Introduction
The Delhi High Court (“DHC”), on 4th May 2026 in Toyota Jidosha Kabushiki Kaisha v. Tech Square Engineering Pvt. Ltd., overturned a Single Judge judgment (2023) and granted the mark “ALPHARD” well-known status while affirming its trans-border reputation. The judgment is noteworthy as it has articulated a test for trans-border reputation and has also observed that in luxury/niche markets, brand visibility and global reputation drive consumer awareness and not mass penetration.
In this blog post, I break down the judgment, explain its stance on luxury/niche market areas, analyse the judgment against Apex Court’s Prius (2017) and question if the observations have taken us subtly back to Pre-Prius principles of universality and engage with policy reasons around it.
Praharsh and Hiranya have covered the Single Judge judgment of 2023 in their post here. Vikram and Aditya have, in their respective posts (here and here), analyzed two recent DHC cases dealing with the issue of trans-border reputation.
Brief Facts
The Appellant, Toyota Jidosha Kabushiki Kaisha (“Toyota”) claims to have adopted the mark ALPHARD as early as 1986 (outside India), with its continuous and extensive use worldwide since 2002 and it contended that the mark had acquired formidable goodwill and reputation in India owing to cross-border exposure and availability of vehicles through imports. The Respondent, Tech Square Engineering Pvt Ltd, secured registration of the same mark in India on a “proposed to be used” basis in 2015. This prompted Toyota to initiate rectification proceedings under Section 57 of the Trade Marks Act, 1999 (“the Act”). The Single Judge dismissed Toyota’s challenge in 2023, holding that Toyota had failed to establish sufficient use and reputation in India before the respondent’s adoption of the mark. Toyota challenged that decision before the Division Bench.
When does a mark wrongly remain on the Register?
The Division Bench of the DHC clarified the contours of rectification application for the ground – “by any entry which wrongly remains on the Register” [Section 57(2)]. In such cases, the Court noted that “it is necessary to refer to Sections 9 and 11 [absolute and relative grounds of refusal of registration, respectively], which prescribe the circumstances under which a mark ought not to have been registered in the first place” (Para 41).
The Court’s reasoning on this point, however, deserves one qualification. Courts should not treat Sections 9 and 11 as exhaustively defining when an “entry wrongly remains on the Register“. While the Division Bench, treated absolute and relative grounds of refusal of registration (Sections 9 and 11) as the relevant factors for determining when an “entry wrongly remains on the Register“, in future courts should not regard those provisions as exhaustively defining the scope of an “entry wrongly remains on the Register” Section 57(2). Those provisions undoubtedly cover the most common invalidity grounds, but the aforementioned rectification ground under Section 57(2) is worded more broadly. Where a registration is shown to be inconsistent with the Act or has otherwise become legally unsustainable, courts should retain the flexibility to order rectification even if the case does not fit squarely within Sections 9 or 11.
Grounds of prior use and dishonest adoption, as claimed by Toyota in this case, require the applicant’s trademark to be an “earlier trade mark” per Sections 11(1) and 11(2). A mark qualifies as an “earlier trade mark” if it is registered, its registration application is pending before the Registrar, or if it is recognised as a well-known trade mark on the date the later mark is applied for [Explanation below Section 11(4) of the Act]. In the given case, the Appellant had neither registered the mark nor had an application pending before the Registrar, thus, the Court had to determine whether the mark was a well-known trade mark owing to its claimed trans-border reputation.
Transborder-Reputation v Goodwill – Back to Pre-Prius Universality?
The Court rightly clarifies that the Supreme Court judgment in Prius (2017) must not be read as rejecting the concept of cross-border reputation, rather, it should be understood as holding that Toyota failed on the facts because the Prius brand “lacked a real commercial presence, sufficient publicity, and inadequate consumer recognition in India” (Para 60).
The Prius (2017) case had firmly established the principle of territoriality, which requires the Courts “to determine if there has been a spill over of the reputation and goodwill of the mark used by the claimant who has brought the passing off action” (find Prof. Basheer’s blog covering the judgment here). The Apex Court had observed that “there must be adequate evidence to show that the plaintiff had acquired a substantial goodwill … in the Indian market also” per the territoriality principle.
