Toyota Jidosha Kabushiki v  Ms Prius Auto Industries Limited

  Brief overview of the judgment

1. This judgment is given against the landmark ruling of NR Dongre vs Whirlpool Corporation [1]wherein the Supreme Court held that protection to a trademark can be given on grounds of trans-border reputation even when only the knowledge of the product is disseminated through media and advertisements without any actual presence or use of the product in the Indian market.
2. Only in the year ,2017 this judgment was overruled by supreme court in the case of Toyota Jidosha Kbushiki vs M/S Prius Auto Industries Limited[2] while deciding the question on universality principle to determine trans-border reputation.
3. In the case, Supreme Court, relying on the principle of Territoriality, held that, showing trans – border reputation abroad is not sufficient enough now, in order to enforce a famous, unregistered mark across international border, goodwill must be shown within the territory of India.

Parties to the case

1. Toyota Jidosha Kabushiki Plaintiff
2. M/s Prius Auto Industries Limited Defendant

Jurisdiction

1. Supreme Court of India

Case No

1. Civil Appeal Nos. 5375-5377 of 2017

Facts of Toyota Jidosha Kabushiki v  Ms Prius Auto Industries Limited

1. Toyota Jidosha Kabushiki Kaisha, the plaintiff is a global automobile manufacturing company headquartered in Japan.
2. In 1990’s, it launched a hybrid model car with the name ‘Prius’ which got trademark registrations in various countries. Furthermore, they started selling in United States and Europe in the year 2001 and 2002.
3. The defendants, M/s Prius Auto Industries Ltd, used to manufacture spare parts and accessories for cars in India since 2001 and got the trademark ‘PRIUS’ registered in 2002.
4. Subsequently, in 2009, Toyota also started promoting its PRIUS vehicle in India and launched the PRIUS there in 2010. Furthermore, when Plaintiff discovered the fact, that Defendant has been using the mark “TOYOTA and PRIUS” for auto parts and accessories they not only approached the Trade Mark Registry for cancellation of the registered marks but also bought a suit of Infringement against the Defendants, on the ground of claiming to pass off of its famous mark, which lead to an unfair advantage of their reputation and goodwill in the market.
5. The Trial Court, following the decade-old practice i.e., “Global Reputation and Prior User” held that, the defendant is liable for passing off of the Trademarks of the Plaintiff, thereby restraining them from using the said trademarks and imposing punitive damages of rupees ten lacks.
6. Aggrieved by the decision of the Trial Court, Defendant approached the Delhi High Court, wherein the single judge bench ruled in favor of Toyota. The Court held that, even though Prius Auto was the prior user and registered proprietor of the mark PRIUS in India still Toyota holds superior rights in the PRIUS trademark.
7. According to the Court, Toyota’s unregistered PRIUS mark is a well-known mark worldwide and Toyota was the prior user of PRIUS in other countries and had a Trans-Border reputation in India through advertisements in International Magazines and on international magazines and on the internet. Thus, the court held that the Defendant is liable for passing off of the Trademarks of Plaintiff, thereby further also restraining them from using the said trademarks and imposing punitive damages of rupees ten lacks.
8. Later, “PRIUS AUTO INDUSTRIES” filed an appeal before the Division Bench of Delhi High Court. The Division Bench held that the decision of Trial Court was acceptable as far as injunctions against the mark ‘Toyota’, ‘Toyota Innova’ and ‘Toyota Device’ is concerned. Injunction against the use of Prius by the Defendant was not justified, as the plaintiff’s evidence was insufficient to establish the trans-border reputation of PRIUS in India at the time the Defendants adopted the mark.
9. Aggrieved by the decision of the division bench of Hon’ble Delhi High Court, the Plaintiff approached the Hon’ble Supreme Court which dealt with the question that ‘whether the defendant is liable of passing off due to the use of ‘PRIUS’.’

