[The Post has been authored by SpicyIP Intern Suhani Chhaperwal. Suhani is a third-year law student at NLSIU who loves to write on IP and tech issues. Her previous post can be accessed here.]
In an age where delivery apps have taken over the world, quick commerce apps like ZEPTO have set new standards for convenience by delivering groceries in minutes, much like Gen Z’s patience for waiting. Like their app ZEPTO, Kiranakart Tech doesn’t seem to believe in delay, this time over the use of trademarks. That’s exactly what was showcased in the Delhi High Court’s recent judgment dt. March 3 which allowed Kiranakart Tech’s rectification application against an identical “ZEPTO” trademark. In its application, filed against the respondent- Mohammad Arshad, Kiranakart Tech alleged that the identical ZEPTO mark should be removed from the register for not being used. Interestingly, while initial news reports suggested that the mark was removed solely due to non-use, the actual reason appears to be that the respondent failed to rebut the arguments raised by Kiranakart. This inaction led the Court to assume non-use of the mark by the Respondent and remove it from the Register. In this post, I’ll take a look at the facts of the case and the legal framework for the cancellation of a trademark. Based on the above, I will try to answer whether the test for cancellation of a registered mark imposes an unreasonable burden on petitioners seeking rectification.
Background
Kiranakart Technologies Pvt. Ltd. filed a rectification petition under Sections 47 and 57 of the Trade Marks Act, 1999, seeking the removal of the respondent’s trademark ‘ZEPTO’ (in Class 35) from the Register of Trade Marks. The respondent had registered the mark in 2014 with a user claim since 2011, covering services related to advertising, trading, and marketing of electronic goods. However, relying on an independent investigation report, Kiranakart argued that the respondent had never commercially used the mark in relation to the claimed services and had only registered it to block others.
Kiranakart contended that their ZEPTO mark had generated immense goodwill since 2021, and they have invested heavily in branding and operations. Interestingly, the respondent had also opposed Kiranakart’s trademark application in Class 35, despite having no active use of his mark. The petitioner alleged that the respondent even attempted to extract money under the guise of settlement negotiations.
The Delhi High Court noted that the respondent had failed to appear in Court or submit a reply, effectively admitting Kiranakart’s claims. Relying on precedents like DORCO Co. Ltd. v. Durga Enterprises (DHC 2023) and Russell Corp Australia Pty Ltd. v. Shri Ashok Mahajan (DHC 2023), the Court held that the absence of a rebuttal to a non-use claim leads to an assumption that the mark was never used.
Under Section 47(1)(b), a trademark can be removed if it remains unused for five consecutive years. The Court found that the respondent’s mark was merely a hindrance to Kiranakart’s ZEPTO registration and did not serve a legitimate commercial purpose. Accordingly, the Court ordered the removal of the respondent’s mark from the Trade Marks Register, reinforcing the principle that trademarks must be actively used to retain protection.
Legal Framework for Non-use Cancellation
Section 47 (1)(b) of the Trade Marks Act, 1999 lays down that a trademark can be cancelled by the aggrieved person if the registered mark has not been used for a continuous period of 5 years and 3 months prior to filing of the rectification/cancellation application. However, Section 47(3) lays down an exception that a registered mark will not be considered for cancellation on the grounds of non-use if it is caused due to special circumstances in the trade, which includes restrictions on the use of the trademark in India imposed by any law or regulation and not to any intention to abandon or not to use the trade mark in relation to the goods or services.
Essentially, Section 47 encapsulates the test of cancellation for non-use which was laid down in A.K. AL Muhaidib and Sons v. Chaman Lal Sachdeva (DHC 2024) as follows:-
- That the application is by an aggrieved person- who was defined as someone who can show real, and not fanciful injury from the impugned trademark’s registration.
- That the trademark has not been used for at least a period of 5 years and 3 months prior to the date of rectification application.
- No such special circumstances existed which affected the use of the trademark, justifying the non-use—meaning the proprietor can’t just say, “I was going to use it… eventually.”
