Delhi High Court Orders Cancellation Of Indian Firm's 'ALPHARD' Trademark Registrations In Favour Of Toyota

The Delhi High Court has allowed Toyota Jidosha Kabushiki Kaisha's appeal and directed removal of the trademark 'ALPHARD' from the Indian Trade Marks Register, holding that the Japanese automaker had established spill-over reputation of the mark in India prior to Tech Square Engineering Pvt. Ltd.'s registration of the mark.

A Division Bench of Justice C. Hari Shankar and Justice Om Prakash Shukla, in a judgment pronounced on May 4, cancelled Tech Square's ALPHARD trademark registrations covering automobile-related goods and directed the Registrar of Trade Marks to remove them from the register.

“The law does not require mass-market penetration or extensive commercial sales to establish reputation,” the Bench observed while holding that Toyota had demonstrated recognition of the ALPHARD mark among the relevant section of Indian consumers in the luxury automobile segment.

The dispute arose from applications filed by Tech Square Engineering in 2015 seeking registration of the mark ALPHARD under Classes 9, 12 and 27 on a “proposed to be used” basis.

Toyota subsequently initiated rectification proceedings under Section 57 of the Trade Marks Act, 1999, contending that it had adopted the mark as early as 1986 and commercially launched it globally in 2002 in relation to its luxury multi-purpose vehicle.

Toyota argued that although the ALPHARD vehicle had not been formally launched in India before 2015, the mark had acquired trans-border reputation and goodwill through imports, online exposure, automotive publications and recognition among luxury automobile consumers in India.

A Single Judge of the High Court had dismissed Toyota's rectification petitions on February 3, 2023, holding that the company had failed to establish sufficient reputation or use of the ALPHARD mark within India prior to Tech Square's adoption of the mark. The Single Judge had also noted that the vehicle was not formally launched in India and that a related vehicle was eventually introduced in India in 2020 under the VELLFIRE brand.

Before the Division Bench, Toyota argued that the Single Judge had incorrectly applied the principles governing trans-border reputation laid down by the Supreme Court in the Prius judgment. The automaker relied on evidence including online listings of imported ALPHARD vehicles in India, Indian automotive blogs, classified advertisements, discussions on Team-BHP and import data to contend that the mark enjoyed recognition in India well before Tech Square's applications.

Accepting Toyota's submissions, the Division Bench held that the presence of imported ALPHARD vehicles in India was itself evidence of recognition and goodwill attached to the mark.

“Such unsolicited importation is not a neutral or accidental occurrence. Rather, it reflects a conscious commercial decision, driven by the recognition and attractiveness of the Appellant's mark among Indian consumers and traders,” the Court said.

The Bench added that in the context of luxury goods, market presence cannot be assessed using standards applicable to mass-market products.

“In markets for luxury goods, consumer awareness is not driven by mass penetration but rather by brand visibility and global reputation. Therefore, evidence such as imports and niche market presence holds heightened probative value, especially when establishing the reputation and goodwill of the mark in the relevant territory,” the Court observed, holding that niche market presence carries “heightened probative value” while assessing goodwill and reputation.

The court distinguished the Supreme Court's decision in Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd., observing that the present case involved substantial material showing recognition of the ALPHARD mark in India prior to Tech Square's registration.

“In this case, the relevant section comprises consumers and market participants in the luxury automobile segment, for whom recognition of the ALPHARD mark is both meaningful and significant,” the Bench held.

The court also rejected the inference drawn by the Single Judge from Toyota's own 2017 application to register ALPHARD in India on a “proposed to be used” basis. According to the Division Bench, such an application only reflected the absence of a formal commercial launch in India and did not negate existing spill-over reputation or goodwill attached to the mark.

On whether ALPHARD qualified as a well-known trademark under Section 11 of the Trade Marks Act, the Bench held that recognition among a relevant section of the public was sufficient and that the law did not require widespread public recognition across all consumer groups.

Tech Square had argued that it had independently coined the mark ALPHARD and had also claimed that the name was derived from a star. The Court found these explanations contradictory.

“The inconsistencies in the Respondent's stand, at one stage claiming coinage of the mark and at another attributing its origin to a dictionary or astronomical reference, further detract from the credibility of its explanation,” the bench observed.

The Court also rejected Tech Square's reliance on invoices issued in the name of Tekstar Global Private Limited, observing that no material had been placed on record to establish any legal nexus between the two entities.

“No evidence of common shareholding, management control, or any formal commercial arrangement was placed on record,” the Bench noted.

Holding that the registrations were “wrongly remaining on the Register” under Section 57(2) and liable to be refused under Section 11 of the Trade Marks Act, the Court allowed Toyota's appeals and directed immediate removal of the registrations from the Trade Marks Register