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In a significant legal battle, Kiranakart, the parent company of the popular quick commerce platform Zepto, emerged victorious in a trademark dispute against Mohammad Arshad, the individual who had previously registered the “Zepto” trademark. The Delhi High Court’s ruling, which concluded a nearly year-long legal struggle, has important implications for brand ownership and trademark rights in India.
the Case
Kiranakart, operating Zepto, filed a petition to cancel the “Zepto” trademark, which had been registered by Mohammad Arshad in 2014. The Delhi High Court, presided over by Judge Amit Bansal, ruled in favor of the startup, citing that Arshad had failed to commercially use the trademark for nearly eight years. The court further noted that Zepto had been actively using the brand since July 2021, establishing a strong reputation in the market.
The dispute arose when Arshad registered the trademark “Zepto” under classes 9 and 35, covering a range of goods and services such as smartphone distribution, phone accessories, and software. However, despite his registration, Arshad had not utilized the trademark for the services claimed under these classes. This non-use, lasting over five years, led to the court ruling that the trademark was merely an obstruction in the register, which needed to be removed.
The
In its defense, Zepto also accused Arshad of attempting to delay the registration process and harass the company. Zepto claimed that an offer made by Arshad in July 2024, which was rejected, appeared to be an extortion attempt under the guise of a settlement.
What Undercode Say:
The case between Kiranakart (Zepto) and Mohammad Arshad raises several interesting points about trademark law and the competitive landscape in India, especially in the context of emerging startups and the tech-driven quick commerce industry. Zepto’s success is partly attributed to its ability to rapidly scale up, with 350 dark stores, 40,000 delivery executives, and a customer base exceeding 8 million. This rapid expansion is a testament to the brandās aggressive marketing strategies and the role trademarks play in securing brand identity.
From a business perspective, trademark disputes like this are not uncommon in India, where brand ownership is fiercely contested. The courtās ruling brings into focus the need for companies to not only register their trademarks but also to actively use and protect them. Arshadās failure to use the “Zepto” trademark for eight years highlights an important aspect of trademark law ā that mere registration without active usage can lead to the cancellation of a trademark.
Moreover, the Delhi High
The courtās reference to the “bona fide intention” requirement is crucial. Trademark law does not protect marks that are simply filed with the intent to obstruct competition. This ruling could have wider implications for other companies that have registered trademarks but are not actively using them. It signals to businesses that they must demonstrate genuine usage or risk losing their trademark protection.
Additionally, Zepto’s ability to highlight the scale of its operations during the trial likely played a significant role in the courtās decision. By emphasizing the company’s national reach and employee base, Zepto demonstrated its commitment to its brand, further strengthening its case against Arshadās dormant trademark. The courtās focus on usage rather than just the registration process ensures that businesses are held accountable for how they manage their intellectual property.
While Zeptoās victory is undoubtedly a significant milestone, it also underscores the challenges that startups face in protecting their intellectual property rights, especially in highly competitive sectors like e-commerce and quick commerce. The legal costs, time investment, and uncertainty that come with trademark disputes can be burdensome for startups. This case highlights the importance of securing trademarks early and using them actively to avoid unnecessary legal entanglements.
Fact Checker Results:
- The trademark dispute over “Zepto” was primarily based on non-use by Mohammad Arshad for nearly eight years.
- Zepto has been using the trademark actively since 2021 and built a strong reputation in India.
- The Delhi High Court ruling follows the Trade Marks Actās provisions regarding non-use of a registered trademark for five years.
References:
Reported By: https://timesofindia.indiatimes.com/technology/tech-news/zepto-vs-mohammad-arshads-zepto-delhi-hc-rules-in-favour-of-/articleshow/118924383.cms
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