Indian Supreme Court rejects Toyota ‘Prius’ case
The Supreme Court of India has confirmed that trademark rights are territorial, not global, in rejecting a trademark case brought by Toyota.
Toyota had sued spare parts manufacturers, called M/S Prius Auto Industries & Ors, for trademark infringement and passing off in 2009. The complaint cited three trademarks incorporating the name ‘Toyota’, as well as the mark ‘Prius’.
While the Japanese company has registrations for the three ‘Toyota’ marks in India, it does not have one for ‘Prius’, the name of its hybrid car. The model was released in India in 2010, some 13 years after it was first launched in Japan.
Since 2002, the defendants have owned an Indian trademark for ‘Prius’, covering auto parts and accessories. Toyota tried to cancel the mark and filed the lawsuit seeking damages for infringement and passing off.
The Supreme Court judgment follows several rulings in the case, with the most recent coming in December 2016 from the Division Bench of the Delhi Court.
In that ruling, the court set aside an earlier decision that had granted an injunction in favour of Toyota against the ‘Prius’ mark. The Supreme Court noted that the defendants accepted an injunction concerning the three ‘Toyota’ marks, so the current appeal only dealt with ‘Prius’.
The earlier judgment, which was handed down in July 2016, found the defendants had passed off the ‘Prius’ name despite owning an earlier trademark for that term. It said Toyota had used the name first, having marketed the car globally since at least 1997, and that the name’s goodwill and reputation had permeated the Indian market.
But in reversing this ruling, the Division Bench of the Delhi High Court said the findings on transnational reputation were incorrect. The court also held that prior use of a trademark in one jurisdiction would not ipso facto allow the owner to claim exclusive rights to it in another country.
“It was therefore necessary for the plaintiff in the case to establish that its reputation had spilled over to Indian market prior to April 2001,” said the Supreme Court, citing the defendants’ first use of the mark on this date.
The court discussed whether trademarks should be governed by the territoriality principle or universality doctrine, using academic publications and foreign jurisprudence (including from the UK Supreme Court) to show that the territoriality principle should be used.
The court affirmed the judgment from the Division Bench of the Delhi High Court (December 2016) and dismissed Toyota’s case. It said that because goodwill/reputation in India had not been established, no other issues needed determining.
Shamnad Basheer, honorary research chair of IP law at Nirma University and founder of the SpicyIP blog, said it was a “path-breaking” development that IP rights are territorial, not global.
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