Toyota Jidosha Kabushiki Kaisha v. Tech Square Engineering Pvt. Ltd. & Anr.

High Court of Delhi at New Delhi, Division Bench | Decided: 4 May 2026 LPA Nos. 176, 177 & 178 of 2023 Bench: Hon’ble Mr. Justice C. Hari Shankar & Hon’ble Mr. Justice Om Prakash Shukla

Background

Toyota Jidosha Kabushiki Kaisha, a multinational automobile manufacturer of undisputed global standing incorporated under the laws of Japan and founded in 1937, claims to have adopted the trade mark ALPHARD as early as 1986, with commercial launch of a luxury multi-purpose vehicle under that mark in 2002. The appellant asserted that the mark had over time acquired substantial goodwill and reputation on a global scale, supported by extensive sales of over 850,000 units since 2002 and significant promotional activities across numerous jurisdictions. The mark enjoyed statutory protection in several countries including Japan, China, Singapore and Malaysia.

Insofar as India was concerned, the appellant conceded that the ALPHARD vehicle had not been formally launched in the Indian market through official commercial channels. It asserted however that the vehicle had been available in India through direct imports by automobile enthusiasts and private parties as early as 2008. The appellant relied upon its global reputation, online presence and cross-border dissemination of information to contend that the mark ALPHARD had acquired spill-over reputation and goodwill within India prior to any formal commercial introduction. The appellant also pointed to digital visibility including online classified listings of second-hand ALPHARD vehicles, discussion threads on Indian automobile enthusiast platforms such as Team b hp, Indian news articles and blog posts published from 2009 onwards, a Times of India article dated November 2011 referencing industrialist Gautam Adani’s ALPHARD vehicle, an article about the Tamil Nadu Chief Minister’s ALPHARD vehicle, import data from zauba.com and Times of India classified advertisements for second-hand ALPHARD vehicles.

Respondent No. 1, Tech Square Engineering Pvt. Ltd., applied for registration of the mark ALPHARD in India on 5 November 2015 on a proposed to be used basis under three classesClasses 9, 12 and 27 obtaining registrations under Registration Nos. 3093216, 3093218 and 3093219. The respondent claimed to have independently coined the mark and to be the bonafide prior adopter and registered proprietor in India since 2015. The respondent’s explanation for adoption varied at one stage it claimed to have coined the mark independently and at another attributed it to the name of a star, an astronomical reference. The respondent’s invoices in support of claimed use were in the name of Tekstar Global Private Limited which the respondent described as a sister concern and not in the respondent’s own name.

Upon becoming aware of the respondent’s registrations, the appellant initiated rectification proceedings under Section 57 of the Trade Marks Act, 1999 seeking removal of the impugned mark from the Register. These proceedings were originally filed before the Intellectual Property Appellate Board, transferred to the Delhi High Court upon abolition of the IPAB and adjudicated as C.O. (COMM.IPD-TM) 586/2022. The learned Single Judge by judgment dated 3 February 2023 dismissed the appellant’s petitions, holding that the appellant had failed to demonstrate sufficient use or establish the reputation of the ALPHARD mark within India prior to the respondent’s adoption. The Single Judge placed determinative reliance on the absence of formal commercial use in India, treated the appellant’s 2017 application for registration on a proposed to be used basis as an admission of no prior use and found the respondent to be the prior adopter and bonafide user of the mark in India since 2015. The appellant preferred the present Letters Patent Appeals challenging the correctness of those findings.

