Delhi High Court Cancels 'Zepto' Trademark for Non-Use

 

Delhi High Court Cancels 'Zepto' Trademark for Non-Use: A Landmark Decision on Trademark Diligence
By Abhishek Jat, Advocate

In a landmark judgment, the Delhi High Court has delivered a significant ruling in the realm of trademark law, emphasizing the importance of active use and due diligence in trademark registration. The court ordered the cancellation of the 'Zepto' trademark, registered in 2014, in a rectification petition filed by Kiranakart Technologies Pvt. Ltd., a prominent player in the quick commerce sector. This decision underscores the principle that trademarks are not merely passive assets but require genuine commercial use to retain their validity.

Background of the Case

Kiranakart Technologies Pvt. Ltd., operating under the well-known 'Zepto' brand, is a rapidly growing startup that provides instant consumer goods delivery services. Since its inception in July 2021, the company has achieved remarkable success, expanding its operations to over 10 cities, serving more than 8 million customers, and generating a turnover of Rs. 4,252 crores in the financial year 2023-24. The company’s mobile application, 'Zepto,' has garnered over 1 crore downloads and boasts a high rating on the Google Play Store, reflecting its widespread popularity and consumer trust.

However, Kiranakart’s journey to secure its trademark was fraught with challenges. After filing for the 'Zepto' trademark in Class 35, which covers advertising, business management, and retail services, the company encountered opposition from an earlier registrant, Mohammad Arshad, who had secured the 'Zepto' mark in 2014. Despite the registration, Arshad had never commercially used the trademark, leading Kiranakart to file a rectification petition under Sections 47 and 57 of the Trade Marks Act, 1999, seeking its cancellation.

Legal Arguments and Court’s Analysis

The petitioner, Kiranakart, argued that the 'Zepto' trademark had become exclusively associated with its business due to extensive use, promotion, and advertising. The company highlighted that it had invested over Rs. 187 crores in marketing and had established a strong market presence, making the mark synonymous with its services.

On the other hand, the respondent, Mohammad Arshad, failed to appear in court or file a response to the petition. This absence was critical, as the court noted that in the absence of a denial, the petitioner’s allegations of non-use were deemed admitted. The court relied on Section 47(1)(b) of the Trade Marks Act, which mandates the removal of a trademark if it has not been used for a continuous period of five years from the date of registration.

The court also referred to precedents such as Russell Corp Australia Pty Ltd. vs. Shri Ashok Mahajan (2023), where it was held that trademarks must be actively used in commerce. The court reiterated that trademarks are not mere property rights to be held indefinitely without use. In the present case, the respondent’s failure to use the 'Zepto' mark for nearly eight years since its registration in 2014 justified its removal from the Trademark Register.

Key Takeaways from the Judgment

1. Active Use is Mandatory: The judgment reinforces the principle that trademarks must be actively used in commerce. Non-use for a continuous period of five years or more can lead to cancellation, as trademarks are intended to protect brands in active use, not to block others from registering similar marks.
2. Importance of Trademark Searches: The case highlights the critical importance of conducting thorough trademark searches before filing for registration. Had Kiranakart conducted a comprehensive search earlier, it could have identified the conflicting registration and taken proactive measures to address the issue.
3. Burden of Proof in Non-Use Cases: The court clarified that while the burden of proving non-use lies with the petitioner, the respondent must specifically deny the allegations. In the absence of a denial, the allegations are deemed admitted, making it easier for the petitioner to secure cancellation.
4. Trademarks as a Responsibility: The judgment serves as a reminder that trademarks are not just names or logos but represent a brand’s reputation and goodwill. Companies must not only register their trademarks but also actively use and protect them to maintain their validity.

Conclusion

The Delhi High Court’s decision to cancel the 'Zepto' trademark for non-use is a significant development in trademark law, emphasizing the need for active use and due diligence in trademark registration. For businesses, this case serves as a crucial lesson: trademarks are not passive assets but require continuous commercial use and protection.

As the legal landscape evolves, companies must prioritize trademark searches, timely registration, and active use to safeguard their brands. The judgment also underscores the importance of legal expertise in navigating trademark disputes, ensuring that businesses can protect their intellectual property rights effectively.

Case Name & Citation

Kiranakart Technologies Private Limited vs. Mohammad Arshad & Anr.
C.O. (COMM.IPD-TM) 62/2024, Delhi High Court