Note: 1. Territoriality Principle: The Principle of Territoriality holds that if a trademark is widely recognised in a country, even without a business presence, anyone in that country using the same trademark can be liable for trademark infringement.

2. Universality doctrine: The universality doctrine in trademark law recognizes certain marks as being so widely used and understood that they are considered generic and cannot be protected as trademarks.

Facts:

• Toyota Jidosha Kabushiki Kaisha or Toyota (Plaintiff) is a Japanese multinational automotive manufacturer, established in 1937. The Plaintiff owns the well-known trademark 'Prius' for hybrid cars, which has been in use since 1997 and registered in various countries worldwide. The Plaintiff launched the Prius car in India in 2009.
• Prius Auto Industries Ltd. or Prius Auto (Defendants) and its partners were a partnership firm engaged in the manufacture of automobile spare parts. They registered the trademark ‘PRIUS’ in India in 2002-2003.
• The Plaintiff filed a Civil Suit [CS (OS) No. 2490 of 2009] in the Delhi High Court seeking a permanent injunction for infringing their trademark, passing off, and for damages against the Respondents for protecting ‘‘TOYOTA’, ‘TOYOTA INNOVA’, ‘TOYOTA DEVICE’ and the mark ‘PRIUS’ which the Defendants claim to be Prior User of.
• This was a Plaintiff’s appeal against the decision of the Division Bench of the High Court of Delhi’s decision dated 23.12.2016.

Background:

• Toyota (the Plaintiff) sought cancellation of the Defendants' (Prius Auto and Ors.) registered trademark and filed a suit in the High Court of Delhi seeking a Permanent Injunction against the Defendants from using the trademarks in question.
• The High Court granted an ex-parte ad-interim injunction on 22.12.2009, but this was later vacated upon the Defendant's application, leading to a trial.
• Toyota appealed the vacation order before a Division Bench, which, in an order dated 10.08.2010, permitted the Defendant's conditional use of the trademarks pending adjudication.
• The Single Judge subsequently granted a permanent injunction in favour of Toyota and against the Defendants, along with awarding punitive damages to Toyota.
• Both Toyota and the Defendants appealed against the damages and injunction order, respectively, before the Division Bench. The bench, in an order dated 23.12.2016, set aside the permanent injunction regarding the usage of the trademark ‘Prius’, deeming it unjustified. The appeal of Toyota regarding the quantum of damages was also dismissed.
• Aggrieved with the Division Bench's decision, Toyota filed the present appeal.
  

Main Issue:

1. Whether the adoption of a globally recognized trademark of a foreign company by another company in India would amount to infringement?
2. Whether a trademark is to be governed by the territoriality principle or by universality doctrine?