Supreme Court Partly Relaxes Injunction in Exide-Amara Raja Trade Dress Dispute: Balancing Trademark Protection and Commercial Reality.

Supreme Court's order in Amara Raja Energy Mobility Ltd. v. Exide Industries Ltd. (Civil Appeal arising out of SLP (C) No. 18549 of 2026).

Introduction

Intellectual property disputes involving trade dress often require courts to strike a delicate balance between protecting brand identity and preventing unfair commercial losses. In a significant interim order dated 27 May 2026, the Supreme Court of India partly modified an injunction granted in favour of Exide Industries Ltd. against Amara Raja Energy Mobility Ltd. concerning the alleged imitation of Exide's distinctive red-coloured battery packaging and trade dress.

The judgment is noteworthy because it demonstrates the Court's pragmatic approach in dealing with existing inventory that had already entered the distribution chain before the injunction came into effect. While preserving trademark rights, the Court also considered the commercial realities faced by distributors, retailers, and the appellant company.

Matter Involved

The dispute arose from allegations by Exide Industries Ltd. that Amara Raja Energy Mobility Ltd. was manufacturing and marketing batteries under the brand 'ELITO' using a red-coloured trade dress and packaging that allegedly resembled Exide's well-known packaging.

The Calcutta High Court had granted a temporary injunction restraining Amara Raja from manufacturing and selling products bearing the impugned trade dress. The injunction was subsequently affirmed by the Division Bench on 2 April 2026.

Aggrieved by the continuation of the injunction, Amara Raja approached the Supreme Court through a Special Leave Petition. During the proceedings, the Supreme Court directed the appellant to disclose the extent of inventory lying with itself, distributors, franchisees, and retailers.

Pursuant to this direction, an affidavit was filed by Mr. Radhakrishnan Chandrasekar, Chief Business Officer of Amara Raja Energy Mobility Ltd., detailing the quantity and value of the existing stock and explaining the logistical difficulties involved in complying with the injunction.

Parties' Submissions and Pleas

Appellant: Amara Raja Energy Mobility Ltd.

The appellant submitted that:

1. It had ceased manufacturing the disputed products after the injunction order.
2. The last date of manufacture was 29 March 2026.
3. The last dispatch to distributors was made on 31 March 2026.
4. Large quantities of stock had already been sold to distributors and franchisees on a principal-to-principal basis and were no longer under the company's control.
5. Approximately 1,38,477 battery units worth Rs. 24.99 crore were lying with distributors and franchisees.
6. Approximately 81,000 battery units worth Rs. 15.60 crore were estimated to be lying with retailers.
7. The company itself retained around 20,789 units valued at approximately Rs. 2.63 crore.
8. Since the red trade dress was affixed directly onto the battery casing and not merely on external packaging, changing the appearance of the existing stock was commercially and technically impractical.
9. Preventing disposal of existing stock would result in substantial financial loss and wastage.

The appellant therefore sought permission to dispose of the existing inventory despite the injunction.

Respondent: Exide Industries Ltd.

Exide opposed any relaxation of the injunction, contending that continued circulation of products bearing the allegedly infringing red trade dress would dilute its brand identity and undermine the purpose of the interim protection granted by the High Court.

Exide sought continued enforcement of the injunction to prevent any further use of packaging and trade dress that allegedly infringed its intellectual property rights.

Court's Examination and Understanding

The Supreme Court carefully examined the affidavit and focused on two distinct categories of goods:

A. Inventory in Possession of Amara Raja

The Court noted that approximately 20,789 units remained in the appellant's possession and that 1,44,547 empty cartons bearing the disputed trade dress were also available.

The Court was not persuaded by the appellant's request to market these products in their existing form. Instead, it held that the batteries could only be marketed if repackaged in a manner that did not employ the impugned red colour scheme or resemble Exide's packaging.

With regard to the empty cartons, the Court adopted a stricter approach. Since the cartons themselves allegedly embodied the disputed trade dress, the Court directed that they be destroyed and not used in the market.

B. Inventory with Distributors and Retailers

The Court took a different view regarding products already sold into the distribution chain.

It recognised that:

• The products had already been sold before the injunction.
• The stock was no longer under the appellant's custody or control.
• The transactions with distributors and franchisees were principal-to-principal sales.
• Manufacturing had ceased prior to the operative injunction.

In these circumstances, the Court considered it inequitable to prevent distributors and retailers from selling existing inventory that had already entered the market.

Accordingly, the Court modified the injunction to permit the sale of such products by distributors, franchisees, and retailers.

The Court thereby distinguished between future commercial conduct and pre-existing market inventory.

The Verdict

The Supreme Court partly allowed the appeal and modified the temporary injunction granted by the Calcutta High Court.

The operative directions were:

• Products already lying with distributors, franchisees, and retailers could continue to be sold to customers.
• The appellant could not utilise the 1,44,547 empty cartons bearing the disputed trade dress; these cartons were directed to be destroyed.
• The products remaining in the appellant's possession could only be marketed in packaging that was not red in colour and did not resemble Exide's packaging.
• The modification was confined solely to the interim injunction issue and would not affect the merits of the underlying trademark and trade dress suit.

The Court expressly clarified that its observations were limited to the interlocutory stage and should not influence the final adjudication of the dispute.

Writer's Understanding and Analysis

The order is an example of judicial pragmatism in intellectual property litigation.

The primary objective of an interim injunction is to prevent ongoing harm. However, courts must also avoid creating disproportionate commercial hardship where goods have already entered the stream of commerce before the injunction became effective.

Three aspects of the judgment deserve particular attention.

1. Recognition of Commercial Realities: The Court acknowledged that once products are sold on a principal-to-principal basis, a manufacturer loses direct control over the inventory. Holding distributors and retailer's hostage to a subsequent injunction could produce severe economic consequences for parties who are not directly involved in the infringement dispute.

2. Preservation of Trademark Rights: At the same time, the Court protected Exide's interests by refusing to permit continued use of unused cartons bearing the disputed trade dress. The destruction order ensures that no additional allegedly infringing packaging enters the market.

3. Equitable Balancing: The decision reflects a classic exercise of equitable jurisdiction. Rather than adopting an absolute approach, the Court differentiated between future conduct and past transactions. Such calibrated relief is often preferable in intellectual property matters where commercial supply chains are extensive and inventory movement is difficult to reverse.

Nevertheless, the order does not determine whether Amara Raja's red trade dress actually infringes Exide's rights. That substantive question remains open and will be decided during the trial or final adjudication of the suit.

Conclusion

The Supreme Court's order in Amara Raja Energy Mobility Ltd. v. Exide Industries Ltd. underscores that interim trademark and trade dress injunctions must be implemented in a manner that protects intellectual property rights without causing unnecessary commercial disruption.

By allowing the sale of inventory already circulating in the market while simultaneously preventing further use of the disputed packaging, the Court crafted a balanced solution that accommodates both proprietary rights and business realities.

The decision serves as a valuable precedent on how courts may deal with existing inventory in trademark and trade dress disputes. It reinforces the principle that interim relief should be protective rather than punitive and that equitable considerations remain central to the grant and modification of injunctions in intellectual property litigation.

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