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Turbulence Ahead for GoAir/GoFirst? Trademark Rights and Issues

May 28, 2021

By Vikrant Rana and Pranit Biswas

For the past 15 years or so, GoAir has been a preferred mode of air travel for many customers in India, due to its competitive fare pricing. Since the early 2000s, the growing demand for low-cost carriers/flights in India led to an explosion of new players on the scene– GoAir, Indigo, Spice Jet, etc. Due to its competitive pricing, GoAir garnered many loyal customers and immense goodwill and reputation (in the name/brand GoAir), and, till date, holds a notable share of the Indian commercial aviation industry.

As has been reported in several news outlets, GoAir is shifting to an Ultra Low-Cost Model in a bid to further expand its business presence, and is preparing an Initial Public Offering (IPO) in the process of going public and has filed its IPO papers with SEBI. In addition, advertisements have also come out about GoAir rebranding itself to GoFirst. Many news reports have in fact suggested that the rebranding is related to a dispute within the Wadia Group, which owns the GoAir brand[1].

This article will attempt to delve into this from a trademark/brand-holding perspective and analyze the subtext behind circumstances leading a popular brand as GoAir to abruptly re-brand.

BUSINESS STRUCTURE OF GOAIR

GoAir conducts its business under the company GO AIRLINES (INDIA) LIMITED, which was incorporated on April 29, 2004. One of its 14 directors is Mr. Jehangir Nusli Wadia, popularly known as Jeh Wadia, son of Mr. Nusli Wadia, chairman of the Wadia Group.

However, the name of another entity, GO HOLDINGS PRIVATE LIMITED, has come up in the news, as a company which has significant control over the GoAir brand[2]. Jeh Wadia reportedly owns a 24% stake in Go Airlines (GO AIRLINES (INDIA) LIMITED), and was its Managing Director till January 2021. It is pertinent to note that Jeh Wadia is also 1 of the 2 directors of GO HOLDINGS PRIVATE LIMITED, which was incorporated in 2006.

GoAir brand/trademarks, used to be licensed by GO HOLDINGS PRIVATE LIMITED to GO AIRLINES (INDIA) LIMITED at least up until 2013-14, as per recent reports, however, use of the said brands/trademarks has not been governed by way of written license since then [3]. GO HOLDINGS PRIVATE LIMITED had in fact filed applications/obtained registrations for many important/core marks of the Airlines, which date back to as far back as 2005-2006 – such as www.goair.in, GO AIRLINES, , , etc.

TRADEMARK RIGHTS-HOLDING PATTERN

A review of the publicly available trademark records of the GoAir brand reveals that until April-May 2021, all trademarks associated with the said brand had been applied for and/or registered with GO HOLDINGS PRIVATE LIMITED (Jeh Wadia’s company) and not GO AIRLINES (INDIA) LIMITED.

Many of these trademarks date back to 2005, including some of their core marks. Even more startling is the fact that at the same time as the news of GoAir’s rebranding to GoFirst was breaking, and its preparation for IPO being publicized, GO AIRLINES (INDIA) LIMITED filed over 100 trademark applications related to the GoAir brand, as well as the new GoFirst brand, as recently as April-May 2021 [which includes trademarks such as GO FIRST (Application Nos. 4958407-4958413); (Application Nos. 4971207- 4971216), etc.].

Interestingly, many of these filings overlap with the older trademarks in the name of GO HOLDINGS PRIVATE LIMITED, as is illustrated by a couple of examples as below:

GO HOLDINGS PRIVATE LIMITED GO AIRLINES (INDIA) LIMITED
SIMILAR/ IDENTICAL MARKS
TRADEMARK CLASS TRADEMARK CLASS
Filed on: March 20, 2021

Status: Objected

Application Nos. 4914721

Filed on: April 28, 2021

Status: Formalities Check Pass

Application Nos. 4958400- 4958406

GO AIRLINES 39 GO AIRLINES 9, 12, 16, 37, 38, 39, 42
Filed on: March 20, 2021

Status: Objected

Application Nos. 4914722 – 4914723

Filed on: May 11, 2021

Status: Formalities Check Pass

Application Nos. 4970312- 4970318

www.goair.in 35, 39 www.goair.in 9, 12, 16, 37, 38, 39, 42

Further, the new filings of GO AIRLINES (INDIA) LIMITED also include many domain names besides goair.in, such as:

