The Federal Court in the case of Crash Dummy Movie vs Mattel Inc [601 F.3d 1387, 1391 (Fed. Cir. 2010)] ruled in favour of the defendant, stating that although it has not used the mark “Crash Dummies” for a considerable period of time, the evidence has been produced before the court showing that it intended to use the mark in the near future.
The framework related to Intellectual Property Rights in India is still in its nascent stages and regulation related to zombie trademarks is still a far-achieving goal.
However, recently in Boman R Irani vs Rashid Ahmad Mirza & Ors. [CS(COMM) No.1021/2016], the hon’ble Delhi High Court, dealt with Zombie Trademark, though not specifying the name of the concept. In the said suit, the plaintiff sued the defendant demanding injunction from “passing off” its footwear with the trademark “YEZDI” as that of the plaintiff. The plaintiff claimed that his father adopted the trademark in 1969 for motorcycles. Though, the manufacturing stopped in 1996, the goodwill and reputation of the brand sustained. Although, court established a balance between the two by dictating that defendant should not convey in advertisements that it is anyway related to or inspired by previous mark of motorcycles.
Wide-ranging client familiarity and lingering goodwill are the driving forces behind the creation of a zombie brand. Regardless of whether the goods are marketed under the trademark or not, people may remember it with a nostalgic sense of bygone times and be all the more drawn to the brand as a whole. The trademark must be adopted by someone other than the original trademark owner and used for the same category of goods that the original owner was using them for. This is one more essential requirement for a zombie trademark to exist.
With reference to Zombie trademarks, three parties are involved. These are the original trademark owner, the entity assuming ownership of an abandoned trademark, and the consumers who purchased the goods or services bearing the brand.
Although it may appear on the surface that the original owner of the trademark isn't concerned about it now that he has abandoned it and stopped using it, the owner may actually be concerned about the possibility of someone else abusing it and the residual goodwill that the original owner has, in fact, created over a period of time with his business.
The residual goodwill and consumer familiarity associated with the abandoned trademark are essentially what those who restore them are betting on. They understand that the new products that will be released under the old name will quickly prove to be seriously appealing, saving them the time and effort it would take to build their own reputation and goodwill. On the other hand, the public is influenced because the new owner's potential use of the zombie trademark could result in deception.
It is not necessary for the new owner of the trademark to offer goods or services bearing the mark that are of the same calibre as those offered by the prior owner. The public may, however, assume that the original owner has reintroduced its goods or services under the name and that they would be of comparable quality to those provided by the original trademark owner. Customers may subsequently purchase goods and services based on the erroneous belief that they would obtain goods or services of a quality consistent with their prior interactions with the brand.
Zombie trademarks and their exploitation are not covered by the Trademark Act of 1999's provisions or statutory regulations. In the case of BOMAN R IRANI v. RAHID AHMAD MIRZA & ORS. (2017), the Delhi High Court outlined its position on the legality of zombie trademarks. The plaintiff in this case is the owner of a motorcycle manufacturing business who sued a shoe manufacturer for utilising the brand name "YEZDA" that was formerly his trademark. The defendant argued that because the trademark had been abandoned and out of use for 40 years, the plaintiff had no rights to it. The plaintiff further asserted that despite the brand not being used since 1969, it still had some residual goodwill due to its internet presence. Additionally, the plaintiff argued that they intended to utilise the trademark again soon. The High Court decided that even though the plaintiff had given up on the trademark and it was no longer in use, the defendants were not allowed to assert that their footwear brand, "YEZDA," was connected to or inspired by the YEZDA motorcycles in any manner.
The American courts have a distinct philosophy than the Indian courts. Many cases established by US courts demonstrate that a trademark cannot become a zombie simply by being abandoned. There must be evidence that the first trademark owner has no intention of starting future trademark usage. The court case CRASH DUMMY MOVIE v. MATTEL INC. (Fed. Cir. 2010) brought the aforementioned idea to light. Although the plaintiff in this case had not yet utilised the trademark "Crash Dummies," they had enough proof to show that they intended to do so in the future. Hence, the federal court made a decision in the plaintiffs' favour.
An abandoned trademark, with residual goodwill, can cause huge losses to previous original owner of the mark, if in evil hands. It is true that trademark gains its importance and goodwill by commercial use and exploitation and thus, the owners should not stop using a mark, except for certain valid reasons. It is because the consumers shall buy or use the products under the misconception that these are provided by the original owner only. If the courts decipher that the previous owner has left the mark for no good reason, then it shall open gates for other applicants to use the mark and gain exclusive rights in the market. Therefore, the possibility of emergence of disputed related to zombie trademarks in India cannot be neglected.