# TOYOTO JIDOSHA KABUSHIKI KAISHA v. MIS PRIUS AUTO INDUSTRIES LTD. & ORS

- **Citation:** [2017] 12 S.C.R. 805
- **Court:** Supreme Court of India
- **Decided:** 2017-12-14
- **Case number:** Civil Appeal Nos. 5375-5377 of2017
- **Bench:** RANJAN GOGOi, Navin Sinha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/toyoto-jidosha-kabushiki-kaisha-v-mis-prius-auto-industries-ltd-ors-31759
- **Pages:** 22

## Headnote

Trade Marks Act, 1999 - Foreign claimant - Action for
passing off - Maintainability of - Appellant-plaintifj; an automobile
manufacturer incorporated in Japan, flied suit against respondentdefendant seeking permanent injunction restraining the respondents
from using appellant '.Y unregistered trade mark 'Prius '. of which
the plaintiff claimed to be a prior use1-, so as to prevent the
respondents from passing off their goods as that of the appellant -
Single Judge of High Court restrained the respondents from using
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the mark 'prius' in respect of auto accessories manufactured by D
them - Division Bench set aside the order of Single Judge - On
appeal, held: Plaintiff launched the world'.Y first commercial hybrid
car called 'Prius' in Japan in I 997 - Said car was introduced in
India in 2009-I 0 and until that point of time appellant had not
obtained registration of the mark 'Prius' in India - Howeve1-,
defendants were continuously using the mark 'Prius' since 2001
and they had obtained registration of the same in the year 2002 -
Though, trade mark 'Prius' had acquired a great deal of goodwill
in several otherjurisdictions in the world, but there must be adequate
evidence to show that appellant had acquired a substantial goodwill
for its car under the brand name 'Pri11S' in the Indian market also -
Furthe1; appellants advertisements in automobile magazines,
international business magazine, availability of data on information
disseminating portals like Wikipedia etc., even if accepted, are not
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a safe basis to hold the existence of necessary goodwill and
reputation of the product in Indian market at the relevant point of 0
time - The brand name of appellants car Prius had not acquired
the degree of goodwill, reputation and market or popularity in Indian
market so as to vest in appellant the necessary attributes of the
right of a prior user and to successji1lly maintain an action of passing
off against respondent, the registered owner.
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SUPREME COURT REPORTS
[2017] 12 S.C.R.
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lntellec/l/al Property Rights - Trademark - Passing ufl -
Proof/or estahlishing - Trinity test - Held: Three 111gredienls
required to be prul'ecl by the plai11ti/Jfi1r establishing w1 action uf
passing (?ff arc his goodwill, misrcprcse11/alion and damages.
lntellect11af Properly Righrs - Trademark - Passing off -
13
Misrepresentation - Test of likelihood of co11/i1sio11 vis-a-vis actual
co11/i1sion -B11rde11 to prove - Discussed.
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fmclfect11al Property Rights - Trademark - Action for passing
off- Territoriality principle - Disrnssed - D0<:trincs!Pri11cipfcs.
Dismissing the a1>peals, the Court
HELD: l. l According to the trinity test, to prove and
establish i111 i1ction of passing off, three ingredients arc re11uired
to be proved by the plaintiff, i.e., his goodwill, misrepn:sentation
and damages. (Para 211[82l~CJ
S. Si:ed Mohideen
v.
P. S11/odw11a Bai (2016) 2 SCC
683 - relied on.
1.2 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 arc customers for the
claimant's products in that jurisdiction, then the claimant stands
in the same position as a domestic trader. The overwhelming
judicial and academic opinion all over the globe, therefore, seems
to be in favour of the territori:1lity principle (a trade mark being
recognized as having a separate existence in each sovereign
country). There is no reason why the same should not apply to
this country. !Paras 27, 281(823-E-FI
Pr<?( Cristopher Wadlow in his book "The Law of PassingOff 5'" Edn. Sweet & Maxwell" - relied on.
