Case Study: Daimler Benz Aktiegesellschaft v. Hybo Hindustan

By Anish Sinha 9 Minutes Read

“A well-known trademark is crucial in global markets for recognizing symbols and signs that are widely recognized by the general public and hold a significant reputation.”

Citation: AIR 1994 Delhi 2369

Court: Delhi High Court

Date of Judgment: 10th November 1993

Bench: Justice M Narain

Facts

• Here, Petitioners were a manufacturer of Mercedes Benz cars, alleged Respondent of using its mark of BENZ for selling its undergarments.
• Hybo Hindustan adopted a “Three-Pointed Human Being in a Ring” mark for trading in the business of undergarments, which was the same as Mercedes. Mark and word in the instant case are “Benz” and “Three-Pointed Human Being in a Ring”.
• In response to which Daimler Benz claimed that the said mark is infringed and impacted their well-reputed company “Three-pointed star in a circle” device and approached the Delhi high court for relief.

Decision of the High Court of Delhi

Delhi High Court held that the trademark ‘BENZ’ was extensively used with respect to automobiles. The use of an identical mark ‘Benz’ with respect to undergarments will lead to confusion in the market, although the manufacturers of Mercedes Benz cars were neither manufacturing nor selling garments nor underwear apparels. 

The Court emphasized that such a well-known mark is not up for grabs for anyone as the name ‘BENZ’ is associated with one of the finest cars in the world and cannot be used by any trader particularly for undergarments, which negatively impacts the credibility of the Mercedes’ trademark.

It is pertinent to note that the word “dilution” was nowhere used in the judgement barring at one place as “in my view, the defendant cannot dilute, that by use of the name “Benz” with respect to a product like under-wears.”

Judgment

In deciding the case, the Court recognized the plaintiff’s logo as a well-known trademark and thus restrained the Defendant from using the impugned mark, stating that there was no valid reason for the defendant to adopt the name “Benz,” which is associated with one of the world’s finest engineered cars and has a trans-border reputation and goodwill.

Justice M. Narain commented “…. There are marks which are different from other marks. There are names which are different from other names. There are names and marks which have become household words. “Benz” as the name of a Car would be known to every family that has ever used a quality car. The name “Benz” as applied to a car, has a unique place in the world. There is hardly one who is conscious of the existence of cars/automobiles, who would not recognize the name “Benz” used in connection with cars….”

The Defendant was restrained from using the mark ‘Benz’ along with the device of a three-pointed human being for undergarments.

Key legal issues discussed

• Whether Hybo Hindustan infringed Daimler Benz’s mark even though they were functional in different industries?

No

The Court rejected all defenses raised by Hybo Hindustan and granted the injunction to stop the infringement of Daimler’s mark.

Further High Court ruled that “Mercedes Benz” and its insignia are a well-known brand in every Indian household. It emphasizes that a sign of this magnitude should not be “up for grabs” for any business owner, regardless of industry.

Hybo Hindustan relied on various instances, including Amritdhara Pharmacy v. Satya Deo Gupta[1], to use the “honest and concurrent use” argument, but the Court dismissed it owing to Daimler’s global dominance. Hybo Hindustan also used a variety of additional defenses to undermine the “Benz” mark, including the assertion that the mark is a popular German surname that should be freely available to everyone.

Case Analysis

This was one of the first trademark instances in which the court acknowledged a brand’s international reputation notwithstanding its modest presence in the Indian market. Furthermore, it discussed trademark dilution (albeit not explicitly invoking the phrase) because both trademarks operated in different product markets.

This is not the first case where a court has ruled such a decision but there are many other cases too. In this instant case London Rubber Co. Ltd. v. Durex Products (Incorporated) And Anr.[2], relating to condoms. The condoms were being sold under the name “Durex”. It was a brand name on which the condoms were being sold in other parts of the world. In India, condoms were also being sold under the name “Durex”. The Court in this case accepted the facts of the case, accepting that it was an honest concurrent user and in cases of concurrent users can be applied with reference to marks and names like “Benz”.

Certain brands develop a link with a certain quality of goods/services. The usage of identical brands for unrelated items may not generate uncertainty about the source, but it may dilute the brand.

For example, if an organization uses the mark “Aple” for its hair oil, people will associate it with the well-known trademark “Apple” for mobile phones. It might be argued that “Aple” for hair oil reduces the uniqueness and distinctiveness of the “Apple” trademark, even if it is for different goods and services.

Well reputed trademarks that are directly linked with a set genre of goods/services like “ROLEX” for watches or “AMUL” for dairy products or “BATA” for shoes and if someone uses the said popular marks for different goods, it will result in dilution of the trademarks’ distinctiveness and reputation.

This is the first instance where the doctrine of trademark dilution is being acknowledged and applied the same.

The Trade Marks Act of 1999, which replaced the Trademark & Merchandise Marks Act of 1958, was enacted to extend the foundation for the theory of trademark dilution and to better protect well-known brands. The idea of trademark dilution was established under Section 29 (4) of the Act, notwithstanding the fact that the Act itself does not include the terms “trademark dilution”.

In the landmark judgement of ITC Limited v. Philip Morris Products Sa and Ors.[3] ITC sued Philp Morris alleging that its mark ‘M’ on Marlboro cigarette pack is diluting ITC’s well established ‘W’ Namste mark of the Welcome group. The High Court in accordance with Section 29(4) of the Trademarks Act, 1999 laid down the essentials for determining the dilution of a trademark. The Court observed that ITC has never used the mark on the cigarettes and that the reputation of ITC’s mark could not be extended to mid to high priced cigarettes and the trademark dilution cause of action did not survive.

[1] 1963 AIR 449.

[2] AIR 1959 CAL 56.

[3] 2010 SCC OnLine DEL 27: 2010 DLT 166 177.

Anish Sinha