Trademark

To belong or not to belong? Toyota suffers setback in trademark battle before the Delhi High Court


In a recent decision of the Delhi High Court, available here, the Japanese automobile magnet Toyota suffered a setback, when the petition that it had filed seeking exclusive rights over the trademark “PRIUS” for its hybrid cars was dismissed by the court. The matter, titled Toyota Jidosha Kabushiki Kaisha v. Deepak Mangal & Others, comprised of I.A.Nos.16776/2009, 110/2010, 1156/2010 & Crl.M.A.No.1032/2010 in CS(OS) No.2490/2009 and the judgement was delivered on March 19, 2010 by Indermeet Kaur, J.

The petitioner had sought to prevent the defendants from using the trademark/trading style TOYOTA, the toyota device, INNOVA and PRIUS regarding automobile parts and accessories or any other related goods or to perform a passing-off action with respect to the defendant’s goods in the name of the petitioner.


This suit was actually based on a two-fold cause of action. The first was regarding the infringement of the 3 registered trademarks of the petitioner by the defendants, viz. TOYOTA, the toyota device and INNOVA. The second was with respect of the defendants seeking to pass off the trademark PRIUS as their own. The petitioner had claimed to be the prior user of that trademark, although it had not been registered before in India in the petitioner’s name.


According to the petitioner, in 1994, it had designed a concept vehicle with a hybrid engine, named it “PRIUS” after the Latin word “prior” or “before”. The first model was sold in December, 1997 in Japan and the vehicle was officially launched in 2001. Petitioner has also been the registered proprietor of the trademark PRIUS in as many as 28 countries from 1990 onwards. In order to back its position, the petitioner put on record the sales figures of the car in foreign counties as well as extensive advertisements of the vehicle both in national and international publications. Newspaper reports and other online media coverage of the petitioner’s promotion of the PRIUS brand had also been cited along with. The defendants, on the other hand, were alleged to have been using the same mark as an essential and leading portion of their trading name and the same appears on the defendants’ products. Nor have the defendants sought any authorization from the petitioner for such use and hence such action on the defendants’ part allegedly amounted to passing off and dilution of the plaintiff’s trademark, thereby adversely affecting the plaintiff’s goodwill.


Given the wide media coverage that the vehicle and the petitioner’s actions to promote the same along with the new hybrid system received even in prominent Indian newspapers and automotive journals, the petitioner contended that it was not possible to believe that the defendants were unaware of the prior usage of the mark PRIUS and the petitioner company’s association with the same and that their subsequent efforts to use the mark had not been aimed to pass off the petitioner company’s huge goodwill and brand value as their own.

In this context, the petitioner relied upon the decision of the Supreme Court in N.R. Dongre v. Whirlpool Corporation [(1996) 5 SCC 714]. The relevant part of the judgement that had been cited is as follows:

The concept and principle on which passing off action is grounded is that a man is not to sell his own goods under the pretence that they are the goods of another man. A trader needs protection of his right of prior user of a trade mark as the benefit of the name and reputation earned by him cannot be taken advantage of by another trader by copying the mark and getting it registered before he could get the same registered in his favour. We see no reason why a registered owner of a trade mark should be allowed to deceive purchasers into the belief that they are getting the goods of another while they would be buying the goods of the former which they never intended to do. In an action for passing off if should not matter whether misrepresentation or deception has proceeded from a registered or an unregistered user of a trademark. He cannot represent his own goods as the goods of somebody else.

According to the petitioner, as per this judgement, although the defendants might have registered the trademark PRIUS under their names, but the same did not constitute a defence for their action seeking to pass-off the petitioner’s goods as their own. To substantiate this allegation, the decision in Jolen Inc. v. Doctor and Company [(2002)2 C.T.M.R. 6] was also cited.

The petitioner also referred to Pfizer Ireland Pharmaceuticals v. Intas Pharmaceuticals and Anr. [2004(28) PTC 456(Del)] to support the submission that the worldwide reputation of the trademark PRIUS has been established by his sale turnover. Regarding the defendants’ plea of the plaintiff not having any presence/business in India when the defendant had adopted the mark, it was contended that the plaintiff was naturally affected when it sought to establish such business in India and found the defendant to be trespassing, as was the case in Ford Motor Company of Canada Limited & Anr. v. Ford Services Centre [MANU/DE/1774/2008], where plaintiff was found entitled to the interim relief.

