Introduction-

The word ‘Bullying’ is quite familiar to most of us which mean intimidating a weaker person to do or to abstain from doing something. Unfortunately, this intimidation is not only limited to schools/colleges but also has invaded the trademark industry.

Trademark bullying means when a registered trademark owner threatens or tries to threaten another trademark owner, generally, may not be a registered one through legal actions or notices against him. United States Patent and Trademark Office (USPTO) defines the term ‘trademark bullying’ as “the act where the trademark owner that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow.”

It can be explained as a vexatious practice by a trademark holder, typically a bigger organization or company to file a suit against another trademark user, supposedly a smaller company in order to intimidate or harass him under the scope of its trademark rights.

Trademark Bullying in India-

Trademark Bullying cases have started taking a toll in India. The Trademark law in India has given a bunch of various rights to the trademark owners which also includes initiating a legal proceeding against anyone who tries to infringe the trademark of the owner but the same should be in bonafide and legitimate.

Thus, to protect the smaller companies in India from the baseless infringement proceedings initiated by the larger business and to safeguard their rights a provision under the Section 142 of Trademark Act,1999 is present which states –

“ Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding for infringement of a trademark which is registered, or alleged by the first-mentioned person to be registered, or with some other like proceeding, a person aggrieved may, whether the person making the threats is or is not the registered proprietor or the registered user of the trade mark, bring a suit against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats and may recover such damages (if any) as he has sustained, unless the first-mentioned person satisfies the court that the trade mark is registered and that the acts in respect of which the proceedings were threatened, constitute, or, if done, would constitute, an infringement of the trade mark.”

Provisions related to this are also present under the Patent Act, 1970, Copyright Act, 1957, and Designs Act, 2000.

It is observed that these smaller companies who are being targeted by the larger entities do not have enough capital to fight a case against these big companies and as a result, they give up the mark or cease its operations.

This type of bullying is considered as an aggressive type of strategy by the trademark holder to prevent the other party from using the trademark altogether which may not normally cause a threat to the trademark owner’s market value or its share.

The potential harm is caused to the smaller entity in terms of economic loss which includes rebranding the cost of the product, removal of the product from the market, loss of reputation, or incurring a heavy amount of litigation cost to defend the suit.

However, the plaintiff company may also face a backlash from its customers or general public because of its negative publicity or its reputation now being tagged as a “bully” company.

Cases related to the Trademark Bullying in India-

There are some important cases in India where the Intellectual Property Appellate Board (IPAB) and the Courts have taken Trademark Bullying as a serious issue and have decided in the favor of the smaller companies.

Crystal Knitters vs. Swarovski-

In the present case, Crystal Knitters, a textile manufacturer from Tripura, Tamil Nadu, instituted a rectification petition against the defendant company which has a big name in the fashion industry for its crystals. The petitioners stated that they had been using its trademark- ‘Crystal’ since 1971 and also had trademark registrations and copyrights in the artistic work of its trademark. Further, they stated that the defendant company was aware of its existence but still registered its trademark under ‘Crystal Glamour’ in 2005.

The defendant company in its contention to the rectification petition replied through a letter stating that Swarovski’s trademark has lapsed a long time ago and they were not interested in renewing its registration. They also added that given the current situation they did not see any point in attending the hearing.

The Intellectual Property Appellate Board in its hearing ordered to remove the trademark and that Swarovski had disclaimed ‘Glamour’ from its trademark which meant that they had claimed ‘Crystal’ as their trademark. However, the same trademark was registered under the name of Crystal Knitters in the same Class. Therefore, the defendant company’s trademark was laid down to be cancelled as they both were alike.

M/s ITC Limited vs. Nestle India Limited-

ITC Ltd had launched its Sunfeast Yipeee! Noodles in the year 2010 had two varieties and one of them was ‘Magic Masala’. In 2013, Nestle India Limited used the phrase ‘Magical Masala’ relatively for its instant noodles and advertised the same under the expression ‘Maggi extra-delicious Magical Masala’.

Thus, the plaintiff company stated that ‘Magic Masala’ is an essential feature of their trademark ‘Sunfeast Yipeee! Noodles Magic Masala’ and the defendant company had allegedly copied their trademark by sightly modifying the brand as ‘Magical Masala’.

