The Delhi High Court has cancelled the registration of the trademark "ZORA", ruling in favour of Spanish famous clothing ZARA, after finding that the two marks were deceptively similar despite being used for different categories of goods.

Justice Jyoti Singh allowed an appeal filed by Industria de Diseño Textil, S.A. (Inditex), the owner of the ZARA brand, challenging the Registrar of Trade Marks' decision to reject its opposition to the registration of the mark ZORA in favour of a Sadar Bazar-based fabric trader.

Setting aside the Registrar's order dated February 8, 2024, the Court directed the Trade Marks Registry to cancel the registration of ZORA under Registration No. 4310686 in Class 24 and remove the mark from the Register of Trade Marks within two months.

The dispute arose after the Registrar concluded that ZARA and ZORA were not similar enough to cause confusion. Inditex argued that this conclusion was erroneous because the Registrar compared only parts of the marks instead of assessing them as a whole.

The company further contended that ZARA, a globally recognised brand with trademark registrations in India since 1993, enjoys protection under Section 11(2) of the Trade Marks Act, 1999, which extends safeguards to well-known trademarks even when they are used in relation to dissimilar goods.

The fabric trader opposed the appeal, arguing that ZARA had never been formally declared a well-known trademark by the Registrar. It also maintained that the two marks catered to different markets and that ZORA had been adopted in good faith, inspired by the English word "dawn."

Rejecting these submissions, the High Court held that ZARA and ZORA are phonetically and visually similar. The Court observed that both are four-letter words sharing the same consonant pattern and ending sound, with only a single vowel distinguishing them.

According to the Court, such a minor difference is unlikely to be noticed by an average consumer with imperfect recollection, making confusion between the two marks reasonably possible.

On the issue of well-known trademarks, the Court clarified that Section 11(2) does not require a prior formal declaration by a court or the Registrar. Instead, the relevant consideration is whether the trademark enjoys substantial recognition and goodwill among the relevant section of the public.

Taking note of ZARA's extensive retail presence, significant sales, advertising expenditure and its earlier recognition by the High Court as a well-known mark, the Court held that the brand was entitled to oppose the registration of ZORA, even if the competing goods were not identical.

The Court also dismissed the Registrar's finding that the absence of evidence showing actual consumer confusion weakened ZARA's case. It observed that proof of actual confusion is not a prerequisite for refusing registration of a deceptively similar mark.

Additionally, the Court noted that the fabric trader's business had witnessed a sharp rise in sales after adopting the ZORA mark in 2016, a factor that also weighed in its assessment.

Accordingly, the High Court quashed the Registrar's order and directed the Trade Marks Registry to remove the ZORA trademark from the Register of Trade Marks within two months.