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By Madhur Singh
India’s top court rejected Toyota Motor Corp.'s attempt to block an Indian auto parts marker from using “Prius,” the name of the Japanese company’s gas-electric hybrid car.
The Supreme Court of India ruled that Toyota failed to show that its hybrid car had built a reputation in India before Prius Auto Industries Ltd. registered its trademark in 2002. That reputation couldn’t be assumed simply because the Prius was well-known abroad.
The requirement to establish goodwill and reputation in the Indian market is a far-reaching change, Ranjan Narula of Gurgaon-based firm RNA told Bloomberg Law in an email.
Foreign trademark owners will now have to produce better documentary evidence to support claims of reputation and goodwill in India. Companies planning to bring existing brands to the Indian market must proactively secure rights, either by registering trademarks or getting the marks listed in the well-known trademarks registry started earlier this year, intellectual property lawyers told Bloomberg Law.
Toyota had originally convinced a single-judge bench of the Delhi High Court to issue a permanent injunction against Prius Auto based on its argument that its car’s name was a well-known trademark. The judge ruled that Toyota’s Prius brand had a reputation in India, even though it wasn’t sold in the country at the time.
Prius Auto appealed, and the decision was overturned by a Delhi High Court division bench. The two-judge panel found that Toyota failed to establish the transborder reputation of the “Prius” mark in India at the time that Prius Auto had adopted the mark. The panel said it was a time of limited internet penetration and awareness of foreign brands in India.
Toyota appealed to the Supreme Court, arguing that the division bench had not considered that Toyota’s Prius was a well-known mark, and had failed to take note of the publicity created by an advertising campaign promoting the launch and sale of the car worldwide, including in the Indian media.
The court rejected Toyota’s argument, because it didn’t provided sufficient proof of having built a reputation for the Prius trademark in the Indian market.
“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 court said. The advertisements and online mentions Toyota had furnished did not constitute a basis for the necessary goodwill and reputation of the product in India at the time, the court said.
However, the situation is vastly different today in India because internet and mobile penetration is deep, and e-commerce allows people to buy foreign products, Raja Selvam of Chennai-based law firm Selvam & Selvam told Bloomberg Law in an email. “People are well aware of every brand and product available in any corner of the world.”
Putting together evidence to show how well-known a trademark is in India should also be much easier now, Selvam said. “Google analytics would provide you with the exact number of users accessing the websites from India,” he said
However, the ruling is a clear warning for trademark owners to be proactive about protecting their marks, both lawyers said.
“It costs next to nothing to have a trademark registered in India, and not doing so could prove an expensive mistake for a company looking to bring a brand into the Indian market in future,” Selvam said.
This case is Toyota Jidosha Kabushiki Kaisha V. Prius Auto Industries Ltd. , Sup. Ct. (India), No. 5375-5377, 12/14/17 .
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