It is to be noted that the plaintiff company had never registered the said expression for their products. Thus, ITC filed a suit for perpetual injunction against the use of their trademark by Nestle India.

The defendant company contended that the expression ‘Magical Masala’ was not used by them as a trademark but rather as a flavor descriptor. It further added that such terms ‘Magic’ and ‘Masala’ are everyday used expressions in the food industry and cannot belong to any individual person.

The Madras High Court took a note of Nestle’s contention and ordered that “Both the words ‘Magic’ and it’s derivative ‘Magical’ are common to the trade. Therefore, neither the plaintiff nor the defendant can claim any monopoly over the expression ‘Magic’ or ‘Masala’ for they are common words in Indian culinary and Indian food industry”.

It observed that ITC was using the expression as a flavor descriptor and not as a trademark and also no application for the registration of the trademark was filed with the Trade Marks Registry. Further, the court stated, “ITC has used the expression “Magic Masala” in a laudatory manner to praise the “Masala” in the sachet. Laudatory epithet cannot be given monopoly or protection as has been held by Courts… Since it is a laudatory word, it can never be monopolized.”

Bata India Limited Vs Vitaflex Mauch GmbH-

In this case, the plaintiff had filed a suit against the defendant company for restraining the defendant from making threats of legal proceedings related to the trademark which were totally baseless to the plaintiff. The plaintiff also claimed damages from the defendant for issuing groundless threats.

The major question before the High Court of Delhi was whether the legal notice amounted to legal threat or harassment and whether the plaintiff is entitled to damages and injunction for the same.

The Delhi High Court held the case in favor of the plaintiff company and stated that the threats made by the defendant were groundless, unreasonable, and wrongful. Thus, the defendant was ordered to hold back any such groundless threats in any manner whatsoever.

Jones Investment Co Inc vs Vishnupriya Hosiery Mills-

In this case, a US-based giant clothing brand, Jones Investment Co Inc of Wilmington, filed a suit against Vishnupriya Hosiery Mils located in Chennai which was using the trademark ‘Jones’ for its products.

The plaintiff company contended that this local brand (defendant) was causing confusion among the customers as the company solely was a registered owner of that trademark named under ‘Jones New York’ which was used all over the world including a variety of goods such as, clothing, footwear, hosiery, and these products have acquired a reputation in the market.

To this, the defendant company stated that it had been using its trademark since 1993 even before the plaintiff company and there cannot be any confusion among the costumers as Jones Investment’s goods are not sold in India.

The Intellectual Property Appellate Board decided the case in the favor of the defendant company and allowed the local brand to retain its trademark. It said that Multinational Companies who have no intention to sell its goods in India, cannot restrict an Indian company which has adopted the mark in bonafide and who is first in the market, cannot be prevented from using the same.

Cadbury vs. ITC Ltd-

Cadbury filed a case against ITC when the company started marketing Eclairs along with its ‘Candyman’ trademark on which the plaintiff company got an injunction. Eventually, ITC moved the Intellectual Property Appellate Board stating that the trademark hasn’t been used since 1994.

“Section 47 of the Trademark Act, 1999 states removal of the trademark by IPAB on the grounds of non-use, trademark registered without any bonafide intentions, or if there has been no proof of use for a period of five continuous years from the date of application for registration of the trademark.”

Cadbury in its defense stated that its trademark ‘Chocolate Eclairs’ was registered in India in the year 1974, and it has been used ever since. It also has its trademark for ‘Chocolate Eclairs Pop’. However, the company failed to present any evidence in this respect.

The judgment delivered by V Ravi and S Usha said there isn’t “a single evidence” to prove it. “Just the registration alone will not help the respondents to prove their use.” Further, they added, “The board in various matters on the issue of non-user has held that if the respondent does not appear to rebut the ground of non-user, it goes without saying that they have not used the mark even after several years of registration and the mark shall be canceled for non-user.”

Subsequently, Cadbury decided not to take the matter any further as the trademark was not used for years. It can be observed that non-use of the mark is also a major reason why the companies are losing their trademarks.

