Trans-Border Trademark Landscape in India Post Toyota-Prius Judgement

INTRODUCTION

A trademark is any word, mark, logo, brand, name, slogan, or other visual element that differentiates one company’s products or services from those of another. Trademarks are considered Intellectual Property Rights and are legally protected under both national and international laws. The rationale for giving legal protection is that trademarks symbolise quality standards and prevent counterfeiting of the company’s products, therefore increasing the company’s goodwill. In India, trademarks are controlled by the Trademarks Act of 1999, which provides an exhaustive framework for trademarks.

One of the many aspects of trademark recognition is the Trans-Border reputation of a trademark. Trans-border reputation means that when the trademark of the company gains goodwill and is reputed globally, beyond the territorial limits of the country where the trademark is filed due to its widespread presence in the market through physical presence product, promotion, advertisements and/or publicity.

Trans-border trademark recognition has become more important in recent years to assist traders in protecting their trademarks internationally. Because the courts acknowledge this element of trademarks, third parties from other countries are limited to registering any trademark that suggests any likeness to a trademark previously filed by one nation in another country.

EMERGENCE

N.R. Dongre vs. Whirlpool Corporation, 1996 (16) PTC 583

Facts:

Whirlpool Corporation and its Indian subsidiary launched a lawsuit against N.R. Dongre in India for trademark infringement. Whirlpool was selling washing machines in India using the same trademark that N.R. Dongre was accused of infringing. The appellants (Whirlpool) contended that they have long used the disputed trademark and that the appellant’s company’s goods have a trans-border reputation. One of the several issues presented in this case was whether Whirlpool was widely recognised in India and had a trans-border reputation.

Held:

The Delhi High Court’s single and division benches both decided in Whirlpool’s favour. It stated that the appellants’ evidence proved that they had been long-time users of the mark in question, whilst the respondents failed to show their innocence for using the mark. Division Bench of the Delhi High Court further acknowledged the mark’s trans-border reputation and indicated that it is not required to have the goods present in physical form to recognise the trademark, but that the product is recognised in the market through marketing, as was the case here. The Supreme Court likewise supported the Division Bench’s judgement, stating that overturning the Division Bench’s decision would cause irreparable injury to Whirlpool because they had been using this mark for a long time.

The concept of trans-border has evolved through this case and the courts have heavily relied on this case to determine the cases of trans-border trademark recognition of multinational companies.

TOYOTA JIDOSHA KABUSHIKI KAISHA vs. M/S PRIUS AUTO INDUSTRIES LTD. & ORS. 2018 (73) PTC 1

Facts:

Toyota (hereafter referred to as plaintiff), an internationally recognised automobile manufacturer, introduced a car named the ‘PRIUS’ for which trademark registrations were submitted across the world. Prius Auto Industries (hereafter referred to as the defendant) is a company incorporated in India that manufactures and sells vehicle components and accessories. Toyota filed before the Single Judge Bench of the Delhi High Court for a permanent injunction against Prius Industries for violating Toyota’s trademark, which it had already filed. If the injunction is not granted, Prius Industries will obtain an unfair advantage over Toyota’s brand reputation and goodwill, which is detrimental to Toyota.

Held:

The Single Judge Bench issued an ex parte ad interim injunction prohibiting the defendants from using Plaintiff’s registered trademarks.

The defendants filed an appeal with the Delhi High Court’s Division Bench against the ruling. The Division Bench decided that Prius lacked a transborder reputation in India, and that print media marketing had minimal impact on the public. Furthermore, no substantive evidence suggested that the public was confused about both items.

The Supreme Court heard an appeal, and upheld the Division Bench’s ruling. Toyota claimed that the ‘PRIUS’ mark was marketed internationally in print media, but failed to demonstrate that the ‘PRIUS’ brand had established significant goodwill and recognition in the Indian market prior to when Prius Industries applied to use the same mark. They also said that if people affiliated with the sector or the items are aware of the mark, it has built a positive reputation and goodwill in the market.

However, the court did not agree with this but rather agreed with the territorial principle to be the primary focus. It noted that in order to establish a trans-border reputation, the mark must have gained goodwill in the Indian market before anyone else may submit a trademark application for it. Because it was not clear in this case that Toyota had a significant level of goodwill for its automobile, the Division Bench of the Delhi High Court’s decision to overturn the permanent injunction was affirmed.

CONCLUSION

According to the well-established precedent set by Whirlpool, even in cases when a product is not physically present in the market, the company’s mark alone would be enough to identify it as a trans-border reputation in the Indian market. The Toyota decision provided more clarification on this issue, with the court ruling that a trademark cannot be considered to have trans-border recognition just because it is printed in newspapers and magazines. Whether or not the general public has been impacted and influenced by these commercials is one of its key components. It acknowledged the territorial doctrine and placed a strong emphasis on the spillover of global reputation to the Indian market prior to its adoption by others.

The Toyota case expanded the scope of trademarks’ trans-border reputation in the Indian market and gave greater protection to those using marks that were not acknowledged in the Indian market but were registered as trademarks elsewhere in the world. Following this precedent, each case’s facts will be interpreted differently because a variety of factors will be taken into account when determining whether a company’s trademarks have a trans-border reputation. This ensures better protection to the other company and fair and equal justice for all which forms the basis of the Indian Constitution.

Author : Riya Shah, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

SOURCES

IIPRD Blog – Intellectual Property Discussions