The defendants pleaded that the petitioner has delayed for long before approaching the court, in response to which, the latter cited the case of Daimler Benz Aktiegesellschaft and Anr. v Hybo Hindustan [AIR 1994 Delhi 239] to contend that the delay in approaching the Court could not justify the use of the trademark which was a worldwide famous name. The petitioner had further drawn the court’s attention to the packaging of the defendants’ products, showing use of the trademark TOYOTA, the toyota device, INNOVA and PRIUS along with the invoices, brochures and price list. It had further been submitted that the extensive use of the said marks on these documents of the defendant prima facie evidence his malafide intent; i.e. of the infringement of the petitioner’s trademarks and passing off his goods to the innocent purchaser as that of his own. The defendants pleaded that such use for the purpose of character identification of goods, which was categorically denied by the petitioner.

Defendants in this case had put up a defence of delay, waiver and acquiescence on the part of the petitioner. According to them, the petitioner had neither applied for registration of the trademark PRIUS itself nor objected to the defendants’ registration of the same in 2002. By allowing use of said mark by defendants for such a long time from 2002 to 2009, the petitioner was alleged to have given up all claims, if any, on that mark. Defendants further submitted that certain advertisements, as produced by the defendants in evidence clearly exhibit that the defendant is the supplier of garnish covers and auto accessories for various vehicles including that of the Toyota group. The usage of marks ‘toyota device’ had only thus been for the purpose of the identification of the item and its suitability to the wide range of vehicles mentioned thereunder and not with the intent to deceive the purchaser or to confuse him into believing that defendants had been selling auto accessories of ‘TOYOTA’. In fact, petitioner itself had relied on the same published advertisements.

Nor had the petitioner provided any explanation regarding the delay that it indulged into before bringing the matter to court, which indicated acquiescence of defendants’ claim by the petitioner, if not a waiver of rights. In this context, reliance had been placed on the cases Amritdhara Pharmacy v. Satyadeo Gutpa [AIR 1963 SC 449] and Khoday Distilleries Limited(Now known as Khoday India Limited) v. The Scotch Whisky Association and Ors. [AIR 2008 SC 2737] were delay in filing application alleging infringement had been held as fatal to the accusation.


“PRIUS” being contained in the English dictionaries, it was argued that petitioner could not claim a monopoly over the word, which was not an invented one and Sections 30(1)(b), (2)(d) and Section 35 of the Trademark Act were relied upon to argue that ‘Toyota’, ‘toyota device’ and ‘INNOVA’ had been used by the defendants only to demonstrate the compatibility of the auto accessories in the use of these vehicles, along with several others. For this, defendants had relied upon Hawkins Cooker Ltd v. M/s Murugan Enterprises [2008(36) PTC 290(Del)].

Petitioner, in return argued that mere existence of the aforesaid advertisements on the defendants’ part did not necessarily imply that petitioner had prior knowledge of the infringement. A distinction was sought to be drawn between constructive knowledge and actual knowledge in this context and the cases of Automatic Electric Limited v. R.K.Dhawan & Anr. [1999 PTC (19) 81] and M/s Hidesign v. M/s Hidesign Creations [AIR 1991 Delhi 243] were cited in support. It was further contended tha the cumulative sales figure of the defendants during this 7 year-delay consisted of a miniscule figure only and hence could not be regarded as proceeds from a well-established business. To establish the legality of the petitioner having proprietary word PRIUS and to quash the defendants objections regarding the same, the matters of Ciba Ltd. Basle Switzerland v. M.Ramalingam and S.Subramaniam Trading in the name of Sought Indian Manufacturing Co., Madura and Another [AIR 1958 Bombay 56 (V 25 C 21 )], Altiebolaget Volvo v. Volvo Steels Limited [1998 PTC (18) (DB)], Satyam Infoway Ltd. v. Siffynet Solutions (P) Ltd. [(2004) 6 SCC 145] were relied upon. To drive home defendants’ dishonest usage of the marks from the beginning, the petitioner cited the cases of L.D.Malhotra Industries v. Ropi Industries [ILR 1976 Delhi 278] and Beiersdorf A.G. v. Ajay Sukhwani and Another [2009 (39) PTC 38 (Del.)].

