24 January 2017

World famous or not-Trans-border reputation in trade marks

by Kumudavalli Seetharaman

Trans-border reputation as the name suggest means reputation that has spilled over to other jurisdictions wherein there is neither use of the trade mark in question nor the trade mark registered. The general position in India is that trans-border reputation protects global reputation of the goods that have not even entered the Indian market.

A Division Bench of the Delhi High Court, recently dealt with the concept of trans-border reputation in the case of Prius Auto Industries & ors. v. Toyota Jidosha Kabushiki [see end note 1]. In an infringement and passing off action initiated by Toyota in the year 2009 against Prius, an ex-parte ad- interim injunction was granted in favor of Toyota and against Prius restraining it from using the trademarks TOYOTA, TOYOTA INNOVA and Toyota device mark, which was later vacated on an application filed by Prius. Being aggrieved, Toyota preferred an appeal wherein a Division Bench granted an order in favour of Toyota albeit with certain conditions on the use of the above mentioned trademarks and the suit was sent to the Single Judge for decision on merits. The Single Judge of the Delhi High Court, after trial, granted permanent injunction in favour of Toyota and against Prius restraining Prius from infringing the trademarks TOYOTA, TOYOTA INNOVA and Toyota device mark and passing off the mark Prius. In addition, the Single Judge awarded damages. Being aggrieved by this judgement Prius preferred an appeal before the Division Bench. The main issue before the Division Bench was whether Toyota had established trans-border reputation for the mark ‘PRIUS’ and whether the Appellants/Prius can take the plea of waiver/ delay.


Brief Facts

The plaintiff/ respondent, Toyota is an internationally known company, engaged in the manufacture and sale of motor vehicles. It is the registered proprietor of the trade marks TOYOTA, TOYOTA INNOVA and the Toyota device mark in India as well as various countries abroad, with reported global sales of over US$ 220 billion.

In the year 1994, Toyota designed a hybrid engine which was displayed at the 1994 Tokyo Motor Show. Toyota pleaded that the first hybrid automobile, PRIUS, was sold in Japan in 1997 and the same became global news as it was a fuel-efficient hybrid car which addressed the environmental concerns of pollution.

The defendants/ appellants on the other hand, sell auto parts meant for use in different brands of automobiles; under their registered trade mark ‘PRIUS’. The Defendant No. 3 (M/s. Prius Auto Industries) was constituted as a partnership firm by Defendants No.1 and 2 (Mr. Deepak Mangal and Mr. Sandeep Verma respectively) in 2001.

The defendants/ appellants admitted to using the words ‘Toyota’ and ‘Innova’ on the packaging material in which auto parts were packed. However, they claimed that it was not used a trade mark but to make it known to the consumers that an automobile part was suitable for a particular brand of motor vehicle manufactured and sold by Toyota. Further, the registration of the trade mark PRIUS was obtained by the defendants/ appellants in the year 2002 with user since July 2001. Therefore, it was submitted by the defendants/ appellants that trans-border reputation of Toyota in its trade mark ‘PRIUS’ had to be established prior to the year 2001 in order to show that the adoption by the defendants/ appellants was not honest and was influenced by the Toyota’s trans-border reputation in the mark ‘PRIUS’. They had also pleaded acquiescence on the part of the Respondent/ Plaintiff for not having taken any steps till 2009 (when the suit was instituted) while the respondent/plaintiff was bound to be aware of the defendants/ appellants since the year 2004 as both the parties advertised in the same magazine ‘Auto car’.

A Single judge of the Delhi High Court by issuing summons in the suit in 2009, granted an ex-parte ad-interim injunction restraining the defendants/ appellants from using the trade mark TOYOTA, INNOVA, PRIUS and the Toyota device in respect of auto parts and accessories. The order was vacated in 2010. Toyota took the matter in appeal and the same was disposed by the Division bench of the same Court and remanded back to the Single Judge, imposing an interim arrangement restricting PRIUS from using the trade mark TOYOTA and INNOVA, except for the purpose of identifying that their product can be used in those vehicles. The defendants were required to ensure that TOYOTA and INNOVA were not written in the same font as written by the plaintiff and the logo of the plaintiff was also prohibited from being used and were directed to replace the term ‘Genuine Accessories’ with ‘Genuine Accessories of PRIUS Auto Industries Limited.On completion of trial and hearing the arguments of the parties, the Single Judge passed the judgment restraining PRIUS from infringing and passing off the above mentioned trademarks of Toyota. Hence, this appeal was preferred by PRIUS.


