Understanding Zombie Trademarks

By

Sakshi Shairwal

Ch Shloka

Intellectual Property refers to the intangible type of property which is a creation of human imagination, mind, or ideas for example inventions, paintings, etc... Trademarks, Copyrights, Patents, Industrial Designs, and Trade Secrets are among the most popular kinds of Intellectual Property. However, in this article, we’ll focus on Zombie Trademarks- a part of Trademarks.

Trademarks are unique symbols, words, or even symbols that legally distinguish the goods or services offered by an entity from those offered by any other entity of its kind. For example the peacock logo of NBC, the tick logo Nike, ‘i’ in names of Apple products (iPod, iPhone).

Once any trademark is registered, no one can use it without the consent of its owner. A registered trademark serves as an asset to the owner of that logo. A trademark can be used to earn money by selling, franchising, assigning, or commercially exploiting it in some other way. The company can allow any other company or individual to use its trademark for a price. One can identify that a logo is trademarked by a particular entity through symbols like ® and ™. If a logo is registered then symbol ® is used whereas when the trademark is not registered in any country and is free from any enhanced protection by law, then ™ is used.

The Trademark Registry came into existence in the year 1940; however, it was established under the Trademark Act 1999. All the rules and regulations related to trademarks are governed by the Trademark Act 1999. The trademarks in India are all registered under the Controller General of Patents, Designs, and Trademarks.

At present, the Registry of Trademarks fills in as an operational body of the Act. It can be said that it works in close nexus with the Act. As a functional body, the Registry of Trademarks executes every one of the principles and guidelines of the trademark law in India. The Head Office of the trademark registry is in Mumbai and it has branch workplaces in Delhi, Ahmedabad, Chennai, and Kolkata. While enrolling a trademark, it is enlisted under the Trademark Act, 1999 and afterward, the Registry of Trademarks registers it. In this procedure, the registry will check whether the enlisting mark/symbol meets every one of the conditions of the Act prior to its registration.

The registration of a trademark is voluntary and not a compulsory process. Nonetheless, if a trademark is registered, it constitutes proof that it belongs to a particular person or entity. If any case arises, all the legal decrees will be passed in the favour of the individual who has his trademark registered in the first place.

After a trademark is registered, the validity of the aforementioned extends to ten years from the date of filing the registration application. The registration of the trademark needs to be renewed, failing to do which will subsequently lead to the removal of the trademark. The procedure for renewal may be started only within one year to the date of expiry of such registration. The trademark can be renewed for a period of another ten months.

Any trademark, the filing of which is still active is known as a live trademark. A dead trademark can be defined as a trademark that is abandoned, expired, or even canceled. They may die because of the non-renewal of registration. A dead trademark does not always indicate that the mark is not being used by the owner but that the registration has lapsed because the owner has failed to renew the trademark in the stipulated time.

The dead or abandoned trademarks when revived are known as Zombie/ Ghost Trademarks. The term ‘zombie’ or ‘ghost’ simply refers to ‘returning from dead’. These revived trademarks still hold goodwill, loyalty, legal protection, and fame among customers. The owner of a trademark when stops’ using the trademark or when the action to register the same, fails, the trademark is assumed to be abandoned.

It is relevant to make reference to here that abandonment alone doesn't make a zombie trademark. The reason for the production of a zombie trademark is far-reaching customer recognition and remaining goodwill. Even though the goods are not sold under the trademark, the customers may in any case recollect it with a nostalgic sensation of bygone times and be all the more disposed towards the brand in general. One greater component required anyway for a zombie trademark to exist is that the trademark should be embraced by somebody other than the original trademark owner and should be utilized for the similar category of products that the initial owner was utilizing them for.

There are three parties involved with regard to Zombie trademarks. They constitute the original owner of the trademark, the party taking on the ownership of the abandoned trademark, and the customers who bought such trademarked products or services.