1.3 To give effect to the territoriality principle, the courts
must necessarily have to determine if there has been a spill over
of lhe reputation and goodwill of the mark used by the claimant
who has brought the passing off action. In the

## Text

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[2017] 12 S.C.R. 805
TOYOTO JIDOSHA KABUSHIKI KAISHA
v.
MIS PRIUS AUTO INDUSTRIES LTD. & ORS.
(Civil Appeal Nos. 5375-5377 of2017)
DECEMBER 14, 2017
[RANJAN GOGOi AND NAVIN SINHA, JJ.]
Trade Marks Act, 1999 - Foreign claimant - Action for
passing off - Maintainability of - Appellant-plaintifj; an automobile
manufacturer incorporated in Japan, flied suit against respondentdefendant seeking permanent injunction restraining the respondents
from using appellant '.Y unregistered trade mark 'Prius '. of which
the plaintiff claimed to be a prior use1-, so as to prevent the
respondents from passing off their goods as that of the appellant -
Single Judge of High Court restrained the respondents from using
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the mark 'prius' in respect of auto accessories manufactured by D
them - Division Bench set aside the order of Single Judge - On
appeal, held: Plaintiff launched the world'.Y first commercial hybrid
car called 'Prius' in Japan in I 997 - Said car was introduced in
India in 2009-I 0 and until that point of time appellant had not
obtained registration of the mark 'Prius' in India - Howeve1-,
defendants were continuously using the mark 'Prius' since 2001
and they had obtained registration of the same in the year 2002 -
Though, trade mark 'Prius' had acquired a great deal of goodwill
in several otherjurisdictions in the world, but there must be adequate
evidence to show that appellant had acquired a substantial goodwill
for its car under the brand name 'Pri11S' in the Indian market also -
Furthe1; appellants advertisements in automobile magazines,
international business magazine, availability of data on information
disseminating portals like Wikipedia etc., even if accepted, are not
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a safe basis to hold the existence of necessary goodwill and
reputation of the product in Indian market at the relevant point of 0
time - The brand name of appellants car Prius had not acquired
the degree of goodwill, reputation and market or popularity in Indian
market so as to vest in appellant the necessary attributes of the
right of a prior user and to successji1lly maintain an action of passing
off against respondent, the registered owner.
805
H
806
SUPREME COURT REPORTS
[2017] 12 S.C.R.
A
lntellec/l/al Property Rights - Trademark - Passing ufl -
Proof/or estahlishing - Trinity test - Held: Three 111gredienls
required to be prul'ecl by the plai11ti/Jfi1r establishing w1 action uf
passing (?ff arc his goodwill, misrcprcse11/alion and damages.
lntellect11af Properly Righrs - Trademark - Passing off -
13
Misrepresentation - Test of likelihood of co11/i1sio11 vis-a-vis actual
co11/i1sion -B11rde11 to prove - Discussed.
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fmclfect11al Property Rights - Trademark - Action for passing
off- Territoriality principle - Disrnssed - D0<:trincs!Pri11cipfcs.
Dismissing the a1>peals, the Court
HELD: l. l According to the trinity test, to prove and
establish i111 i1ction of passing off, three ingredients arc re11uired
to be proved by the plaintiff, i.e., his goodwill, misrepn:sentation
and damages. (Para 211[82l~CJ
S. Si:ed Mohideen
v.
P. S11/odw11a Bai (2016) 2 SCC
683 - relied on.
1.2 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 arc customers for the
claimant's products in that jurisdiction, then the claimant stands
in the same position as a domestic trader. The overwhelming
judicial and academic opinion all over the globe, therefore, seems
to be in favour of the territori:1lity principle (a trade mark being
recognized as having a separate existence in each sovereign
country). There is no reason why the same should not apply to
this country. !Paras 27, 281(823-E-FI
Pr<?( Cristopher Wadlow in his book "The Law of PassingOff 5'" Edn. Sweet & Maxwell" - relied on.