Thus, the observations made in Prius highlight that the claimant must have acquired substantial goodwill in the Indian market and not just reputation. But what’s the difference between goodwill and reputation? We may refer to DHC’s decision in Intex Technologies (2017) for this distinction, where it relied on Kerly’s Law of Trade Marks and Trade Names, 15th Edition:
“As ‘the attractive force which brings in custom’, goodwill is a form of legal property, representing the connection between business and customer. Reputation is a matter of fact: to what extent is the indicium in question known in the public mind? The existence of reputation does not require there to be a business in this country, whereas there must be some business or market in this country for goodwill to exist.” [Paras 16-17 of Intex Technologies (2017)]
Thus, goodwill requires some business or market in the country, whereas reputation is just a matter of public awareness.
But in the present case, the Division Bench observes that “the Appellant must show that the mark has made a substantial imprint on the Indian market, even if no direct sales were made. The necessary territorial goodwill can be shown through spill-over reputation, such as extensive advertisements, promotions, and general public awareness. The core test is whether a significant and noteworthy segment of the relevant Indian consumer base recognizes the mark and associates it with the claimant” (Para 61). The aforementioned metrics propounded by the Division Bench diverge from the commercial presence requirement in the country and are more in line with the concept of reputation (as opposed to goodwill) and the principle of universality (as opposed to territoriality).
So does this case, while acknowledging Prius, diverge from it? Well, partly yes (as shown above) and partly no. The reason I qualify my answer is due to the ambiguities embodied in Prius itself where the Supreme Court had observed that one need not necessarily show a real market, but such territorial presence can be shown in subtle forms (Para 29 of Prius) [Anindita Mitra & Eashan Ghosh]. Further, in the given case, Toyota did show spill-over reputation and goodwill in India owing to unsolicited imports [these facts may be taken into account and the aforementioned Para 61 may not be read independently – “Observations of Courts are neither to be read as Euclid’s theorems nor as provisions of the statute and that too taken out of their context” – BPCL v. N.R. Vairamani ].
Niche treatment for niche market areas!
The Court observed that in markets for niche/luxury goods – consumer awareness is not driven by mass penetration but by brand visibility and global reputation (Para 63). Since such products cater to a specialised segment of consumers rather than the general public, their “indicia of reputation must be evaluated accordingly, considering the targeted consumer base rather than broad public penetration” (Para 73). Applying this approach, the Court found that ALPHARD had acquired sufficient spill-over reputation in India through unsolicited imports and recognition among consumers and market participants in the luxury automobile segment, and accordingly declared it a well-known trademark! (Paras 80 and 101)
Interestingly, while analysing the Single Judge’s decision three years ago, Praharsh and Hiranya had questioned whether the outcome might have been different had Toyota argued that ALPHARD catered to “a higher income group that is able to afford goods and is also aware of Alphard“, thereby constituting the relevant class of consumers. The Division Bench’s reasoning effectively vindicates that argument. This approach is also more consistent with the statutory framework. As part of the statutory scheme for determining whether a trade mark is a well-known trade mark, Sections 11(6) and 11(7) of the Act require courts to assess whether the mark is known to the “relevant section of the public“, rather than to the public at large. Evaluating reputation with reference to the specialised consumer base of luxury goods therefore reflects both commercial reality and the text of the statute.
Conclusion
The Division Bench has undoubtedly brought greater clarity to the trans-border reputation jurisprudence by establishing a test and has also rightly recognised that reputation in luxury and niche markets cannot be assessed by the same metrics as mass-market goods. At the same time, its articulation of the test appears to blur the distinction between goodwill and reputation that lay at the heart of Prius. Whether this judgment merely applies Prius to the facts of the case or subtly signals a return towards pre-Prius notions of universality is a question that only future courts can answer. For now, ALPHARD adds another interesting chapter to India’s evolving jurisprudence on trans-border reputation.
I would like to thank Vikram Raj Nanda for pointing me towards this insightful piece by Anindita Mitra & Eashan Ghosh.
I would like to thank Praharsh Gour for reviewing this post.
