Trans-border Toyota trumps prior Prius

By Vaishali Mittal and D Neha Reddy, Anand and Anand
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One of the first and biggest trademark disputes in the auto segment has come to an end after seven years, with the final Judgment passed by the Delhi High Court on 8 July 2016, in Toyota Jidosha Kabushiki Kaisha v Deepak Mangal & Others, in favour of Toyota.

Vaishali Mittal, Partner, Anand and Anand
Vaishali Mittal
Partner
Anand and Anand

In 1994, Toyota’s team designed the world’s first concept car with a hybrid engine for the 1995 Tokyo Motor Show. The vehicle was named “PRIUS”, derived from the Latin word for “prior” or “before”. The first PRIUS went on sale in December 1997, in Japan. The present battle in India began in 2009, prior to the launch of Toyota Prius in India in 2010, when Toyota filed a case against Prius Auto Industries and Prius Auto Accessories Private Limited for use of its trademark, PRIUS. The defendants were also selling indigenously manufactured spare parts under the trademarks TOYOTA, its emblem, INNOVA and QUALIS.

The defendants had applied for and secured registrations for the mark PRIUS in India. In addition to filing rectification petitions for cancellation of the defendants’ registrations for the mark PRIUS, Toyota filed a lawsuit for infringement and passing off the plaintiff’s trademark and trade name in Delhi High Court, convinced that the defendants had taken unfair advantage of the reputation of its vehicles to expand their business.

In December 2009, when the lawsuit was first filed by Toyota, it emerged victorious, having secured an ex-parte ad-interim injunction restricting the defendants from using the marks PRIUS, INNOVA, TOYOTA and the Toyota emblem for their auto parts and related goods. However, the Delhi High Court vacated the ex-parte injunction after the defendants appeared and filed an application for the same. This was immediately corrected by the division bench of Delhi High Court in an appeal by Toyota.

The division bench passed an order restraining the defendants from using Toyota’s registered trademarks INNOVA, TOYOTA and the Toyota emblem in relation to their products in the same font and manner as Toyota’s trademarks, and permitted them to use these marks only for the purposes of identification of auto parts manufactured by them. However, as the defendants owned registrations for the mark PRIUS and were prior users in the Indian territory, the court permitted the defendants to use this mark with a condition that they would file a statement of accounts of its business every six months. Additionally, for the first time, the division bench expedited the trial to be completed within four months. This proved to be a huge victory for litigants and lawyers alike at a time when the trial stage alone took several years to complete.

THE RESULTS

The final judgment, by the Delhi High Court was a clear victory for Toyota, and also for the first time laid down new standards for adjudication of matters of this nature.

D Neha Reddy, Associate, Anand and Anand
D Neha Reddy
Associate
Anand and Anand

Relying on evidence filed by the car manufacturer, the High Court recognized Toyota as being one of the world’s leading auto and auto-parts manufacturers, recognizing its trademarks for which it also owns registrations in India. The defendants were held liable for infringement of Toyota’s registered trademarks as the manner of use of the marks by the defendants would cause confusion in the minds of the public as to their origin, and give an impression that they emanated from Toyota.

The heart of the judgment lies in the court’s findings on the mark PRIUS. The court held that in addition to the evidence filed on court record, the fact that the Toyota PRIUS was the world’s first hybrid car was a matter of history and an undeniable fact.

In light of the fact that the defendants failed to provide any justification for their use of the mark PRIUS since 2002, it was held that it was immaterial that the defendants used the mark and had registrations in India prior to the launch of Toyota’s PRIUS in India, as Toyota was the first to adopt the mark in 1995 and use it internationally. The court also held that PRIUS was a well-known trademark in India, warranting the highest form of protection – a rare finding when a mark is unregistered in India.

The court directed the defendants to stop using the mark PRIUS as part of their trading name within a period of two months. Having found the defendants’ conduct to be dishonest, the court was also of the opinion that Toyota must be compensated for the loss of goodwill over the years as a result of the defendants’ use, and directed the defendants to pay Toyota ₹1 million (US$15,000) in damages.

VAISHALI MITTAL is a partner at Anand and Anand, and D NEHA REDDY is an associate at the firm.

Anand And Anand

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