1.3 To give effect to the territoriality principle, the courts
must necessarily have to determine if there has been a spill over
of lhe 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
TOYOTO JIDOSHA KABUSHIKI KAISHA v. M/S PRIUS AUTO
807
INDUSTRIES LTD.
the claimant through its 1nark within a particular territorial
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jurisdiction in a more subtle form. [Para 29][823-F-GJ
1.4 Once the claimant who has brought the action of passing
off estal.itishcs his goodwill in the jurisdiction in which he claims
that the defendants arc trying to pass off their goods under the
brand name of the claimant's goods, the burden of establishing
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actual confusion as distinguished from possibility thereof ought
no! 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
circumst:rnces surrounding the manner of salc/nrnrketing of the c
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 clainrnnt that
goods marketed by the defendants under the impugned mark D
had been inadvertently purchased as that of the plaintiff/claimant.
The onus of bringing such proof, as an inv:1riable 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 he a surer :rnd better test of proving
an action of passing off by the defendants. Such a test would also
he consistent with commercial and business morality which the
law of passing off seeks to achieve. In the last resort, therefore,
it is preponclcnmce of probabilities that must be left to judge the
claim. (Para 31 [[824-G; 825-A-D[
1.5 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 registnition of the same
by the defendants in India. Uut if the territoriality principle is to
govern the matter, which it should, there must be acle<1uate
evidence to show that the plaintiff had acquired a substantial
goodwill for its car under the brand name 'Prius' in the Indian
nrnrkl·t also. The car itself was introduced in the Indian market
in the year 2009-2010. The advertisements in automobile
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[2017] 12 S.C.R.
magazines, international business magazines; availability of data
in information-disseminating portals like Wikipcdia 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 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 the general population,
even proof of such knowledge and information within the limited
segment of the population is not prominent. 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
G present premises. Further, 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. [Paras 32, 33][825-E-H; 826-A-G]
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TOYOTO JIDOSHA KABUSHIKI KAISHA v. M/S PRIUS AUTO
809
INDUSTRIES LTD.
N.R. Dongre v. Whirlpool Corporation (1996) 5 SCC
14 : [1996) Suppl. SCR 369; Mi/met Oftho Industries
& Ors. v. Allergan Incorporated (2004) 12 SCC 624 :
[2004] Suppl. SCR 586; Trans Tyres India Pvt. Ltd. v.
Double Coin Holdings Ltd. & Am: 2012 SCC Online
Delbi 596 - referred to.
Athletes' Foot Marketing Associates Inc. v. Cobra Sports
Ltd. (1980) R.P.C. 343; Starbucks v. British Sky
Broadcasting 2015 UK SC 31; Reckitt and Colman Ltd.
v. Borden Incorporated 1990 (1) All E.R. 873; ;
ConAgra v. McCain Foody (1992) 23 IPR 193; Taco
Bell v. Taco Co. of Australia 1981 60 FLR 60; SA
Anciens Etablissements Panhard et Levassor v. Panhard
Levassor Motor Co. 1901 2 Ch. 513; Grant v. Levitt
1901 18 RPC 361; C&A Modes v. C&A (Waterford)
1976 I.R. 198 (Irish) - referred to.
Kerly:~ 'Law ofTrade Marks and Trade Nam~s' I4'1' Edn.,
1'ho111so11, Sweet & .Maxwell South Asill11 Edition - relied
on.
Case Law Reference
(2004] Suppl. SCR 586
referred to
Para 12
1990 (1) All E.R. 873
referred to
Para 12
(1992) 23 IPR 193
referred to
Para 19
(2016) 2 sec 683
relied on
Para 21
[1996) Suppl. SCR 369
referred to
Para 21
2015 UK SC 31
referred to
Para 24
(1980) R.P.C. 343
relied on
Para 25
1981 60 FLR 60
referred to
Para 26
1901 2 Ch. 513
referred to
Para 30
1901 18 RPC 361
referred to
Para 30
1976 I.R. 198 (Irish)
referred to
Para 30
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5375B
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5377of20I7.