Issues for Determination

1. What is the scope of interference available to a Division Bench in an intra-court appeal against the decision of a Single Judge and whether the present case warrants departure from the general principle of limited interference.
2. Whether the appellant’s mark ALPHARD qualified as a well-known trade mark in India within the meaning of Section 11(6) to (10) of the Trade Marks Act, 1999 as of the date of the respondent’s application for registration on 5 November 2015, having regard to the doctrine of trans-border reputation and the factors governing recognition within the relevant section of the public.
3. Whether unsolicited importation of the appellant’s vehicles by private individuals into India, combined with online presence, media coverage and digital visibility, was sufficient to establish spill-over reputation and goodwill of the mark ALPHARD within India prior to the respondent’s adoption and whether the Single Judge erred in discounting this evidence solely because it did not emanate from the appellant itself.
4. Whether the respondent’s adoption of the identical mark ALPHARD in relation to allied and cognate goods was bonafide, having regard to the respondent’s inconsistent explanations for adoption, the absence of credible evidence establishing a legal nexus between the respondent and Tekstar Global Private Limited whose name appeared on the invoices and the global reputation of the mark.
5. Whether the impugned registrations ought to be removed from the Register of Trade Marks under Section 57(2) of the Trade Marks Act, 1999 as marks wrongly remaining on the Register, on the ground that they contravene Section 11 of the Act.

Key Holdings of the Court

• First, the Division Bench affirmed the settled principle that interference in an intra-court appeal is warranted only where the judgment or order under challenge is demonstrably erroneous or suffers from perversity and not merely because another view is possible on the same facts. However, the Court found that the Single Judge’s findings fell within the category warranting interference as they were based on an erroneous application of the legal standard governing trans-border reputation.
• Second, the Court held that the mark ALPHARD qualified as a well-known trade mark in India within the meaning of Section 11 of the Trade Marks Act, 1999 as of the date of the respondent’s application. The Court found that the appellant had placed on record substantial material demonstrating that the mark had acquired recognition within India prior to 5 November 2015 specifically through independent imports by private individuals since 2008, online classified listings of second-hand ALPHARD vehicles on Indian platforms, discussions on Indian automobile enthusiast forums, Indian news articles and blog posts and import data. Taken as a whole this material established trans-border spill-over reputation and goodwill within the relevant consumer segment.
• Third, the Court held that the Single Judge had committed a fundamental error by applying an unduly high standard requiring mass-market penetration or formal commercial sales by the appellant. The law under Section 11(6) and (7) of the Trade Marks Act, 1999 only requires recognition within the relevant section of the public which in the case of luxury automobiles is a niche, specialised consumer segment. The absence of mass penetration or a formal commercial launch is not fatal to a claim of reputation in this segment. The Court explicitly held that reputation in a niche market, even without mass penetration, is sufficient to establish a well-known mark.
• Fourth, the Court held that unsolicited voluntary importation of the appellant’s vehicles by private individuals into India was itself powerful and compelling evidence of the mark’s reputation and goodwill. The Court reasoned that such importation particularly of a high-value luxury product is not a neutral or accidental occurrence but reflects a conscious commercial decision driven by the recognition and attractiveness of the appellant’s mark among Indian consumers and traders. The Court held that goodwill is best evidenced not by mere assertion but by the response of the market itself and that the market had spoken unequivocally in favour of the appellant’s mark.
• Fifth, the Court held that the Single Judge erred in discounting evidence of use and recognition solely because it did not emanate from the appellant itself. Drawing on the Division Bench decision in Trustees of Princeton University v. Vagdevi Educational Society and Others, the Court held that the statutory definition of use under Section 2(2)(c)(ii) of the Trade Marks Act, 1999 is not confined to acts of the proprietor alone but extends to any statement in the public domain that associates the mark with the availability or performance of the goods or services.
• Sixth, the Court held that the appellant’s 2017 application for registration on a proposed to be used basis did not negate its prior trans-border reputation. Such an application reflected the absence of a formal commercial launch but did not detract from spill-over goodwill that had already accrued through third-party imports and public recognition.
• Seventh, on the respondent’s adoption, the Court found that the respondent had failed to discharge the burden of proving prior user or bonafide adoption. The invoices relied upon were in the name of Tekstar Global Private Limited and not the respondent itself. No material establishing common shareholding, management control or any formal commercial arrangement between the respondent and Tekstar was produced. A mere assertion of corporate association unsupported by documentary proof cannot convert the actions of a third party into use by the proprietor. Several invoices recorded undisclosed cash transactions without identifying the purchasers, further undermining their reliability. The respondent’s inconsistent explanations for adoption at one stage claiming coinage and at another attributing the mark to an astronomical reference further detracted from its credibility and raised a serious doubt as to the bonafides of the adoption.
• Eighth, the Division Bench concluded that the impugned registrations contravened Section 11 of the Trade Marks Act, 1999 and constituted marks wrongly remaining on the Register within the meaning of Section 57(2) of the Act. The Court ordered the removal of Registration Nos. 3093216, 3093218 and 3093219 in respect of Classes 9, 12 and 27 from the Register of Trade Marks, declared these registrations invalid and directed the Registrar of Trade Marks to effect the rectification forthwith. The appeals were allowed with no order as to costs.

