Toyota Jidosha Kabushiki Kaisha vs M/S Prius Auto Industries Limited

1. The appellant (hereinafter referred to as ‘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. The partnership firm of the respondents was constituted in the year 2001. The fourth respondent is a Private Limited Company in which the second and third respondents are majority shareholders.

3. 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’ 3 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 plaintiff claimed that various advertisements and news reports about ‘Prius’ and publications in car magazines in India and across the globe has made ‘Prius’ a well known trade mark within the meaning of the said expression under Section 2(1)(zg) of the Trade Marks Act, 1999 (hereinafter referred to as ‘the Act’). According to the plaintiff, in the year 2009, it discovered that the defendants not only had got the mark ‘Prius’ registered way back in the year 2002-2003 for all types of auto parts and accessories but that they had also been using the said trade mark in carrying out their trade in such auto parts and accessories. The plaintiff, therefore, approached the Trade Mark Registry for cancellation of the registered trade mark of the defendants and also filed the suit in question on the ground that the defendants had been using the 5 well known trade marks of the plaintiff without any authorization thereby taking an unfair advantage of the reputation and goodwill of the plaintiff which it had earned over a period of time across the globe. Accordingly the plaintiff prayed for:

6. The learned trial Judge of the High Court by Order dated 22.12.2009 granted ex-parte ad-interim injunction restraining the defendants from using the registered trade marks of the plaintiff i.e. ‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA DEVICE’ and the mark ‘Prius’ in respect of auto accessories manufactured by the defendants. This order was vacated on 19.03.2010 on the basis of an application filed by the defendants. Aggrieved, the plaintiff had filed an appeal before the Division Bench of the High Court and by Order dated 10.08.2010, the Division Bench permitted the defendants to use the registered as well as un-registered trade marks of the plaintiff subject to the following conditions:

7. It does not appear that the defendants had carried the aforesaid Order dated 10.08.2010 10 of the Division Bench of the High Court in any further appeal. Consequently, the said order governed the parties during the pendency of the suit. Allegations of the breach of the order were, however, brought before the Court by the plaintiff.

8. At the conclusion of the trial, the learned trial Judge by judgment dated 08.07.2016 held that the impugned acts of the defendants constituted infringement of the trade marks ‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA DEVICE’ registered in favour of the plaintiff. The learned Judge also held that such acts of the defendants amounted to passing off of the defendants’ goods under the trade name ‘Prius’, which, though registered in favour of the defendants in the year 2002-2003, the plaintiff was the first user thereof having marketed its hybrid car all over the globe under the name ‘Prius’ at least from the year 1997. 11 Consequently, the learned trial Judge restrained the defendants from using the plaintiff’s trade marks (‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA DEVICE’ marks) except in accordance with the terms of the conditional injunction order passed by the Division Bench dated 10.08.2010. So far as the mark ‘Prius’ is concerned, on the basis of the finding that the plaintiff was the prior user of the mark ‘Prius’ in various countries, if not in India, and that goodwill and reputation of the plaintiff so far as the mark ‘Prius’ is concerned having permeated to the Indian jurisdiction, it was held that the plaintiff was entitled to an injunction against the defendants restraining them from passing off the said mark. Punitive damages quantified as Rupees ten lakhs was also awarded in favour of the plaintiff.

10. The Division Bench of the High Court by the impugned judgment dated 23.12.2016, on grounds and reasons, that will be noticed in the course of deliberations and discussions that follow, took the view that grant of injunction in favour of the plaintiff insofar as the trade name ‘Prius’ is concerned was not justified. Accordingly the aforesaid part of the order of 13 the learned trial Judge was set aside. Consequently, the appeal filed by the plaintiff with regard to quantum of damages was also dismissed. Aggrieved, the plaintiff has filed the instant appeal.

known claimants from almost anywhere in the world. Some of the more radical proposals for 8 5th Edn., Sweet & Maxwell 34 changing the law to assist foreign claimants ignore the need for this balancing exercise, without which the opportunities for abuse are simply increased, and further uncertainty created”

28. The overwhelming judicial and academic opinion all over the globe, therefore, seems to be in favour of the territoriality principle. We do not see why the same should not apply to this Country.

11 1981 60 FLR 60 37

33. If goodwill or reputation in the 45 particular jurisdiction (in India) is not established by the plaintiff, no other issue really would need any further examination to determine the extent of the plaintiff’s right in the action of passing off that it had brought against the defendants in the Delhi High Court. Consequently, even if we are to disagree with the view of the Division Bench of the High Court in accepting the defendant’s version of the origin of the mark ‘Prius’, the eventual conclusion of the Division Bench will, nonetheless, have to be sustained. We cannot help but also to observe that in the present case the plaintiff’s delayed approach to the Courts has remained unexplained. Such delay cannot be allowed to work to the prejudice of the defendants who had kept on using its registered mark to market its goods during the inordinately long period of silence maintained by the plaintiff.

34. For all the aforesaid reasons, we deem 46 it proper to affirm the order(s) of the Appellate Bench of the High Court dated 23.12.2016 and 12.01.2017 and dismiss the appeals filed by the appellant/plaintiff.

(NAVIN SINHA) NEW DELHI;

Date : 14-12-2017 These appeals were called on for pronouncement of judgment today.

For parties: