Toyota Jidosha Kabushiki Kaisha vs Mr. Biju & Anr
2011 Latest Caselaw 1118 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                   Judgment Pronounced on: 24.02.2011


+           CS(OS) No. 62/2007


TOYOTA JIDOSHA KABUSHIKI KAISHA                .....Plaintiff


                           - versus -


MR. BIJU & ANR                                 .....Defendant


Advocates who appeared in this case:

For the Plaintiff: Mr. Pravin Anand, Ms. Diva Arora and
                   Ms. Tanya Varma

For the Defendant: None

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1. Whether Reporters of local papers may
   be allowed to see the judgment?                         Yes

2. To be referred to the Reporter or not?                  Yes

3. Whether the judgment should be reported                 Yes
   in Digest?


V.K. JAIN, J. (ORAL)

1. This is a suit for permanent injunction, rendition

of accounts and damages and delivering up of infringing

material. The plaintiff is a corporation registered in Japan.

Defendant No.1 Mr. Biju is the proprietor of defendant No.2

Benz Auto Spares. The plaintiff claims to be the sixth

largest industrial corporation in the world engaged in

manufacture and sale of automobiles and auto-parts and is

amongst Fortune Global 500 Companies. The plaintiff

claims to have coined the trademark TOYOTA which has no

meaning in India nor is a dictionary word or a word of any

trade or usage. It is alleged that the trademark TOYOTA is

being used by the plaintiff in India since 1957 in relation to

vehicles, their parts and fittings. It is also alleged that on

account of the quality of the products, which are being sold

under the name TOYOTA and continuous use of the

aforesaid trademark, it has acquired an enviable reputation

and goodwill in the market. The trademark TOYOTA is

registered in the name of the plaintiff company in the

following classes:-

S.No. Trademark Registration/ Class Status Application No.

1. TOYOTA 506695 12 Registered and renewed upto 09.03.2013

2. TOYOTA 506690 05 Registered and renewed upto 09.03.2009

3. TOYOTA 506685 10 Registered and renewed upto 09.03.2009

4. TOYOTA 506697 18 Registered and renewed upto 09.03.2010

5. TOYOTA 1228330 12 Registered upto THS 28.08.2013

6. TOYOTA 1232944 12 Registered upto INNOVA 05.09.2013

7. TOYOTA 1243213 36 Registered upto 14.10.2013

8. TOYOTA 1243214 37 Registered upto 14.10.2013

9. TOYOTA 1243215 39 Registered upto 14.10.2013

10. TOYOTA 1243207 36 Registered upto DEVICE 14.10.2013 MARK

11. TOYOTA 1243209 39 Registered upto DEVICE 14.10.2013 MARK

2. The plaintiff claims sale of

Yen15,501,553,000,000, Yen17,294,760,000,000 and

Yen18,551,526,000,000 in the years 2003, 2004 and 2005,

respectively. It is alleged that in automobile industry the

mark TOYOTA qualifies as a source indicator of one the

most reputed and trusted names in car makers and it is a

well known mark under Section 11 of Trademarks Act,

1999, entitled to protection across classes of goods since

any misuse of the mark is not only likely to cause confusion

and deception but would also be contrary to public interest

and would dilute the reputation and goodwill which has

come to be associated with it for last many years.

3. Defendants No.1 to 3 are dealing in automobile

spares. On receipt of information about sale of fake spare

parts being sold under the name TOYOTA, the plaintiff

company appointed Investigator and it came to be revealed

that they were selling Spurious Oil Filter and Universal

Joint Cross. It is alleged that the Investigators were able to

purchase a Spurious Oil Filter from defendant No.3 and a

Spurious Universal Joint Cross from defendant No.2. A

legal notice was sent by the plaintiff to the defendants in

February 2006 requiring them to refrain from unauthorized

use of the trademark TOYOTA. There was no response to

this notice which then was followed by a reminder sent in

May 2006. Defendant No.2 replied to the notice denying

infringement.

4. The plaintiff has sought injunction restraining the

defendants from manufacturing, selling, offering for sale or

advertising auto spare parts under the trademark TOYOTA

or any other trademark identical with or deceptively similar

to the plaintiff's trademark TOYOTA. It has also sought

injunction restraining the defendant from using the

aforesaid mark on any goods not originating from the

plaintiff company. The plaintiff has also sought damages

amounting to Rs.25 Lacs besides delivering up of the

infringing packaging goods, packaging, etc.