From the Judgment and Order dated 23.12.2016 in RFA (OS)
No. 62 of2016 and 12.01.2017 in RFA(OS) No. 69 of2016 of the High
Court of Delhi at New Delhi.
P. Chidambaram, Mukul Gupta, Sr. Advs., Pravin Anand. Ms.
Vaishali Mittal, Aditya Verma, Siddhant Chamola, Ms. Mrinali Menon,
Ms. Jennifer Rohita Xavier, Ms. S. Lakshmi, Sumit Kumar Mishra, Ad vs.
for the Appel !ant.
Sai Krishna, Ms. Archana Sahadeva, Kapil Midha, Nikhil Lal,
Advs. for the Respondents.
The Judgment of the Court was delivered by
RAN.JAN GOGOI, .J. I. 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 arc partners. The partnership firm of the respondents
was constituted in the year 2001. The fom1h respondent is a Private
'jmited Company in which the second and third respondents arc majority
sharcholde~·s.
2. Civil Suit [CS (OS) No. 2490 of 2009) was instituted by the
plaintiff in the Ddhi High Court seeking a decree ofpennanent 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' 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.
TOYOTO JIDOSHA KABUSHIKI KAISHA v. M/S PRIUS AUTO
81 l
INDUSTRIES LTD. [RANJAN GOGOi, J.]
Furthermore, according to the plaintin: it had launched the world's
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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
2000-200 l. The plaintiff also cluimed regrntration ofthe 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.
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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 in
Delhi and Bangalore held in the yc<Jr 2009 and it was formally launched
in India in the year 20 I 0.
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( I )(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 noi 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 well known
trade marks of the ph1intiffwithout any <wthorization 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 bc1:11 using the words 'TOYOTA', 'TOYOTA
INN OVA' and 'TOYOTA DEVICE' on the packaging materials in which
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the auto parts manufactured by them 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
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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 period of time, they have built up a considerable
market reputation. According to the defendants, the mark 'Prius" had
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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
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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 'pehe/a prayas' (Hindi word meaning first attempt). It
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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 '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
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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 t~c Division Bench of the High Court and by Order dated
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TOYOTO JIDOSHA KABUSHIKI KAISHA v. MIS PRIUS AUTO
813
INDUSTRIES LTD. [RANJAN GOGOI, J.]
10.08.2010, the Division Bench permitted the defendants to use the
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registered as well as un-registered trade marks of the plaintiff subject to
the following conditions:
"(i) The defendants were restrained from using the plaintiff's
registered trade marks (TOYOTA, INNOVA) except for the
purpose of identifying that the defendants' products can be
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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
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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 docs not appear that the defendants had carried the aforesaid
Order dated J 0.08.2010 of the Division Bench of the High Court in any
further appeal. Consequently, the said order governed the parties during
the pend ency 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 tria!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 20022003, 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. 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 userofthe mark 'Priris' in various
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countries, tf not in India, and that goodwill and reputation of the plamtitf
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 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 I 0.08.20 I 0) 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 datc.d 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 'Prins' is concerned was not justified. Accordingly the aforesaid
part of the order of 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 fikd 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 'Prins' and specifically
whether by use of the said name/mark to market the automobile spare
pa11s manufactured by them, the defendants arc guilty of passing off
their products as those of the plaintiff thereby injuring the reputation of
the plaintiff in the market.
