Delhi High Court has restrained two Indian auto spare parts manufacturers from infringing on the trademarks like Prius and Innova of Japanese car-maker Toyota and directed them to pay Rs 10 lakh as damages to the auto giant for "knowingly and intentionally" using its brands to earn "undue profits".
Justice Manmohan Singh also restrained the city-based firms, its owners, agents and representatives from making, selling, advertising or dealing in auto spare parts or any other product under the trademarks of Toyota or deceptively similar to them.
The court came down heavily on the firm, Prius Auto Industries, its sister concern, Prius Auto Accessories, and the owners, saying they were guilty of infringing the 'Innova and Toyota' trademarks of the Japanese company as well as of passing off their goods and services as that of Toyota.
Justice Manmohan said "the defendants' (two firms and their owners) use of these trademarks is malafide, as it takes unfair advantage of such huge goodwill and reputation and aims to encash upon this vast reputation and goodwill.
"Clearly, the impression in the minds of the consumer will be a false one as the defendants manufacture and sell spare parts (which are not genuine products of the plaintiff) and claim that they are compatible with those of the plaintiff's cars. Therefore, the actions of the defendants are in violation of the provisions of the Trademark Act."
With regard to the 'Prius' name used by the Indian firms, the court said Toyota's trademark 'Prius' "has acquired an excellent global goodwill and reputation" ever since the Japanese car-maker launched the world's first hybrid car under that name in 1995 and it was difficult to accept defendants' claim that they were unaware of this.
The court's directions came on Toyota's plea seeking to restrain the two Indian firms from infringing its registered and well known trademarks.
Represented by advocate Pravin Anand, Toyota had contended that the two Indian firms and their owners had illegally obtained registrations for the mark 'Prius' for all types of auto parts and accessories.
Anand had argued in court that the defendants were using Toyota's registered and well-known trademarks without any authorisation, license or permission.
Dealing with the claims of Toyota, the court in its 121- page judgement said that while the defendants claimed that their use of the trademarks "Toyota, Innova, Qualis and Toyota device" was in accordance with honest industrial practices, their stand was totally contrary to samples of their products.
"It was found that the said trademarks are not used in order to describe the bonafide description (of the products) but the same have also been used as trademarks and in the similar manner, script and device," the court said and held this claim of the defendants as "false".
Justice Manmohan Singh also noted that the defendants disobeyed the interim orders in the matter passed by a division bench of the High Court which had directed them to indicate on the packaging that their product were meant for particular automobiles only.
"The new packaging filed by the plaintiff (Toyota) would reveal that the defendants have not been in compliance with the above mentioned conditions imposed upon them by this Court," the judge said.
"I am of the considered opinion that such use by the defendants as appeared from the packaging cannot be treated as being bonafide as per the provisions of the Act and as a matter of fact, the defendants have calculated their actions aimed to encash upon the goodwill and reputation enjoyed by the plaintiff in its respective trademarks," he added.
The court said it was evident from the material before it "that the immense goodwill and reputation of the Toyota Prius, as it is enjoyed in several countries across the world, could have validly spilled over into India in 2001, irrespective of the fact that its physical use in India commenced only in the year 2010".
It directed the Indian firms "to deliver up to the plaintiff for destruction/erasure of all the goods, stickers, cartons, packing, dies, articles papers and other material of the defendants bearing the impugned marks Prius, Toyota, Toyota device and Innova within the period of four weeks" from July 8.
However, "in the interest of justice, equity and fair play", the court granted two months' time to the defendants to "change the impugned trademarks and trade names" of the two firms and dispose of the existing stocks.