5. Defendant No.3 compromised with the plaintiff

during pendency of the suit and a compromise decree was

accordingly passed on 16th December 2008. The other

defendants were proceeded ex parte vide order dated 16 th

December 2008.

6. The plaintiff has filed affidavit of Mr. Koichiro

Inagaki, General Manager, Department of Intellectual

Property Division of the plaintiff company. In his affidavit

Mr. Inagaki has supported on oath the case setup in the

plaint and has proved the documents relied upon by the

plaintiff. He stated that the trademark TOYOTO was first

used in India in the year 1957 in relation to vehicles, parts

and fittings and on account of their quality and continues

use it has acquired enviable reputation and goodwill. He

has further stated that by virtue of priority of adoption,

long, continuous and extensive user the goods bearing the

trademark TOYOTO are exclusively associated with the

products originating from the plaintiff. He has claimed that

the trademark TOYOTO has become a source identifier

inasmuch as it stands for the high standards and superior

quality of goods manufactured by the plaintiff and sold the

over world.

7. A perusal of the legal proceedings certificate

Ex.PW-2/13 (colly) would show that vide registration

No.1232944, the word mark TOYOTO INNOVA was

registered in the name of the plaintiff company in respect of

motorcars and parts thereof, falling in Class 12 w.e.f. 5th

September 2003 and the registration is valid upto 5 th

September 2013. It further shows that vide registration

No.506695 the word mark TOYOTO was registered in the

name of the plaintiff in respect of goods included in Class

12. Vide registration No.1228330 the word mark TOYOTO

THS was registered in the name of the plaintiff company in

respect of motorcars, engines for land vehicles, all being

goods falling Class 12.

8. Ex.PW-2/19 is the copy of invoice whereby a fuel

filter was purchased by the Investigator appointed by the

plaintiff company from Benz Auto Spares, which is stated to

be the proprietorship concern of defendant No.1 Mr. Biju. It

has come in the affidavit of Mr. D.C. Sharma, Independent

Investigator appointed by the plaintiff company that in the

month of July 2005, he had visited Benz Auto Spares and

purchased a counterfeit TOYOTO spare part being fuel filter

for a sum of Rs.190/- vide invoice bearing No.145 dated

22nd July 2005. He has further stated that the products as

well as the invoice were given by him to the plaintiff

company. A perusal of Ex.PW-2/19 would show that this is

the same invoice which has been referred in the affidavit of

Mr. Sharma. Ex.PW-2/17 is the photograph of the fuel

filters, which were purchased by Mr. Sharma from Benz

Auto Spares. A perusal of the photograph on the right of

Ex.PW-2/17 would show that the word mark TOYOTA has

been used on the fuel filter which Benz Auto Spares sold to

the Independent Investigator appointed by the plaintiff

company. It is thus evident that defendant No.1, who is

trading under the name and style of Benz Auto Spares, has

been selling auto parts using the trademark of the plaintiff

company without any permission or authorization from the

plaintiff company.

9. Section 29(1) of Trade Marks Act, 1999, to the

extent it is relevant, provides that a registered trade mark is

infringed by a person who, not being a registered proprietor

or a person using by way of permitted use, uses in the

course of trade, a mark which is identical with, or

deceptively similar to, the trade mark in relation to goods or

services in respect of which the trade mark is registered and

in such manner as to render the use of the mark likely to be

taken as being used as a trade mark.

10. The mark being used by defendant No.1 on the fuel

filter sold by him is exactly the same as is the registered

trademark of the plaintiff company, and the defendant has

just copied the plaintiff's registered mark, the product on

which the aforesaid trademark was found being used by

defendant No.1 is an auto component being fuel filter, which

is used in cars and other four wheeled automobile. The

trademark TOYOTO is registered in the name of the plaintiff

company in respect of the goods under Class 12 of Schedule

4 to the Trade Mark Act, 1999, which are vehicles;

apparatus for locomotion by land, air and water. The fourth

schedule specifically provides that parts of an article or

apparatus are, in general, classified with the actual article

or apparatus, except where such parts constitute articles

included in other classes. There is no particular class in the

fourth schedule with respect to automobile components.

