When Trademarks Outlive Companies: The Yezdi Dispute

This article examines the Yezdi trademark dispute to explore how trademark rights are treated when a company enters prolonged liquidation and ceases commercial operations. Using the conflicting decisions of the Karnataka High Court, it analyses the tension between insolvency law's focus on asset preservation and trademark law's insistence on use, maintenance, and abandonment.

INTRODUCTION

The Yezdi trademark dispute underlines some larger issues in the governance of intellectual property: the ways in which rights survive or otherwise when a company is wound up and its operations cease. Trademark doctrine operates around use, consumer recognition, and continued market presence. Ideal Jawa (India) Ltd's trajectory from 20th‑century successful motorcycle manufacturer through early 2000s liquidation muddles doctrinal clarity and leaves intangible assets in flux in those instances when business has ended, yet cultural value endures. This case brings those questions to the fore.

Yezdi held a distinctive place in Indian motorcycling and was revived by Classic Legends Pvt Ltd, co-founded by Boman R. Irani and Mahindra & Mahindra. This revival was opposed by the Official Liquidator of Ideal Jawa on the ground that the trademark was an asset in liquidation. The dispute pits two ownership concepts against each other: i) corporate continuity through winding-up, and ii) abandonment, lapse, and lawful re-registration doctrines. The move from the Single Judge's 2022 decision to the Division Bench's 2025 reversal shows the tension at the intersection of insolvency and prolonged non-use in the law of trademarks.

ORIGINS, LIQUIDATION AND THE DORMANT TRADEMARK

A complete understanding of the current litigation requires going back into the historical development of the Yezdi mark and the corporate circumstances that have embroiled it. The trademark began with Ideal Jawa, created by Rustom S. Irani, who assigned the YEZDI mark to the company as part of its commercial identity and as a mark of respect to his Persian heritage. During the 1960s and 1970s, and well into the late 1980s, the company manufactured Yezdi motorcycles in Mysuru. Its motorcycles were known for their rugged character, distinctive aesthetics, and large cultural resonance. Even after production ended, the brand maintained an emotional connection with riders and collectors.

Things began to fall apart in the early 1990s as the company faced financial trouble. Insolvency petitions were and by 1996 Ideal Jawa ceased the production of Yezdi motorbikes. This marked the end of Yezdi's commercial presence. In 2001 the Karnataka High Court passed a winding up order, placing all corporate assets under the superintendence of the Company Court through the Official Liquidator.

During this period, the company's trademark registrations gradually lapsed. And even after it being one of Ideal Jawa's most recognisable assets, when the assets of the company were sold off to Mr. Aquil Qureshi of M/s. Premier Iron and Metal Industries, these trademarks were not part of either the valuation report or public notice issued by Ideal Jawa's secured creditor. Public sale notices from 2003 to 2006 did not mention intellectual property or brand rights either. As the years passed, the registered trademarks expired gradually expired as renewal deadlines passed. The Registrar issued notices warning (in the form of O-3 communications indicating the impending removal of the registrations for non-renewal, yet no steps were taken by the company or the Official Liquidator to preserve, renew, or restore them. By 2007- 2008, the marks had lapsed entirely.

Meanwhile, Rustom Irani's son, Boman R Irani, retained a personal connection to the brand. After his father died in 1989, he maintained the domain “www.yezdi.com” as an informal archive and point of engagement for enthusiasts. Once the company's trademark registrations lapsed, he began pursuing registrations of certain marks in his own name around 2013 – 2014. As a matter of fact, the facts mentioned in the DB Judgement, Irani had gotten one of these marks as a consequence of a settlement deed between him and Mr. Amit Soni in 2015. In 2018, Irani licensed the marks to Classic Legends, a company he had incorporated with Mahindra and Mahindra for a revival of Yezdi Bikes.

These facts evolved in a legal environment where the company in liquidation did not claim or assert its trademark and therefore created a confused state of affairs as to ownership and use. The chronology began with Irani and Mahindra & Mahindra setting up Classic Legends Pvt Ltd in June 2015 with the express purpose of reviving many dormant motorcycle brands, including the brand Yezdi. In more than a few years after its inception, Irani handed an exclusive license to Classic Legends to use the Yezdi brand. As a result, a notice was given by the Official Liquidator to the Registrar in August 2015, suggesting that the trademark belonged to Ideal Jawa and therefore could not be alienated or licensed without court approval. Subsequently, petitions were filed with the High Court by the Official Liquidator for approval of selling the trademark in liquidation and canceling registration obtained by Irani.

