Toyota vs. Jidosha Kabushiki

1st May, 2023 - 7:09 am Categories: Legal Issues Trademark 0 Comments

Introduction

Toyota claimed to have launched its product- a minivan, under the name Alphard in 2002, stating that they have been using it in China, Russia, Indonesia, Philippines and Japan. In India, Toyota has filed an application to register the mark on a “proposed to be used” basis, under class 12 (Vehicles; apparatus for locomotion by land, air or water) in 2017. However, the same stands rejected by the Registry on the ground of its similarity with Techsquare’s mark. On the other hand, Techsquare Engineering Pvt. Ltd. (respondent) has registered the mark ‘Alphard’ in 2015, for using it in classes 9 (different scientific, nautical, life-saving apparatus, computer and computer softwares etc.) 12 (for car cover, horns, visor, bumper horns and other car-related accessories) and 27 (Carpets, rugs, mats and matting, linoleum and other materials for covering existing floors; wall hangings). Toyota has rejected Techsquare’s ‘Alphard’ word mark application from 2017 and its device application from 2018, both of which are pending registration under Class 12 for land vehicles (device).

[Image Sources : Shutterstock]

The case reached the Delhi High Court as a result of this maze 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.

Seemingly following the footsteps of the Toyota v Prius order, the court rejected Toyota’s rectification application on the ground that it has failed to establish goodwill and the reputation of the Alphard mark in India. Two important observations by the court in the present order were:

• Its reliance on the strict test (prescribed in Toyota v. Prius) regarding the ‘territoriality principle’ and
• The difference between the application of the ‘spillover effect’ of the transborder reputation in passing off and rectification cases.

Regarding the first, the court rejected all of Toyota’s evidence in order to uphold the position that in addition to establishing Alphard’s goodwill abroad, Toyota must also do the same for its own goodwill in India.

In its second attempt, Toyota cited MAC Personal Care and Keller Williams Realty to support its claim that “Alphard” had a spillover effect in the Indian markets as a result of its international reputation. The court, however, disregarded this argument because the judgements in question dealt with passing off rather than correction. So, this should ideally imply that the petitioner must satisfy a different level of proof than those required in passing off in order to prove the spillover effect of transborder reputation in case of rectification application, isn’t it? The court has not spoken on this matter, however.

The order did not place enough focus on the case’s revised factual circumstances, which was one of its shortcomings. In paragraph 4.7, it refers to Toyota’s mark as having been “objected” rather than discussing how it was rejected. Moreover, it makes no mention of Toyota’s opposition to Techsquare’s applications for class 12 vehicles.

Judges have been reluctant to use the rigorous standard outlined in the Prius decision. The current arrangement, however, departs from this. In Hypnos v. Hosur Coir Foam, the single judge bench refers to the Prius and the IPAB order while discussing the territoriality concept, which affects multinational reputation. According to the Prius case, there must be a spillover of the claimant’s mark’s reputation and goodwill in the territory the Claim has been brought into in order to implement the territoriality principle. In addition to the premise described above, the Hypnos case offers a more detailed test to establish transborder reputation, demonstrating that the mark is well known to a sizeable portion of Indian consumers due to extensive usage in India or another location.

Looking at the international brochures, annual reports, awards, worldwide trademark registration certificate/renewal certificates, and promotional material in respect of “ALPHARD” placed on record, the Court stated that insufficient proof was not produced to demonstrate spillover of reputation. In Hermes v. Crimzon, the court made the point that a mark must be well-known and recognisable to a “relevant segment of the public” in order to qualify. Therefore, if I were to play the role of the devil’s advocate here, would it have been successful for Toyota to claim that its target market is affluent and aware of Alphard? Although there may not be a strong case that the mark “ALPHARD” is distinctive to the broader public, one may have made the case that it is distinctive to the “relevant segment of the public” who are interested in MUVs/Minivans and generally in foreign cars and automotive companies.

Despite the fact that this logic may sound reasonable, it is important to keep in mind that, unlike Hermes’ situation, Toyota minivans with the ‘Alphard’ brand were not offered in India. In fact, the court made it clear that not Toyota, but only a small number of private parties—not many—had placed the few shipment documents under the name “Alphard.” Moreover, Toyota is marketing the vehicle under the name “Vellfire” rather than “Alphard” in India.

Conclusion

This ruling could have very serious consequences for Toyota because it could be used to undermine its opposition to the ‘Alphard’ marks before the Registry based on the court’s comments about Toyota’s goodwill and reputation in the mark. Even yet, Toyota still has hope because it is protected in India under the rebadged “Vellfire” trademark for the same minivans.

Author: Tanya Saraswat, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

References

• Praharsh Gour & Lokesh Vyas, Spill the TEE M: Discussing the Delhi High Court’s order on transborder reputation in Toyota V TechSquare Spicyip (2023), https://spicyip.com/2023/02/spill-the-tee-m-toyota-v-techsquare.html (last visited Mar 31, 2023).