Intellectual Property Rights

Daimler Benz Aktiengesellschaft & Anr. v. Hybo Hindustan

AIR 1994 Del 239

Facts

Daimler Benz manufactured luxury motor vehicles under the famous MERCEDES-BENZ and BENZ marks.
It also used the well-known three-pointed-star device.
The marks had been used internationally for many decades and were registered in India.
Hybo Hindustan used:
the word BENZ;
a device resembling the three-pointed star;
in relation to undergarments.
The goods were completely different from motor vehicles.
Daimler Benz sued for passing off and infringement and sought an interim injunction.
Hybo argued that:
undergarments and cars were unrelated;
consumers would not believe that the products came from the same source;
Daimler had delayed approaching the court.

Whether a famous mark can be protected against use on entirely dissimilar goods.
Whether use of BENZ and the star device on undergarments unfairly exploited the mark’s reputation.
Whether delay defeated injunctive relief.

A trademark of exceptional reputation may receive protection extending beyond the exact goods for which it is registered or used.
No trader is entitled to appropriate a famous mark merely because its goods are unrelated.
Protection is particularly strong where:
the mark is invented or highly distinctive;
the defendant has no plausible reason for selecting it;
adoption appears calculated to benefit from the plaintiff’s prestige.
Passing off protects against false association and commercial misappropriation.
Delay does not ordinarily legalise dishonest adoption.
Where infringement is continuing, an injunction may still be granted unless the plaintiff has clearly acquiesced and the equities overwhelmingly favour the defendant.

BENZ was not a word that a trader in undergarments would naturally need to describe its goods.
It had become globally associated with Mercedes-Benz motor cars, engineering quality and luxury.
The defendant also adopted a star device resembling the famous Mercedes symbol.
The combined adoption made coincidence implausible.
Even though consumers would not literally mistake underwear for a motor car, they could assume:
licensing;
merchandising;
sponsorship;
commercial connection with Daimler Benz.
More importantly, Hybo could gain prestige by borrowing the aura of a world-famous mark.
The Court treated such appropriation as injurious to the uniqueness and reputation of the mark.
A famous trademark could not be allowed to become diluted through use by unrelated traders on ordinary consumer goods.
The Court rejected the argument that protection should be confined mechanically to the registered product category.
The more unique and celebrated the mark, the stronger the justification for preventing unrelated exploitation.
Delay was also insufficient.
Hybo’s adoption was prima facie dishonest.
A trader knowingly using another’s celebrated mark could not build an equitable defence merely by continuing the unlawful use for some time.
The defendant had no legitimate commercial interest comparable to Daimler’s longstanding goodwill.
The balance of convenience therefore favoured preserving the mark’s exclusivity.

The Delhi High Court granted an injunction restraining Hybo Hindustan from using BENZ and the three-pointed-star device.
It recognised enhanced protection for exceptionally famous marks even against unrelated goods.
Use this case for: a renowned mark may be protected beyond its product class where a defendant adopts it without justification to exploit its prestige or weaken its uniqueness.