The petitioner also contended that high safety measures adopted by the petitioner compared to the defendant also needed to be borne in mind and the purchaser could not be exposed willingly to a risk given the nature of the goods involved, viz. automobile parts.

The court held that the journals publicizing petitioner’s usage of PRIUS were not easily available to the common Indian public. Even the Indian magazine publications relied upon by the petitioner had been irregular at best. It had only been in 2009 that the Auto Indian Magazines had published detailed information on the Toyota vehicle. The court referred to the case of Gillette Company vs. A.K. Stationery [2001 PTC 573 (Del)]. In that matter, judiciary had recognized the principle of a trans-border reputation and the spill over of its international reputation from foreign lands to the Indian boundaries. It had been held that its application would depend on case-to-case basis. In the present case, the court believed that there was not sufficient material on record to hold that an Indian purchaser of chrome plated auto accessories had become aware Toyota’s association with the PRIUS mark. The case of Sakalain Meghjee v. B.M.House (India) Ltd. [2002 (24) PTC 207 (Del)] was also referred to in this relation.

On the other hand, the registration of the mark by the defendants in 2001 and the subsequent sales figures indicated that the exclusive use of the said mark by them as per Section 28(2) of the Trademarks Act and continuing business regarding the same. The court refused to accept the petitioner’s argument of it having only a constructive knowledge of the defendants’ usage of the mark. The defendants’ reliance on the Amritdhara Case and the Khode distilleries case was also approved of.


The court opined that acquiescence was one facet of delay and if the petitioner had stood by knowingly and let the defendants build up an important trade until it had become necessary to crush it, then the petitioner would be stopped by his acquiescence. Thus if the acquiescence in the infringement amounted to consent, it would be a complete defence and the acquiescence must be such as to lead to the inference of a license sufficient to create a new right in the defendant. The court in this context also referred to cases such as Ramdev Food Products(P) Ltd. v. Arvindbhai Rambhai Patel and Ors.[2006 (33) PTC 281] and other legal authorities like Halsbury’s Laws of England, Fourth Edition, Vol. 16, paragraph 1505 to emphasize this point.


The court then went on to say that petitioner’s delay in filing the case by 7 years without having a reasonable explanation allowed the defendant to establish a substantial business and at that point, such delay might be prejudicial to the petitioner being granted any relief. Reference was made to cases such as Allied Blenders and Distillers P. Ltd. v. Paul P.John and Ors. [2008 (38) PTC 568 (Del)] and Procter & Gamble Company v. Satish Patel and Ors. [1997 (1) ARBLR 158 (Del)] and also Standard Electricals Limited v. Rocket Electricals and Anr. [2004 (72) DRJ 794]. The court also dubbed the petitioner’s submission of it having learnt about the defendant only in 2009 on a stray web search as patently false and chastised the petitioner for not having disclosed to the court the date of registration of the mark by the defendants as far back as March, 2002. Had it done so, then that would have been taken into consideration before the court had granted interim relief to the petitioner. Mention was made of Old Navy (ITM) Inc. and Ors., GAP (ITM) Inc. and Ors. and Banana Republic (Itm) Inc. and Ors. [2007(99) DRJ 571], wherein it was held that non-disclosure of material facts would work to the prejudice of such a non-disclosing party disentitling him to a relief in equity.

