1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs.5375-5377 OF 2017
TOYOTA JIDOSHA KABUSHIKI KAISHA ...APPELLANT(S)
VERSUS
M/S PRIUS AUTO INDUSTRIES LTD.
& ORS. ...RESPONDENT(S)
J U D G M E N T
RANJAN GOGOI, J.
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.
2
2. Civil Suit [CS (OS) No. 2490 of 2009]
was instituted by the plaintiff in the Delhi High
Court seeking a decree of permanent injunction
for infringement of trade mark, passing off and
for damages against the respondents (hereinafter
referred to as ‘the defendants’) in order to
protect the plaintiff’s trade marks ‘TOYOTA’,
‘TOYOTA INNOVA’, ‘TOYOTA DEVICE’ and the mark
‘Prius’ of which the plaintiff claimed to be a
prior user.
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.
Furthermore, according to the plaintiff,
it had launched the world’s first commercial
hybrid car called ‘Prius’ in Japan in the year
1997 and in other countries like U.K., Australia,
the U.S.A. etc. during the year 2000-2001. The
plaintiff also claimed registration of the trade
mark ‘Prius’ in different countries as early as
the year 1990 (in Japan) and eventually in other
jurisdictions all over the globe. So far as India
is concerned, however, the car was released in
the year 2009 and until that point of time the
plaintiff had not obtained registration of the
mark ‘Prius’ in the Indian jurisdiction.
However, the car was displayed in the car shows
4
in Delhi and Bangalore held in the year 2009 and
it was formally launched in India in the year
2010.
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
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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:
(i) Permanent injunction restraining the
defendants from using the plaintiff’s
registered trade marks (‘TOYOTA’, ‘TOYOTA
INNOVA’ and ‘TOYOTA DEVICE’); and
(ii) Permanent injunction restraining the
defendants from using the well known
(unregistered) trade mark ‘Prius’ so as to
prevent passing off the defendants’ goods
as that of the plaintiff.
4. The defendants contested the claim of
the plaintiff by contending that they have been
using the words ‘TOYOTA’, ‘TOYOTA INNOVA’ and
‘TOYOTA DEVICE’ on the packaging materials in
which the auto parts manufactured by them
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are/were packed for the purpose of item
identification and nothing more. According to the
defendants, since they were in the business of
manufacturing spare parts of automobiles, they
are/were entitled to indicate the cars for which
the spare parts have been manufactured by
displaying the same name on the packaging of the
products. The use of the words ‘TOYOTA’, ‘TOYOTA
INNOVA’ and ‘TOYOTA DEVICE’ etc. were, therefore,
for the purpose of honest use in an industrial
matter and thus protected under Section 30 of the
Act.
5. Insofar as the mark ‘Prius’ is
concerned, according to the defendants, they had
obtained registration of the said mark in the
year 2002 and have been continuously using the
same since the year 2001. They have been
regularly supplying auto accessories to various
automobile giants like Hyundai Motors, General
Motors. The defendants claimed that, over a
7
period of time, they have built up a considerable
market reputation. According to the defendants,
the mark ‘Prius” had not been registered in
favour of the plaintiff for any of its products;
nor had any Prius Car sold been in India so as to
enable the plaintiff to claim goodwill in respect
of such cars in the Indian market. As the product
itself was not in existence in the Indian market,
according to the defendants, it was impossible
for the people in India to identify and recognize
or associate the defendants’ registered trade
mark ‘Prius” with any of the products of the
plaintiff. In fact, in the written statement
filed, the defendants claimed that as they were
the first in India to manufacture add-on chrome
plated accessories, they had conceptualized their
attempt as ‘pehela prayas’ (Hindi word meaning
first attempt). It was on that basis that they
had adopted the name ‘Prius’ and got the same
registered in the year 2002 as ‘PRIUS’
(Registration No. 1086682 dated 13.03.2002) and
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‘PRIUS - The name you can trust’ (Registration
No. 1163594 dated 2.1.2003).
