By on March 21, 2010

“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?

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33 Comments on “Toyota Loses Critical Prius Court Case...”


  • avatar
    Robert.Walter

    “Priapus maybe?”

    Maybe, but since non-exclusivity is a painful market pressure that won’t go away, it seems more like a priapism to me.

  • avatar
    tced2

    Hughes Electronics (as subsidiary to GM) started DirecTV and the service was called DSS (digital satellite system). A few years later it was discovered that another company owned the trademark DSS and DirecTV had to stop using it. It was changed DBS (direct broadcast satellite).

    Why DirecTV went through this affair is unexplained. A simple search of trademarks found that another company already owned it.
    Bad legal advice?
    Someone forgot to check ownership of the term?
    Ego-driven legal advice? (we’re bigger than them and we’ll win in court).

    This sounds like the explanation for both the DirecTV case and the Toyota case.

    • 0 avatar
      Robert.Walter

      Anybody remember the dust-up when GM launched Saturn Division, as they tromped over the name and mark of Saturn Electronics of Auburn Hills, Michigan? What a way to launch a new product, having to fight to establish a new trademark under the shadow of litigation.

      Poor Old GM thy mistakes were legion…

      btw the joke at the time was that GM try to mildly rework the logo to keep within the ringed-planet theme and just change the planetary focus from Saturn to Uranus … given this alternative, litigating to gain use of these marks makes sense.

  • avatar
    golden2husky

    Toyota has been here before, and on the other side of the equation. Remember when Lexus first came to the States? Lexis (Lexisnexis) the provider of legal software and services filed against Toyota for trademark infringement since the name was so similar. In this case Toyota prevailed. Toyota has no leg to stand on here.

  • avatar
    pgcooldad

    “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.”

    Ohhh like Chrysler did against Seminole County’s Lake Mary High School and was vilified here, and many other internet blog sites??

    http://www.thetruthaboutcars.com/imitating-chrysler-is-not-the-sincerest-form-of-flattery/

    • 0 avatar

      I’m sorry, but trademark law requires you to monitor your mark and to defend it from infringers. If you don’t do it, you allow dilution and you can lose your mark. That’s just how the law is written.

      Better write the cease and desist letter and get vilified on some blogs, than turn a blind eye and lose your trademark.

    • 0 avatar
      Juniper

      In the case of the high school they came up with an agreement so the school could use the symbol without a big hassle. But Chrysler was right to protect their trademark.

    • 0 avatar
      Daanii2

      Trademark dilution is a very different thing from this Toyota case. And a trademark can be protected from dilution a lot better than Chrysler did. If big companies stopped using bare-knuckled litigation tactics and started using a little more common sense, they would be a lot better off. (Look, for example, at http://www.taubmansucks.com/condensed.html)

      I say this as a patent attorney who has spent a lot of time on trademark matters in both the US and Japan.

      And Juniper, the solution Chrysler came up with for the high school using the picture of the Dodge Ram was for them to stop using it and go back to their old goat picture. Nothing creative there.

    • 0 avatar
      pgcooldad

      Bertel, you are correct in that they are required by law to protect their trademark. I know that, you know it, and I would say 60-80% of the people who frequent this site are intelligent enough to know that they had to defend it. But the “masses are asses” and Chrysler was vilified for doing the right thing.

      In the end they came up with an agreement that allowed Lake Mary to retain the logo as reported below:
      http://blogs.orlandosentinel.com/news_education_edblog/2010/03/chrysler-softens-stand-on-lake-mary-highs-ram-jam.html

      The damage has been done though, because the agreement has not been reported as much as the criticism. Matter of fact the goodwill agreement hasn’t even been REPORTED HERE!!

    • 0 avatar
      Daanii2

      “Bertel, you are correct in that they are required by law to protect their trademark.”

      Not any law I know of. And I’m a patent attorney who has practiced trademark law in Japan and the United States.

      As to Chryler’s agreement with the school, Chrysler did agree after a lot of uproar and complaint to soften its stance. The school does have to stop using the mark. But the school does not have to tear up the gym floor or remove the mark from any other long-lasting equipment or structure. Those uses of the mark can remain until the equipment or structure wears out. From the start, Chrysler could easily have agreed to that — and to much more — instead of making this into a federal case.

      My point is that trademark attorneys ought to have a little sense. In Japan, the Disney company went after an elementary school that had painted a picture of Mickey Mouse on the bottom of its swimming pool. Anyone but a lawyer would know that you are going to lose much more in goodwill than you gain in trademark protection by sending cease-and-desist letters aimed at sixth graders.