TM App. Nos. Trade Mark App. Date
4964536, 4964534, 4964538, 4964543, 4964539, 4964545, 4964542 www.goairlines.com May 04, 2021
4964516- 4964522 www.goairlines.in May 04, 2021
4964606-4964612 www.gofirst.co.in May 05, 2021

From the above, both parties appear to be scrambling to strengthen their rights over the core trademarks of the GoAir brand. Although, GO AIRLINES (INDIA) LIMITED has no old trademark applications or registrations under their own name. Moreover, GO AIRLINES (INDIA) LIMITED has filed its applications for GoAir.in claiming use since 2004 – although incidentally, as per the WHOIS data available on Registry.in¸ the domain name was created on February 16, 2005. [GoAir.in is the primary website/domain name of the airline].

TROUBLE IN THE AIR? NO SMOOTH SAILING INSIGHT

The revelations regarding the nature of trademarks holdings for the GoAir brand, coupled with the news reports, suggest that the re-branding may be related to the fact that all the GoAir brand/trademarks in question are not vested with the airline operating entity, i.e. GO AIRLINES (INDIA) LIMITED. Further, as reportedly there is no longer any existing (express) license between Jeh Wadia’s company (GO HOLDINGS PRIVATE LIMITED) and the airline, it may be possible that GoAir/ GO AIRLINES (INDIA) LIMITED suddenly found itself to be bereft of any statutory rights in the requisite trademarks.

It would be interesting to see how this story pans out over the course of the next few weeks.

MORAL OF THE STORY

The major takeaway for brand owners, start-ups and big companies alike, is that it is imperative that their valuable intellectual property is consolidated and held either with itself or the parent company or a special IP holding company, and/or at most, with a company whose ownership is directly under the parent company –such as a subsidiary in which the majority stakeholder is the actual parent company.

Lack of such steps can lead to a situation where the actual brand-user may one day find itself severed from its valuable trade marks and other intellectual property (required in the course of even day to day operations) due to lack of proper ownership or chain-of-title. This not only can lead to circumstances wherein a company may be constrained to litigate and/or transition to an alternate brand, but may also adversely affect business prospects, from the perspective of financiers and shareholders and the general market in itself, as such institutions may be reluctant to regard an entity whose core intellectual property and brand identity in itself is under threat, as being of significantly high value. In fact, Moneycontrol.com recently reported that GoAir in its Draft Red Herring Prospectus itself has reportedly listed a risk as “Our brand ‘GoAir’ and certain related trademarks, which we will continue to use until our transition to our new brand, and thereafter, are registered in the name of Go Holdings (in which one of our Promoters, Jehangir Nusli Wadia holds 99% shareholding) and not in the name of our Company.”. It has further been reported that the re-branding from GoAir to GoFirst itself has also been listed as a risk[4].

Thus, IP rights-holders should strive to keep IP rights immune to factors such as change in leadership, management disputes, etc., so as to not affect the sanctity of the everlasting brand. As illustrated by the above example of the venerable GoAir brand, if IP is not properly consolidated, they may become susceptible to damage due to management disputes, amongst other things.

[1] GoAir, promoter spar over trademark amid IPO plan: Times of India, May 15, 2021 (URL: https://timesofindia.indiatimes.com/business/india-business/goair-promoter-spar-over-trademark-amid-ipo-plan/articleshow/82642342.cms).

[2] GoAir DRHP hints at tussle with Jeh Wadia over trademarks, names: The Hindu Business Line, May 15, 2021 (URL: https://www.thehindubusinessline.com/companies/go-airlines-in-a-tussle-with-nusli-wadia-over-trademark-use/article34555955.ece).

[3] Supra Note 2

[4] Go Air IPO: Here are important risk factors to the airline’s growth and future plans, Moneycontrol.com: https://www.moneycontrol.com/news/business/ipo/go-air-issues-drhp-ahead-of-ipo-key-risk-factors-to-growth-and-expansion-plans-6891041.html

IP Due Diligence in M&A- 4 points to consider

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