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:
“(i) The defendants were restrained from
9
using the plaintiff’s registered
trade marks (TOYOTA, INNOVA) except
for the purpose of identifying that
the defendants’ products can be used
in these cars;
(ii) the defendants were to ensure that
the words ‘TOYOTA’ and ‘INNOVA’ were
not written in the same font as
written by the plaintiff and the
logos of the plaintiff;
(iii) the defendants would have to replace
the words “Genuine Accessories” with
“Genuine Accessories of PRIUS Auto
Industries Limited;
(iv) the defendants were to ensure that
the words – “the vehicle name (i.e.
the appellant’s trade mark) is used
for item identification only.”
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.
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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.
9. Both sides appealed against the
aforesaid order of the learned Single Judge.
While the appeal of the plaintiff was with regard
12
to the quantum of the damages awarded, the appeal
filed by the defendants was in respect of the
order of injunction granted against them.
However, in the course of hearing of the appeal
filed by the defendants, the grievance with
regard to the conditional use of the trade marks
‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA DEVICE’ (in
terms of the interim Order dated 10.08.2010) was
not persisted with and the sole grievance
expressed was in respect to the permanent
injunction granted by the learned trial Judge
with regard to the use of the name ‘Prius’.
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.
11. At the very outset it must be clarified
that in view of the virtual acceptance of the
conditional order of injunction with regard to
the ‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA DEVICE
MARKS’ by the defendants, the truncated scope of
the present appeal would be confined to the
correctness of the views of the Division Bench
of the High Court with regard to the use of the
name ‘Prius’ and specifically whether by use of
the said name/mark to market the automobile spare
parts manufactured by them, the defendants are
guilty of passing off their products as those of
the plaintiff thereby injuring the reputation of
the plaintiff in the market.
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12. The learned trial Judge in taking the
view that the plaintiff was entitled to an
injunction against the use of the trade mark
‘Prius’ by the defendants, took into account,
inter alia, the global sales of Prius Cars
(ranging upto over a million sales globally); the
exponential hike in the sales of cars (300 units
in 1997 to 285600 units in 2008); and that the
plaintiff’s trade mark ‘Prius’ which had acquired
an excellent global goodwill had already spilled
over to India much before the direct sales of the
car in India in the year 2010. The fact that the
plaintiff’s web sites have been visited by many
Indians seeking information about Prius cars was
held by the learned trial Judge to be evidence of
the fact that people in India were aware of the
car and its popularity. The exhibitions of the
car held in India and other countries; various
advertisements published in different automobile
magazines and cover stories published in
international magazines and journals were taken
15
into account by the learned trial Judge to hold
that the car in question had a stellar reputation
in the world market including India. The learned
trial Judge also took into account the
availability of information regarding the car in
information-disseminating portals like Wikipedia
and online Britannica dictionary. Consequently,
it was held that the physical presence of the car
in India at a later point of time was immaterial.
In fact, the learned trial Judge went on to hold
that the mark ‘Prius” had satisfied the
definition of a “well-known trade mark” under
Section 2(1)(zg) read with Section 11(6) & 11(9)
of the Act. Relying on the decision of this Court
in S. Syed Mohideen vs. P. Sulochana Bai1, the
learned trial Judge took the view that if the
plaintiff could successfully prove that its case
was covered by “passing off” the registered trade
mark of the defendants would not remain protected
under the Act. Proceeding further, the learned
1 2016 (2) SCC 683
16
trial Judge took the view that the plaintiff was
the prior user/adopter of the mark ‘Prius’,
though it may not have been such prior user so
far as the Indian market is concerned. In this
regard, the learned trial Judge relied on the
decision of this Court in N.R. Dongre vs.
Whirlpool Corporation2 wherein this Court had
approved the views of the Delhi High Court
holding that wide advertisement of a trade mark
without the existence of the goods in the local
market can well be considered as use of the trade
mark in the said local market. Again, relying on
the decision of this Court in Milmet Oftho
Industries & Ors. vs. Allergan Incorporated3
the learned trial Judge held that the real test
of establishing prior use is to determine who is
the first in the world market. Adopting the
tests laid in Reckitt and Colman Ltd. vs.
