India: Zombie Trademarks: What Is Dead May Never Die

Introduction

Zombie trademarks (also known as ghost trademarks, orphan brands etc) can be defined as previously abandoned marks that have been newly revived that still enjoy a measure of consumer recall, protection, goodwill and loyalty. Under trademark law, a trademark is presumed to be dead/ abandoned, once its owner ceases to use that trademark to identify his goods and services. This practice is also known as abandonment of trademarks usually takes place if an owner ceases to use his trademarks or fails in successful prosecution of his trademark application.

It is pertinent to mention here that abandonment alone however does not create a zombie trademark. The cause of creation of a zombie trademark is widespread consumer recognition and residual goodwill. Although the goods and services are no longer sold under the mark, consumers might still remember it with a nostalgic feeling of the good old days and be more favorably disposed towards the brand in general. One more element required however for a zombie trademark to exist is that the trademark must be adopted by someone other than the original trademark owner and must be used in conjunction with the similar or same products that the original owner was using them for.

When it comes to zombie trademarks and their exploitation, there are three parties involved.

1. The original trademark owner;

2. The party that is adopting the abandoned trademark; and

3. The consumers buying the products and services.

Although prima-facie it might seem that the original owner is not concerned about his trademark since he has abandoned it and is no longer using it, the owner might not necessarily be happy with the idea of another party exploiting his trademark along with the residual goodwill that the original owner has in fact generated over a period of time with his investment.

Parties that revive abandoned marks are actually banking upon the residual goodwill and consumer recognition that is associated with the abandoned mark. They know that the new products that will be launched under the old trademark will immediately become more appealing and save them the energy and investment in establishing their own brand and goodwill. 1On the other hand, the public is affected because use of the zombie trademark by the new owner could lead to deception. There is no requirement that the new owner of the trademark sell products or services under the mark that are of the same quality as those sold by the original trademark owner. Yet, it is possible that the consuming public may assume that the original owner has reintroduced its products or services under the mark and that they will be of equal quality to those provided by the original trademark owner. As a result, consumers may purchase products and services based on the mistaken belief that they will acquire products or services of a quality consistent with their past experience with the brand.

Legal standpoint in U.S

Abandonment of a trademark by a previous owner is the key to the existence of a zombie

trademark. Various precedents laid down by the Courts show that a zombie trademark cannot exist just by mere abandonment of a trademark. There should also be evidence that the previous trademark owner has no intention to further commence use of the trademark.

This principle was highlighted in the case of Crash Dummy Movie vs. Mattel Inc2 wherein the Federal Court held that although the company hadn't used the trademark "CRASH DUMMIES" for a considerable period of time, they had produced evidence that they intended to commence use of the mark again. Intent being the key word here, Mattel Inc. produced heaps of evidence including an agreement with KB toys about producing a line of Crash Dummy toys. The Court ruled in the favour of Mattel Inc.

The judgments regarding zombie trademarks and their use are heavily fact driven and evidence dependent in nature. The burden of proof is entirely on the previous owner to show that he intended to reuse the mark or that the abandonment was due to valid reasons at that time.

Another case in point is General Motors Corp. v. Aristide & Co., Antiquaire de Marques, 873 wherein the plaintiff General Motors tried to restrain the defendant from reviving and using the mark LASALLE for motor vehicles. The Court rejected the contentions of the plaintiff and held that since they hadn't used the marks in 65 years and evidenced no intent to reintroduce any vehicle under the mark, they could not stop the defendant from registering the trademark.

Legal standpoint in India

In India, there is no statutory recognition of zombie trademarks. A recent decision of the Delhi High Court in Boman R Irani vs. Rahid Ahmad Mirza4 has dealt with the aspect of Zombie Trademarks.

In this case, the plaintiff filed a suit to restrain the defendants from using the mark 'YEZDI' with respect to footwear. They contended that the plaintiff had been using the mark with respect to motorcycles since 1969 and had gained enviable goodwill among the consumers and although the manufacturing of motorcycles of the YEZDI brand was stopped, the goodwill continued to subsist through internet presence, biker gangs etc. The plaintiffs also iterated that they were in the process of rebranding and fully intended to reuse the trademark YEZDI. The defendant argued that the trademark hadn't been used in over 4 decades and therefore the plaintiff had absolutely no rights over it.

The Court however struck a balance while pronouncing the judgment and held that although the plaintiff hadn't been using the mark, the defendants were injuncted from claiming that their footwear under the YEZDI trademark was in any way inspired or associated with YEZDI motorcycles.

Conclusion

A Zombie trademark can be fatal to a previous owner's reputation if it falls in the wrong hands. There is no doubt that one of the most important aspects of trademark law is commercial exploitation and use. There is no point in registering a trademark, using it and then abandoning the same without any valid reason. Owners of trademarks that have widespread consumer recognition and considerable goodwill should think carefully before abandoning those marks. If it is

determined that the original owner actually abandoned its mark, the owner no longer has legal rights to the mark to enforce and the mark becomes fair game for another to adopt for products and services that may be the same as, or similar to, those offered by the original owner.

The persons who use abandoned marks to further their own brand value must also exercise utmost caution while doing so - lest they are accused of falsifying and falsely applying trademarks under Section 101 of the Trade Marks Act,1999.

Footnotes

1 Robert P. Felber, Jr., and Julian Bibb, IV, Night of the Living Trademark: Zombie Trademarks in the United States, available at  https://www.inta.org/INTABulletin/Pages/Zombie_Trademarks_7118.aspx

2 601 F.3d 1387,1391 (Fed.Cir.2010)

3 U.S.P.Q.2d 1179 (T.T.A.B. 2008)

4 CS(COMM) No.1021/2016

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