Contentions of the parties

The respondent/ plaintiff contended that the news of Toyota launching the first hybrid car was made available globally through the print media, that it must be held that the reputation from other jurisdictions had permeated across the borders and into India. The same was supported by them by submitting various news articles, publications and journals. They also contended that the Appellants/ Defendants no. 1 and 2 along with the father of Defendant no. 2 were in the automobile trade for several years and that they would have known about Toyota launching a hybrid car under the trade mark PRIUS in the year 1997, and therefore, adoption of the said trade mark was dishonest. They also contended that the word PRIUS had no obvious meaning and is a word of Latin origin meaning prior/ former.

The appellants/ defendants contended on the other hand, that they adopted PRIUS because they were the first in India to introduce chrome plated motor parts and the Hindi words ‘Pehla prayas’ came to their minds. However, in order to make their trade mark more stylish and catchy, they consulted dictionaries and chanced upon the word PRIUS. Further, they contended that only those publications and journals showing the sale of the motor vehicle PRIUS was a global event were to be considered which were prior to April 2001 as it was in the said month and year that the appellant/ defendant’s partnership firm was constituted.

They also contended that the argument that PRIUS garnered trans-border reputation is very weak as a list of other cars which were introduced by Toyota were never even heard of by consumers in India. Not all motor vehicles which are sold in various foreign jurisdictions become known in India and hence, there is no trans-border reputation in India for motor vehicles sold in foreign jurisdictions by Toyota. Further, as per the evidence provided by the respondent/ plaintiffs, only one article published in 1997 referred to Prius and that a solitary news article could not be sufficient evidence to establish trans-border reputation.


Decision of the Court

The Division Bench was of the view that whether trans-border reputation exists is essentially a question of fact and therefore it requires the evidence to be considered. The Bench opined that the Single Judge had erred in discussing this issue as the evidence post April 2001 was also considered by the Single Judge whereas, only evidences prior to April 2001 were to be considered as that was the date of adoption of the mark by the Appellant/ Defendant.

The Bench held that the law on trans-border reputation requires two facts to be established. The first is the reputation in foreign jurisdictions of the trade mark. The second is the knowledge of the trade mark in a domestic jurisdiction due to its reputation abroad. Therefore, though Toyota was able to prove that the sale of PRIUS was reported in the press world over, the nature of the news was not such that would attract public attention at large. Moreover, publications in the nature of articles had minimal evidentiary worth. Further, Toyota had led no evidence of money spent in advertisements in India for PRIUS before 2010, therefore a reputation in the form of public confidence in the goods and as a result the association of the mark with the source of the goods was not made.

The Bench further opined that in a case which is either a qua-timet action or wherein the defendants are recent entrants in the market, the test of likelihood of confusion was enough. However wherein the parties have been in business for a number of years, there must be evidence of actual confusion and not just likelihood. As there were no complaints to Toyota, the Court deduced that no consumer of Toyota car or auto parts was confused by the appellant/ defendant selling their products under the trade mark PRIUS.

The Division Bench thus held that Toyota had failed to establish trans-border reputation and that the justification as given by the Appellants/ defendants as to the adoption of the mark PRIUS had enough credibility. The appeal was thereby allowed by setting aside the decree, but the restraint on Prius Auto Industries about not using the other trademarks of Toyota being continued. The direction with regard to the damages was also dismissed by the Division Bench and as a consequence thereof the cross-appeal preferred by Toyota for enhancement of the damages was also dismissed vide subsequent order dated January 12, 2017.

Though the idea of claiming trans-border reputation is gaining ground, it needs to be established based on evidence.

[The author is a Junior Associate, IPR Practice, Lakshmikumaran & Sridharan, Delhi]

End Notes:
  1. RFA (OS) 62/2016


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