Therefore, automobile components would also be included

in Class 12 and, consequentlyl, the registration of the

trademark TOYOTO in the name of the plaintiff company in

respect of vehicles would also cover the components which

are used in a vehicle. Therefore, by using the mark

TOYOTO on the fuel filter being sold by him defendant No.1

has infringed the registered trademark TOYOTO of the

plaintiff company.

11. Section 29(4) of Trade Marks Act, 1999, to the

extent it is relevant, provides that a registered trade mark is

infringed by a person who, not being a registered proprietor

or a person using by way of permitted use, uses in the

course of trade, a mark which is identical with or similar to

the registered trade mark; and is used in relation to goods

or services which are not similar to those for which the

trade mark is registered provided the registered trade mark

has a reputation in India and the use of the mark without

due cause takes unfair advantage of or is detrimental to, the

distinctive character or repute of the registered trade mark.

12. In Mahendra & Mahendra Paper Mills Ltd. vs.

Mahindra & Mahindra Ltd. 2002(24) PTC 121 (SC), the suit

was filed by Mahendra and Mahendra against use of the

words Mahindra and Mahindra Ltd. The contention of the

defendant before the Supreme Court was that there was no

similarity of the goods manufactured or sold by the parties.

Noticing that the name 'Mahindra & Mahindra' had

acquired a distinctiveness and a secondary meaning in the

business and trade circles and people had come to associate

the name 'Mahindra' with a certain standard of goods and

services, the Supreme Court was of the view that any

attempt by another person to use that name in business

and trade circles is likely to and in probability will create an

impression of a connection with the plaintiffs' group of

companies.

13. In Montari Overseas Ltd. vs. Montari Industries

Ltd. 1996 PTC (16), Supreme Court, inter alia, observed that

while adopting a trade name, a person is required to act

honestly and bona fidely and not with a view to cash upon

the goodwill and reputation of another. It was further

observed that no company is entitled to carry on business in

a manner so as to generate a belief that it is connected with

the business of another company, firm or individual. It was

also observed that copying of a trade name amounts to

making a false representation to the public from which they

need to be protected. The observations made by the

Supreme Court would clearly apply when a well established

corporate name or trademark of a large company is adopted

by another person though not in respect of the same goods

or services, when the trademark has become synonymous

with the company and the members of the public expect any

product bearing that trademark to be of a particular

standard and quality.

14. In the case of Mahendra (supra), the impugned

name was not a replica of the name of the plaintiff company.

In the case of Montari Overseas Ltd. (supra) also there was

change in the middle name. However, in the present case,

the defendants have been found using not only the

corporate name, but also the registered trademark of the

plaintiff company and that too without even making an

attempt to camouflage their infringement by making minor

changes here and there. The infringement by them,

therefore, is very blatant and absolutely unequivocal. The

case of the plaintiff company for grant of injunction,

therefore, stands on a much stronger footing.

15. As noted earlier, the trademark found being used

by defendant No.1 is absolutely identical to the registered

trademark of the plaintiff company. Is has come in the

deposition of Mr. Iganaki that the trademark TOYOTA is

being used in India since 1957 and is now a well known

brand in India. A large number of vehicles are being sold in

India under the trademark TOYOTA, prominent amongst

them being TOYOTA INNOVA, TOYOTA CAMRY, TOYOTA

COROLLA and TOYOTA ETIOS. A perusal of Ex.PW-2/15

which are the extracts from the books titled 'The World's

Greatest Brands' edited by Nicholas Kochan would show

that the TOYOTA is amongst top 100 brands being placed at

serial No.31. It further shows that amongst Automotive and

Oil companies, the plaintiff company occupies 4 th position in

the world. The plaintiff company had huge turnover of

Yen15,501,553,000,000, Yen17,294,760,000,000 and

Yen18,551,526,000,000 in the years 2003, 2004 and 2005,

respectively

16. Ex.PW-1/11 is the Global Brand Survey of 100 top

brands, which would show that TOYOTA was ranked at

serial No.11 in the year 2003 and at serial No.9 in the year

2004, amongst 100 top brands. It is, therefore, difficult to

dispute that the trademark TOYOTA enjoys immense

reputation and goodwill in India in respect of automobiles

and it parts and, therefore, has become a well known

trademark in this field. The use of the trademark TOYOTA

by the defendant is likely to prove detrimental to the

reputation and goodwill which the brand TOYOTA

commands in the market. Any person buying an auto

component being sold under the trademark TOYOTA would

be buying it under the impression that he was purchasing a

product manufactured and sold by the plaintiff company.