Issues in Toyota Jidosha Kabushiki v.  M/S Prius Auto Industries Limited

1. Whether, using of the mark, PRIUS, by the defendants, to market the automobile spare parts manufactured by them is infringement of reputation of the plaintiff in the market?
2. Whether defendants are guilty of passing off their products as those of the Plaintiff?

Arguments of the Plaintiff

1. The main contentions of the Plaintiffwere various advertisements and news reports about the trademark in India and across the globe have made ‘Prius’ a well-known trademark. Thus, these promotional tools are sufficient to establish reputation and goodwill within a particular geographical area. Also, since 1997, Prius’ was widely publicized and advertised in leading newspapers and in consonance with the judgment of NR Dongre vs Whirlpool Corporation[3].
2. Thus, the mark PRIUSwas a well-known mark under Section 2 (1) (zg) r/w Section 11(6) & 11(9) of the Act as the mark PRIUS had acquired a great deal of goodwill in several other jurisdictions in the world much prior to Prius Auto’s use and registration in India.

Arguments of the Respondent

1. The counsel for the respondent highlighted the principle of territorial doctrine over universality principle. Furthermore, relying on the judgment of Starbucks v. British Sky Broadcasting wherein the court held that “No trader can complain of passing off as against him in any territory… in which he has no customers, nobody who is in trade relation with him.”
2. The counsel for the defendant in consonance with the above judgment contended that to establish the goodwill and reputation in a particular jurisdiction, one has to show adequate evidence that he has acquired a substantial goodwill in India for its mark. Also, prior use of the trade mark in one jurisdiction would not ipso facto entitle its owner or user to claim exclusive rights to the said trade mark in other jurisdiction which was also observed by division bench of High Court earlier.

Judgment of Supreme Court in Toyota Jidosha Kabushiki v  Ms Prius Auto Industries Limited

The Supreme Court upheld the decision of divisional bench and gave acceptance to Prius Auto’s arguments on ‘Territoriality Principle’ stated that there needs to be substantial evidence to show that a mark has acquired substantial trans-border goodwill in India even if it already has acquired a huge good will in other jurisdictions. Also, the importance of having customers within a particular jurisdiction from a brand-specific perspective was also seen by the Apex Court as a key factor for establishing goodwill within that jurisdiction.

Furthermore, The Supreme Court also insisted on the Trinity Test as laid down by Reckitt & Colman Products Ltd. v Borden Inc.[4]

• The goods or services have acquired goodwill or reputation in the marketplace that distinguishes such goods or services from competitors;
• The defendant misrepresents his goods or services, either intentionally or unintentionally, so that the public may have the impression that the offered goods or services are those of the claimant; and
• The claimant may suffer damages because of the misrepresentation.

Analysis of the Judgment: Toyota Jidosha Kabushiki v  Ms Prius Auto Industries Limited

1. Trademarks that have created a reputation in India in relation to any promotional instruments may be protected under trademark law, but substantial evidence is required to show that the claimant has done so. Ads and articles in print media alone would not be enough to establish a trans-border reputation if they did not have an impact on the Indian population at large.
2. It was also concluded that in order to successfully continue action for passing off, there must be a spill over of worldwide reputation and goodwill into Indian markets.
3. The claimant does not bear the burden of proving actual confusion once goodwill and reputation have been established, according to the court. The court stated that the risk of confusion can be easily proved by referring to the mark’s specifics and the circumstances surrounding the sale and marketing of products.

End Notes

[1] NR Dongre vs Whirlpool Corporation (1996) 5 SCC 714

[2] Toyota Jidosha Kbushiki vs M/S Prius Auto Industries Limited, 2018 (73) PTC 1

[3] NR Dongre vs Whirlpool Corporation, (1996) 5 SCC 714.

[4] Reckitt & Colman Products Ltd. v Borden Inc,  [1990] 1 All E.R. 873

The article has been contributed by Bulbul Patni.