Borden Incorporated4 the learned trial Judge came
to the conclusion that the goods of the plaintiff
2 1996 (5) SCC 714
3 2004 (12) SCC 624
4 1990 (1) All E.R. 873
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enjoy transborder reputation and goodwill which
had permeated the Indian market and that as the
defendants had used an identical mark in relation
to more or less an identical product(s) having a
common market, the likelihood of confusion was
unavoidable. The learned trial Judge further held
that, as both the parties had advertised their
respective products in the same magazines and
periodicals, any person reading such an
advertisement would be bound to be misled to
believe that the defendants goods emanates from
the plaintiff’s organization and that there is a
nexus between the two. Accordingly, the learned
trial Judge came to the conclusion that the
adoption of the mark ‘Prius’ by the defendants,
though they were the registered proprietor
thereof, was misleading, as the plaintiff was the
true and first user of the trade mark all over
the world and the reputation of the mark and the
goodwill of the plaintiff on that basis had
permeated to the Indian Market well before the
18
use of the mark by the defendants in 2001 and its
registration thereafter in 2002-2003. The trial
Judge further held that the defendants had
adopted the mark ‘Prius’ with the sole intention
of enjoying the benefits from the use of the said
mark. The explanation given as to why and how the
defendants had adopted the name ‘Prius’ was found
to be wholly untenable by the learned Single
Judge. Accordingly, the finding that the
defendants were guilty of passing off their goods
under the mark, of which the plaintiff was the
first user, was arrived at. Consequently,
permanent injunction restraining the use of the
mark ‘Prius’ by the defendants in order to
prevent passing off the defendants’ goods as the
plaintiffs’ was issued and damages quantified at
0.25% of the total sales, amounting to Rs.10
lakhs, was awarded.
13. In appeal, the Division Bench reversed
the conclusion(s) of the learned Single Judge
19
holding that the findings with regard to spread
of the transborder reputation of the mark ‘Prius’
had not been correctly arrived at by the learned
trial Judge as facts and materials beyond the
relevant point of time i.e. first date of use
(April, 2001) of the mark by the defendants in
India was taken into consideration. The Division
Bench of the High Court while holding that the
launching of the car ‘Prius’ in the year 1997 was
widely reported and advertised, however, held
that such publication in the print media was not
ground breaking and in fact in the issue of
Economic Times dated 27.03.1997 and 15.12.1997,
small news items with regard to the launching of
the product in Japan had been published, which
could not have impacted the Indian public at
large. Relying on one of its own judgments in the
case of Trans Tyres India Pvt. Ltd. vs. Double
Coin Holdings Ltd. & Anr.5 the Division Bench of
the High Court took the view that the
5 2012 SCC Online Delhi 596
20
Universality Doctrine (which posits that a mark
signifies the same source all over the world) has
not been accepted by courts. Modern day trade;
globalization have brought in multi-channel modes
of sale of goods in the market and therefore it
is the Territoriality Doctrine (a trade mark
being recognized as having a separate existence
in each sovereign country) would hold the field.
The Division Bench further held that prior use of
the trade mark in one jurisdiction would not ipso
facto entitle its owner or user to claim
exclusive rights to the said mark in another
dominion. 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.
14. The aforesaid issue was decided by the
Division Bench of the High Court against the
plaintiff on the ground that not only the
publicity and advertisement surrounding the
21
launching of the product by the plaintiff in the
international market was scanty, internet
penetration in India at that point of time (prior
to April 2001) was limited and, therefore, it
cannot be said that prior to April 2001 the
plaintiff had established its goodwill and
reputation in the Indian market, which the
defendants had taken advantage of. The Division
Bench of the High Court further held that the
test of possibility/ likelihood of confusion
would be valid at the stage of quia timet actions
and not at the stage of final adjudication of the
suit, particularly when the defendants had used
the impugned mark for a long period as in the
instant case. The test, therefore, would be one
of actual confusion. No evidence was led by the
plaintiff to show that any section of the
consuming public was misled by the use of the
trade mark ‘Prius’ by the defendants.
