Nine Kingfisher trademarks, valued at over ₹360 crore, were put up for auction to recover part of a ₹2,000-crore loan. The auction found no takers — and that failure says more about the nature of trademark value than the valuation ever did.
The auction
With Kingfisher Airlines grounded and its promoter having left the country, lenders were left trying to recover their money. One route: auction nine trademarks registered for the airline.
The marks formed part of the collateral held by State Bank of India against a loan of roughly ₹2,000 crore. They were valued at over ₹360 crore and listed for auction on 30 April 2016.
Most sat in Class 39 (transport; packaging and storage of goods; travel arrangement) and included “Fly Kingfisher”, the Flying Bird Device, and the Kingfisher (label) mark. Others covered Class 25 (clothing and footwear), Class 42 (scientific and technical services, particularly computer software and hardware) and Class 16 (paper and related articles), in conjunction with Class 39.
Why nobody bought
At roughly ₹40 crore a mark, the pool of realistic buyers was tiny: someone already running an airline, or ready to start one. A buyer would have to pay for the marks, then rebuild the reputation attached to them, then operate an airline of their own. The clothing, software and paper classes might have found isolated takers, but not at those numbers.
The auction attracted no bids — and repeated attempts to sell the airline’s assets fared no better. The valuation assumed the brand carried its former pull; the market disagreed.
There was precedent for the idea working. When Eastern Air Lines in the US went bankrupt and sold its intellectual property, another airline company bought the marks and revived them. What differed there was the buyer: an operator already in the business, able to put the mark straight back into use.
What a trademark is actually worth
A trademark’s value rests on the goodwill the business has earned and on continuous, extensive use — the point at which a name, logo or device is so etched in public memory that consumers immediately, sometimes unconsciously, connect it to the company and its products. Kingfisher was unmistakably one of those marks.
That is exactly why the marks were hard to sell. Goodwill does not transfer as cleanly as a registration certificate does. A mark detached from the operating business it was built on carries reputation, but not the machinery that made the reputation mean anything — and, in Kingfisher’s case, carried the association with a very public collapse. (Note too that the Kingfisher beer brand sits with a different owner and was never part of this auction; the residual public warmth for the name largely belonged there, not to the airline marks on the block.)
IP as collateral
This was probably the first time a sale of trademarks in India drew this much public attention, though pledging IP as security was already established practice. Indian banks do sanction loans against intellectual property for reputed brands, with a portion of the IP pledged. LT Foods Limited, for instance, pledged its IP in the well-loved basmati brand Daawat to raise finance for a US acquisition.
The caution is obvious once stated: IP is intangible, but it carries the goodwill and years of labour that built a reputation. Pledging it risks what a company has spent decades building — and, as Kingfisher showed, the realisable value on enforcement can be far below the book valuation.
The takeaways
- Trademarks can be pledged as loan collateral — and Indian banks do lend against them.
- Valuation and realisable value differ sharply — the Kingfisher marks drew no bidders at ₹360+ crore.
- Goodwill doesn’t travel with the paperwork — a mark severed from its business loses much of its pull.
- The realistic buyer pool is narrow — usually an operator already in the same trade.
Frequently asked questions
Can trademarks be used as security for a loan in India? Yes — banks do sanction loans against intellectual property for reputed brands, with the IP (or a portion of it) pledged as collateral.
Why did the Kingfisher trademark auction fail? The realistic buyer pool was limited to airline operators, and a buyer would have had to pay a large sum and then rebuild the goodwill attached to a collapsed business.
Does buying a trademark transfer its goodwill? Legally the registration and associated goodwill can be assigned, but commercially the reputation depends on continued use and the business behind the mark.
How is a trademark valued? Chiefly on the goodwill earned by the business and the extent and continuity of use — how strongly consumers associate the mark with the company’s products.
Useful official resources
- The Trade Marks Act, 1999
- Trade Marks Registry — IP India