Delay in Taking Action Costs Toyota Exclusivity in India
19 December 2012
Recently, in the case of Toyota Jidosha Kabushiki Kaisha v. Deepak Mangal and others, the Delhi High Court ruled against the Japanese auto manufacturer Toyota, which had asked for exclusive rights over the “Prius” trademark for its hybrid cars. Toyota, which owns the Toyota and Innova marks and the Toyota device, has also acquired registration to use the Prius mark in more than 28 countries, but not in India. The defendants became the registered owner of the Prius trademark in 2002 and had been using the mark as an essential and leading portion of their trading name.
Trademark infringement is a violation of exclusive rights attached to a trademark by another, without the authorization of the trademark owner or any licensee. Section 29 of the Trademark Act 1999 deals with infringement of registered trademarks. There were two main causes of action in this case;
1. The infringement of the three registered trademarks: Toyota, the Toyota device and Innova.
2. The defendant’s seeking to pass off the Prius trademark as their own.
Toyota contended that they had designed a concept car with hybrid engine named Prius, the first model of which was sold in December 1997 in Japan; the vehicle was officially launched in 2001. To substantiate, Toyota lawyers presented the sales figures in foreign countries as well as extensive advertisements in both national and international publications. Their assertion was that their trademark was well-known, having a worldwide reputation and goodwill, as well as known in India. Further, they contended, with the wide media coverage and promotional activities, it was not possible that the defendants were unaware of the prior usage of the Prius mark and Toyota’s association with the same. Hence, their adoption of the mark was aimed at passing off the goodwill and value of Toyota.
The facts, however, pointed out that the defendants registered their mark in 2002 and that Toyota did not object to such registration. Therefore, there was delay, waiver and acquiescence on Toyota’s part. Further, the defendant’s advertisements clearly showed that they were suppliers of garnish covers and auto accessories for various vehicles, including those of the Toyota group. The usage of the Toyota device marks by the defendants had only been for the purpose of the identification of the item and its suitability to the wide range of vehicles mentioned in its advertising and not with the intent to deceive the purchaser or to confuse him into believing that defendants had been selling Toyota-produced auto accessories. It was revealed in the court that the defendants had purchase orders from various reputed companies including Mahindra & Mahindra, Hyundai and General Motors. This raised the issue of acquiescence by Toyota of the business and practice of the defendants, which went against them.
Further, Prius was found to be in English-language dictionaries and not to be an invented word, therefore Toyota could not claim a monopoly over it. Sections 30(1)(b), (2)(d) and Section 35 of the Trademarks Act were relied upon to argue that ‘Toyota, ‘Toyota device’ and ‘Innova’ had been used by defendants only to demonstrate the compatibility of the auto accessories in the use of these vehicles, along with several others.
The Court held that the common Indian public was not much familiar with Toyota’s usage of Prius, as journals and magazines publishing the same were not easily available to them. It had only been in 2009 that a magazine published detailed information on Toyota vehicles. The court cited the case of Gillette Company vs. A.K. Stationery [2001 PTC 573 (Del)], where the principle of a trans-border reputation and the spillover of its international reputation from foreign lands to the Indian boundaries had been recognized. Further the court refused to accept Toyota’s argument of it having only a constructive knowledge of the defendant’s usage of the marks. Since Prius was not an invented word, the defendant was held to be an honest user. The court also stated that there was a lot of dissimilarity between the two with regard to trade dress, packaging, shape of material, visual impressions and getup, and also the variation in price.
The court also accepted the defendant’s argument under Section 30(2)(d) that the use of mark and the device was reasonably necessary to indicate that the goods are adaptable and suited to the vehicles mentioned therein.
Lastly, weighing the balance of convenience and the loss caused to the defendant, which would be higher if they were prevented from using the mark, as compared to the plaintiff, who had not even launched the vehicle on Indian roads, the court gave the verdict in favour of defendants, allowing them to continue the usage of the mark.
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