15. Laches and delay on the part of the
22
plaintiff in instituting the suit in the year
2009 was also held against the plaintiff to
reverse the decree passed by the learned trial
Judge. In this regard, the Division Bench held
that the plaintiff was aware of the defendants’
mark at least from April, 2003. Publications in
Pioneer magazines (like Autocar, Overdrive)
contained defendants’ advertisements under the
name ‘Prius’ and in fact both the parties have
been advertising their products in the same
magazines. In fact, the plaintiff, at no relevant
point of time, had applied for registration of
the trade mark, which was done only on 3.12.2009,
followed by the institution of the suit on
21.12.2009, and that too on a ‘proposed to be
used basis’. The Division Bench of the High Court
in reversing the conclusion of the learned trial
Judge also took the view that the word ‘Prius’ is
publici juris and that the explanation given by
the defendants for adopting the said word as
their trade mark is logical and acceptable. It is
23
on the aforesaid broad basis the decree passed by
the learned trial Judge was reversed by the
Division Bench of the High Court.
16. The arguments advanced on behalf of the
rival parties may now be noticed.
17. Shri P. Chidambaram, learned senior
counsel, who had argued the case of the appellant
before us, submitted that recognition and
reputation of a trade mark is not contingent upon
the actual sale of goods in India bearing the
mark in question. Advertisement and promotion of
the mark through different forms of media is
sufficient to establish reputation and goodwill
within a particular geographical area, i.e.,
India. It is urged that in the present case the
car Prius was widely publicized and advertised in
leading newspapers and magazines with wide
circulation all over the world since the year
1997. It is also urged that to establish goodwill
24
and reputation it is not necessary that the mark
should be recognized by every member of the
public and it would be sufficient if persons
associated with the industry/goods are aware of
the mark. In this regard learned counsel has
urged that the Division Bench of the High Court
in the impugned judgment accepted the fact that
the launch and sale of the car Prius had been
widely advertised. However, the Division Bench
took the view that such publications were not
groundbreaking and did not have the necessary
prominence to show that the public at large would
be aware of the trade mark. Learned counsel has
further urged that the Division Bench of the High
Court did not deal with the issue of the trade
mark ‘Prius’ being a well known mark. The
entitlement of such a well known mark is to a
higher statutory protection against misuse under
the Act. The finding that the trade mark ‘Prius”
did not have transborder reputation permeating
into India is, therefore, incorrect. He has also
25
urged that the test of passing off always rest
upon a likelihood of confusion irrespective of
the stage at which the matter may be considered.
The fact that the trade mark ‘Prius’ was
registered in favour of the defendants was
irrelevant insofar as the plaintiff’s claim for
passing off is concerned. The triple identity
test laid down in Reckitt and Colman Ltd. (supra)
would govern the instant adjudication. The use by
the defendants of the multiple trade marks of the
plaintiff (‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA
DEVICE MARKS’); the conditional injunction Order
dated 10.08.2000; the violation thereof; all have
been urged by Shri Chidambaram to contend that
the aforesaid facts are strong evidence of
dishonest intention on the part of the defendants
to defraud the plaintiff to derive undue benefit
from the goodwill and reputation of the trade
mark of which the plaintiff is the first user.
18. Shri Chidambaram has additionally urged
26
that the story put forward by the defendants
surrounding the adoption of the word ‘Prius’ is
on the face of it absurd. The possibility of
conjuring a word in the Hindi language and then
looking for it in the English dictionary and
finally selecting a Latin word is too far fetched
for acceptance as a bona fide act of adoption of
a mark. If the initial use of the mark ‘Prius’ by
the defendants in April, 2001 is dishonest, as it
certainly is, no amount of user of the said mark
after April, 2001, can sustain any claim of
goodwill and reputation of the defendants in the
mark in question. Shri Chidambaram has also
struck an issue with regard to the trade mark
‘Prius’ being publici juris. It is urged that
the said finding has been arrived at without
there being an issue before the Court and without
any evidence being led on the point.
