The abandonment of trademarks by the Registry and the events that ensued did steal the spotlight from another trademark issue that has come out at the same time. Right after the (for the lack of a better word) flight of Kingfisher’s Vijay Mallya, the banks have been in a fix trying to recover the loans. One of the ways it has been sought is by auctioning 9 trademarks registered for the airline.

The trademarks were part of the collaterals held by State Bank of India for a loan given to Mallya for Rs.2000 core. These trademarks being valued at over Rs.360 crores and will be on auction on April 30th 2016.

The trademarks mostly in class 39 which deals Transport; packaging and storage of goods; travel arrangement includes the marks ‘Fly Kingfisher’ the ‘Flying Bird Device’ as well as the ‘Kingfisher (Label) mark. The other classes that some marks have been registered for are in 25 (clothing and footwear), 42 (scientific and technical services especially relating to computer software and hardware) and 16 (paper and related articles), in conjunction with 39. With a value of roughly 40 crores each in order to help recover the debt. Hence the people who would be ready to buy the trademarks must be having or be extremely ready to start their own airlines. Which seems a pretty hard to find. Though the classes for software, clothes and paper may have a few takers. The question being who would be ready to spend the money to get the trademarks, then work even more to make them get back their reputation and then start making one of their own. This though did work out in the case of Easter Airlines in USA, where, when the erstwhile Miami airline carrier went bankrupt and the sold it’s intellectual property, it was bought by another airline company.

The value of a trademark is based upon the goodwill the business has earned and the continuous and extensive usage to the trademark, of how a particular trademark is so well etched in the memory of the people that on seeing the name, logo or the device they can immediately and even at time unconsciously relate to the company and the products sold by them. Kingfisher being one of those unmistakably good trademarks.

This might be the first time that the sale of trademarks in India has garnered so much attention, though keeping trademarks as collateral has been used by many a firms, the example of Eastern Airlines above being one. Indian banks do sanction loans against intellectual property for reputed brands where a portion of the intellectual property could be pledged. Intellectual property though intangible, bears the goodwill and the years of labor used to create a reputation and a name, risking it would mean risking what a company has worked to build for ages. As was done by LT Foods limited, which held its intellectual property in the loved basmati rice ‘Daawat’ in order to seek a loan to acquire a company in the USA.

With respect to Kingfisher, it is likely that the reputation and the name of the beer brand would spill over to whoever buys the trademarks that are on auction. Only time will tell, if the Kingfisher will rise from the ashes like a Phoenix, and soar the skies again. This case has though reinstated the significance of Intellectual Property especially trademarks in being a true indicator of a companies worth especially when the value of a trademark is coupled with goodwill, brand reputation and not to mention usage.

This article has been authored by Shwetha, an IP Law practitioner.