The combination of prolonged non-use, lapse of registration, Irani's own conduct, and then the Official Liquidator's intervention at the end created a perfect storm for what followed. The questions at issue reached beyond the facts, and they were: Do trademarks exist subsequent to liquidation if there hasn't been an effort made to maintain it, can goodwill be said to exist after so much time, and can it be seen as acceptable to bring back and resubmit a trade mark after so much dormancy?

SINGLE JUDGE'S 2022 JUDGMENT

The case argued before a Single Judge in December 2022 involved decades of corporate decline, administrative gaps, and competing claims. The central issue was whether decades of long non-use and lapsed registrations did not keep the Yezdi trademark with Ideal Jawa in liquidation and whether the subsequent registration and licenses by Irani could legally be sustained. The Judge treated the matter as one involving how trademark rights survive or vanish in winding-up and not just a dispute between owners.

The Court observed that as of the 2001 winding-up order, the Yezdi marks stood registered in the name of Ideal Jawa. Section 456 of the Companies Act vests all assets in the custody of the Official Liquidator, and any trademark registration or assignment after winding up becomes void under Section 536(2). The rationale upon which the decision of the Court is based is the basic principle that once the corporate estate is under judicial administration, it cannot be unilaterally diminished or privately transferred.

A significant part of the judgment related to goodwill and its survival upon cessation of business. The Court rejected the argument that goodwill is always dissipated by non-use, observing that Yezdi continued to have resonance in the public mind long after formal activity had stopped. Evidence such as fan pages, rider groups, and an active owner community pointed to the brand's continuing source-identifying significance long after production had ceased. With citations to cases recognizing goodwill as an intangible but legally protectable commercial reputation capable of surviving independently of ongoing business, the Court ruled that Ideal Jawa had not abandoned the trademark by reason of non-use.

The court thus distinguished between non-use occurring either because a business is pursuing a strategy or simply neglects it and non-use born from special circumstances in this case: liquidation. Once a winding-up order is made, the company cannot effectively renew trademarks or run its business because the law intervenes to restrain them. The Single Judge treated these statutory limitations as special circumstances within the meaning of the Trade Marks Act, so that abandonment is not activated.

The Court also pointed out that there was procedural defect with regard to deleting the marks from the Register: notices as regards the impending expiry (O-3) were sent to ex-trademark agents and not to the Official Liquidator, which is a requisite under Section 25(3) coupled with this kind of error, therefore, vitiates the deletion and strengthens the finding that such marks never validly passed out of the possession of Ideal Jawa.

As per Section 25(3) of the Trademark Act mandates that the Registrar must send a notice in form O-3 (now form RG-3) to the registered proprietor six months before the expiration of the registration, informing them of the expiration date and the conditions for renewal. Under the earlier Trade Mark Rules, Rule 64 required the Registrar to notify the registered proprietor in writing using Form O-3. This notification must be sent between one and three months before the registration expiration. Under the new Rule 60(2), the Registrar must send Form RG-3 no more than six months before expiration, notifying of the expiration date. Therefore, the issuance of notice under Section 25(3) read with Rule 64(1) of the Trade Marks Rules, 2017 (the “Rules”) is a mandatory precondition before removing a trademark from the Register. This has been reiterated by the Division Bench of the Delhi High Court in Union of India v. Malhotra Book Depot (2013), where it was held: “…Section 25(3) cannot be interpreted as permitting removal without the condition of sending the notice being complied with,” along with numerous other judgments.

The Single Judge ultimately held that the Yezdi marks belonged to Ideal Jawa and cancelled the registration granted to Irani, directing restoration of the mark to the company. An injunction was issued against Irani and Classic Legends enjoining them from using the trademark in question. Simultaneously, the Official Liquidator was empowered to sell the mark for and on behalf of creditors. Throughout, the emphasis in this judgment was on the continuity of ownership in liquidation, along with accrued goodwill.

THE DIVISION BENCH'S 2023 REVERSAL

In 2025, the Division Bench took a closer look at the issue. It observed that Ideal Jawa had not used and/or protected the Yezdi trademarks for more than fifteen years: production stopped in 1996, registrations lapsed in 2007–2008, with no renewal or support. Such long abandonment contradicted the fundamental principle that trademark rights flow from use and continued interaction with the statutory system. The Court rejected the notion that a trademark may remain in some sort of limbo within an estate in liquidation without asserting its rights, holding that protracted non-use amounts to abandonment.

The court also further rejected the argument of notice sent to the trademark agent, relying on Rule 21 of the Trademark Rules, 2002, which recognises service of documents on an authorised agent as valid.