Statutory Provisions Involved

Section 57 of the Trade Marks Act, 1999 empowers the High Court or the Registrar, on application by any person aggrieved, to make such order as it thinks fit for cancelling or varying the registration of a trade mark on specified grounds. Section 57(2) specifically empowers the authority to make, expunge or vary entries made without sufficient cause, entries wrongly remaining on the Register or entries containing errors or defects. The Court applied this provision to hold that the respondent’s registrations were wrongly remaining on the Register as they contravened the relative grounds of refusal under Section 11 and ordered their removal and rectification.

Section 11 of the Trade Marks Act, 1999 prescribes relative grounds for refusal of registration. Section 11(1) proscribes registration of a mark identical with or similar to an earlier trade mark in respect of identical or similar goods where there exists a likelihood of confusion. Section 11(2) proscribes registration even in respect of dissimilar goods where the earlier mark is a well-known trade mark in India and use of the later mark without due cause would take unfair advantage of or be detrimental to the distinctive character or repute of the earlier mark. Section 11(3) proscribes registration where use of the mark in India is liable to be prevented by the law of passing off protecting an unregistered mark used in trade. The Explanation to Section 11 defines an earlier trade mark as including a registered mark, an application pending before the Registrar or a mark which on the date of application was entitled to protection as a well-known trade mark. Sections 11(6) to (10) set out the factors for determining whether a mark is a well-known trade mark, including knowledge or recognition within the relevant section of the public, duration and geographical area of use and promotion and the record of enforcement of rights.

Section 2(1)(zg) of the Trade Marks Act, 1999 defines a well-known trade mark as one which has become so known to the substantial segment of the public which uses such goods or receives such services that its use in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade with the person using the mark in relation to the first-mentioned goods. The Court applied this definition to hold that the standard of a well-known mark requires recognition within the relevant section of the public and does not require universal recognition across the entire population or mass-market penetration.

Section 2(2)(c)(ii) of the Trade Marks Act, 1999 governing the definition of use of a trade mark was referred to by the Court in the context of the Division Bench decision in Trustees of Princeton University, to support the proposition that use is not confined to acts of the proprietor alone but includes statements in the public domain associating the mark with the goods or services.

Reasoning of the Court

The Division Bench’s reasoning proceeded from a clear articulation of the doctrinal framework governing trans-border reputation before applying it to the facts in a manner that expressly distinguished the present case from the Supreme Court’s earlier decision in Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. the Prius case which the Single Judge had relied upon to dismiss the petition.

The Court first established that Prius should not be read as rejecting the concept of cross-border reputation altogether. Rather Prius held Toyota to have failed on facts because the Prius brand lacked real commercial presence, sufficient publicity and adequate consumer recognition in India at the relevant time. The Court specifically noted the Supreme Court’s observation in Prius that the existence of a real market is not a precondition to establishing trans-border reputation what is required is the presence of the claimant through its mark within the particular territorial jurisdiction in a more subtle form and that if there are customers for the claimant’s products in a jurisdiction then the claimant stands in the same position as a domestic trader.

