The case of Toyota Prius & trans-border reputation

It was a sigh of relief for the Delhi based automotive accessories Company (Prius Industries) when the infringement case wasn’t decided against them as Toyota failed to prove trans-border reputation. Prius Auto Industries, set – up in Delhi in the year 2001 and engaged into manufacturing automotive accessories for four wheelers in India, was up against the automobile giants Toyota in an trademark infringement case.

The Background

The Toyota Motor Corporation is a Japanese multinational automotive manufacturer which is globally recognized and enjoys the cushion of well- known trademark around the world.  Toyota designed the hybrid engine in the year 1994 and was displayed in the Tokyo Motor Show the same year. Also, the hybrid automobile “PRIUS” was sold in Japan 1997 onward. And it obtained the registration of the word mark ‘Prius’ and ‘Toyota Prius’ in different jurisdictions. However, the application (No. 1891316) in India was filed only in the year 2009 for the registration of the Trade mark ‘Prius’ which is currently pending.

On the other hand, The Prius Industries (Appellant herein) is engaged into selling auto parts for different brands of automobiles under their registered Trademark “PRIUS”, the Application (Appl. No 1086682) was filed in the year 2002.

Toyota filed a suit for permanent injunction restraining the infringement of trademark, passing off, damage and delivery up against four defendants namely Deepak Mangal, Sandeep Verma (Partners of Prius Auto Industries), M/s Prius Auto Industries and M/s Prius Auto Accessories Pvt. Ltd. for alleged infringement of the well- known Trademark of Toyota, Toyota Innova and Prius. On July 2008, the Learned Single Bench Justice decreed in favor of the Plaint (Toyota), asking the defendants to change the impugned Trademark as well as the Trade names within span of two months and dispose off the existing goods, in addition, a sum of Rs. 10 Lakhs to be awarded as relief to the Plaintiff.

Resentful of the judgment, the Prius Industries appealed, which was heard by Justice Pradeep Nandrajog of the Division Bench of the Delhi Court on December 23, 2016.

Prius industries (Appellant) Contentions

The word Prius is a Latin word which simply denotes the meaning “prior in use” which was appropriate as they are forerunners in introducing the chrome – plated accessories in India. Also, the word Prius corresponded to the words “Pehla Prayas” in Hindi which also translated to the same meaning. Most importantly the word Prius was Publici Juris (of Public right) in the year 2001.

The appellants admitted to the use of the marks ‘Toyota’ and ‘Innova’ on the packaging of their auto parts; however, put forth that that wasn’t used as trade mark, but only as an indication for people to know that the automobile parts were compatible with such automobile brands.

The auto parts factory-made by the Appellants were directly sold to the manufacturers such as Hyundai, General motors and Mahindra & Mahindra. They contended that Toyota allowed them to penetrate into the market and establish a concrete reputation for them. And, Toyota filed suit for infringement only in the year 2009, thereby, acquiescing their rights. The Appellants put forth that the suit for injunction would strangulate them from producing auto parts under their registered trade mark Prius.

Toyota (Respondent’s) Contentions

The Learned Counsel Pravin Anand for Toyota provided that the word “PRIUS” was an arbitrary and fanciful word and no way connected to the description of automobiles, thereby, highest protection had to be given although not created a secondary meaning for itself. The launching of Toyota hybrid car Prius in the year 1994 gripped the attention of environmentalists, in that way becoming a global event and also professed that the family of the defendants were into the trade of auto parts for a span of over ten years and that the appellants had dishonestly adopted the trade mark ‘Prius.’

The Learned Counsel also advanced the argument that the triple identity test: identity in the goods; goods in the same market; class of buyers all were satisfied. Also, Section 28(3) (empowers the registered trade mark owner to use the mark over the unregistered user when the two trademarks are identical/similar) of the Trade Marks Act, 1999 cannot be raised in the context as the Appellant was not a bona fide registered user.

Pronouncement of the Court

The vital point that was considered was the trans–border reputation acquired by Toyota in the trade mark of Prius prior to 2001 (Appellant’s company Prius Industries was established in April,2001). Another point in consideration was whether the launching of the car was widely reported in the Press. The hybrid car Prius introduced by the Toyota in the year 1997 was a phase where the usage of internet wasn’t prominent in India and most of the exhibits of newspaper articles submitted by the Defendants were magazines and journals which weren’t available in the country. In the words of the Justice:

“Toyota is a big company. It has had a presence in India for over two decades when the suit was filed. It was well entrenched in the Indian market in the year 2001. Obviously, no consumer of Toyota car or buyer of an auto part sold by Toyota was ever confused by the appellants selling their products under the trade mark Prius, for if this was so, in ten years somebody would have complained to Toyota or at least would have made known said fact to Toyota.”

There are two facts to be established pertaining to law on trans–border reputation:

1. Reputation in foreign jurisdiction of the trade mark;
2. The knowledge of the trade mark in the domestic jurisdiction due to its reputation abroad

The reason is because a trade mark is territorial in its operation. If its reputation spills over beyond the territories of its operation, the benefit thereof can be claimed in an action of passing off. In the present case however, no sale made in India of the hybrid car coupled with no advertisements published by Toyota for its car Prius in India, the weight of evidence leaned in favor of the view that by April 2001, Toyota had not established a global reputation in its trade mark Prius which had entered India.

Also, the Court found credibility in the justification given by the appellants as to how they adopted the word Prius which was publici juris in the year 2001. Owing to the fact that Toyota failed to establish the trans-border reputation of the mark PRIUS and also owing to the credibility of the arguments of the Appellants with regard to adoption of the mark, the decree was set aside and the appeal was allowed.

However, the injunction granted has been retained and the Prius Auto Industries is restrained from using other trademarks of Toyota like Toyota, Toyota device and Innova.

Furthermore, the following guidelines were given by the Court to Prius Industries and these points are to be remembered by all the automotive accessories manufacturing firms.

1. Cannot use the trade mark TOYOTA and INNOVA (any registered trademarks of automobile manufacturers), except for the purpose of identifying that their product can be used in cars;
2. The marks TOYOTA and INNOVA not be written in the same font as written by the plaintiff and the logos of the plaintiff;
3. Also, the phrase “Genuine Accessories” should be replaced with “Genuine Accessories of PRIUS Auto Industries Limited” (the name of the firm);
4. The defendants were also directed to ensure that the words “the vehicle name (Toyota’s trade mark)” was used for item identification only.

Inference

This long-disputed tussle coming to an end is a piece of learning to both the sides the well-established car manufacturers as well as the automotive accessories company. Toyota being world leader and pioneer of manufacturing hybrid electric vehicles in addition to the largest conglomerate in the world, it is pivotal to prove and protect the trans–border reputation. Also, oversight in bringing the issue, the suit for infringement was filed only in the year 2009 whereas, the Prius Industries was established as early as 2001 thereby, letting it grow and evolve over the years.