M/S Eat Hearty Private Limited v. M/S Jagdamba Incorporation Private Limited & Anr.

When a business partnership ends, most founders assume the other side will simply walk away. But what happens when a former franchisee keeps your招牌 glowing above their door, serving customers under your name long after the ink on the termination notice has dried? For one burger brand, this nightmare scenario became a legal showdown that tested the boundaries of arbitration law and trademark protection. The lesson here is critical for any founder who licenses their brand: a signed termination letter is not the same as a stopped infringement.

M/S Eat Hearty Private Limited, the registered proprietor of the trademark 'BURGRILL', found itself in an uncomfortable position. The company had entered into a franchise arrangement with M/S Jagdamba Incorporation Private Limited, granting them the right to operate under the BURGRILL brand. However, that franchise agreement was terminated. Despite the termination, the respondent continued to operate a BURGRILL outlet in Vadodara, using the petitioner's registered trademark without authorization. Faced with this ongoing unauthorized use, Eat Hearty approached the Delhi High Court seeking immediate interim relief to restrain the respondent from further infringement.

Eat Hearty's argument was straightforward: they owned the registered trademark 'BURGRILL', the franchise agreement had been terminated, and yet the respondent was continuing to operate an outlet and use the mark as if nothing had changed. This constituted ongoing trademark infringement that was causing irreparable harm to the brand's reputation and goodwill. The respondent, on the other hand, was bound by the terms of the original franchise agreement, which contained an arbitration clause. The core legal friction centered on a fundamental question: when a dispute is primarily governed by arbitration, can a party still seek urgent interim relief from a civil court to stop alleged IP infringement? Eat Hearty contended that waiting for arbitration to formally commence would allow the infringement to continue unchecked, while the respondent's continued use of the mark after termination was a clear violation of the petitioner's trademark rights.

The Delhi High Court ruled in favor of M/S Eat Hearty Private Limited. The Court recognized that despite the existence of an arbitration clause in the terminated franchise agreement, the petitioner was entitled to interim protection under Section 9 of the Arbitration Act. The Court found merit in the petitioner's case based on the termination of the franchise agreement and the evidence of continued unauthorized use of the 'BURGRILL' trademark. The respondents were restrained from operating the specific Vadodara outlet and from using the BURGRILL trademark in any manner until arbitration proceedings formally commenced. This decision affirmed that the termination of a contractual relationship does not strip a trademark owner of their right to seek immediate judicial intervention against ongoing infringement.

For founders and IP professionals, this case delivers a powerful reminder: trademark rights survive the termination of a contract. If you license your brand through a franchise or distribution arrangement, do not assume that ending the agreement automatically stops the other party from using your mark. Build your exit strategy with the same rigor as your onboarding process. Include clear termination clauses that explicitly address post-termination use of intellectual property, and be prepared to invoke Section 9 of the Arbitration Act when urgent relief is needed. Waiting for full arbitration to resolve can mean months of brand dilution. When infringement is ongoing and the harm is immediate, courts can and will step in to protect your trademark, even in the shadow of an arbitration clause.