragmented IP Under Haldiram Dispute
The legacy trap talked about in IP Law under family business units is aptly depicted in the Haldiram family dispute. The growth of the brand name from a small shop in Bikaner, Rajasthan to a global reputed brand is worth inspiring many but the lore does not exclude the internal family conflicts arising out of fragmented IP and partition dispute. Haldiram was founded by Ganga Bishan Agrawal in 1918 in Bikaner, Rajasthan operating as a sole proprietorship for manufacturing sweets and bhujia. Later in 1956, it became a partnership firm, M/S Chand Mal Ganga Bishan which included his 3 sons as partners. This resulted in an apparent successful territorial expansion of the company. By 1980s, the company’s operations were expanded to Kolkata, Nagpur and Delhi. Moolchand inherited exclusive rights on the Haldiram brand in Nagpur and Delhi, Rameshwar Lal ran the operations in Kolkata and Shiv Ratan Agarwal (grandson) inherited the Bikaner Division named “Bhikaji Foods International Limited”. All these branches were initially run under the “Haldiram” name thus providing collective rights and benefits from the family name. This fragmented approach was a territorial and lacked a centralized model indicating that the trademark was regionally characterized rather than being recognised as a collective family brand.
In 1974, a dissolution deed was initiated in order to clarify the family conflict by fragmenting the IP rights based on territory. This decision resulted in a landmark case that changed the framework of intellectual property rights among family businesses. Under the declaration of the 1974 dissolution deed, Rameshwar Lal admitted that Moolchand and his successors had the sole ownership of “Haldiram Bhujiawala” except the Kolkata Branch which was operated by him. However, the main conflict arose when the successors of Rameshwar Lal attempted to expand business in Delhi. This led to the landmark case of Haldiram Bhujiawala vs Anand Kumar Deepak Kumar (2000)[1] wherein the primary issue was whether “honest concurrent use”[2] or “prior use”[3] can be claimed by Kolkata branch for its expansion.
This further escalated when the Intellectual Property Appellate Board (IPAB), in 2013, cancelled the trademark held by Kolkata branch (No.330375). The board held that Rameshwar Lal was a “permitted user” for the mark in West Bengal and thus could not claim proprietorship over the same in any other part of India. The board also held that since he concealed existence of conflicting application while applying for their registrations, his act amounts to fraudulent practice. Furthermore, the Hon’ble Delhi High Court, in 2015, upheld an interim injunction against the Kolkata branch restraining them from using the mark “Haldiram Bhujiawala” outside West Bengal. This compelled the Kolkata branch into rebranding and using “Prabhuji: From the House of Haldiram’s” as their brand name in order to distinguish themselves while still maintaining connection to the family name.
Another significant approach was taken by Shiv Ratan Agarwal (Ganga Bishan’s grandson) who, in 1993, established “Bikaji” as an individual brand to avoid any further family disputes. This was a successful strategy as it enabled the company to grow rapidly without restrictions from the 1974 deed and has thus made “Bikaji” as one of India’s largest snack brands.
Finally in 2024, “Haldiram” was recognized as a “well-known trademark” under Section 2(1)(zg) of the Trade Marks Act[4]. The court applied the “Triple Identity Test” indicating that the infringers were using identical mark for identical services in identical business chains. Court emphasized on the fact that being a well-known trademark, there is no restraint in holding rights outside West Bengal. This ruling established significant position of the brand in market and enabled protection against all third-party infringers.[5]
Centralized IP Under Tata Sons Case
Unlike the Haldiram dispute, Tata Sons approach toward family-owned business is remarkably more successful as it utilised a centralized IP framework to secure brand identity and reputation. This was initiated by the Tata Brand Equity and Business Promotion (TBEBP) Scheme which marks consolidation of all Tata Sons trademarks under one company named Tata Sons Limited. Every subsidiary using the name “Tata” shall be duly recognised under this scheme. This scheme enables the brand to gain worldwide reputation and also acts to check the quality that the brand name offers. Thus, no individual or family member can claim exclusive rights over the “Tata” name, proving this fragmentation model as the best way to avoid family conflicts as seen in the Haldiram case.
