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Toyota Jidosha Kabushiki Kaisha Vs. Prius Auto Industries Ltd. and Ors. - (Supreme Court) (14 Dec 2017)

To sustain action for trademark infringement, a global brand must prove its goodwill and reputation


Intellectual Property Rights

The Appellant ('the Plaintiff) is an automobile manufacturer incorporated under the laws prevailing in Japan. The first Respondent is a partnership firm engaged in the manufacture of automobile spare parts of which the second and third Respondents are partners.

Civil Suit was instituted by the Plaintiff in the Delhi High Court seeking a decree of permanent injunction for infringement of trade mark, passing off and for damages against the Respondents ('the Defendants') in order to protect the Plaintiff's trade marks 'TOYOTA', 'TOYOTA INNOVA', 'TOYOTA DEVICE' and the mark 'Prius' of which the Plaintiff claimed to be a prior user.

In the plaint filed, it was averred by the Plaintiff that it is a renowned carmaker having its presence in many countries across the world. The Plaintiff claimed an enviable goodwill and reputation as one of the foremost automobile manufacturers in the world. According to the Plaintiff, it had acquired registration in India in different classes for its trade marks 'TOYOTA', 'TOYOTA INNOVA' and 'TOYOTA DEVICE' during the years 1989-2003. It was specifically averred by the Plaintiff that the goods manufactured and sold by the Defendants bore the Plaintiff's registered trade marks thereby clearly constituting infringement of the said registered marks. The Division Bench of the High Court by the impugned judgment took the view that grant of injunction in favour of the Plaintiff insofar as the trade name 'Prius' is concerned was not justified. Aggrieved, the Plaintiff has filed the instant appeal.

To give effect to territoriality principle, Courts must necessarily have to determine, if there has been a spill over of reputation and goodwill of mark used by claimant who has brought passing off action. Once claimant who has brought action of passing off establishes his goodwill in jurisdiction in which he claims that Defendants are trying to pass off their goods under brand name of claimant's goods, burden of establishing actual confusion as distinguished from possibility thereof ought not to be fastened on claimant. Possibility or likelihood of confusion is capable of being demonstrated with reference to particulars of mark or marks, as may be, and circumstances surrounding manner of sale/marketing of goods by Defendants and such other relevant facts.

Indeed, Trade mark 'Prius' had undoubtedly acquired a great deal of goodwill in several other jurisdictions in world and that too much earlier to use and registration of same by Defendants in India. But if territoriality principle is to govern matter, there must be adequate evidence to show that Plaintiff had acquired a substantial goodwill for its car under brand name 'Prius' in Indian market also. Moreover car itself was introduced in Indian market in year 2009-2010. Advertisements in automobile magazines, international business magazines; availability of data in information-disseminating portals like Wikipedia and online Britannica dictionary and information on internet, even if accepted, will not be a safe basis to hold existence of necessary goodwill and reputation of product in Indian market at relevant point of time, particularly having regard to limited online exposure at that point of time, i.e., in year 2001.

News items relating to launching of product in Japan isolatedly and singularly in Economic Times (Issues dated 27th March, 1997 and 15th December, 1997) also do not firmly establish acquisition and existence of goodwill and reputation of brand name in Indian market. Evidence of Plaintiff's witnesses themselves would be suggestive of a very limited sale of product in Indian market and virtually absence of any advertisement of product in India prior to April, 2001. This, in turn, would show either lack of goodwill in domestic market or lack of knowledge and information of product amongst a significant section of Indian population.

Present Court agreed with conclusion of High Court that, brand name of car Prius had not acquired degree of goodwill, reputation and market or popularity in Indian market so as to vest in Plaintiff necessary attributes of right of a prior user so as to successfully maintain an action of passing off even against registered owner. Plaintiff's delayed approach to Courts has remained unexplained. Such delay cannot be allowed to work to prejudice of Defendants who had kept on using its registered mark to market its goods during inordinately long period of silence maintained by Plaintiff. Appeals dismissed.


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