TOYOTA JIDOSHA KABUSHIKI KAISHA vs. MR. BIJU & ANR

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
CS(OS)No.62/2007 Page 1 of 17

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:-

CS(OS)No.62/2007 Page 2 of 17

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.
CS(OS)No.62/2007 Page 3 of 17

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
CS(OS)No.62/2007 Page 4 of 17

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
th
accordingly passed on 16 December 2008. The other
th
defendants were proceeded ex parte vide order dated 16
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
CS(OS)No.62/2007 Page 5 of 17

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
th
motorcars and parts thereof, falling in Class 12 w.e.f. 5
th
September 2003 and the registration is valid upto 5
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
CS(OS)No.62/2007 Page 6 of 17

purchased a counterfeit TOYOTO spare part being fuel filter
for a sum of Rs.190/- vide invoice bearing No.145 dated
nd
22 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
CS(OS)No.62/2007 Page 7 of 17

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
CS(OS)No.62/2007 Page 8 of 17

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
CS(OS)No.62/2007 Page 9 of 17

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
CS(OS)No.62/2007 Page 10 of 17

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
CS(OS)No.62/2007 Page 11 of 17

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
th
Oil companies, the plaintiff company occupies 4 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
CS(OS)No.62/2007 Page 12 of 17

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
CS(OS)No.62/2007 Page 13 of 17

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.
CS(OS)No.62/2007 Page 14 of 17

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
CS(OS)No.62/2007 Page 15 of 17

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
CS(OS)No.62/2007 Page 16 of 17

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
CS(OS)No.62/2007 Page 17 of 17