Toyota Loses Critical Prius Court Case
“If we lose that case, we will lose heavily” said Toyota in Delhi’s High Court. The judges had no sympathy for Toyota’s pleadings. Their decision might impact seriously on Toyota’s plans to market the Prius in 40 countries worldwide. As if Toyota doesn’t have enough problems with recalls and class action suits, now this:
The Delhi High Court is teaching Toyota a long needed lesson: A trademark is not a god given right. You must monitor your trademark and “vigorously defend” it against all infringers, lest you will lose it. Or not get it in the first place, as it is the case in India.
Eight years ago, Prius Auto Industries, a maker of “automobile accessories, bumper grills, bumper guards, side beeding (sic) and head lamp accessories” did set up shop in Delhi. They properly registered Prius as a trademark. As there was nobody else in India who had that mark, they received it, used it, and lived happily ever after. Until …
Toyota showed their Prius at the Delhi Auto Expo, Jan 5th to 11th. Then it dawned on them that a little known manufacturer of side beeding had the Prius name. Toyota also had bad (or greedy) lawyers. They should have told Toyota that Toyota has no case. India is a “first to file” country. When Prius Auto Industries filed, there was no prior Prius in India, and Toyota did not object.
Therefore, “The Delhi High Court has rejected Toyota Motors claim to exclusive trademark right over the name ‘PRIUS’ for launching a new car in India,” as India’s Tribune reports.
The court also tut-tutted Toyota for approaching the court “six years after Prius Auto Industries got its trademark registered and started its sales,” reports The Hindu. The court was especially unsympathetic to Toyota’s plight because “Toyota slept over the matter and idled over it for a long period,” as the ruling reads. The court also intimated that Toyota should have known better, because Prius Auto Industries has grown into a big company with large orders from companies such as General Motors, Hyundai and Mahindra and Mahindra.
Moral: If you register a mark, research it carefully, in all the markets you want to use it, especially in growth markets such as China and India, which, coincidentally, both follow the “first to file” doctrine. Many others, such as Mexico, do the same. A lot of whining about trademark infringement comes from the misunderstanding of the difference between “first to use” and “first to file.” Another reason for pain is lack of monitoring of the “first to file” countries. If you are too lazy or too stingy to register your mark in these countries, then you should at least monitor trademark applications there and object if something comes too close.
The court thinks that the buyer of Toyota’s spare parts will not get confused with the products of the Prius Auto Industries and will not be deceived into believing that their side beeding is from Toyota. As far as India goes, Toyota must be content with living as Prius inter pares. Or find another name. Priapus maybe?
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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WAsn't there a similar case with the Chevy Beretta and the handgun manufacturer?
I work for a global auto brand in India. From my experience, I can tell you that these corporations do not care to even appoint a single person to manage their trademark portfolio, or to monitor its misuse. The reason is apparently lack of budget for enforcement. But the real reason is that top executives' ignorance of the significance of the IPR laws. During their B-school education, they were not even told about IPR laws. India is the second most populous country in the world, and the most densly populated one too. It may not be as significant as China, but it has got educated people who know how to misuse a trademark for commercial gain. No wonder, we have huge domestic consumption of counterfeits, and India is a recognized name in exports of counterfeits too- just check seizure statistics from the US CBP and the European Union Taxation and Customs website. Last checked, only about 10 Indian and multi-national companies have appointed full time in-house trademark law managers (variously called as Anti-counterfeit Manager/ Brand Protection manager) to check abuse: Hewlett-Packard, Diageo, Bosch, Unilever, Proctor & Gamble, Beiserdorf, Mercedes-Benz, Microsoft, Symentec & Indian Music Industry (IMI)...and that's all !!! May be I am forgetting one or two names. The point is- trademark law managers are employed by handful of companies to do a very crucial job. There are hundreds of incidents of trademark abuse which are not even known to people. But if the owners of these global trademarks won't care, who would ? The corrupt Indian government ? or the helpless common man ?