Impact of Supreme Court’s order in the Prius case on the determination of transborder reputation of trademarks
Logos, names, or a combination of both are used to create a new design commonly known as trademarks in legal language. These marks signify a product’s originality, connect the consumer with the product emotionally, and guarantee a high standard of quality while purchasing. Trademarks are used to identify or give the product an identity. A trademark is the right of a manufacturer to identify their product and make it secure so that no one other than him can use the same logo or name to sell the product without the original owner’s permission.[1] To protect the trademark infringement, the government at the national and world levels has framed some rules that govern the trademark rights of companies and regulate the market regarding trademark issues. One can acquire a trademark right through registration. One of the main aspects of trademark protection is the concept of reputation. This refers to the goodwill, quality, status, and association of the product for which the trademark is registered. Any company can register its trademark in foreign countries to prevent the breach of its trademark rights. By registering in foreign countries, they get legal rights to file a suit if there has been any infringement in their trademark right. That legal battle for trademark protection was fought by Toyota Jidosha Kabushiki Kaisha, where they had claimed that one local manufacturer Prius Auto Industries Ltd. had been using their trademark and taking illegal profits. The case was decided by the Supreme Court of India.[2]
Brief facts of the case are as follows Toyota Jidosha Kabushiki Kaisha, the plaintiff in this case is a global manufacturer of automobiles which is based in Japan. It launched a car named Pirus. The car was applauded globally and became popular. The company registered the car trademark in different countries. The sale of cars in India was started in 2009, but before that the car had received recognition and a reputation globally. The defendant, M/s Prius Auto Industries Ltd had a business of manufacturing spare parts and accessories for cars in India since 2001 and they had registered the trademark PRIUS in 2002. The plaintiff after finding out that the defendant is selling their products under the trademark of Prius is illegal, filed a suit against them for seeking an injunction in the said matter and claiming damages. Meanwhile, they also applied for trademark registration. The single learned judge of the Trial Court upholding the principle of “Global Reputation and Prior User” gave the judgment in the favour of the plaintiff and restrained the defendant from further using the name Prius for any trade and also paying damages to the plaintiff.[3] Aggrieved by this M/s Prius Auto Industries Ltd filed a suit in the Delhi High Court. This court upheld the same decision given by the trial court judge. Finally, the plaintiff that is M/s Prius Auto Industries Ltd approached the Supreme Court of India, which dealt with the question of whether the defendant is liable for passing off due to the use of ‘PRIUS’.
Before this case, the courts in India had a wider approach towards recognition of transborder trademarks, they often favored the global brand in protection of their trade rights. Their judgment was based on two key and notable case laws, Milmet Oftho Industries & Ors v. Allergan Inc. (2004) where The Supreme Court held that pharmaceutical companies having international reputations need not their physical presence in the Indian market for protection of their trademark, they only had to prove that mark was popular and known to certain classes of consumers. In the case of Whirlpool Corporation v. Registrar of Trademarks (1998) the Supreme Court of India protected the rights of Whirlpool, saying that it had established a global reputation and, despite no presence in the Indian market its rights were protected because it had well-advertised its product in the Indian market. These precedents established that a trademark’s reputation could cross borders, and evidence of use, recognition, or spill-over publicity was sufficient to claim protection in India, even without direct business activities.
Supreme Court decision in the Prius case left aside these settled principles and established some new findings. The first one is the Higher Evidentiary Threshold, the companies in order to claim trademark protection need to show that their products had been well known in the Indian market, before the date the Indian entity’s use began. Thrash hold for this was set high for the foreign companies claiming rights in India. Mere tangible presence is satisfactory, they need to prove that their popularity in India is as much as it is globally through surveys. The court rejected the idea of global recognition automatically translated to the Indian market unless there is some degree of consumer awareness and local impact. The burden of proof was also placed on the claimant, to demonstrate how and where had the mark been infringed. This shift of the Supreme Court reflects the view, for the protection of domestic companies in trademark suits, unless there is any compelling evidence of the foreign brand’s local recognition shown.[4]
The impact of this case on the determination of transborder reputation are; a) Stricter Standards for Proving Reputation: The decision established that transborder reputation claims require robust and specific evidence of local impact. Their connection with the Indian market should be shown directly, they need to bring their local sales data, consumer satisfaction forms, and surveys demonstrating awareness as evidence proof. Their global recognition is not sufficient now to qualify in the Indian market for trademark protection. This puts a higher burden on the foreign countries thereby protecting the rights of Indian companies. There should be a targeted advertisement and visible presence in the Indian media to protect rights. This decision has helped domestic companies from monopolizing trademarks based purely on international reputation, thereby supporting local entrepreneurship. This judgment reflected that now the Indian courts may not align with the rules of international standards or other jurisdictions for the protection of domestic manufacturers thereby forcing the foreign brands to either partner, invest, or engage more prior to the investment in India.
The Supreme Court’s order in the Prius case has reshaped the determination of transborder reputation in India, as it demands direct evidence of local recognition, and high and, strict standards to balance the protection of domestic manufacturers. The Prius case serves as a crucial reminder that while global reputation is valuable, its protection in India requires clear, tangible connections to the local market.[5]
Notes:-
[1] Meindert Flikkema and others, ‘Trademarks’ Relatedness to Product and Service Innovation: A Branding Strategy Approach’ (2019) 48 Research Policy 1340.
[2] Larisa Ertekin, Alina Sorescu and Mark B Houston, ‘Hands off My Brand! The Financial Consequences of Protecting Brands through Trademark Infringement Lawsuits’ (2018) 82 Journal of Marketing 45.
[3] Rika Permata, ‘Legal Protection of Online Trademark Dilution in Indonesian Economic Development Framework’, SSRN Electronic Journal (2013) <http://www.ssrn.com/abstract=2585971> accessed 23 September 2024.
[4] Ron D Katznelson, ‘The Burden of Proof for Invoking the Public Interest Exception to ITC Exclusion Orders Under Section 337’ [2019] SSRN Electronic Journal <https://www.ssrn.com/abstract=3449200> accessed 23 September 2024.
[5] P Wells, ‘The Tata Nano, the Global “value” Segment and the Implications for the Traditional Automotive Industry Regions’ (2010) 3 Cambridge Journal of Regions, Economy and Society 443.
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Author Introduction- Ankit Kumar is a current student in the second year of his study at Chanakya National Law University (CNLU), Patna pursuing the course of B.A. LL.B. (Hons.). He has always been fascinated by legal systems and their role in helping humans cooperate and communicate on a large scale, enabling the growth of civilization. It has become part of his life’s mission to interpret the evolution of law and the frameworks that shape it.
