Trademark In IndiaDelhi High Court Rejects Toyota’s Trademark Rectification Application

The High Court of Delhi, in the case of Toyota Jidosha Kabushiki Kaisha Vs. Tech Square Engineering Pvt. Ltd. &Anr.[CO(COMM.IPD-TM) 298/2022-]decided on 03.02.2023, held that the rectification application of the PetitionerPetitioner company stands rejected on the ground that it has failed to establish goodwill “and” the reputation of Alphard mark in India.

FACTS

Toyota Jidosha Kabushiki Kaisha (hereinafter referred as (“Petitioner”) is incorporated in Japan. It is an automotive manufacturer and operates throughout the world. It entered the Indian Market in a Joint Venture (hereinafter referred to as “JV”) with the Kirloskar Group in 1997 and set up manufacturing facilities in India. The Petitioner company owns various distinctive and well-known trademarks and one of them includes the trade mark ‘ALPHARD’. The aforesaid trademark was adopted by the Petitioner company in the year 1986 and a luxury MUV under the said brand was launched in the year 2002. Respondent

The Petitioner claimed that the Alphard, a minivan, was introduced in 2002 and has been since  used in China, Russia, Indonesia, the Philippines, and Japan. In India, Petitioner company filed a “proposed to be used” trademark registration application in 2017 under class 12 i.e. vehicles; apparatus for locomotion by land, air, or water. However, the Registrar rejected the same on the grounds that it is similar to Techsquare’s (hereinafter referred as ‘Respondent’) trademark.

The dispute is over the trademark ALPHARD, registered by Respondent for car accessories. Respondent applied for ALPHARD with an intent to use in 2015.  The Petitioner, meanwhile, are the proprietors of ALPHARD abroad. They adopted the trademark in 1986, bequeathed it to a vehicle line, of which they have sold over 850,000 units since its launch in 2002. Petitioner’s Indian trademark application for ALPHARD was registered in November 2017, also with an intent to use. It promptly ran into Respondent company’s existing registrations. This caused Petitioner to seek cancellation against Respondent in 2018.

The present adjudication is another trademark litigation claiming transnational reputation this time on a different brand of cars- ‘Alphard’.

The case reached the Delhi High Court as a result of this complexity of registrations, oppositions, and refusals when Toyota filed a rectification petition to have Techsquare’s trademark revoked. It’s interesting to note that Toyota sells the same vehicle in India under the name “Vellfire” instead of using the Alphard mark.

Thus, the aggrieved Petitioner has filed a rectification petition before the High Court of Delhi.

ISSUES BEFORE THE HONORABLE COURT

1. Whether the Petitioner’s application establishes the goodwill and reputation of its mark and if it can be registered on the basis of the Transborder Reputation or not?

CONTENTIONS OF THE PARTIES

According to the Petitioner, the word “ALPHARD” is a “well-known” trade mark that has come to imply secondary meaning because  of its widespread goodwill and reputation. On November 21, 2017, the Petitioner submitted an application to register the mark “ALPHARD” in India on the used basis. The Trade Marks Registry, however, objected to the Petitioner’s trade mark application since the Respondent had already registered the mark “ALPHARD” in classes 9, 12, and 27 on a proposed to be used basis on 5 November 2015.

Therefore, the Petitioner alleged that the Respondent had adopted the mark “ALPHARD” in relation to goods in cognate and allied fields in a mala fide manner in order to trade upon the Petitioner’s good will and reputation in these rectification applications against the Respondent’s registrations. The Respondent stated in its defence that it had been using the mark “ALPHARD” for goods in classes 9, 12, and 27 since 2015 and that its use of the mark was bona fide and honest. As opposed to the Petitioner, the Respondent had been using the mark in India before the Petitioner and is the prior user. The Respondent further asserted that because the Petitioner had not used its mark in India, there could not possibly be any goodwill towards the aforementioned trade mark in India or any transnational reputation for the same. Moreover, according to Respondent’s arguments, the Petitioner claimed that the mark had been used in India since 2008, but on the other hand, it applied for registration of the mark in India in 2017 on the basis of proposed to be used.