      Like taking candy from a baby.

    • 0 avatar
      CarPerson

      @ Daanii2

      Case law, not statute forces the owner to be overly aggressive.

      It took several readings to get your point that the servicemark/trademark/copyright owner is often better off offering some type of license agreement to the offender rather than a cease-and-desist letter.

      Good advice some giant corporations should have taken in the past.

    • 0 avatar
      texlovera

      The TTAC article you linked to did not vilify Dodge. The vast majority of the comments did not vilify Dodge.

      I can’t speak to the rest of the internets…

    • 0 avatar
      CarPerson

      @ Daanii2 Like taking candy from a baby.

      Ever try to take candy from a baby?

  • avatar
    Geo. Levecque

    This whole thing is just so much smoke and mirrows,who really cares here in North America eh! What they do in India is one thing, wait till these Auto parts start appearing in North America, on India made vehicles.

  • avatar
    hakata

    I can almost guarantee you that Toyota’s corporate counsel told the company they had no case. They don’t get paid by the hour and have no incentive to waste time in court on a 90% losing proposition. More likely it was an executive decision to gamble, given the admittedly high stakes. They rolled the dice and lost. Now, whether it was a lawyer or an executive who dropped the ball 8 years ago on the trademark monitoring, I can’t say. You’ll have to ask around the Toyota mado-giwa-zoku.

  • avatar
    NulloModo

    At the end of the day I don’t see this as a big deal for Toyota. The Prius name has recognition and meaning in the US and other English speaking markets due to exposure, but in India where it has never been sold why not start it out with a new name? There are automakers that use different names for the same car in the US and Canada, two countries that routinely see the same ads, and it doesn’t seem to make a difference.

  • avatar
    detlump

    It isn’t a huge deal for Toyota, they can simply choose another name for the car in India. It’s happened many times. Mitsu had to pay for each Mirage sold, Beretta, GTO (3000 GT), Jimmy, Futura/Fusion (Pep Boys) the list goes on.

    It would be bigger news if Toyota could not import the car for some reason.

  • avatar
    ClutchCarGo

    So instead of co-opting a maker of auto parts by giving them business in exchange for exclusive use of the name. Toyota tries to muscle them in court. And loses. Smart move, there.

  • avatar
    JimothyLite

    hakata-hakata: “Well, I have never been there, but Changchun seems a gay, happy place…” Wowzers! It’s the “Longwan” Shaman Amusement Park, all right! But now you’ve ruined my Sunday, as I feel compelled to find the average height of all over-30-foot tall like structures in the world. Should I start with Texas?

  • avatar

    Can Toyota get anything right lately?

  • avatar
    James2

    Just call it the “Corona Hybrid” (I’m presuming ToMoCo already offers the Corolla in India) or something and call it a day.

  • avatar
    Daanii2

    Toyota’s arguments in court notwithstanding, this result seems more like a nuisance than anything that will impact Toyota’s marketing plans for the Prius.

  • avatar

    Toyota still has, by and large the best lease offers on the planet. While so few pickup trucks even offer a lease offer, the Toyota Tundra is at the very top in truck lease comparisons.
    http://monthlycarlease.com/2010/03/truck-lease-comparison/

  • avatar
    tparkit

    If Toyota had plans to establish Prius as a multi-product brand in India (or perhaps globally), this would explain their corporate angst.

    I wonder if Toyota considered other solutions first. For instance, (a) paying Prius Auto Industries to change its name, or (b) buying Prius Auto Industries, and then re-selling the company without the name. Both of these are common solutions, because it’s not unusual for a large corporation to discover that smaller businesses have long been using a brand name the corporation wishes to exploit.

    Now however, after costing PAI a lot of money and wasted time, and probably cheesing off the owners, solutions (a) and (b) are likely to prove very expensive to Toyota — not least because Toyota has tipped its hand regarding how important the Prius trademark is to its plans. I expect that a bunch of folks at PAI, and their families, are about to become very wealthy.

  • avatar
    Accazdatch

    There is still that issue with Nissan cars USA / .com and http://nissan.com/

  • avatar
    ponchoman49

    I have a better name for it. The Pukis

  • avatar
    v65magnafan1

    Now you know why Wranglers in Canada are called TJ’s.

    Why?

    Because you could buy Wrangler blue jeans.

  • avatar

    WAsn’t there a similar case with the Chevy Beretta and the handgun manufacturer?

  • avatar
    raumybhan


    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 ?


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