Defending the business against Trademark Bullying-

Trademark Bullying is an obstacle for smaller businesses to enter the market. Due to this many of these businesses are discouraged from launching their products, spreading their business in a new market, or using a certain trademark as they may face a legal consequence from the larger entities. The smaller companies can take certain measures to defend themselves from trademark bullying-

1. The company can take proper care before registering its mark in order to not infringe another company’s intellectual property rights. One should conduct proper research for any similar marks before applying for a trademark to avoid future litigations.
2. The trademark owner should keep knowledge of basic trademark laws. Basic knowledge of the same can help the owner to differentiate between a legitimate claim and an unreasonable claim or threats from the opposite party as it is very important to distinguish when the trademark is being bullied.
3. The smaller business should not voluntarily back down in front of the bullying attempt. Many trademark proceedings are initiated without appropriate inquiry. Thus, a voluntary move can make the company lose its trademark forever.
4. The companies can always offer to settle the matter through Alternative Dispute Resolution such as arbitration or mediation. This can help to save the defending cost.
5. The trademark owner should wait till the mark is fully registered, before investing in brand advertising or manufacturing products with the mark.
6. The smaller business can also publicize the bullying. This can lead the bully company to take back its suit due to negative publicity which can hinder its reputation and brand name.
   A trademark is one of the crucial elements of a company. It becomes an identity for a company and makes it easy for consumers to find the business. Therefore, protecting the trademark from the ‘bullies’ should be prominent for the business owners.

Conclusion-

To conclude, all infringement notices cannot be termed as threats or trademark bullying. It is very important for the person initiating the legal action that it is within the scope of his rights and reasonable claims. For the defendant companies who are being harassed and suffered can always resort to courts.

They can claim compensation for the loss incurred or a claim of defamation depending on the severity of the trademark bullying from the bully company. The theory of Trademark bullying is slowly catching up in India and it can be seen that Courts are not restraining themselves to protect the small/local business against the big brands.

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Introduction

The unrivalled occupancy and rapid advancements of Computers, technology and the Internet has significantly shaped the world into an edified space. With the burgeoning demand and colossal utilizations, its access isn’t limited to a certain set or type of people anymore, instead appears, more or less, as an around-the-globe administration. The fast-paced growth of the web, outstanding reach over people and generation of a global surge of excitement are laudable.

Estimates vary as to the number of people connected to the net. But it’s widely believed that the number is over 60 million, and growing exponentially^[1]. Between 750,000 and 1 million people are caught up in the Internet phenomenon every month, and it is expected that by the end of the century, the total number of users will be at least 150 million and the value of goods, services and information traded globally over the internet will reach US $ 200 billion^[2].

This leads us to elucidating on the concept of cyberspace, which isn’t precisely defined anywhere, although it can be termed as an intangible space in which communication over various computer networks occur simultaneously.  This widespread interconnected digital technology [cyberspace] eventually means that a person sitting in one part of the world can access content of any kind uploaded by a server, oceans away on the other side. Due to these advancements it is apparent that any data and information can be availed in a digitised format—detached from the physical medium—since the internet transcends the physical dimensions of things.

Notwithstanding the foregoing, this as a consequence, makes the notion of property and exclusivity irrelevant. Hence it can be understood that as soon as any information is released into cyberspace, it practically becomes of public use, without any specific ownership; it becomes publici juris. Therefore, it can be used by anybody.

The advantages and scope of publicity of business through e-commerce or business on the World Wide Web can reach the surfers very fast in any part of the world. Unfortunately this has also paved the way for the emergence of cyber crime^[3].

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Cyber crime & The IT Act, 2000

Cyber crime—although an undefined term by an Indian statute—is a catchall attributed to any crime which includes as an essential requirement, a computer and a network. The National Cyber Crime Reporting Portal (a body set up by the government to facilitate reporting of cybercrime complaints) defines the term, as ‘any unlawful act where a computer or communication device or computer network is used to commit or facilitate the commission of crime’^[4]. Cyber crime isn’t confined to fraud, bullying or identity theft anymore. Various activities can be termed as cyber crimes like: CSAM^[5], Cyber bullying, cyber stalking, vishing, online fraud, identity theft, phishing, spamming, data breach, cyber-squatting, pharming, crypto-jacking, espionage, online drug trafficking etc. and several other in accordance with the statutes.