Birla Group Hybrid Approach
Unlike Tata Group, Birla group opted for a hybrid and flexible model for IP framework wherein the brand divided into two significant groups namely, Aditya Birla Group and the CKA Birla Group. The case governing this shared surname dilemma is Grasim Industries Limited & Anr v. Saboo Tor Private Limited & Ors.[6] (2025) wherein Bombay High Court dismissed the application for interim injunction for use of “BIRLA TMT” mark by defendants for steel products. The plaintiff (Aditya Birla Group) claimed that the mark is their exclusive well-known mark. The principles mentioned by the Bombay High Court were:
- The Lupin Principle
The court shall not invalidate a registered trademark unless rendered fraudulent or illegal. Since the mark had prior registration under other specific classes (class 6), it shall not grant injunction for infringement against any other registered proprietor.[7]
- Exclusive Class Registration
The plaintiff owned registration under class 19 whereas the defendants were registered under class 6 and hence, there cannot be any monopolisation over all classes if the mark fulfils the honest concurrent use criteria in classes other than the one registered by the plaintiff.
- No Centralized Agreement
Emphasis was made on the fact that there was no explicit mention of centralising the brand name as one entity in any agreement and its lack thereof shall not render the use of such surname by other related entities as invalid.
Recognising this conflict, the CKA Birla Group, in 2024, had undergone successful rebranding for its company HIL Limited into “BirlaNu”. This strategic rebranding was primarily aimed at building a different entity whilst also maintaining the reputational status from family legacy of the “Birla” name.
Global Impact: “Gray Marketing”
Gray marketing is when the products or services of a brand as sold in the global market without the owner’s authorization. The US District Court in the case of Haldiram India Ltd. v. Punjab Trading, Inc. (2025) granted a preliminary injunction against defendants for import and sale of Haldiram snacks in the US on following grounds:
- Lack of certain specific dyes and strikingly dissimilar percentages of ingredients like cashews in the products as compared to the Indian products.
- Makeshift stickers on Indian products concealing the “not for export” labels.
- Directing costumers to different service entities thus leading to misrepresentation.
This case is significant to observe that when proper approach for coordinated IP management has not been implemented by a family brand, it results in the dilution of its identity at a global level. It becomes a challenge for the brand to maintain its individual identity and repute against such gray market operations when other family branches produce “materially different” versions of the same brand.
Key Recommendations and Way Forward
The best way to protect the brand from serious implications of fragmented IP law and the family conflicts is to adopt the approach used by the Tata Sons Group. Any family business unit should centralize the ownership and rights arising from their trademark in a single holding entity having a “well-known trademark” status. Then such marks shall be licensed to the various subsidiary companies incorporated under the family business unit. Furthermore, clear explicit contract shall be executed defining the divisional branches based on classes or the products they offer rather than on the basis of geography. Such agreements shall also explicitly mention regular audits to keep a check on subsidiary businesses in order to safeguard the legacy brand’s reputation and value. One of the significant approaches is to also ensure declaration of “well-known” status and prioritizing the same to avoid both internal family disputes as well as third party infringements. Just like “Bikaji” and “BirlaNu”, distinct branding shall be necessitated in cases of shared surnames in order to distinguish them from the primary brand whilst also maintain significant link to the family legacy for avoiding disputes.
Conclusion
The various case studies discussed above show the importance of transitioning from fragmented IP to a centralized approach in order to protect the legacy and hereditary rights of trademarks arising out of family business units. While the Haldiram paradigm illustrates the negative implications of fragmentation based on geography, an approach that is not compatible for the modern business environment, the Tata Sons approach demonstrates the importance of having a centralized IP management framework to avoid internal family disputes and also to maintain legacy through proper contractual backing. In modern times, where traditional family businesses have started expanding globally, there is a dire need for these brands to adopt modern approaches backed by statutory procedures in order to avoid internal disputes and to maintain the global recognition. Proper contractual partitions, with clear distribution of exclusive rights to the members shall be rightly governed by keeping the IP Laws in the loop because at last, the survival and global repute of a legacy name depends solely on the generational goodwill and the efficiency in maintaining the collective assets of the brand and distributing them wisely to provide exclusive rights arising out of those.
Author:– Daisy Banakhede, in case of any queries please contact/write back to us atsupport@ipandlegalfilings.com or IP & Legal Filing.
[1] Haldiram Bhujiawala v. Anand Kumar Deepak Kumar, (2000) 3 SCC 250.
[2] The Trade Marks Act, 1999, § 12.
[3] The Trade Marks Act, 1999, § 34.
[4] The Trade Marks Act, 1999, § 2(1)(zg).
[5] Haldiram India Pvt. Ltd. v. Berachah Sales Corporation & Ors., (2024) SCC OnLine Del 2265.
[6] Grasim Industries Ltd. v. Saboo Tor Pvt. Ltd., 2025:BHC-OS:19474 (India).
[7] Lupin Ltd. v. Johnson & Johnson, (2015) 1 AIR Bom R 645 (FB).
