Trademarks serve the dual purpose of securing to the proprietor the benefits of a good reputation, which in turn help foster competition and innovation, while conveying product and proprietor information to the consumer. A trademark represents facets of a business's goodwill, symbolising inter alia a consistent quality and a reputation for service, and this goodwill forms the primary basis for consumer choice among competing brands. What is protected under trademark law is not the mark itself but what the mark symbolises, namely, a firm's goodwill. A trademark is a distinguishing mark allowing a firm with a good reputation to intimate to consumers that a certain goods belongs to them, and trademark law seeks to prevent other firms from imitating this mark and trading on another firm's reputation. A trademark's legal existence is inextricably entwined with the goodwill it symbolizes. A trademark confers no monopoly whatever in a proper sense but is merely a convenient means for facilitating the protection of one's goodwill in trade by placing a distinguishing mark or symbol, a commercial signature, upon the merchandise or the package in which it is sold.
(Para 21)
The principles of trans-border reputation are well recognised and it is not intend to make a catalogue of various judgments dealing with trans-border reputation. Before the era of the internet, the judgments were to the effect that where a product is sold in India and sales figures coupled with money spent on advertisements show acceptability of the product in the market, this would be good evidence of the product having acquired a reputation through its trademark. Concerning trans-border reputation, the judgments were to the effect that if the product is not sold in India but information relatable thereto is available in the print media and especially magazines purchased by consumers having an interest in the particular category of goods, it would be good evidence of trans-border reputation having entered in the municipal jurisdiction of India. Post-internet era the law of trans-border reputation expanded because the internet virtually broke the domestic walls in areas of trade and business. On the internet, through search engines one can access information put on the website, be it by the manufacturer of the goods or in e-journals and e-magazines. Acquiring trans-border reputation is essentially a question of fact and it requires the evidence to be considered.
(Paras 23 and 25)
The word Prius is a Latin word and means “coming before”. The dictionary meaning shows that if not earlier, at least in the year 1989 the word had found acceptability in the English language and was entered in the dictionary with the meaning “prior”, “former” and “earlier”. Documentary evidence also shows the word as a source indicator of a hybrid motor vehicle would be irrelevant to determine the fact, whether the trademark Prius had acquired a global reputation which had permeated into the territory of India, for the reason the plaintiff's two exhibits do not show the year of the publication of Encyclopaedia Britannica from which the two pages have been downloaded. The court takes judicial notice of the fact that in the late 1970s, concerns by environmentalists of global warming had started ringing the warning bells. By this time, fuel consumption globally had arisen drastically, and how to control carbon, had become a matter of concern. With the advancement of technology, new and better machines which were energy efficient had started entering the market by mid 1980s. That fossil fuels emit carbon dioxide which is a greenhouse gas is well-known. Since motor vehicles, apart from electricity generating plants, consume a lot of fossil fuels, environmental concerns were felt in the industry and an endeavour was made to develop technology where motor vehicles could be run without a fossil fuel as the source of energy i.e. electrical cars or fuel efficient hybrid cars, where the idle power generated by the engine while running on fuel would be stored in a battery and the electric energy stored would be used at some point of time when the vehicle plied. Appellants do not refute that in the year 1997, Toyota marketed the first hybrid car under the trademark Prius. That the launching of the car was widely reported in the press is established by production of several magazines and journals published in 1997 to 2000. It is not relevant that many of the articles and publications have not been proved to be available in India, because at base is the limited issue under discussion, whether the launching of the car was widely reported in the press. These articles and publications, six of which are in India, establish that even the media in India widely reported about a hybrid car by the name of Prius being sold in the Japanese market in the year 1997. The suit was filed by Toyota in the year 2009 and it would be very difficult to lay ones hand on all newspapers and journals which reported the event in the year 1997. With passage of time, it becomes difficult to secure evidence. But the exhibits referred to above, are proof of the hybrid car launch being discussed in the print media. It becomes irrelevant whether the newspapers, weeklies, by-weeklies or monthly magazines published abroad, which have been exhibited were or were not available in India. These publications are relevant to prove the event being reported in the press world over.
