While clarifying that the mere likelihood of confusion is enough to establish a case of infringement of Trade Marks, and actual confusion is not required to be demonstrated, the Delhi High Court held that the addition of descriptive terms like ‘USA’ and ‘POWER’ is not enough to distinguish the goods and services of the Defendants from those of the Plaintiff, i.e., ‘TESLA’.
Applying the dominant feature test as well as the triple identity test of the product category, trade channel and the consumer base, the Court ruled that the Plaintiff has established its prior user as well as goodwill and reputation, and directed the Defendants neither to use any brand deceptively similar to the word ‘TESLA’, nor issue any promotional advertisements in relation to EV vehicles under the Trade Name ‘TESLA’. The Court also directed the Defendants not to use the registered device/logos of ‘TESLA’ till the final disposal of the Suit.
The Court also held that the Plaintiff has made a prima facie case of passing off, as they have shown substantial goodwill through the revenue earned and the coverage received in various newspapers and magazines across the globe, and has been able to demonstrate actual instances of confusion. Thus, the Plaintiff is likely to suffer loss of reputation, as the Plaintiff’s Trade Marks have amassed considerable goodwill and are neither descriptive, nor generic.
A Single Judge Bench of Justice Tejas Karia observed that the Plaintiff has earned a significant revenue of $98.6 billion by selling its goods and services, and its website, which is accessible in India and abroad, generates huge traffic. Further, when the Plaintiff’s goods and services have received coverage from leading national newspapers in India, it is implausible that the Defendants were not aware of the Plaintiff and its Marks, considering the overwhelming goodwill. Accordingly, the Bench held that the use of the Impugned Trade Marks by the Defendants is prima facie dishonest and appears to be an attempt to ride on the goodwill and reputation of the Plaintiff’s Trade Marks.
Further, the Bench noted that despite the Defendants having no client base in the USA, they have dishonestly adopted ‘TESLA POWER USA’, which is deceptive and appears to be with the intention to mislead the customers into believing that the technology that the Defendants are using originated in the USA and that the Defendants are connected with the Plaintiff, which is based in the USA. The rejection of the Defendants’ applications for registration of the Impugned Trade Marks in the USA, Turkey and Hungary clearly shows dishonest adoption by the Defendants to ride on the goodwill and reputation of the Plaintiff in India.
While explaining that a Trade Mark possesses a distinctive character, it serves to identify and distinguish the goods or services of a party from those of others, the Bench stated that the Plaintiff has been using the Mark ‘TESLA’ continuously since the year 2003 with respect to EVs and Batteries, and as the Plaintiff’s Trade Marks are validly subsisting on the Register of Trade Marks, the Defendant cannot contend that the Plaintiff does not have the right to protect its proprietary rights in the Trade Marks.
Further, as the Plaintiff’s registration for the Trade Marks in Class 09 covers Inverters, the Defendants’ use of the Impugned Trade Marks for Inverters is clearly an infringement, and therefore, the Bench disregarded the submissions of the Defendant that the Plaintiff has not sold any products under their ‘TESLA’ Marks in India or abroad that are similar to the products sold by the Defendants under the Impugned Trade Marks.
Briefly, earlier in May 2024, the Defendants claimed that they have no intention to manufacture Electric Vehicles (EVs) at all and will not market other entities’ EVs as well under the Trade Name ‘TESLA POWER USA’ and/or any other brand deceptively similar to the word ‘TESLA’. However, pleading that the Defendants were not abiding by the said undertaking, the Plaintiff has filed the suit for a permanent injunction restraining the Defendants from using the Marks ‘TESLA POWER’ / ‘TESLA POWER USA’, and/or any other deceptively similar marks, including the domain names www.teslapowerusa.com, www.Teslapowersusa.in, www.Teslapowerusa.ae and www.Teslahealthylife.com.
The Defendant, however, opposed this by contending that the Defendants were abiding by the undertaking and handed over documents stating that they had written to all their vendors and partners to remove the marks pursuant to having given the undertaking.
Cases Distinguished:
Royal County of Berkshire Polo Club Ltd v. Lifestyle Equities CV and Others [2023 SCC OnLine Del 5347]
Rhizome Distilleries P. Ltd. & Ors. vs. Pernod Ricard SA France & Ors. [2009 XAD (Delhi) 305]
Skyline Education Institute (India) P. Ltd. vs. SL Vaswani & Anr. [(2010) 2 SCC 142]
Neon Laboratories Ltd. vs. Medical Technologies Ltd. & Ors. [MIPR 2015 (3) 1070]
Vans Inc. Usa vs. Fcb Garment Tex India (P) Limited and Another [2024 SCC Online Del 8424]
Appearances:
Senior Advocate Chander M. Lall, along with Advocates Raghav Malik, Nancy Roy, Prakriti Varshney, Lalit Alley, Annanya, and Prashant, for the Plaintiff
Senior Advocate J. Sai Deepak, along with Advocates Mohit Goel, Sidhant Goel, Abhishek Kotnala, Kartikeya Tandon, and Avinash Sharma, for the Defendant
