Zombie Trademarks: Are they dead or alive?

Written by Aditi Goel

Third Year student Symbiosis Law School, Noida

Source: Bayut

Disclaimer: Please note that the views expressed below represent the opinions of the article's author. The following does not necessarily represent the views of Law & Order.

The term trademark refers to a distinctive sign, expression, word or symbol that signifies and legally separates a particular product from all other products of that kind. It marks a product solely as belonging to a specific company and acknowledges the brand's ownership over the company. They are known as a form of intellectual property and can be licenced or not.

Zombie trademarks (also known as ghost trademarks, orphan labels, etc.) can be defined as newly resurrected, previously discarded marks that still enjoy a measure of customer recall, security, goodwill, and loyalty. A trademark is considered to be dead/ abandoned under trademark law if the proprietor refuses to use the trademark to distinguish its products and services. This activity is often referred to as the abandonment of trademarks typically happens if the applicant ceases to use his trademarks or attempts to pursue his trademark application effectively[1].

One of the most interesting examples of a zombie trademark in India is the case of Delhi HC which granted a limited injunction on the defendant on the use of the existing abandoned trademark YEZDI, which was originally created by the plaintiff’s father for motorcycles. Though the brand stopped making the motorcycles, it still held the goodwill and the brand value, due to which the court ordered a limited injunction in usage of the abandoned trademark for any goods or services related to the trademark.

There are three groups involved when it comes to zombie trademarks and their exploitation[2]:

  1. Proprietor of the original trademark;

  2. The party adopting the discarded trademark; and the party adopting the abandoned trademark,

  3. The clients who buy the goods and services.

It is essential to note that there is a difference between a proprietor and a registered user. A registered user of the trademark is the one who is authorised to use the said mark, whereas a proprietor can defend others from using the said trademark in order to protect the product or service related to it and maintain goodwill.

A trademark survives from the goodwill ascribed to it in the eyes of the buying public when used professionally in conjunction with products or services. When the owner ceases using it with no hope of resuming use, a symbol becomes abandoned. After abandonment, goodwill diminishes and the mark's death follows accordingly. Just like the zombie plague, the normal order can be resisted by goodwill. Some discarded brands are so memorable that for the sake of nostalgia, customers continue to enjoy them.

Non-use of a Trademark

A case decided by IPAB held that if for more than 5 years and 3 months, the owner of the logo has not used the mark, he may lose his trademark rights in such rectification or opposition proceedings[3]. While the person who files the request for rectification is normally responsible for proving non-use, the responsibility can be passed to the trademark owner in the process of the hearing and if he fails to establish the use, his mark may be liable to be withdrawn from the registry. The abolition of IPAB would definitely create questions about the validity of the said judgement among others. What is important to note, is that irrespective of its abolition, the said judgement was made on reasonable grounds by a Board which specialised in IP. It has seen various cases of Trademark usage since the very inception, unlike the courts.

The mark is deemed to have lost its meaning as a source or quality marker if a symbol has died. A label that has expired from disuse may be a candidate for another group to become a reanimated label because, others may say, even such an abandoned brand may have some residual fame or residual goodwill (enough to make it attractive for a third party to try to adopt that mark for its own). In a way, the logo can be known to have only enough juice in it to be kept alive in the minds of the market (i.e., at least some people do recognise it as a legacy brand), but it is all but dead in the sense of a legitimate trademark since the previous owner no longer uses it[4].

While deemed to have lost the meaning can still be a cause for zombie trademark, where as mentioned before, the residual goodwill stays attached, the lost meaning turns the trademark into a non-use trademark which later dies and can be used by another creator. The meaning, the goodwill attached to the mark is what gives it the little life it has, just like a zombie.

Though Indian statutory provisions don’t deal with zombie trademarks, the case of Boman R Irani vs. Rahid Ahmad Mirza[5]dealt with the same. In this case, as mentioned earlier in the article, with reference to boots, the complainant filed a complaint to prohibit the defendants from using the mark 'YEZDI'. They claimed that since 1969, the appellant had been using the label with regard to motorcycles and had acquired enviable goodwill among buyers, and while the production of YEZDI brand motorcycles was halted, the goodwill continued to subsist through internet presence, biker gangs, etc. The complainants further iterated that they were in the midst of rebranding and were completely intending to reuse the YEZDI trademark. The appellant maintained that in more than 4 decades the patent had not been used and thus the complainant had absolutely no rights to it.

However, when pronouncing the verdict, the Court struck a balance and ruled that while the complainant had not used the logo, the defendants were ordered to assert that their shoes were in some manner influenced or affiliated with YEZDI motorcycles under the YEZDI trademark.

If it is in the wrong hands, a Zombie trademark can be lethal to the image of a former owner. There's no question that industrial misuse and usage is one of the most critical facets of trademark law. There is no point in licencing, using and then abandoning a trademark without any legitimate excuse. Before abandoning such labels, owners of trademarks which have broad market awareness and substantial goodwill should think carefully.

Where it is known that the original owner has simply lost his trademark, the owner is no longer able to enforce the trade mark and the trademark becomes a fair game for any person to implement goods and services which might be the same as, or identical to, those sold by the original owner.

Having a mark with goodwill and reputation is like a reward for all the hard work the trademark owner does. The work done throughout the life of the trademark accounts for the profits even after the pause in the usage. It gives rights to the owner of the exclusivity on the trademark even after it is not in use. This has always acted as a strong protection layer for the trademarks that are not in use, especially during the time of SARS-COVID. As we all know, this global pandemic began in 2019 and has affected everyone in terms of personal and professional life. Professionally, all forms of occupations and professions have seen some form of step down or a step back. Not many have successfully run the previous year with a profit margin. Some businesses have even shut down due to SARS-COVID. During this time the idea and the concept behind a zombie trademark, for those companies who worked to maintain a certain goodwill of the product or the service, has helped them stay in the business with the same trademark even after such a heavy loss to the economy of the world, especially India.

[1] Z. Peter Sawicki & James L. Young, Zombie Trademarks: Undead Brands Unearthed, ATTORNEY AT LAW MAGAZINE, (Oct. 2, 2016), https://attorneyatlawmagazine.com/zombie-trademark [2] Shrabani Rout, India: Zombie trademarks: What is Dead May Never Die. MONDAQ, (Oct. 16, 2017), https://www.mondaq.com/india/trademark/637562/zombie-trademarks-what-is-dead-may-never-die

[3] Anubhav Pandey, Rectification of Registered Trademarks, IPLEADERS, (April 13, 2017), https://blog.ipleaders.in/registered-trademark/#:~:text=Such%20an%20application%20is%20filed,or%20after%20the%20registration%20of [4] Zombie Trademarks: Are They Really an UNDEAD Threat to Consumers?, JD SUPRA, (n.d.), https://www.jdsupra.com/post/contentViewerEmbed.aspx?fid=65e9b67e-a7c3-4718-8cff-6132143af381 [5] CS(COMM) No.1021/2016