Regarding the use of the impugned mark, courts have given a broad interpretation, for instance in Kabushiki Kaisha Toshiba v. Toshiba Appliances Co, (2024) the DHCinterpreted that ‘use’ does not necessarily mean and imply actual physical sale; even mere advertisement without having even the existence of the goods can be said to be a ‘use’ of the mark. A similar interpretation was previously upheld by the Supreme Court in Hardie Trading Ltd. v. Addisons Paint & Chemicals Ltd. (2003), reaffirming that courts continue to adhere to the broad definition of “use.”
The case put forth by Kiranakart here was quite clear as there was clear non-use for a period of 8 years without the existence of any special circumstances and therefore, the Court effectively gave the judgment in their favor. However, this test in other cases, places a huge burden on the petitioners.
A Test or a Hurdle? The Struggle to Cancel a Registered MarkA Test or a Hurdle? The Struggle to Cancel a Registered Mark
The broad interpretation of “use” under Indian trademark law, coupled with the expansive reading of “special circumstances” under Section 47, may impose an undue burden on petitioners seeking rectification. The interpretation of “use” where the mere advertisement was held to constitute use, significantly raises the burden on applicants seeking removal of a mark for non-use. The fundamental purpose of a trademark, as reflected in its name, is its use in the course of trade. Courts have consistently held that advertising can constitute “use” when substantial investment is made, as it helps build brand recognition, goodwill, and market presence. However, this principle has limits—mere advertising without launching the goods or services for an extended period cannot qualify as genuine use because it may pose a problem for entities who might end up making their goods commercially available in the market using a similar mark. While an owner’s expenditure on promotions may indicate an intent to use the mark, prolonged non-availability of goods bearing the mark reduces it to mere token use, which does not fulfill the true function of a trademark. Unlike in jurisdictions such as the United States, where the concept of token use or non-actual use has been restricted, Indian courts have maintained a broader scope, which may complicate challenges under Section 47 of the Act.
Additionally, the Supreme Court in Hardie Trading Ltd v. Addisons Paint & Chemicals Ltd also established that petitioners must prove not only non-use but also an absence of intention to use the mark. This places a significant evidentiary burden on applicants, as proving an absence of intent becomes a complex process.
The interpretation of “special circumstances” under Section 47(3) has also been extensively broadened. In M J Exports Pvt Ltd v. Sunkist Growers, the Registry held that non-use due to import restrictions and tariff duties constituted a valid special circumstance, protecting the registrant from cancellation. Similarly, in Toshiba Appliances New Delhi v. Kabushiki Kaisha Toshiba (DHC 2024), it was held that non-use could be excused for five years and one month under special circumstances such as import restriction by the government affecting the product, manufacturing, or supply of the related product which was in contention here. The concept was further expanded in Aktiebolaget Jonkoping Vulcan v. V S V Palanichamy Nadar, (Cal HC 1968) where it was ruled that special circumstances need not be unique to an individual business but should broadly affect the entire trade.
Final Thoughts: The Fine Line Between Protection and Monopoly
This broad interpretation might have serious implications. Firstly, while courts recognize that trademarks can acquire reputation through extensive advertising even in the absence of actual market presence of the goods, such an approach may still be problematic as it creates a risk of trademark owners exerting rights over marks without genuine market use, potentially impeding fair competition. Second, the leniency in interpreting “special circumstances” offers broad leeway for registrants to justify prolonged non-use, further entrenching barriers to entry. A more structured interpretation of “use” and “special circumstances” is necessary to prevent the indefinite retention of trademarks without genuine commercial activity. While courts recognize reputation through advertising as a valid form of use, passive ownership, defensive registrations, lack of bona fide intent, and prolonged unjustified non-use should not be protected. This distinction ensures that trademarks serve their primary function of identifying the source of goods/services rather than being used as a tool for monopolization.
Therefore, the Indian Court’s approach towards “use” and “special circumstances” creates an undue burden on petitioners, discouraging new market entries, enabling defensive registrations, and leading to an accumulation of unused marks in the register. A more balanced interpretation, akin to the U.S. “use it or lose it” principle is required to prevent marks from being treated like NFTs which are bought, and held, but never actually used for anything tangible.