The products of the plaintiff company enjoy a premium

position and premium price in the market. The defendant

cannot be allowed to take an unfair advantage of the

immense goodwill and brand quality which the brand

TOYOTA enjoys in the market in relation to automobiles and

auto components.

17. If a product being sold by the defendant under the

trademark TOYOTA is found to be of any inferior quality

that is likely to cause serious prejudice to the image and

goodwill of the brand TOYOTA in the market since the

person purchasing the product on being saddled with an

inferior product, bearing the same trademark, may assume

that the quality of the product being manufactured and sold

by the plaintiff company has gone down. This, in turn, is

likely to adversely affect the financial interest of the plaintiff

company besides giving unjust enrichment to the defendant

at the cost of the plaintiff company.

18. The learned counsel for the plaintiff seeks award of

punitive compensatory damages. Regarding punitive

damages in the case of Time Incorporated v. Lokesh

Srivastava & Anr., 2005 (30) PTC 3 (Del), this Court

observed that punitive damages are founded on the

philosophy of corrective justice and as such, in appropriate

cases these must be awarded to give a signal to the wrong

doers that the law does not take a breach merely as a

matter between rival parties but feels concerned about those

also who are not party to the lis but suffer on account of the

breach. In the case of Hero Honda Motors Ltd. v. Shree

Assuramji Scooters, 2006 (32) PTC 117 (Del), this Court

noticing that the defendant had chosen to stay away from

the proceedings of the Court felt that in such case punitive

damages need to be awarded, since otherwise the

defendant, who appears in the Court and submits its

account books would be liable for damages whereas a party

which chooses to stay away from the Court proceedings

would escape the liability on account of the failure of the

availability of account books.

19. In Microsoft Corporation v. Deepak Raval MIPR

2007 (1) 72, this Court observed that in our country the

Courts are becoming sensitive to the growing menace of

piracy and have started granting punitive damages even in

cases where due to absence of defendant, the exact figures

of sale made by them under the infringing copyright and/or

trademark, exact damages are not available. The

justification given by the Court for award of compulsory

damages was to make up for the loss suffered by the

plaintiff and deter a wrong doer and like-minded from

indulging in such unlawful activities.

In Larsen and Toubro Limited v. Chagan Bhai

Patel MIPR 2009 (1) 194, this Court observed that it would

be encouraging the violators of intellectual property, if the

defendants notwithstanding having not contested the suit

are not burdened with punitive damages.

20. Also, the Court needs to take note of the fact that a

lot of energy and resources are spent in litigating against

those who infringe the trademark and copyright of others

and try to encash upon the goodwill and reputation of other

brands by passing of their goods and/or services as those of

that well known brand. If punitive damages are not

awarded in such cases, it would only encourage

unscrupulous persons who actuated by dishonest intention,

use the well-reputed trademark of another person, so as to

encash on the goodwill and reputation which that mark

enjoys in the market, with impunity, and then avoid

payment of damages by remaining absent from the Court,

thereby depriving the plaintiff an opportunity to establish

actual profit earned by him from use of the infringing mark,

which can be computed only on the basis of his account

books. This would, therefore, amount to putting premium

on dishonesty and give an unfair advantage to an

unscrupulous infringer over those who have a bona fide

defence to make and therefore come forward to contest the

suit and place their case before the Court.

21. For the reasons given in the preceding paragraphs,

defendant No.1 is restrained from manufacturing, selling,

storing for sale or advertising auto components under the

trademark TOYOTA or any other mark identical or similar to

the registered trademark TOYOTA of the plaintiff company.

Defendant No.1 is also directed to pay punitive damages

amounting to Rs.50,000/- to the plaintiff company. No

other relief is pressed, at this stage, by the learned counsel

for the plaintiff. In the facts and circumstances of the case,

there shall be no order as to cost.

Decree sheet be prepared accordingly.

(V.K. JAIN) JUDGE FEBRUARY 24, 2011 Ag