19. In reply, Shri Sai Krishna, learned
counsel for the respondents/defendants has
27
submitted that as a manufacturer of spare parts,
the defendants are entitled to inform the
consumer the name of the specific vehicles for
which the particular spare part is suitable and
useful. This is precisely what has been done and
nothing more. Such action on the part of the
defendants is protected under Section 30 of the
Act. It is urged that the conduct of the
plaintiff in belatedly moving the Registry of
Trade Mark for registration and that too on a
“proposed to be used basis” and the amendment to
the said prayer made, after filing of the suit,
are crucial circumstances for determination of
the plaintiff’s claim. On the other hand, the
mark was adopted by the defendants in the year
2001 and registration thereof was obtained in the
year 2002-2003 whereas this mark was adopted by
the plaintiff in India in the year 2009 and the
car in question was launched in the year 2010.
The documents proved by the plaintiff to
establish goodwill and reputation are all post
28
April, 2001 (date of adoption of the mark by the
defendants). Furthermore, the evidence of the
plaintiff’s witnesses make it clear that not only
the mark was adopted by the plaintiff for the
first time in India in 2009 but also that no
advertisements were published by the plaintiff
prior to April 2001. From the evidence of the
plaintiff’s witnesses it is clear that since the
launch of the car in 2010, only 130 cars were
sold. Learned counsel for the defendants have
further urged that it is the Territoriality
Principle as opposed to the Universality Doctrine
which has been accepted by the courts all over
the world as the correct test to determine
goodwill and reputation within any particular
jurisdiction. It is therefore necessary that the
trade mark is recognized and has a separate
existence in each sovereign Country. Positive
evidence of spill over of reputation and goodwill
of the plaintiff’s mark ‘Prius’ to the Indian
market, prior to April, 2001, is absent. In this
29
regard reference is made to the several passages
in the book “The Law of Passing-Off” by Prof.
Christopher Wadlow to urge that the test whether
a foreign claimant (in this case, the plaintiff;
Toyota) may succeed in a passing off action is
whether his business has a goodwill in India;
that even the most internationally renowned
business owns not one goodwill, but a bundle of
many different ones. The nature of goodwill as a
legal property with no physical existence means
that when a business is carried on in more than
one country, there must be separate goodwill in
each. It is submitted on the strength of the
decision of the Federal Court of Australia in
ConAgra vs. McCain Foods6 that in the last
resort the test is whether the owner of the goods
has established a ‘sufficient reputation’ with
respect to his goods within the particular
country in order to acquire a sufficient level of
consumer knowledge of the product and attraction
6 (1992) 23 IPR 193
30
for it to provide customers, which if lost, is
likely to result in damage to him.
20. The delay and latches on the part of the
plaintiff in tolerating the defendants using the
trade mark ‘Prius’ since April, 2001 in spite of
due knowledge has also been urged to contend that
the claim of the plaintiff has been rightly
rejected by the Division Bench of the High Court.
21. At the very outset, certain principles
that govern the law of passing off may be
usefully noticed. Such principles, in fact, have
been considered by this Court in its decision in
S. Syed Mohideen (supra), though in a somewhat
different context, i.e., the right of a
registered owner of a particular mark to bring an
action for passing off against another registered
owner of an identical or largely similar trade
mark. In S. Syed Mohideen (supra), this Court on
a collective reading of the provisions of the Act
31
held “that the action for passing off which is premised on
the rights of prior user generating a goodwill shall be
unaffected by any registration provided under the Act,” which
proposition actually stood approved in an earlier
decision of this Court in N.R. Dongre (supra).
The trinity test laid down in Reckitt and Colman
Ltd. (supra) was reiterated by this Court in S.
