The Toyota/Prius dispute is one that has been in news for over 7 years now. Over the last 8 years, the case has seen multiple dimensions and decisions all of which have been justified but the parties were never satisfied.
The appellant/plaintiff in the case is Toyota which is an automobile manufacturer based in Japan. Toyota has gained worldwide recognition and goodwill over the past several years. In India also Toyota has registered its trademark under different names of “Toyota” “Toyota Innova” “Toyota Devise” etc. In 1997, Toyota launched first commercial Hybrid car “Prius” in Japan and got trademarks in U.S., U.K. over the period of time and eventually in jurisdictions all over the globe. In India specifically, Toyota registered “Prius” in 2009.
Now the respondent/defendant is a manufacturer of automobile spare parts in India. It got itself registered in the year 2002 under the Trademark “Prius”. Long before the car “Prius” made rounds in the country.
The plaintiff filed a Civil Suit in the Delhi High Court for the grant of permanent injunction on the defendant for infringement of trademark, passing off and damages. The learned trial judge granted ex-parte ad-interim injunction on the defendants for the use of “Prius” as their trademark. The order was later vacated on an application filed by the defendant. The plaintiff then filed an appeal before the Division bench of the High Court. The division bench permitted the use of trademark for the defendant but laid down four conditions which were;
They were restricted from using the trademark except for the purpose of identification of the spare parts.
They were to make sure that the words “Toyota” and “Innova” were not written in the same font as that of the plaintiff.
They would have to replace “Genuine Accessories” with “Genuine Accessories Auto Industries Ltd.”
They also have to make sure that the trademark in dispute is used only for item identification.
As there was no objection from the side of the defendant this order was assumed to be final. But soon enough the plaintiff brought a breach before the trial court.
TRIAL JUDGE RULING
The trial judge ruled that the defendant stood in infringement as Toyota’s product “Prius” was world renowned and even though the defendant had its registration in the country 5 years prior to the launch of the car, the Universality doctrine would be applied which concludes that Prius is a well-known trademark and has been so in India as well it was also the first user of the word “Prius” as it has existed since 1997. Hence the Trial judge restrained the defendants from using the trademark except in accordance with the conditions laid down. Punitive damages of ten lakhs were also imposed.
Both the parties appealed against the order of the single judge in the double bench. The defendant appealed for quashing of the injunction and the plaintiff for quantum of damages. The defendant, leaving aside all other claims, claimed only for removing injunction from the use of “Prius”.
DOUBLE BENCH RULING
The division bench set-aside the order of the trial judge stating that the grant of injunction against the defendant in the use of “Prius” was not justified as the trademark was being used in India 5 years prior to the launch of Prius in the country. Consequentially, the bench also dismissed the plea of the plaintiff for quantum of damages.
Plaintiff then approached the Supreme Court.
There are two doctrines that have primarily been focused on in this dispute: Universality Doctrine and Territoriality Doctrine.
This was pled by the plaintiff stating that the plaintiff was a world renowned manufacturer of cars and has gained goodwill all over the globe for over 20 years. By means of its marketing and launching of cars in various jurisdictions, Toyota had built a reputation for itself. Even though the car didn’t launch in India before 2009, the popularity of the car had caught on since it was first launched in 1997. There were news and talks of the car all over the world including India where there were articles about the car in the newspapers. The plaintiff’s product became a well-known trademark in India because the website of “Prius” had been accessed by many Indian, seeking information about the car which made it clear that the car was popular in the country hence making it a well-known trademark.
This was pled by the defendants. This doctrine has been accepted by most courts as opposed to the universality doctrine. It is considered as the correct test for establishing goodwill and reputation around one jurisdiction. The basic concept of this doctrine compares the existence of the local trademark and the international trademark as to which came before and the impact it had. Prior to 2001, there was no goodwill or reputation of the car “Prius”. The trademark of the Indian auto-spare part manufacturer was registered in the year 2002 and 5 years after that the car was launched. Another question that arouse in the Division bench was that if Toyota was aware of the existence of Prius in India since before, why it did not contend against the entity in 2002 itself.
The Supreme court after observing the orders passed by the Trial Judge and the Division Bench and hearing the contentions of both the sides came down to the conclusion that the territoriality doctrine would supersede the universal doctrine. It relied on the judgment of Syed Mohideen v. P. Sulochana Bai, wherein the test of passing off was reiterated.
The court relied, inter alia, on the contention made by the Counsel for the defendant that in 2002 when the defendant registered its trademark, the online or the internet exposure was minimal, and hence the question of bad faith involved by the defendant becomes irrelevant.
Hence the court dismissed the appeal.