Though prima-facie, it may appear to be that the original owner isn't worried about his trademark since he has deserted it and is done utilizing it, the owner may not really be content with the possibility of another person misusing his trademark alongside the residual goodwill that the original owner has truth be told produced throughout some stretch of time with his venture.

Parties that restore abandoned trademarks are really banking upon the residual goodwill and customer recognition that is related to the abandoned trademark. They realize that the new items that will be introduced under the old trademark will promptly turn out to be seriously engaging and save them the energy and interest in setting up their own image and goodwill. Then again, the general public is influenced on the grounds that utilization of the zombie trademark by the new owner could lead to trickery.

There is no prerequisite that the new owner of the trademark sells items or services under the trademark that is of a similar quality as those sold by the original trademark owner. However, it is conceivable that the devouring public may accept that the original owner has once again introduced its items or services under the trademark and that they will be of equivalent quality to those given by the original trademark owner. Subsequently, customers may buy products and services dependent on the mixed-up opinion that they will secure products or services of a quality steady with their past experience with the brand.

The Trademark Act, 1999 does not carry any provision or statutory regulation for Zombie Trademarks and their exploitation. The Delhi High Court in the case of BOMAN R IRANI v. RAHID AHMAD MIRZA & ORS. (2017) laid down its legal standpoint with regard to Zombie Trademarks. In this case, the plaintiff is an owner of a Motorcycle manufacturing company who had filed a suit against a footwear manufacturing company for using the product name ‘YEZDA’ which was previously trademarked by him. It was the contention of the defendant that the plaintiff has no rights on that trademark as it was abandoned and not in use for 4 decades. The plaintiff also held that even though the trademark was not being used since 1969, it had some residual goodwill that continued to exist because of its internet presence. It was also contended by the plaintiff that they were planning to reuse the trademark in the near future. The High Court took into consideration the cases of both the parties and held that although the plaintiff had abandoned the trademark and the trademark was not in use, the defendants were to refrain from claiming that their footwear brand ‘YEZDA’ was in any way linked to or inspired by the brand YEZDA motorcycles.

The stance of the courts in the United States is different than the courts in India. Different precedents lay down by the US Courts show that a zombie trademark cannot exist just by simple abandonment of a trademark. There must be proof that the original trademark owner has no goal to initiate utilization of the trademark in the future. The case- CRASH DUMMY MOVIE v. MATTEL INC. (Fed. Cir. 2010) drew attention to the aforementioned principle. In this case, the plaintiff had not used the trademark ‘Crash Dummies’ for long but they have enough evidence to prove the fact that they had the intention to use that trademark in the future. The federal court hence ruled in the favor of the plaintiffs.

In another case relating to the same subject matter, the Federal court held that the original owner had no right over the trademark as neither had they used the trademark for a period of over 65 years nor had any evidence that proved their intention of reusing the trademark in the future. (GENERAL MOTORS CORP. v. ARISTIDE & CO., ANTIQUAIRE DE MARQUES (2008))

The decisions with regard to Zombie trademarks and their utilization are purely fact and evidence-driven. The burden of proof lies completely on the original owner to show that he intended to reuse the trademark or that at the time, the abandonment was because of legitimate reasons.

A Zombie trademark can be lethal to the reputation of the original owner in case it falls into the wrong hands. There is no uncertainty that quite possibly the main parts of trademark law are business misuse and use. There is no reason for enlisting a trademark, utilizing it, and afterward abandoning something similar with no legitimate explanation. Owners of trademarks that have far-reaching customer recognition and goodwill should think cautiously prior to abandoning those trademarks. In the event that it is proved that the original owner really deserted his trademark, the owner no longer holds any statutory rights to the trademark. On the happening of such an event, it gives considerable chance to another party to adopt that same as or similar trademark. The people who reuse abandoned trademarks to enhance their brand value should be prudent - in case they are held responsible for fabricating and falsely applying for trademarks under Section 101 of the Trade Marks Act 1999.

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