Syed Mohideen (supra) by holding that to prove
and establish an action of passing off, three
ingredients are required to be proved by the
plaintiff, i.e., his goodwill, misrepresentation
and damages.
22. The following passage from Kerly’s ‘Law
of Trade Marks and Trade Names’7 noticed in S.
Syed Mohideen (supra) may be reiterated herein
for a clear exposition of the principles laying
down the test for judging an action of passing
off in the Indian jurisdiction. The provisions in
the Indian Trade Marks Act, 1999 incidentally are
7 14th Edn., Thomson, Sweet & Maxwell South Asian Edition
32
analogous to those in the U.K. Trade Marks Act,
1994
“15-034. Subject to possibly
one qualification, nothing in the
Trade Marks Act, 1994 affects a
trader’s right against another in
an action for passing off. It is,
therefore, no bar to an action for
passing off that the trade name,
get up or any other of the badges
identified with the claimant’s
business, which are alleged to
have been copies or imitated by
the defendant, might have been,
but are not registered as, trade
marks, even though the evidence is
wholly addressed to what may be a
mark capable of registration.
Again, it is no defence to passing
off that the defendant’s mark is
registered. The Act offers
advantages to those who register
their trade marks, but imposes no
penalty upon those who do not. It
is equally no bar to an action for
passing off that the false
representation relied upon is an
imitation of a trade mark that is
incapable of registration. A
passing off action can even lie
against a registered proprietor of
the mark sued upon. The fact that
a claimant is using a mark
registered by another party (or
even the defendant) does not of
itself prevent goodwill being
generated by the use of the mark,
or prevent such a claimant from
relying on such goodwill in an
33
action against the registered
proprietor. Such unregistered
marks are frequently referred to
as ‘common law trade marks’.”
(Underlining is ours)
23. Whether a trade mark is to be governed
by the territoriality principle or by
universality doctrine? Prof. Cristopher Wadlow in
his book “The Law of Passing-Off8” has analysed
the problem and its possible resolution in the
following words:
“in the worst case, an
international company seeking to
expand into a new territory may
find itself blocked by a small
business already trading under the
same name or style, perhaps on a
miniscule scale; and perhaps
having been set up for the very
same purpose of blocking
anticipated expansion by the
claimant or being bought out for a
large sum. On the other hand, a
rule of law dealing with this
situation has to avoid the
opposite scenario of bona fide
domestic traders finding
themselves open to litigation at
the suit of unknown or barelyknown
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”
24. The view of the courts in U.K. can be
found in the decision of the U.K. Supreme Court
in Starbucks vs. British Sky Broadcasting9
wherein Lord Neuberger observed as follows:
“As to what amounts to a
sufficient business to amount to
goodwill, it seems clear that mere
reputation is not enough...The
claimant must show that it has a
significant goodwill, in the form
of customers, in the jurisdiction,
but it is not necessary that the
claimant actually has an
establishment or office in this
country. In order to establish
goodwill, the claimant must have
customers within the jurisdiction,
as opposed to people in the
jurisdiction who happen to be
customers elsewhere. Thus, where
the claimant’s business is carried
on abroad, it is not enough for a
claimant to show that there are
people in this jurisdiction who
happen to be its customers when
they are abroad. However, it could
be enough if the claimant could
show that there were people in
9 2015 UK SC 31
35
this jurisdiction who, by booking
with, or purchasing from, an
entity in this country, obtained
the right to receive the
claimant’s service abroad. And, in
such a case, the entity need not
be a part or branch of the
claimant: it can be someone acting
for or on behalf of the
claimant...”
25. It seems that in Starbucks vs. British
Sky Broadcasting (supra), the Apex Court of UK
had really refined and reiterated an earlier view
in Athletes’ Foot Marketing Associates Inc. vs.
Cobra Sports Ltd.10 to the following effect:
“…no trader can complain of
passing-off as against him in any
territory...in which he has no
customers, nobody who is in trade
relation with him. This will
normally shortly be expressed by
stating that he does not carry on
any trade in that particular
country...but the inwardness of it
will be that he has no customers
in that country…”
26. A passing reference to a similar view of
the Federal Court of Australia in Taco Bell vs.
