By Ananyaa Banerjee and Titiksha Sinha
Background: The Rise of Zepto
ZEPTO is a revolutionary quick-commerce brand operated by Kiranakart Technologies Private Limited. Since its launch in July 2021, Zepto has taken India by storm, offering lightning-fast delivery of over 7, 000 products across 20+ categories.
- With 350+ stores and delivery hubs, 1000+ employees, and a fleet of 40,000+ delivery executives, Zepto has built a rapid expansion model that has redefined convenience.
- Over 8 million customers have placed orders through the Zepto app, which boasts 1 crore+ downloads and a 4.6-star rating on Google Play Store.
- Zepto’s digital presence extends beyond its 2021-registered website (www.zeptonow.com) to a strong following across Facebook, X, Instagram, YouTube, and LinkedIn.
- Within five months of launching, Zepto achieved a $570 million valuation, and by 2023-24, it reported a staggering Rs. 4,252 crores in turnover.
- The company has spent Rs. 187 crores in marketing efforts across print, digital, television, and sponsorships, making it a household name.
- Kiranakart has registrations in multiple classes such as Classes 29, 30, 31, 32, 34, 39, etc., for ZEPTO marks.
The Conflict: An Old Trade Mark Stands in the Way
While Zepto soared, a roadblock appeared, an existing trade mark registration. The Respondent No.1 Mohammad Arshad, had registered the trade mark ZEPTO in Classes 9 and 35 vide Registration No. 2773519 since July 14, 2014 claiming usage since April 01, 2011. However, no document of proof was put on record to show actual use since 2011.
Not only did the Respondent No.1 hold the registration, but they also opposed Kiranakart’s trade mark Application No. 5079706 dated August 09, 2021 in Class 35 for the mark ZEPTO.
The Legal Move: Rectification Petition
In reaction, Kiranakart filed a Rectification Petition under Sections 47 & 57 of the Trade Marks Act, 1999, demanding the removal of the ZEPTO trade mark vide Registration No. 2773519 in Class 35 on the grounds of non-use of the trade mark.
Zepto’s Case-
Kiranakart argued that they are the “person aggrieved” on the basis of the following-
- Exclusive Association: Owing to continuous and extensive use since July, 2021 along-with advertisement activities, ZEPTO marks are exclusively associated with the Petitioner.
- No Use, No Rights: A third-party investigation report supported by an affidavit proved that Respondent never commercially used ZEPTO in Class 35. The Hon’ble court noted, “The respondent no.1’s user claim of 1st April, 2011 in the impugned registration is therefore false and misleading.”
- A Baseless Opposition: Despite no commercial activity, Respondent opposed Zepto’s application purely to delay and create obstacles. The court observed, “Despite no active commercial use of the impugned mark by the respondent no.1, he had filed a vexatious opposition against the petitioner’s application for the mark ZEPTO in class 35.”
- Extortion Tactics: In July 2024, Respondent approached Kiranakart for a settlement, but negotiations fell apart when monetary demands surfaced. The Hon’ble court remarked, “Between 23rd July, 2024 and 12th September, 2024, the parties were negotiating amongst themselves, however, the respondent no.1 was merely attempting to extort money under the garb of amicable resolution.”
Key Rulings
Since the Respondent, Mohammad Arshad did not appear at the hearings, citing landmark cases, the Hon’ble court found the arguments heavily in favor of Kiranakart-
- DORCO Co. Ltd. v. Durga Enterprises & Anr[1]: If a party fails to counter claims of non-use, the trademark can be removed. The ruling stated, “In the absence of any denial of the averments made in the petition, the same have to be taken as admitted.”
- Russell Corp Australia Pty Ltd. v. Shri Ashok Mahajan[2]: Uncontested third-party investigations are valid evidence for non-use. The court noted, “Under such circumstances, in the absence of denial by the Respondent, the Court has no reason to disbelieve the pleadings as also the investigator’s affidavit on record.”
*The Respondent did not file any reply in the present petition which further strengthened the Petitioner’s case as absence of any denial is taken as admission of the averments of made in the petition.
The Verdict
The Registration No. 2773519 for the “ZEPTO” trade mark in Class 35 was ordered to be REMOVED from the Trade Marks Register. The final ruling declared, “In view of the above, the impugned mark is liable to be removed from the Register of Trade Marks under the provisions of Section 47(1)(b) of the Act.”
The outcome of the opposition proceeding is yet to be seen.
Final Thoughts and Implications for Businesses
Kiranakart’s victory is an important ruling for startups facing legacy trademark blocks. With the obstacle removed, Kiranakart is now free to expand its brand without legal hurdles, and claim rights on its bonafide trade mark.
This case also underscores the critical importance of active and bona fide use of a trademark post-registration. Merely registering a trade mark without genuine commercial use can render it vulnerable to cancellation, even if the entity is the prior owner and adopter of the same, such as in the present case.
Recommendations for Trade Mark Holders:
- Ensure Active Use: Post-registration, it is imperative to use the trade mark in commerce, genuinely and continuously, and document all instances of use, to defend the validity, if ever challenged. Using the trade mark not only strengthens brand recognition but also safeguards against potential cancellation actions.
- Monitor and Defend Your Trademark: Regularly monitor the market for potential infringements and be prepared to enforce your trade mark rights. However, any enforcement action must be based on legitimate business interests, and not backed by malafide intent for commercial gains.
Ojasvi Madan, Junior Associate Advocate at S.S.Rana & Co. has assisted in the research of this article.
[1] C.O. (COMM.IPD-TM) 50/2022
[2] C.O. (COMM.IPD-TM) 164/2022