Invoking the wide powers of the Company Court under Section 446 of the Companies Act, the judgment held that cancellation, rectification, and restoration are Trade Marks Act proceedings. As a result, the order of the Single Judge directing the Registrar to remove Irani's registered trademarks and restore those belonging to the appellant that had lapsed was held to be beyond jurisdiction.

Further, the Court analyzed the Official Liquidator's timing and manner of action. The Official Liquidator claimed rights over the Yezdi marks only in 2015, much after they had expired and when Classic Legends had already started the revival process of the brands. The Official Liquidator was well placed to safeguard the company's assets, including its trademarks, as it had accedd to records and statutory powers under the Company Act, 1956. The Bench observed that, the Official Liquidator's repeated failure and lack of any earlier attempt to protect the marks, whether at expiry, upon receipt of notices, or during asset valuation and sale, weakened the assertion of lawfulness of the company's remaining rights.

Thus, the Bench held that the registrations of Irani could not be displaced by rights that the former company no longer possessed. The appeals were allowed, thereby permitting Classic Legends to continue using the Yezdi name. The decision re-centered the discourse around basic principles of trademark law: marks must be used and maintained; and Company courts lack authority to revive a company's intellectual property years after it has been abandoned.

IMPLICATIONS FOR TRADEMARK GOVERNANCE AND LIQUIDATION

The Yezdi dispute illustrates several deeper issues buried within the general trademark governance framework. The core tension is between two visions of trademark ownership, namely: (1) the character of the mark as a purely corporate asset that subsists through liquidation until sold for the benefit of creditors; and (2) the character of the mark as rights subject to active use and statutory maintenance, lapsing if the proprietor does not exercise them within the limitation periods. Each position is based on valid principles; their interaction becomes problematic in the context of a prolonged liquidation period with accompanying unmanaged intangible assets.

The decisions of both Single and Division Benches on the issue of goodwill display somewhat of a counterintuitive situation. Mr. Irani had acknowledged that goodwill was subsisting in the Yezdi marks. His submissions were sought to be used by the opposing parties to further their case. Resultantly, the Single Bench accepted Irani's submissions on goodwill in order for the company to be holder of the marks. If seen, Mr. Irani's initiative of starting Classic Legends was possible only because of the subsisting goodwill that belonged to Ideal Jawa. On the contrary, h Division Bench ruled in Mr. Irani's favour by rejecting the existence of goodwill in the mark. With the termination of business activities, non-use mark, and the expiry of registration, no goodwill existed anymore.

The Single Bench ruling had taken into account the mark's ongoing appeal and the supporters' desire to revive the Yezdi brand. This asks the question whether that would be goodwill or mere reputation that the Single Bench unintentionally tried to protect. The two concepts have been understood to be different, since goodwill is a legal property, whereas reputation is a matter of fact. This in turn begs the question, if goodwill does exist, who would you give credit to for its existence? One can praise Mr. Irani for having continued running that wbsite while it may also be argued that the it was the fandom that sustained it. In fact, Professor Catherine W. Ng, in her book “Goodwill in Passing off” has argued that the law must not focus on protecting this ‘substantive' conception of goodwill (which pertains to the attractiveness and positive perception of the brand), but instead limit itself to what she calls “structural goodwill” (public recognition of the goods' origin or association with a certain trader/company).

This case also exposes deficiencies in the typical corporate governance approach to intangible assets. Liquidators tend to focus on tangible assets and cash flows. As a result, they may often overlook older, dormant trademarks that could be valuable. The failure to renew the Yezdi registration significantly influenced the Division Bench's decision. This emphasizes the need for effective management of intellectual property, even in insolvency cases.

CONCLUSION

The Yezdi case demonstrates a basic conflict in Indian trademark governance-insolvency's asset preservation vs. trademark law's use, vigilance, and maintenance. The 2022 Single Judge ruled for corporate continuity in liquidation, treating the mark as a custodia legis asset with value from residual goodwill, so that losses would not occur due to administrative delays. But this somehow blurred the demarcation line between legally protectable goodwill and mere reputation or nostalgia. However, if an appeals court were to reverse that ruling and take the more traditional route of non-use and jurisdictional norms, it will arguably appear incomplete, allowing the Official Liquidator's neglect to determine an asset that could still have value for creditors. This case brings up a systemic flaw in the management of intangible assets during liquidation: no clear duty to identify, value, and preserve trademarks, thus leaving them at risk of extinction or opportunistic revival. Yezdi is a cautionary tale-Trademark law cannot protect sentiment, but insolvency law must treat IP as assets in need of active stewardship to prevent ex-post judgments over abandonment vs. endurance.

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