Having established this framework, the Court proceeded to examine the factual matrix and found it materially distinguishable from Prius. Unlike in Prius where there was minimal evidence of any Indian consumer awareness of the brand prior to the relevant date, the present case disclosed a body of material spanning independent imports from 2008 onwards, online classified listings, forum discussions on Indian automotive platforms, newspaper articles and import data that collectively demonstrated recognition of the ALPHARD mark within the relevant consumer segment in India prior to November 2015.

The Court placed particular emphasis on the significance of unsolicited voluntary importation as evidence of reputation. The reasoning was that the decision to import a high-value luxury vehicle is not made spontaneously or accidentally. It is driven by pre-existing knowledge and recognition of the brand. A consumer who imports a luxury MUV from abroad has by definition already recognised the source and reputation of the product. Such importation therefore constitutes compelling market evidence of goodwill indeed the most compelling form of evidence, since it represents the market expressing its own judgment about the desirability of the brand without any prompting from the brand owner.

The Court then addressed the error in the Single Judge’s approach which was to apply a standard of widespread or mass-market recognition that is neither required by Section 11(6) and (7) nor by the doctrine of trans-border reputation. The Court reasoned that the relevant section of the public for luxury automobiles is inherently a niche and specialised consumer segment and that reputation must be assessed by reference to that segment rather than by reference to general public awareness. Section 11(7) of the Act itself recognises this by requiring the Registrar to take into account the number of actual or potential consumers, the number of persons in channels of distribution and the business circles dealing with the relevant goods.

On the respondent’s use and adoption, the Court’s reasoning identified two distinct legal failures. The first was the absence of a credible legal nexus between the respondent and Tekstar Global, the entity named in the invoices. The Court applied the settled principle that a mere assertion of corporate association cannot convert the acts of a third party into use by the registered proprietor foundational documentary evidence of common control or ownership is required. The second was the inherent inconsistency in the respondent’s own account of its adoption the contradictory claims of independent coinage and astronomical reference within the same set of proceedings undermined the credibility of any innocent explanation.

Doctrinal Significance

The Toyota v. Tech Square judgment makes several important contributions to Indian trade mark law, particularly in the areas of trans-border reputation, the standard for well-known marks and the evidentiary significance of third-party imports.

Its most significant doctrinal contribution is the authoritative clarification of the standard of evidence required to establish trans-border reputation for luxury goods. By explicitly holding that the relevant section of the public for luxury automobiles is a niche and specialised consumer segment and that reputation must be assessed by reference to that segment rather than by reference to general public awareness, the Court has provided a practically important calibration of the well-known mark standard that recognises the structural differences between mass-market and luxury goods markets. This is consistent with Sections 11(6) and (7) of the Act but had not previously been articulated with this degree of clarity in the context of luxury automobile marks.

The judgment’s treatment of unsolicited voluntary importation as a powerful indicator of reputation is also doctrinally significant. The holding that the market’s own response demonstrated through independent consumer decision-making to import the goods constitutes the most compelling form of evidence of goodwill provides a useful and practically grounded evidentiary principle for future cases involving high-value goods that may not be officially marketed in India but are nonetheless recognised and sought out by Indian consumers.

The judgment also makes an important contribution to the law on third-party use as evidence of reputation by affirming and applying the Trustees of Princeton University principle that use within the meaning of the Act is not confined to acts of the proprietor alone. This clarification is significant for foreign brand owners whose goods may enter the Indian market through grey channels or parallel imports before any official commercial launch.

Finally, the judgment provides useful guidance on the interface between rectification proceedings under Section 57 and the relative grounds of refusal under Section 11. By affirming that marks which could not have been registered in the first place because they violated Section 11 at the time of registration are wrongly remaining on the Register within the meaning of Section 57(2) and are therefore liable to be removed, the Court has reinforced the corrective function of rectification proceedings as a backstop against registrations that should never have been granted.

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