The status of PRIUS as not being an invented word was also established and the defendants were held to be honest user of the same. The court also took note of the dissimilarity between the trade dress of the petitioner and the defendants, including the packaging, shape of material, all visual impressions and their getup including its colour scheme, description of the words i.e. their font, size and alphabetical array etc. as also the variation in price. Moreover, according to the court, the purchaser of those auto accessories being usually one from a high income group, he was likely to be an educated person aware of the identity of the seller who was unlikely to mistake the defendant for the petitioner. The defendant on the use of the registered marks Toyota, the toyota device and the INNOVA was held to be protected under the saving clause of Section 30 of the Trademarks Act, which protects a honest user of a registered trade mark for the purpose of identification of the goods. Mention was also made of the European Court decision in Gillette Company vs. L.A.Laboratory [2005(37) FSR 808] in this context. In that case, the conditions of an honest use within the meaning of Article 1(1)(c) of the Directive 89/104 was held to be in substance the expression of a duty to act fairly in relation to the legitimate interests of the trade mark owner. The use is dishonest only if: “It is done in such a manner as to give the impression that there is a commercial connection between the third party and the trade mark owner; ii. It affects the value of the trade mark by taking unfair advantage of its distinctive character or repute; iii. It entails the discrediting or denigration of that mark.”

The petitioner had failed to establish such dishonest use by the defendant, who in turn had proven that his use of the mark PRIUS was in accordance with the honest practices in industrial and commercial matters. Since he had not been taking any unfair advantage and his use was not detrimental to the distinctive character or the repute of such a trademark, therefore it did not amount to an infringement/passing off. As per Section 29 of the Trademark Act, the onus to prove that the mark of the petitioner had been infringed lied upon the plaintiff and so did the responsibility of proving that the alleged infringement fell beyond the purview of the exceptions laid down in Section 30. The court also accepted defendant’s argument under Section 30(2)(d) of the use of the other marks like TOYOTA, toyota device and INNOVA as reasonably necessary to indicate that the goods are adaptable and suited to the vehicles mentioned therein

The balance of convenience also lied in favour of the defendant, since if after business growth of more than seven years the defendant is prevented from using his trade name, he would suffer huge business loss and his legitimate financial expectations would be harmed irreparably. On the other hand, given that petitioner had not even launched the vehicle PRIUS on the Indian roads, no similar injury would be suffered by him if defendant was allowed to continue the usage.

Thus, given the aforesaid reasoning, the court dismissed the petitioner’s allegations of trademark infringement against the defendants.

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Shouvik Kumar Guha

Shouvik Kumar Guha

Shouvik is at present employed as a Research Associate and a Teaching Assistant at The W.B. National University of Juridical Sciences, Kolkata. He has obtained his B.A. LL.B. (Hons.) degree from NUJS itself and is also currently pursuing his LL.M. degree from the same university. From his very year at law school, he had been attracted towards the discipline of Intellectual Property and that interest has been kindled further in course of time. The interface between IP and other disciplines such as Economics, Anti-trust Law, Human Rights, World Trade Law and the technological developments relating thereto, has especially caught his attention since then. He’s authored several papers on issues relating to IP and other legal disciplines for journals, books, magazines and conferences in national as well as international levels. He is also currently co-heading an organization called Lexbiosis, which is an endeavor meant to facilitate the collaboration between the legal industry and academia.

5 comments.

  1. AvatarShouvik Kumar Guha

    @anon: I agree. But it was a pretty big judgment where all the parties involved insisted on having their own say with decisions to back. I failed to do justice to that even at 2800.

    Reply
  2. AvatarRadhika

    i read the judgement it was excellent. the way both the sides have put forth their arguements substantiated by case law is awesome. This case just highlights once again that the simple reason of the plaintiffs being well known the world over isn’t enough the trademark sought to be registered must be well known as well in the indian market. tough days ahead for well known international entities.

    Reply
  3. AvatarD.Bheemeswar

    Did the Registrar of Trade Marks have the jurisdiction to revoke the ‘MANJ…

    Yes if the examiner is satisfied by the evidence put before him it can be revoked or if not can be dropped. it all depends on the solid evidence in the form of letter heads used from dates back and the correspondence they had with others. It is the same case with designs and also Industrial designs, but only when challenged. Just like in the case of patented processes or products or both together, if one company is making profits, the other company is they have similar patents the issue can be raised, it need not be necessary at the time prosecution or granting time period. It is the same case even with GI patenting if another Thirupathi(it can have any name, there is chinna Thirupathi in Andhra Pradhesh which is much older than the present one, this present one became famous because of Sree Krishnadevaraya’s efforts, Vijayanagara empire) comes up with and shows that they are originators, the present Thirupati loses it’s status.

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