The meteoric rise of cyber crimes in the world is undeniable. But it wasn’t until much later that this quandary was even acknowledged by the general population or legislations. The fact of the matter is that with the breakneck speed of new digital technology build-out—which patently highlights the nifty uses—sadly, ends up shrouding the major drawbacks. Nevertheless, there has been much-needed awareness in the past few years regarding cyber offences; it’s not treated as a trifling matter anymore.   

To deal with the cyber-crimes, the parliament of India has enacted the Information Technology Act, an act based on UNCITRAL^[6] (which adopted model law on e-commerce advocating a shift from paper based environment to a computer based environment^[7]).

The IT Act, 2000 provides legal recognition to digital signatures and electronic records. It is a legal framework to facilitate and safeguard electronic transactions in the electronic medium.

Intellectual Property

The concept of Intellectual Property can be traced back to the Byzantine Empire where monopolies were granted. For instance, the granting of exclusive privileges to inventors of any machine/process to speed up silk-making by Venice’s statutory legislation, or one year monopoly to cooks for new recipes by Greece^[8] . Over time the concept has been given a clearer picture. The most important of this subject herein is the ability of an idea or creation—not necessarily tangible—is termed as a property and has the right to be protected by the law to support artists, creators and other prime movers. 

According to the World Intellectual Property Organization (or WIPO)—one of the 15 specialized agencies of the United Nations—defines Intellectual property as, “creations of the mind: inventions; literary and artistic works; and symbols, names and images used in commerce. Intellectual property can be further categorized into: industrial property and copyright”. 

Industrial Property deals with patents, trademarks, geographical indications and designs, etc. on the other hand, literary, recording, musical, dramatic, cinematographic films and other such artistic works fall within the ambit of Copyright. 

The primary legislations regulating Intellectual property in India are: The Patents Act 1970, The Trade Marks Act 1999, The Geographical Indications of goods (Registration and Protection) Act 1999, The Design Act 2000, The Semiconductor Integrated Circuits Layout-Design Act 2000 and The Copyright Act 1957. Even still, the biggest discrepancy present in our country’s situation is the lack of understanding regarding IPR and Cyber laws—one cannot be separated from the other if online content has to be protected. 

There’s absence of any provision dealing with Intellectual Property in the IT Act, 2000. There isn’t even a mention of the word ‘IPR’ or anything about Intellectual Property protection on its infringement, which currently is a very challenging area in cyberspace.  

IPR and Cyberspace 

Copyright

In hindsight, the internet has created a new, effortless and trouble-free medium for several artists—writers, musicians, authors, content creators, researchers, and other copyright holders—to display their art while working on a global level, creating data accessible to millions of people. 

Contrarily, it has also opened a Pandora’s Box by making it possible for any user to duplicate information and replicate it as his/her own, thereby facilitating ‘copyright’ infringement.

A copyright confers an exclusive right on the owner, for a finite period, to prevent others from exploiting its subject-matter—an invention, a design, or a literary or other artistic work.

Hence, the copyright owner is entitled to certain ‘exclusive rights’ subject to certain provisions, to do or authorise the doing of certain acts in respect of work or a substantial part of it like: (a) in case of literary, dramatic or musical work—its reproduction, issuing copies, performance, adaptation etc., (b) computer programming, (c) artistic work, (d) cinematography film, (e) sound recording; (emphasis supplied)^[9].

According to the statutes, Copyright work shall be deemed to be infringed when any person, without license granted by the owner of the Copyright/Registrar of Copyrights under the Indian Copyright Act, 1957 or in contravention of the conditions of a license so granted or of any condition imposed by a competent authority under the said Act, does anything which exclusive right to do is, by the Act, conferred upon the owner of the copyright^[10]. Furthermore, on distribution either for trade or to an extent to affect pre-judicially the owner (emphasis supplied)^[11].

As far as basic usage of artistic work for an individual is concerned, liability may be escaped by using the defence of private use^[12]. Despite, unauthorised home taping of radio and television programmes becoming rampant all over the world^[13], the courts heretofore, have termed, liability of the end-user depending upon the degree and extent of unauthorized use, according to circumstances^[14]. 

