Introduction:
Recently, in the case of Zepto vs Zepto [Kiranakart Technologies Private Limited vs. Mohammad Arshad & Anr (C.O. (COMM.IPD-TM) 62/2024 with I.A. 29531/2024 & I.A. 40361/2024)], the Delhi High Court ordered cancellation of an individual’s 2014-registered trademark ‘Zepto’, based on a petition of rectification by Kiranakart Technologies Private Limited, carrying on business under the trade name Zepto. Controversy took place when Kiranakart, being a pioneering quick-commerce service provider, sought the mark ‘Zepto’ under Class 35, but Mohammad Arshad, being the current owner of the mark under Class 35, opposed it.
Kiranakart argued that the respondent never utilised the mark post-registration and made frivolous opposition with only intention of blocking its rightful ownership. The company, having started business under the name ‘Zepto’ from the year 2021, put forward its enormous commercial presence, name recall, and turnover ratio, contending that the mark was only related to its services.
The Delhi High Court in the Zepto vs Zepto case noted that the respondent failed to file any reply to the petition, lending evidence towards the charge of non-use. The Court resorted to Section 47(1)(b) of the Trade Marks Act, which states that a registered mark can be erased if it has not been used continuously for five years or more. After Russell Corp Australia Pvt Ltd. vs. Shri Ashok Mahajan (2023), the Court held that non-user of commercial business character justified cancellation of the impugned mark. According to the same, the Court directed deletion of the ‘Zepto’ mark from Class 35 from the respondent’s name.
Section 47(1)(b) Of The Trade Marks Act, 1999:
The purpose of Section 47 of The Trade Marks Act, 1999 is to prevent hoarding of trademarks. It provides for a registered trademark to be removed from the register on the basis of non-user if the trademark was applied for without any bona fide intention at all on the part of the applicant ever to use it and there has actually been no bona fide use of the aforesaid trademark up to a date 3 months prior to the date of application or a period up to the date of 3 months prior to the date of application of the trademark and a period of 5 years or more from the date on which the trademark was registered has lapsed during which there was no bona fide use of the aforesaid trademark.
Facts of the Zepto vs Zepto case:
The petitioner, Kiranakart Technologies Private Limited, had made a rectification petition under Sections 47 and 57 of the Trade Marks Act, 1999, seeking cancellation of the ZEPTO trade mark (no. 2773519) in favour of Mohammad Arshad (the respondent). The petitioner runs a successful quick-commerce business in the trade name ZEPTO, which was established in July 2021 and has recorded growth and popularity in the market. On the other hand, the respondent had registered mark ZEPTO in 2014 in classes 9 and 35 with use from April 2011, but which was claimed by the petitioner never to have been used.
Issues involved in Zepto vs Zepto Case:
• Whether the mark ZEPTO can be removed from the Register of Trade Marks for non-use by the respondent.
• Whether the petitioner has succeeded in proving its right and goodwill in the ZEPTO mark.
Arguments of Both Sides in Zepto vs Zepto Case:
The petitioner, Kiranakart Technologies Private Limited, argued that it has made intensive use of the ‘Zepto’ mark in India since July 2021 and has created widespread goodwill. It presented evidence demonstrating that it has operational presence due to 350 stores and pick-up points across various cities, employs more than 1,000 people, and has 40,000+ delivery executives. The company also asserted that it spent extravagantly to advertise the brand on print, online, and television media and generated revenues of approximately ₹4,252 crores in the years 2023-24.
The company contended that its repeated and extensive use of the mark had made ‘Zepto’ synonymous with its speed-commerce services. The petitioner had also argued that the respondent, Mohammad Arshad, never used the ‘Zepto’ mark commercially under Class 35, i.e., wholesale, retail, and advertising services. Rather, the respondent had opposed before the registration of the mark ‘Kirinakart’ by him on his own without directly pursuing any commercial activity based on the mark.
The company had relied on confirmatory facts with an affidavit of a third party investigating agency that they were not in a position to detect traces of use or advertisement within nearly eight years from the date of registration of the earlier mark. Kiranakart prayed respondent’s act to be a mala fide act in order to eschew its legitimate claim in lieu of bonafide commercial use.
The respondent Mohammad Arshad never made use of any refutations or a response to the petition for rectification, and hence the petitioner’s claims went unchallenged. This laches, in the view of the Court, assumed the form of an implication of no material defense or reasons for retention of the mark.
Court’s Observation in Zepto vs Zepto Case
The respondent could not make a reply on the petition, and hence it was assumed that the allegations of the petitioner were presumed to be accepted. The petitioner has come with cogent proof of widespread use and promotion of the ZEPTO mark from 2021, while the respondent could not establish any good faith use of the mark in respect of the said services. The Court cited the previous cases that had decreed the rule that a non-used registered mark over the last five years would be removed from the register.
Court’s Judgment in Zepto vs Zepto Case
Delhi High Court Judge, Justice Amit Bansal ruled in favour of the firm in the case of Kiranakart Technologies and held that the respondent’s failure to respond to the petition meant that there was no substantively valid defence to the non-use argument. The Court reaffirmed that a trademark must be used habitually in relation to the goods or services specified therein, failing which it may be ordered to be removed under Section 47(1)(b) of the Trade Marks Act.
The Court also derived its authority from the ruling of the Supreme Court in Russell Corp Australia Pty Ltd. vs. Shri Ashok Mahajan (2023) where the above cited principle had been stated that non-user of a mark by anyone for some time makes a mark liable to its cancellation except for extreme reasons. In the current case, the respondent had not cited any such reason. The Court noted that Kiranakart had become a well-established brand in the quick-commerce space and had used the ‘Zepto’ mark in commercial transactions and advertising consistently.
Since the respondent had not made use of the mark for more than eight years, the Court held that the impugned trademark registration was subject to cancellation. Accordingly, it directed the Trade Marks Registry to remove the ‘Zepto’ mark in Class 35 from the respondent’s register. This decision reiterated the doctrine that marks must be used in commerce if they are to be preserved and that registration simpliciter per se without actual use does not grant permanent rights over a mark.
Conclusion:
This decision in the case of in Zepto vs Zepto emphasizes that registered trademarks must be used so that they can be preserved. An unused trademark can be removed from the register, and therefore, it does not prevent other companies from registering similar marks.
The decision also outlines the duty of the owners of trademarks to proactively defend their registrations and place their marks into use in commerce so that they cannot be subjected to possible cancellation.
Author: Mansi Mishra, 5th year, B.A.LL.B.(Hons.), Indore Institute of Law
Link to the complete judgement: https://indiankanoon.org/doc/178740481/
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