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
TOYOTO JIDOSHA KABUSHIKI KAISHA v. MIS PRIUS AUTO
815
INDUSTRIES LTD. [RANJAN GOGOi, J.]
the defendants, took into account, inter alia, the global sales of Prius
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Cars (ranging upto over a million sales globally); the exponential hike in
the sales of cars (300 ilnits 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
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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 iii
international magazines and journals were taken 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
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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
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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( I )(zg) read with Section
11 (6) & l l (9) of the Act. Relying on the decision of this Court in S. Syed
Mohidcen vs. P. Sulochana Bai1, the learned trial Judge took the view
that ifthe 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 trial Judge
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took the view that the plaintiff was the prior user/adopterofthe mark
'Prius', though it may not have been sucli prior user so far as the Indian
m:.irket is concerned. In this reg:.ird, the le:.irned trial Judge relied on the
decision of this Court in N.R. Dongre vs. Whirlpool Corporation2wherein
this Com1 had approved the views of the Delhi High Court holding that
wide advertisement ofa trade mark witho'ut the existence of the goods
in the local market can well be considered as use of the trade mark in
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the said local market. Again, relying on the decision of this Court in
Milmet Oftho Industries & Ors. vs. Allergan Incorporated3 the learned
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trial Judge held that the rea·l test of establishing prior use is to determine
who is the first in the world market. Adopting the tests l:.iid in Reckitt
1 2016 (2) sec 683
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and Colman Ltd. vs. Borden Incorporated4 the learned trial Judge
came to the conclusion that the goods of the plaintiff 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
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c.onfusion 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
C · adoption of the mark 'Prius' by the defendants, though they were the
registered proprietor thereot: was misleading, as the plaintiff was the
true and first userof 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 use of the mark by the defendants
I) 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
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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 arriyed 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. l 0 lakhs, was awarded.
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13. In appeal, the Division Bench reversed the conclusion(s) of
the learned Single Judge 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, 200 l) of the mark by
the defendants in India was taken into consideration. The Division Bench
G 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
' 1990 (I) All E.R. 873
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TOYOTO JIDOSHA KABUSHIKI KAISHA v. M/S PRIUS AUTO
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news items with regard to the launching of the product in Japan had
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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 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 ipsofacto 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.
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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
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and advertisement surrounding the 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 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 Autoear,
Overdrive) contained defendants' advertisements under the name 'Prius'
and in fact both the parties have been advertising their products in the
'2012 SCC Online Delhi 596
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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 j uris and that the explanation given
by the defendants for adopting the said word as their trade mark is
logical and acceptable. It is on the aforesaid broad basis the decree
passed by the learned trial Judge was reversed by the Division Bench of
the High Court.
1.6. 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 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 'Prins' 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
'Prins" did not have transborder reputation permeating into India is,
therefore, incorrect. He has also 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
TOYOTO JIDOSHA KABUSHIKI KAISHA v. M/S PRIUS AUTO
819
INDUSTRIES LTD. [RANJAN GOGOI, J.]
registered in favour of the defendants was irrelevant insofar as the
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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;
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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 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
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act of adoption of a mark. If the initial use of the mark 'Prius' by the. D
defendants in April, 2001 is dishonest, as it certainly is, no amount of
userofthe 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 Cow·t and without any
evidence being led on the point.
19. In reply, Shri Sai Krishna, learned counsel for the respondents/
defendants has 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 ofTrade
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 crncial
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
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plaintiff to establish goodwill and reputation are all post 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
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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 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 for it to provide customers,
which if!ost, is likely to result in damage to him.
20. The delay and latches on the pm1 of the plaintiff in tolerating
the defendants using the trade mark 'Prins' since April, 200.l 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
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21. At the very outset, ce11ain 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),
6 (1992) 23 !PR 193
TOYOTO JIDOSHA KABUSHIKI KAISHA v. MIS PRIUS AUTO
821
INDUSTRIES LTD. [RANJAN GOGOI, J.]
though in a somewhat different context, i.e., the right of a registered
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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 held "that the action for passing off which is premised
on the rights of prior user generating a goodwill shall be unaffected by
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any registmtion provided tinder the Act," which proposition actually stood
approved in an earlier decision of this Cou11 in N.R. Dongre (supra).
The trinity test laid down in Reckitt and Colman Ltd. (supra) was reiterated
by this Court in S.