In a significant legal reversal, the Karnataka High Court has overturned a previous judgment in the long-running Yezdi trademark dispute, delivering a victory for Classic Legends Private Limited and industrialist Boman R Irani.
The Legal Battle Over an Iconic Brand
A division bench comprising Justices DK Singh and Venkatesh Naik T set aside the single bench order from December 16, 2022, which had declared Ideal Jawa (India) Ltd of Mysuru 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, including domain names, and directed the trademark registrar to cancel all registrations in Irani's name.
The single bench had ordered these trademarks to be transferred to the company in liquidation through the official liquidator, recognizing that the trademarks remained in custodia legis (custody of the law) during the liquidation process.
Court's Rationale for Reversal
The division bench delivered a fundamentally different interpretation of trademark law, emphasizing that trademark rights dissipate through non-renewal or non-use. The judges noted that trademarks are not tangible property and their protection requires active maintenance.
The court observed that Ideal Jawa had not used the Yezdi trademarks since 1996, failed to renew registrations, took no steps to protect the marks, and sold company assets without mentioning the trademarks. "Therefore, we are of the view that no goodwill would subsist and survive," the bench stated in its ruling.
The judgment highlighted a crucial legal principle: "Action or inaction of the company in liquidation or the official liquidator dissipates the right, which by its very nature, would not subsist in the absence of continuous use and renewal of the registration."
Historical Context and Liquidation Process
The case traces back to August 2001 when the company court ordered the winding up of Ideal Jawa and appointed an official liquidator. The liquidation process saw a bid from Aquil Qureshi of Premier Iron and Metal Industries for Rs 26.7 crore being accepted, with a sale certificate issued in March 2006.
Despite this transfer of assets, the trademark issue remained unresolved until the recent legal proceedings. The division bench's decision marks a pivotal moment in the decades-long dispute over one of India's most iconic motorcycle brands.
The ruling establishes important precedent regarding trademark rights during company liquidation, particularly emphasizing the responsibility of companies and liquidators to actively maintain trademark protections or risk losing them entirely.