Both sides had submitted their supporting documents on record and had cited several relevant  judgments. Since 2008, the Petitioner had filed printouts of listings for the sale of the Petitioner’s vehicles in India using the trademark “ALPHARD” on third-party websites. Also, it placed on record the advertising materials for the mark “ALPHARD” as well as international brochures, annual reports, awards, and certificates of worldwide trade mark registration and renewal. The Petitioner claimed that the Respondent had submitted invoices in the name of its sister company rather than in its own. The Petitioner also stated that the Respondent could not have been granted registrations owing to Sections 11(1), 11(2), 11(3) and 11(10) of the Trade Marks Act, 1999. The Petitioner, inter alia, relied on the judgment of a division bench of the Delhi High Court in MAC Personal Care Pvt. Ltd. v Laverana GMBH and Co., [2016 SCC OnLine Del 530] to support its submission that transborder/spill over reputation in respect of a trade mark may exist in India, despite the brand not having any commercial use in India.

The Respondent, on the other hand, contended that the word “ALPHARD” is the name of a star, making the use of the said mark was bonafide and honest, as opposed to its wholly arbitrary and imaginative usage in relation to automotive accessories. The Respondent argued that the Petitioner neither  utilized its trademark for items falling under classes 9 and 27 outside of India and nor  did it use it in India. Further, it refuted the Petitioner’s claims by claiming that Articles 11(1), 11(2), and 11(3) did not apply in this particular case because the Petitioner had never previously registered a trademark in India.

The Respondent contended that there was no transborder reputation available to the Petitioner in India in the present case and that any claimed transborder reputation needed to be verified in accordance with the principle of territoriality. The Respondent referenced the  judgment of the Hon’ble Supreme Court in Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd., [(2018) 2 SCC 1]. The Respondent argued that the alleged transborder reputation was also nonexistent in India in this case as well.

The Petitioner company has sold a lot of units under the trade mark ‘ALPHARD’ since its launch in 2002. The details of sales figures as well as advertising and promotional expenses incurred by the Petitioner company from 2002-2017 have been given in the petition. The Petitioner company’s trade mark ‘ALPHARD’ is well-known throughout the world and has acquired a secondary meaning with the people associated with the trade associating the same with the Petitioner.

The Petitioner company applied for registration of the trade mark ‘ALPHARD’ on a “proposed to be used basis” on 21 November, 2017 and the same has been objected by the Registry. The Respondent no. 1 obtained registration of the trade mark ‘ALPHARD’ under Classes 9, 12 and 27 on 5 November, 2015 on a ‘proposed to be used basis’.

Adoption of the Petitioner company’s trade mark by the Respondent no. 1 in relation to goods in the allied/cognate field has been done in a mala fide manner so as to trade upon the Petitioner company’s goodwill and reputation. The case of the Respondents in the counter statement can be summarized as under: Respondent no. 1 is the prior user and bona fide adopter of the trade mark ‘ALPHARD’ for goods under Classes 9, 12 and 27 since the year 2015.

The Respondent no. 1 coined and adopted the trade mark ‘ALPHARD’ in the year 2015 and since its adoption, the Respondent no. 1 has been continuously and extensively using the said trade mark. The aforesaid trade mark has been used by the Respondent no. 1 along with its sister companies, ‘Tekstar Global Private Limited’ and ‘Sai Supertrek Global Private Limited’.

It further asserted by the Respondent that though the Petitioner company applied for the registration of its trade mark ‘ALPHARD in Class 12, it is an admitted position that the Petitioner company has not used the trade mark ‘ALPHARD’ in India. In light of the non-user by the Petitioner Company, there cannot be any goodwill or transborder reputation in respect of the aforesaid trade mark in India.

Also, the Respondent contended that the Petitioner company has made contradictory claims in its petition. On one hand, the Petitioner company claims that the Petitioner’s vehicles under the aforesaid trade mark were available in India from the year 2008, on the other hand, the trade mark registration application has been filed by the Petitioner company on a “proposed to be used basis” in November, 2017.

DECISION AND FINDINGS

The Court keeping in mind the “within India” picture, noticed that though the Petitioner had used the mark ALPHARD first in the world in 1986 and gained a certain amount of publicity since then across the world in relation thereto, it had filed an application for registration of the mark in India only in 2017 and that too on a “proposed to be used” basis. While the Respondent has  started using the mark in India in 2015 for components and accessories for cars and had secured legal rights to the mark through registrations in the same year.