(Para 26)
The weight of the evidence led by Toyota is that it has simply established that when it launched the hybrid car Prius in the market in Japan in 1997, the event was reported as a news item in different countries including India but not with such prominence that the public at large became aware of the same. The law on trans-border reputation requires two facts to be established. The first is reputation in foreign jurisdictions of the trademark. The second is knowledge of the trademark due to its reputation abroad in a domestic jurisdiction. The reason being, a trademark is territorial in its operation. If its reputation spills over beyond the territories of its operation, the benefit can be claimed in an action of passing off. The corollary of the finding that newspaper reporting of the event of Prius car launched in Japan in the year 1997, and further sales in the year 1998 and 1999 being not with much prominence would be that the knowledge would be limited to the class of persons associated with the trade in automobiles. The trademark has to build a reputation in the form of public confidence in the goods and the association of the mark with the source of the goods. Toyota has led no evidence of money spent in advertisements in India of the Prius car before it was sold for the first time in India in the year 2010. By the year 2000, only 52200 motor vehicles under the trademark Prius had been sold globally and there is evidence of re-call of the cars in the years 2009 and 2010. Albeit post-2001, said evidence would be proof that Prius cars were having problems and one can infer public confidence in the car not rooted firmly. If not shaky, the confidence would be of a wavering kind. Notwithstanding of little weightage, said evidence has to be put in the scale of evidence while deciding on the issue of reputation. No sales being made in India. There being no advertisements published by Toyota for its car Prius in India, and coupled with the fact that not all cars marketed under different trademarks by Toyota acquire a global reputation and much less in India, internet penetration as of the year 2001, being low in India, the weight of the evidence leans in favour of the view that by April 2001 Toyota had not established a global reputation in its trademark Prius which had entered India.
(Para 31)
The appellants had been selling auto parts under the trademark Prius since April 2001, and till December 2009 when the suit was filed there was a constant rise in the sales figures which by December 2009 would be around Rs 4.5 crores for the period 2006 till December 2009. The auto parts were packed in cartons bearing the trademark Prius, and in conformity with Section 30(2)(d) of the Trade Marks Act, 1999, they were entitled to inform the consumer that the auto part was adapted for use in a particular brand of Toyota car. They indicated the same by using the word Toyota and Innova in the packaging material, not as a trademark but because of it being reasonably necessary to indicate that the goods so adapted are compatible for the Toyota motor vehicles. The only fault found by the Division Bench of the court, was the manner in which this was indicated and it is the case of the appellants that they have complied with the Order dated 10-8-2010, passed by the Division Bench, which has been transposed in the impugned judgment while passing a decree for injunction with a condition imposed; the condition being by way of permitting the use of the words Toyota and Innova in the packaging material in terms of the judgment of the Division Bench. It is possible that manner of representation to write that the goods are compatible may appear to one as a trademark use and to another as a non-trade mark use. This would not be evidence of dishonesty. That apart, this line of reasoning adopted by Toyota is an ancillary line of reasoning and not the main plank. It is intended to support the main plea of dishonesty in adoption sought to be proved through trans-border reputation and lack of credibility in the justification given by the appellants as to how defendants 1 and 2 adopted the trademark Prius motivated by the words ‘Pehla Prayas’.
(Para 33)
Nothing turns on the fact that the nature of goods is the same, the class of buyers is the same and the trade channel is the same for the reason that appellants are the registered proprietors of the trademark Prius in India. Registration was obtained by them in the year 2001. The registration subsists. Rectification proceedings are still pending. Toyota has failed to establish trans-border reputation of its trade mark Prius in India when appellants adopted the same. The court has found credibility in the justification given by the appellants as to how they adopted the word Prius which waspublici juris in the year 2001.
(Para 34)
A mental condition of a person is a fact defined under the Evidence Act, 1872. Knowledge claimed by a person or attributed to a person would be a matter of fact. The claim by defendant 1 when he appeared as DW-1 that he and defendant 2 acquired knowledge of the word Prius by consulting the dictionary is probable and possible for the reason there is irrefutable evidence that if not earlier, at least by the year 1989 the word Prius had entered the dictionary. The court takes judicial, notice of the fact that that before a non-English word enters the English dictionary it comes into popular use by English speaking people. The word Prius must have come into use by English speaking people much prior to the year 1989. The appellants have explained how they discovered the word “Prius”. Their explanation is that they were the first in India to manufacture add-on chrome plated accessories”, and they first conceptualised this attempt as “Prayas” (attempt). They being the pioneer in the field of manufacture of add-on chrome plated accessories, the defendants were looking for a word which could properly and exactly describe their first attempt or “Pehla Prayas” (first attempt). The defendants after doing research found one word in the dictionary “PRIUS” meaning “to come first” which was not only attractive but also exactly and properly described the pioneer efforts of the defendants in the field of add-on chrome plated accessories. The justification is logical. Thinking in one's mother tongue, a first pioneering venture by a person would obviously be thought of as “Pehla Prayas”, meaning first attempt. The attempt pleaded is to manufacture add-on chrome plated accessories. The justification in the written statement is, not that it was the first (“Pehla”) business venture of the appellants. The justification given is that the appellants were the first in India to manufacture add-on chrome plated accessories. The Hindi word ‘Pehla’ was used in the context of the first manufacturer and not the first business venture. The Hindi word ‘Prayas’ was used as an attempt in the context of the manufacture and not the business venture.