It has been opined in Helliwell v. Piggott-Sims^[15], a UK case that, ‘private and domestic use can be properly said to have been done if the contemplation of its use was only limited to enjoying the collection.’  

The liability for offence [copyright infringement] usually lies on the originator, or the first person to post the copyrighted information on the web regarding requisite knowledge and intention (of committing the crime) to be present. Therefore, if the person has knowledge (of violation of copyrighted work) then the defence of ignorance—regarding the existence of such a law protecting the same—isn’t tenable^[16]. As far as (ISP) Internet Service Providers are concerned due to its system design appears to commit literal infringement of distribution, display or performance rights^[17].

Computer software is also subject matter of copyright protection under the act. Defined in Section 2(ffc) of the Act is a ‘computer programme’ within its meaning. Computer Programmes are thence included in the definition of literary work in the Act^[18] and owners have the right to grant software licenses^[19]. Moreover, The Penal Code, 1860 also reserves the right to punish publication of copyrighted work as the offence of forgery^[20]. In India, the offence of Copyright infringements are pursued under section 63 of the Copyright Act, 1957 ‘whereby any person who knowingly infringes or abets it shall be punishable for term not less than 6 months extendable up to 3 years with fine not less than rupees 50,000.’

Trademark and Domain Name

The Trademark Act, 1999 defines the term as, “A mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours”^[21]. Basically a trademark serves the purpose of identifying the product (and its origin), guaranteeing its quality, advertising it, and public (prospective consumer) image^[22]. Common examples can be: Pepsi, Sony, and Colgate etc.

A domain name may constitute a trademark if used for the purposes of identifying the source of goods or services^[23]. The most critical aspect of access to a particular website is the domain name.  Since inception of the domain name system, a domain name has been the identifier of an individual or entity operating within the worldwide web comprising cyberspace. On registration, they allow the owners of the domain names to mark their location in cyberspace by providing an identity and an exclusive mode of marketing products^[24].

‘Cybersquatting’ is a form of infringement of trademark laws. It involves the use of domain name by a person with neither registration nor any inherent rights to the name. These people register trademarks of others as domain names and sell those domain names back to the [trademark] owners or third parties at a higher price for profit. Since domain names establish a sense of online identity, they have major importance for creators. However, there’s more—an essential need to prove a dishonest intention, lack of legitimate rights and interest and similarity of domain name with the trademark in these petitions^[25]. ‘A domain name registrant doesn’t obtain any legal right to use that particular domain name simply because he has registered the domain name, he could still be liable for trademark infringement^[26].’

The Supreme Court was of the opinion that the use of similar domain name may lead to a diversion of users which could result from user’s mistaken access on one domain name instead of the other^[27]. This rationale was followed in succeeding judgements like of Tata Sons Ltd. & Anr. v. Arno Palem & Anr.^[28], as well.  

Furthermore, reverse domain name hijacking or reverse cybersquatting is when a trademark owner tries to secure a domain name by making false cybersquatting claims against a domain name’s rightful owner through legal action. Such issues usually arise with large corporations and wealthy individuals.’

Presently India doesn’t have any specific provision to stop violations as the aforementioned, there is a need for new legislation like the United States—U.S. Anti-Cybersquatting Consumer Protection Act, 1999. It protects the interest of owners of both registered and unregistered trademarks against use of their marks within domain names and also safeguards living persons against use of their personal name under certain circumstances.

Issues

Jurisdiction

The notion of jurisdiction is rooted in territoriality from the point of view of both the court which can properly assert jurisdiction and from the point of view of the law that should be applied while deciding the dispute^[29]. This concept of a ‘territorial space’ becomes complicated with the borderless and non-physical domain of the internet. Furthermore, these enforcement issues become more complex in cases of international transaction. In the case of, Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy^[30], the Delhi HC was dealing with an inter-state issue but the plaintiff was a foreign company which had invoked the jurisdiction of an Indian Court to seek an injunction against the alleged violator of trade mark. The court by large followed the development of common law with no indigenous law developed in India. 

Other Issues

Neither is there a legal compensation under the IT Act nor any provision to punish Cybersquatters; the only relief available is to take the domain back. As already mentioned before, there is lack somewhere in respect of jurisdiction issues, cyber stalking, cyber defamation etc. in the said statute.