The Court concluded that the Petitioner had failed to discharge the onus to show that reputation and good will of the mark “ALPHARD” existed in India. In fact, it was not even the case of the Petitioner that it was dealing in products in class 9 and class 27 anywhere in the world. The Court noted that the documents placed on record by the Petitioner did not reflect extensive use of the brand “ALPHARD” or established that the brand “ALPHARD” had acquired a transborder reputation in India in classes 9, 12 and 27.

The Court further noted that evidence on record also showed very limited sales and use of the product in the Indian market and that too, only by private parties. No advertisements had been made by the Petitioner in India and it could not be ascertained that a substantial number of consumers in India knew about the existence of the brand “ALPHARD” of the Petitioner. It was also noted that it was the Petitioner’s own case that the same model of the car had been launched in India under a different brand name: “Vellfire”. Therefore, no reliance could be placed on any articles to show that the brand “ALPHARD” had acquired good will and reputation in India.

The Petitioner has never used the ALPHARD trademark in India in relation to the car accessories for which Tech Square has registrations. This puts the burden on Petitioner to establish its own rights in Classes 9 and 27 in particular, since these do not impede Petitioner’s trademark application in Class 12. Hence, it is therefore forced to climb uphill here, in the sense that it must establish not just reputation from abroad that has found a home in India but also that this reputation elevates ALPHARD above Tech Square’s otherwise unobstructive Class 9 and 27 applications. The other thing to say is that Tech Star has made good its original intent to use by furnishing proof of use since 2015. If its registrations must go, they must go because of Toyota stipulating to its own use of ALPHARD in India prior to 2015.

It was also noted that most of the articles that were relied upon by the Petitioner to show that it was considering launching a vehicle under the brand “ALPHARD” in India were subsequent to the Respondent’s registration of the mark in India. It was also held that Sections 11(1) and 11(2) would not be applicable in the present case as the Petitioner did not have any “earlier registered trade mark” for the mark “ALPHARD” in India as compared to the existing registered trademarks of the Respondent. Even Section 11(3) of the Trade Marks Act, 1999 would not be applicable in the absence of good will and reputation of the Petitioner’s said mark in India. In view of all the above factors, the Petitioner’s rectification petitions against the registered trade mark “ALPHARD” of the Respondent in classes 9, 12 and 27 were dismissed by the Court.

AMLEGALS REMARKS

Back in the days, the SC defined its interpretation on how we understand the role of reputation earned abroad, in claiming trademark rights in India. Now, for a significant time, there has been a duality which has emerged since the case of Toyota in 2017. The concept of ‘Transnational Reputation’ was made conditional by the Supreme Court. Foreign Claimants could only succeed if they demonstrated ‘sufficient evidence’ of domestic presence. Since long, the courts dealing with the matters pertaining to transnational reputation claims have benignly nodded along to the Supreme Court in form, but largely left it alone in substance.

The present case offered some light on this pertinent issue. It demonstrates a viable approach to using Toyota’s “sufficient evidence” standard, perhaps the most effective one yet. It also shows how substantive trademark inquiries can benefit immensely from splitting use claims into their corresponding time periods in a manner that chimes with the underlying purpose of separating transnational reputation from domestic reputation.

Territoriality principle is a determinant of transnational reputation. This is relied on in previous cases of Prius. There have been landmark cases which provides specificity to tests to claim transborder reputation, that the mark is well known with a substantial consumer segment due to its extensive use. The courts have been hesitant in application of the strict test as prescribed in Prius judgement. However, the present case shows deviation from this.

There also is an argument of ‘distinctiveness to relevant section of public’. In case of Toyota, that comes with the section of people interested in MUVs/Minivans and generally in foreign brands. However, this reasoning does not fit in the present case since the Toyota’s minivans bearing ‘Alphard’ mark were not available in India. Furthermore, Toyota is selling the car under the name ‘Vellfire’ and not ‘Alphard’.

– Team AMLEGALS assisted by Ms. Samiha Yadav(Intern)

For any query or feedback, please feel free to connect with mridusha.guha@amlegals.com or falak.sawlani@amlegals.com