10 (1980) R.P.C. 343
36
Taco Co. of Australia11 may also be made.
27. Prof. Cristopher Wadlow’s view on the
subject appears to be that the test of whether a
foreign claimant may succeed in a passing-off
action is whether his business has a goodwill in
a particular jurisdiction, which criterion is
broader than the “obsolete” test of whether a
claimant has a business/place of business in that
jurisdiction. If there are customers for the
claimant’s products in that jurisdiction, then
the claimant stands in the same position as a
domestic trader.
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
29. To give effect to the territoriality
principle, the courts must necessarily have to
determine if there has been a spill over of the
reputation and goodwill of the mark used by the
claimant who has brought the passing off action.
In the course of such determination it may be
necessary to seek and ascertain the existence of
not necessarily a real market but the presence of
the claimant through its mark within a particular
territorial jurisdiction in a more subtle form
which can best be manifested by the following
illustrations, though they arise from decisions
of Courts which may not be final in that
particular jurisdiction.
30. In SA Anciens Etablissements Panhard et
Levassor v. Panhard Levassor Motor Co12, the
plaintiffs were French car manufacturers who had
consciously decided to not launch their cars in
England (apprehending patent infringement).
12 1901 2 Ch. 513
38
Nevertheless, some individuals had got them
imported to England. It was seen that England was
one of the plaintiff’s markets and thus, in this
case, permanent injunction was granted. Similarly
in Grant v. Levitt13, a Liverpool business concern
trading as the Globe Furnishing Company, obtained
an injunction against the use of the same name in
Dublin as it was observed that advertisements by
the plaintiff had reached Ireland and there were
Irish customers. C&A Modes v. C&A (Waterford)14
,
was a case where the plaintiffs operated a chain
of clothes stores throughout the U.K. and even
in Northern Ireland but not in the Republic of
Ireland where the defendants were trading. The
Court held that, “a very substantial and regular
custom from the Republic of Ireland was enjoyed
by this store. Up to that time an excursion train
travelled each Thursday from Dublin to Belfast,
and so great was the influx of customers from the
Republic as a result of that excursion that the
13 1901 18 RPC 361
14 1976 I.R. 198 (Irish)
39
store ordinarily employed extra part-time staff
on Thursday on the same basis as it did on
Saturday which were normally the busiest shopping
days.” The said view has since been upheld by the
Irish Supreme Court.
31. Whether the second principle evolved
under the trinity test, i.e., triple identity
test laid down in Reckitt and Colman Ltd. (supra)
would stand established on the test of likelihood
of confusion or real/actual confusion is another
question that seems to have arisen in the present
case as the Division Bench of the High Court has
taken the view that the first test, i.e.,
likelihood of confusion is required to be
satisfied only in quia timet actions and actual
confusion will have to be proved when the suit or
claim is being adjudicated finally as by then a
considerable period of time following the
initiation of the action of passing off might
have elapsed. Once the claimant who has brought
40
the action of passing off establishes his
goodwill in the jurisdiction in which he claims
that the defendants are trying to pass off their
goods under the brand name of the claimant’s
goods, the burden of establishing actual
confusion as distinguished from possibility
thereof ought not to be fastened on the claimant.
The possibility or likelihood of confusion is
capable of being demonstrated with reference to
the particulars of the mark or marks, as may be,
and the circumstances surrounding the manner of
sale/marketing of the goods by the defendants and
such other relevant facts. Proof of actual
confusion, on the other hand, would require the
claimant to bring before the Court evidence which
may not be easily forthcoming and directly
available to the claimant. In a given situation,
there may be no complaints made to the claimant
that goods marketed by the defendants under the
impugned mark had been inadvertently purchased as
that of the plaintiff/claimant. The onus of
41
bringing such proof, as an invariable
requirement, would be to cast on the claimant an
onerous burden which may not be justified.