(Paras 36 and 37)
If a word is publici juris and a person gives good justification as to how he appropriated a word as a trademark, relating to the state of mind of the person, unless the testimony of the person is discredited, a Court would have no option but to accept the statement made on oath because the fact is of a kind which a person can prove by stating the truthfulness thereof on oath. And if, as in the instant case, there is proof that the word was publici juris it lends assurance to the claim.
(Para 38)
Understanding the logic of the claim of the appellants would be essential for if a blemish is found in the logic it would tilt the scale against the appellants and in favour of Toyota. The straight line logical reasoning is that defendants 1 and 2 wanted to set up a manufacturing unit to produce add-on chrome plated accessories, this technology was being used in India for the first time (as per their belief), therefore “Pehla”. It was an attempt (“Prayas”). The concept ‘Pehla Prayas’. The concept became the motivation to find a catchy word in the English language. The English equivalent of Hindi word ‘Pehla’ is ‘First’. Pick up the dictionary and see the meaning of the word ‘First’. One reaches the word ‘Prior’. Look at synonyms of the word ‘Prior’. One reaches the word ‘Prius’. There is no blemish in the logic of the search and the reasoning. It is probable and likely. The court finds no reason to disbelieve the version made good by the testimony of defendant 1.
(Para 39)
The appeal is allowed with respect to the limited issues which were argued, concerning the trademark Prius and The impugned decree is partly set aside but limited to the injunction issued relating to the trademark Prius. Since the appellants did not challenge the injunction order, which is based on condition concerning the trademark Toyota, the Toyota device and the trademark Innova, said part of the injunction granted is retained. Mandatory injunction is set aside. The appeal would now be listed for arguments on the issue of damages (which would now become an academic issue unless the present decision is set aside by the Supreme Court or is recalled in review). Cross-Appeal filed by Toyota seeking enhancement of damages is listed on 12-1-2017, and it is directed that this appeal may also be listed on 12-1-2017 along with Toyota's case.
(Paras 40 and 41)
If it is proved by the plaintiff that its trademark was well known in the market, the court would assume that those in the trade were aware of the same and any adoption of the trademark would obviously be dishonest. What is dishonest can never be honest.
(Para 22)
Issues of trans-border reputation or likelihood of confusion decided in various cases cited before the court, and even in cases not cited arose before the court, either in quia timet actions or when the defendants had just entered the market. At that point of time, the issue could be decided on the test of likelihood of confusion, and most of the judgments are dealing with the issue at the stage of injunction where documents filed by the parties had yet to translate into evidence and witnesses were yet to be examined. In such situation, the only way in which the issue of an injunction pending adjudication in the suit can be decided is on the touchstone of likelihood of confusion. But in a case of the kind at hand where the appellants had been selling the goods under the offending trademark for nearly ten years when the suit for injunction was filed, there must be evidence of actual confusion. Toyota is a big company. It has had a presence in India for over two decades when the suit was filed. It was well entrenched in the Indian market in the year 2001. No consumer of Toyota car or buyer of an auto part sold by Toyota was ever confused by the appellants selling their products under the trademark Prius, for if this was so, in ten years somebody would have complained to Toyota or at least would have made known said fact to Toyota. May be of little weightage, is a publication published in the year 2004 titled Auto Car in which advertisements of Toyota and that of the appellants have been published, and the publicity department of Toyota which had got the publication of the advertisements done would have received a copy of the publication and would have known that under the trademark Prius the appellants are selling auto parts. The evidentiary worth would be that probably the employees of Toyota in India were themselves not aware of Toyota selling a hybrid car by the name Prius.
