Delhi HC reverses order on 'Prius' brand name in Toyota trademark case

A division bench of the Delhi High Court on Friday reversed a July 8 verdict by a single judge restraining Prius Auto Industries, a Delhi-based an automotive accessories company, from using the 'Prius' trademark for its products after upholding a challenge earlier made by Japanese car maker Toyota Motor Corp.

The July 8 verdict had found Prius Auto guilty of infringing on Toyota's goodwill and reputation, by selling car spare parts under the name 'Prius', a trade name for Toyota's hybrid vehicles and thereby gaining customers who were familiar with Toyota's reputation. The judgment restrained the Prius Auto from manufacturing, selling, or using the trademarks "Prius", "Toyota" and "Innova". In addition, the court had also directed Prius Auto to pay Rs 10 lakh to Toyota as compensation for the infringement.

After the single judge determination, Prius Auto had challenged the interpretation of well-known trademarks, taken by Toyota to secure the judgment and had submitted before the division bench that such trademarks had to be determined in context to a similar class of goods and in a relevant geographical market.

Accepting Prius Auto's arguments, the division bench headed by Justice Pradeep Nandrajog on Friday, held that the single judge interpretation determining Toyota's trans-border reputation on the 'Prius' brand had been established solely through passing references in newspapers, which in themselves could not be said to decisively prove the automatic recognition of the mark in favour of Toyota in India.

The bench also highlighted that the fact that Prius Auto was in the business of manufacturing auto parts since 2001, and no such complaint had been made until the year 2010, itself proved that the use of the 'Prius' brand name did not create confusion in the minds of buyers.

Considering that the nature of goods sold, class of buyers and trade channels were completely different from Toyota's hybrid cars, the bench set aside the order of the single judge and allowed the auto part manufacturer to continue using the 'Prius' brand name for its products. The court however, still upheld the portion of the earlier order that restrains Prius Auto from referring to any of its goods under the 'Toyota' or 'Innova' trade names.