The Karnataka High Court, in a recent judgement, passed an order stating that Ideal Jawa (India) is the owner of the trademark “Yezdi” and prohibited Classic Legends Pvt. Ltd., a company established by actor Boman R Irani and Mahindra & Mahindra, from using the brand ‘Yezdi’ of Yezdi motorbikes as a trademark or domain name, independently or in conjunction with other words.
Ideal Jawa (India) Limited registered Yezdi in 1969, which was later removed in 2007 due to the non-filing of the trademark renewal application. A petition was filed in 1996 to liquidate the Company, which finally concluded in 2001, transferring all its assets to the official liquidator. Meanwhile, Mr Irani was granted registration for the trademarks Yezdi in 2013 and 2014 and also registered a domain name titled www.yezdi.com in 1998.
The official liquidator and Ideal Jawa Employees Association filed the application to restrain Mr Irani from using the Yezdi trademarks and to declare all Yezdi trademarks registered by him during the winding up of the Company null and void. The primary question before the Court was whether Ideal Jawa continued to have ownership over the marks and whether a third person could register the said trademarks if the trademarks still belonged to the Company.
The Counsel, on behalf of the Official Liquidator, i.e., the Plaintiff, submitted that mere removal of the mark from the Registry does not demolish the mark’s goodwill and does not provide a third person with a right over it. It was further submitted that the principles of abandonment of trademark do not apply in the case of winding up and especially not in this case as the mark of the Company is custodia legis. The Plaintiffs also submitted that a right in a trademark is acquired by use and not by registration, and Mr Boman Irani has acted in bad faith by seeking registration of the mark.
The Counsel on behalf of Mr Boman Irani, i.e., Defendant, submitted that registration of the trademark gave Defendant unimpeachable rights and that Defendant had duly protected the mark through registration. The Defendants submitted that it was because of their registration that the rights in the mark had been protected, and as the registration by Ideal Jawa was not renewed, they had lost their rights in the mark. The Counsel further submitted that the Official Liquidator’s duty is extinguished after the winding up order, and no obligations towards the Company are vested in him.
Considering the submissions by both sides, the Karnataka High Court rejected the claims made by Mr Irani. It held that it is evident that the goodwill of the trademark “Yezdi” continues to date. Therefore, the Court held that the mark is the property of Ideal Jawa, and it continues to exercise ownership rights over the mark even after winding up. Goodwill in the trademark is not destroyed even after the business is no longer in operation. Therefore, the Defendants cannot use the mark “Yezdi”, and they are required to compensate the Plaintiffs for any profit made using the mark. The mark was also held to be custodia legis, i.e., the Court’s custody.