Commercial and business morality which is the
foundation of the law of passing off should not
be allowed to be defeated by imposing such a
requirement. In such a situation, likelihood of
confusion would be a surer and better test of
proving an action of passing off by the
defendants. Such a test would also be consistent
with commercial and business morality which the
law of passing off seeks to achieve. In the last
resort, therefore, it is preponderance of
probabilities that must be left to judge the
claim.
32. The next exercise would now be the
application of the above principles to the facts
of the present case for determination of the
correctness of either of the views arrived at in
the two-tier adjudication performed by the High
42
Court of Delhi. Indeed, the trade mark ‘Prius’
had undoubtedly acquired a great deal of goodwill
in several other jurisdictions in the world and
that too much earlier to the use and registration
of the same by the defendants in India. But if
the territoriality principle is to govern the
matter, and we have already held it should, there
must be adequate evidence to show that the
plaintiff had acquired a substantial goodwill for
its car under the brand name ‘Prius’ in the
Indian market also. The car itself was introduced
in the Indian market in the year 2009-2010. The
advertisements in automobile magazines,
international business magazines; availability of
data in information-disseminating portals like
Wikipedia and online Britannica dictionary and
the information on the internet, even if
accepted, will not be a safe basis to hold the
existence of the necessary goodwill and
reputation of the product in the Indian market at
the relevant point of time, particularly having
43
regard to the limited online exposure at that
point of time, i.e., in the year 2001. The news
items relating to the launching of the product in
Japan isolatedly and singularly in the Economic
Times (Issues dated 27.03.1997 and 15.12.1997)
also do not firmly establish the acquisition and
existence of goodwill and reputation of the brand
name in the Indian market. Coupled with the
above, the evidence of the plaintiff’s witnesses
themselves would be suggestive of a very limited
sale of the product in the Indian market and
virtually the absence of any advertisement of the
product in India prior to April, 2001. This, in
turn, would show either lack of goodwill in the
domestic market or lack of knowledge and
information of the product amongst a significant
section of the Indian population. While it may be
correct that the population to whom such
knowledge or information of the product should be
available would be the section of the public
dealing with the product as distinguished from
44
the general population, even proof of such
knowledge and information within the limited
segment of the population is not prominent. All
these should lead to us to eventually agree with
the conclusion of the Division Bench of the High
Court that the brand name of the car Prius had
not acquired the degree of goodwill, reputation
and the market or popularity in the Indian market
so as to vest in the plaintiff the necessary
attributes of the right of a prior user so as to
successfully maintain an action of passing off
even against the registered owner. In any event
the core of the controversy between the parties
is really one of appreciation of the evidence of
the parties; an exercise that this Court would
not undoubtedly repeat unless the view taken by
the previous forum is wholly and palpably
unacceptable which does not appear to be so in
the present premises.
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.
................,J.
(RANJAN GOGOI)
................,J.
(NAVIN SINHA)
NEW DELHI;
DECEMBER 14, 2017
47
ITEM NO.1503 COURT NO.3 SECTION XIV
[FOR JUDGMENT]
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
CIVIL APPEAL NO(S). 5375-5377/2017
TOYOTA JIDOSHA KABUSHIKI KAISHA APPELLANT(S)
VERSUS
M/S PRIUS AUTO INDUSTRIES LIMITED & ORS. RESPONDENT(S)
Date : 14-12-2017 These appeals were called on for pronouncement of
judgment today.
For parties:
Mr. Aditya Verma, AOR
Ms. Archana Sahadeva, AOR
Mr. Kapil Midha, Adv.
Hon'ble Mr. Justice Ranjan Gogoi pronounced
the judgment of the Bench comprising His
Lordship and Hon'ble Mr. Justice Navin Sinha.
The appeals are dismissed in terms of the
signed reportable judgment.
[VINOD LAKHINA] [TAPAN KUMAR CHAKRABORTY]
AR-cum-PS BRANCH OFFICER
[SIGNED REPORTABLE JUDGMENT IS PLACED ON THE FILE]
