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When a trademark lapses due to non-renewal, its commercial value does not vanish — India should adopt a registry-supervised auction mechanism to reallocate lapsed marks, prevent waste of brand equity, and democratise access for SMEs and new entrants.
Trademark law is premised on use, distinctiveness, and consumer association. Yet, many marks are removed from the Register not because they have become irrelevant, but simply because renewal deadlines were missed. The commercial reputation behind those marks — carefully cultivated through years of trade and consumer trust — vanishes along with the registration. Under the Trade Marks Act, 1999, a registered trademark is an intangible property that may be owned, sold, licensed, or transferred. Section 38 permits assignment with or without goodwill, making auction-style transfers structurally possible. India’s approach is similar to the United Kingdom, and stands in contrast to the United States, where the Lanham Act prohibits assignment without goodwill as an invalid “assignment in gross”.
In India, a trademark is valid for 10 years and renewable indefinitely. Under Sections 25(3) and 25(4), a mark is removed if not renewed within the six-month grace period and can be restored within one year of expiry. After that, the mark enters a legal limbo with no clear owner but residual recognition. Section 26 treats it as still “on the register” for 12 months solely to block competing applications. Beyond this, the law is silent on what happens to the mark’s commercial value. There is no system for a new party to directly acquire an abandoned mark through the Registry, leaving only private channels that are costly, unverified, and inaccessible to smaller players.
After the Section 25(4) restoration period expires with no action from the original owner, the mark should be placed into a publicly accessible pool of lapsed marks maintained by the Controller General of Patents, Designs and Trade Marks. Interested parties could identify abandoned marks through an online portal. The Registry would notify the original owner for a final limited chance to reclaim the mark. If unresponsive, the mark would be offered in a transparent online auction open only to legally eligible participants who provide a brief statement of intended use. The buyer acquires only a new registration from the date of transfer — no priority or goodwill from the original owner passes. Any reputation must be rebuilt by the new owner. Safeguards include exclusion of marks in sensitive sectors and well-known marks, restrictions on marks in active disputes or insolvency proceedings, and per-entity acquisition limits to protect SMEs.
The reform could be achieved by amending Section 25 of the Trade Marks Act, 1999 to add a proviso enabling the Registrar to hold lapsed marks in a designated pool for public auction, with the procedure governed by amendments to the Trade Marks Rules, 2017. This aligns with the National IPR Policy, 2016, which views intellectual property as a tool for economic growth, and would activate dormant trademark registrations while supporting local brands, generating registry revenue, and democratising access for new businesses.