Similarly, in the Indian Trademark Act, 1999 and Copyright Act, 1957 there’s a silence on cyber infringement issues. Additionally even with the computer programmes being protected under the copyright act, there’s no remedy for online software piracy^[31]. 

Conclusion

Intellectual Property Rights are a very important aspect in today’s time. There is a massive need for attention in the field for safeguarding the rights of developers, creators, and other artists. In India, although the legislations are going through steady changes there is still a certain requirement for a level of awareness regarding the crimes committed in cyberspace. As the internet provides a massive platform to performers—blatant, unchecked and continuous IPR violations on the internet—pushes intellectual property of people in a downslide motion which isn’t a good thing for the creative process and empowerment of this country. There is an urgent need for stricter laws in this field to avoid further infringements. And hopefully there will be.

^[1] Tan Tee Jim, Net Effect Copyright Conundrum in Cyberspace, 9 SAcLJ 229, 229 (1997).

^[2] See “The Business Times”, 22 September 1997 and “Business Week”, 5 May 1997. 

^[3] Harish Chander, Cyber Laws and IT Protection, 14 (PHI learning Private Ltd. Publication 2012).

^[4] Aprajita Rana & Rohan Bagai, Cybersecurity in India, Lexology (Feb. 24, 2020), https://www.lexology.com/library/detail.aspx?g=4cd0bdb1-da7d-4a04-bd9c-30881dd3eadf

^[5] Child Sexually Abusive Material/Child Pornography

^[6] United Nations Commission on International Trade Law

^[7] Vakul Sharma, Information Technology, 15 (Universal Law Publishing Company 2013).

^[8] Mr. Atul Satwa Jaybhaye, Cyber Law & IPR Issues: The Indian Perspective, Bharat Law Rev., Apr.-June 2016, at 166, 168. 

^[9] Indian Copyright Act, 1957 § 14.

^[10] Ibid, § 51(a)(i)

^[11] Ibid, § 51(b)(ii)

^[12] Ibid, § 52.

^[13] Dr. Gupta & Agarwal, Cyber Laws, 148 (Premier Publishing Company 2010)

^[14] Prosieben Media A.G. v. Carlton U.K. Television Ltd. [1999] FSR 610, 619.

^[15] [1980] FSR 582.

^[16] Rodneyd Ryder, Intellectual Property and the Internet (Lexis Nexis – Butterworths 2002) 320.

^[17] Ryder supra note 15, 320. 

^[18] Indian Copyright Act, 1957 § 2(o)

^[19] Jaybhaye supra note 8, 171.

^[20] Indian Penal Code, 1860, § 463, 464.

^[21] The Trademark Act, 1999 § 2(1)(zb)

^[22] Dr. B.L. Wadhera, Law relating to Intellectual Property, 134 (Universal Law Publishing Company 2009)

^[23] Raymond Limited v. Raymond Pharmaceutical Pvt. Ltd., 2016 SCC OnLine Bom 5159.

^[24] Ibid. 

^[25] Chander supra note 3.

^[26] Yahoo Inc. v. Aakash Arora & Anr.,78 (1999) DLT 285.

^[27] Satyam Infoway Ltd. V. Sifynet Solutions Pvt. Ltd., AIR 2004 SC 3540. 

^[28] 2013 (54) PTC 429 (Del).

^[29] S Muralidhar, Jurisdictional Issues in Cyberspace, 6 IJLT 1, 2-3 (2010).

^[30] 2009 SCC OnLine Del 3780.

^[31] Jaybhaye supra note 8.

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Toyota Jidosha Kabushiki v M/S Prius Auto Industries Ltd

Facts:

The Plaintiff (Toyota) is one of the largest corporations dealing with the manufacture and sale of automobiles. Plaintiff launched its first commercial hybrid car with the trademark ‘Prius” in Japan in the year 1997 and later on in U.K, Australia, U.S.A etc. Subsequently, Plaintiff claimed registration of its mark in various jurisdictions. The plaintiff’s registration of mark was pending in India since 2009. The contention arose when Plaintiff’s discovered that defendants M/s. PRIUS Auto Industry were trading in the name of the mark ‘PRIUS’. Defendants obtained registration of the trademark ‘PRIUS” in 2002 and have been using it since 2001. Thus, the plaintiff approached the Court seeking permanent injunction restraining the defendants from using the mark ‘PRIUS’, claiming that they have acquired trans-border reputation of the respective trademark. 

