In a significant reversal of a previous judgment, the Karnataka High Court has delivered a landmark verdict in the long-standing Yezdi trademark dispute, favoring Classic Legends Private Limited and industrialist Boman R Irani.
Court Overturns Single Bench Decision
A division bench comprising Justices DK Singh and Venkatesh Naik T set aside the December 16, 2022 order from a single judge bench that had declared Ideal Jawa (India) Ltd as the sole owner of the Yezdi trademark. The original ruling had restrained Irani and Classic Legends from using the Yezdi mark in any form and directed the trademark registrar to cancel all registrations in Irani's name.
The division bench fundamentally disagreed with the single judge's approach, emphasizing that trademark rights cannot survive without continuous use and proper renewal. The judges noted that trademarks differ from tangible property and their value dissipates through non-renewal or extended non-use.
The Core Legal Reasoning
The court observed that Ideal Jawa had not used the Yezdi trademarks since 1996, failed to renew registrations, and took no steps to protect the marks while selling company assets without mentioning them. "Therefore, we are of the view that no goodwill would subsist and survive," the bench stated unequivocally.
The legal principle of custodia legis (custody of the law) invoked by the single bench was effectively countered by the division bench's finding that abandonment of trademark rights negates such protection. The court clarified that if a company abandons a trademark, it cannot remain in legal custody from the date of winding-up petition presentation.
Historical Context and Timeline
The dispute traces back to August 2001 when the company court ordered the winding up of Ideal Jawa and appointed an official liquidator. In March 2006, a sale certificate was issued to Aquil Qureshi of Premier Iron and Metal Industries for Rs 26.7 crore, but significantly, the valuation report did not list the Yezdi mark as an asset.
When the original registrations for 'Yezdi (device)' and 'Yezdi D250' expired in October 2007 and April 2008 respectively, Boman Irani obtained fresh registration of the Yezdi trademark in his name. This move was challenged by the official liquidator and the Ideal Jawa Employees Union, who argued that the certificates issued to Irani were null and void.
The division bench ultimately ruled that Irani had not violated the Companies Act or Trade Marks Act by registering the trademarks after they had lapsed and been abandoned by the original company. The court characterized this as "a case of abandonment of the trademark by the company in not taking any action for over a period of 15 years."
