The Weekly Obiter

REPUTATION OF TRADE MARK HAS TO BE ESTABLISHED INDEPENDENTLY IN A TERRITORY: SUPREME COURT

January 22, 2018

In a path-breaking development for Indian trademark law, the Supreme Court in the case of Toyota Jidosha Kabushiki Kaisha vs M/S Prius Auto Industries Ltd. bearing CIVIL APPEAL NOs.5375-5377 OF 2017 reiterated that IP rights are “territorial” and not “global”. The court was deciding a matter involving “Prius”, the brand under which Toyota sells its leading “hybrid” car.
The Apex Court held that merely because Prius is well known outside India does not mean that it enjoys a “reputation” in India as well. That has to be independently established.
The Plaintiff sought to prevent the Defendants from using the trademarks “Toyota”, “Innova” and “Prius”. The first two marks were registered trademarks of the Plaintiff and the lower courts had no difficulty in finding in favour of Toyota on this count. The Defendants did not contest these findings before the Supreme Court. The contest was only with respect to the trademark “PRIUS”, which the plaintiff claimed belonged exclusively to it. Interestingly, the plaintiff had no trademark registration for this mark, but the Defendant did (a registration dating back to 2002). Toyota contested this registration by the defendants, claiming that it was the first user of Prius (and began using this mark as early as 1997) and that the Defendants had wrongly and dishonestly registered the same in India.
The court ruled in favour of the Defendants, noting that the Plaintiff had not supplied enough proof of its “reputation” in the Indian market. In other words, although trans-border reputation was now very much a part of Indian law (ever since the Whirlpool decision), such reputation could not merely be asserted, but must be proved within the “territory” of India. 

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