Issues:

1. Whether Toyota can maintain an action for passing off against the defendants on the ground of trans-border reputation as the model with the trademark ‘PRIUS’ was not available in India till 2009?

Contentions:

The plaintiffs’ contended that they have acquired trans-border reputation of trademark and actual sale of good is not essential in contending reputation/goodwill. The trademark ‘PRIUS’ through cars was widely advertised by way of circulation in leading newspapers, magazines which is sufficient for proving reputation/goodwill. The plaintiff also contended that due to the mark adopted by defendants there is likelihood of confusion with respect to the same which is detrimental to their trademark.

The defendants contended that they have gained significant reputation/goodwill over the years in the domestic market. They also stated that plaintiff has not sold a single product in India, they haven’t registered their trademark, therefore they cannot claim goodwill with respect to Prius cars in Indian market. Defendant urged the court to follow territoriality principle rather than Universality principle. Defendants also contended that the plaintiff has not adduced sufficient evidence with respect to their trans-border reputation. They also stated that it should be noted that there is delay on the part of the plaintiffs to initiate an action for passing off and thus should not be maintainable. 

Single Bench’s observation:

The Learned Judge observed that it was a clear case of spill-over of reputation and passed ad-interim injunction restraining the defendants from using the respective marks in respect of auto mobiles manufactured by defendants. The Court stated that plaintiff has acquired significant reputation and goodwill through websites, newspapers, magazines etc. It also stated that the mark has attained the status of well-known mark.

Division Bench’s observation:

The Court observed that Territoriality Principle should be the primary focus for the present case and not the Universality Doctrine. They stated that, it is necessary that the trademark is recognized and has a separate existence in each sovereign Country. The Court stated that acquiring goodwill globally is not adequate what is essential is the mark should earn goodwill at the relevant time i.e. before the date of adoption of the mark by the opposite party. Positive evidence of spillover of reputation and goodwill of the plaintiff’s mark ‘Prius’ to the Indian market, prior to April, 2001, is absent, when the defendants adopted and used the trademark Prius.

The territoriality principle was followed changing the dimension of trans-border reputation in the country. Reliance was placed on the decision of “Starbucks (HK) Ltd. & Anr. v British Sky Broadcasting Group PLC & Anr”^[1], wherin the Court emphasized that “goodwill of the trademark in the local territory should be established”, they further elaborated that “goodwill should be of utmost importance as one of the essential elements of the Trinity test of passing off”^[2]. Following the trans-border jurisprudence of U.K and America, the Court relied on territoriality principle stating that the plaintiff must prove local goodwill in the context of trans-border reputation prior to the incorporation and registration of the defendant’s trademark. 

It also emphasized that plaintiff did not adduce adequate evidence for an action of passing off. The Court also stated that the delay of 9 years by the plaintiff in filing the suit cannot be considered reasonable. Time is the essence doctrine was reiterated in order to maintain an action for passing off, accordingly it was decided in favor of Prius.

Analysis:

The present case embarks a new dimension towards the future of trans-border reputation in India. The concept of trans-border reputation in India has evolved over the years and there has been paradigmatic shift from the application of Universality principle to Territoriality principle. The decision passed by Delhi High Court is in consonance with the principles followed in U.K, America, Canada etc. The Indian Courts in the history have shown a strong trajectory towards the protection of foreign marks. This case has taken a strong stance by preventing destruction of economic fibre of the home country and subsequently, restricting dilution of this trans-border reputation. It is important for any nation to strike a balance between recognition/protection of foreign marks in compliance with international principles and protecting its country’s economic fibre from exploitation. This case has also highlighted the importance of bonafide national trader which the courts often failed to recognise. It is imperative that each case has to be decided on the basis of facts and prevailing circumstances and blanket application of the principle should be prohibited.

^[1] [2015] UKSC 31 

^[2] Reckitt and Coleman- Trinity Test- Goodwill, Misrepresentation and Damages.

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