Custodia Legis and the Fate of Dormant Trademarks: The High Court’s Perspective in the Yezdi–Jawa Case”.

Custodia Legis and the Fate of Dormant Trademarks: The High Court’s Perspective in the Yezdi–Jawa Case”.

Background & Facts — What led to the dispute

• The motorcycle brand “Yezdi” was originally used by Ideal Jawa (India) Ltd. (“Ideal Jawa”). The mark was registered in the name of Ideal Jawa. Production under the Yezdi / Jawa brand ceased in 1996; the company was ordered to be wound up, and liquidation commenced circa 2001.
• During liquidation, the company’s assets — including trademark registrations — were under custody of the official liquidator (“custodia legis”). The registrations of the Yezdi trademarks expired / lapsed (due to non-renewal) around 2007–2008.
• Subsequently, in 2013–14, Boman R. Irani (and later via his company Classic Legends Pvt Ltd.) applied for and obtained fresh registrations of the “Yezdi” trademark in his own name.
• Classic Legends eventually relaunched Yezdi-branded motorcycles under the new ownership. Meanwhile, the official liquidator (OL) of Ideal Jawa and others challenged Irani’s registrations and use, arguing that the marks remained assets under liquidation and any attempt by Irani to register or use them independently was invalid.
• In Dec 2022, a Single-Judge Bench of the Karnataka High Court had ruled in favour of the OL / Ideal Jawa, declaring that “Yezdi” belonged to Ideal Jawa (in liquidation), and restrained Classic Legends/I­rani from using the mark.

 The 2025 Division-Bench Judgment — What Court Decided & Why

On 27 November 2025, a Division Bench of the Karnataka High Court (Justices D.K. Singh and Venkatesh Naik T.) delivered its judgment in favour of Boman R. Irani / Classic Legends, overturning the 2022 Single-Judge order.

Key points of the Court’s reasoning:

1. Long non-use + non-renewal ? Abandonment
   • Ideal Jawa had not used the Yezdi mark since 1996.
   • The mark’s registration lapsed (by around 2007–08) because there was no renewal or protective steps taken by the company/OL.
   • The Bench held that “goodwill cannot survive in vacuum for several years especially after all assets are sold” and that mere liquidation does not preserve trademark rights indefinitely when there’s no active use or renewal.
2. Trademark rights are not perpetual / physical property
   • The Court observed trademarks are intangible rights contingent on use; in the absence of use and registration renewal, rights dissipate.
   • The notion that the mark remained in “custodia legis” (under the court/liquidator) while being dormant is inconsistent if no steps are taken to preserve or renew the registration over many years.
3. Fresh registration & active stewardship by Irani/Classic Legends validates new ownership
   • The fresh registration by Irani, plus his active steps (e.g. holding domain name, launching business, re-introducing products) indicated genuine attempt to revive the mark.
   • The Bench accepted that this re-establishment of goodwill through legitimate commercial activity sufficed to grant valid rights in the mark.
4. Single-Judge’s 2022 order unsustainable
   • The Division Bench found that Single-Judge erred in holding that liquidation alone preserves trademark rights — especially when the mark was allowed to lapse and was not identified as an asset during liquidation and sale. Accordingly, the Court set aside the 2022 injunction/restraint and permitted Classic Legends / Irani to continue using the Yezdi mark.

Take-aways and Legal Principles (Precedential Significance)

This judgment is important not only for the Yezdi-Jawa saga but for Indian trademark jurisprudence generally. Key legal/Doctrinal take aways:

Precedential impact / Potential influence:

• This ruling may encourage revival of other defunct legacy brands whose marks have lapsed — provided new claimants legitimately re-register and restart commercial use.
• Serves as caution to liquidators/OLs / creditors to proactively protect intangible assets (like trademarks) — mere court custody is insufficient; active maintenance needed.
• Affirms that “use requirement” under trademark law (non-use implying abandonment) applies even in liquidation scenarios.

My Commentary — Observations, Implications & What It Means Going Forward

• The Division Bench’s view aligns with commercial realism and consumer-market interests: iconic legacy brands like Yezdi enjoy goodwill only if someone is willing to invest, re-introduce products, and build brand value; that is preferable to letting trademarks lie dormant indefinitely benefiting no one.
• From a public-policy and brand-revival perspective, the judgment favours productive revival over legalistic stasis. This is likely good for industry, employment, consumers, dealerships, and heritage value — especially for nostalgic Indian motorcycling community.
• On the flip side, this judgment dilutes the value of “custodia legis” for intangible assets — it signals to companies under liquidation (or their official liquidators) that they must promptly either exploit or protect IP rights, or risk losing them permanently. That puts burden on liquidators to be proactive (renew registrations, assess value, public auction or disposal) rather than assume rights remain indefinitely.
• For IP practitioners, this ruling reinforces the importance of active use, renewal and record-keeping; it warns that even long-held heritage may vanish if neglected.
• For brand-revival entrepreneurs and investors: this ruling offers a viable roadmap — register lapsed trademarks afresh, build a legitimate business/ brand-revival plan, and courts may favour you.

Critical Reflections & Open Issues — What Remains Unsettled / What to Watch

• The judgment may incentivize “brand grabbing” — i.e. opportunistic registration of lapsed heritage marks by new entrants merely for commercial advantage, possibly causing conflict with erstwhile stakeholders (creditors, ex-employees, liquidator). While beneficial for revival, there is risk of strategic hazarding / trademark speculation.
• Are there scenarios where non-use is due to regulatory / economic constraints (e.g. forced liquidation)? Should goodwill not be preserved until liquidation completes or claims settled? The judgment appears to lean against such protection.
• The measure of “goodwill” being extinguished by non-use raises questions: would a shorter non-use period also lead to similar loss? Where is the line? The ruling is fact-specific (15+ years), but could be invoked more broadly.
• The impact on creditors / workmen of the dissolved company: since the mark was deemed abandoned, the asset pool for distribution/equity may shrink — this could have negative consequences for claimants in liquidation.

Conclusion — What This Judgment Means in Plain Terms

The 2025 Division-Bench judgment of the Karnataka High Court essentially draws a clear line: a trademark is not a forever-live asset simply because it once existed on paper. If the owner (or liquidator) fails to use, renew, or proactively protect the trademark for an extended period — especially after liquidation — the law may treat it as abandoned, allowing new entrants who legitimately re-register and use the mark to claim ownership.

In the context of Yezdi/Jawa, this means that Classic Legends / Boman Irani are, from a legal standpoint, the rightful owners of the “Yezdi” trademark now, after a decades-long hiatus. The decision underscores that active business use and stewardship matter more than nostalgic legacy in IP rights.

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