Delhi High Court Refuses Interim Injunction in Trademark Infringement Case Between Two Electric Vehicle Companies, Holds ‘MAHINDRA ZEO’ Not Deceptively Similar to ‘EZIO’

Court’s Decision

In this case, the Delhi High Court refused to grant an interim injunction that the plaintiff had sought. The plaintiff was seeking to prevent the defendant from using the trademark ‘ZEO’ or ‘eZEO’ for its commercial electric vehicle, which the plaintiff alleged was infringing on its registered trademark ‘EZIO’. The Court considered that the defendant had modified its original mark ‘eZEO’ to ‘MAHINDRA ZEO’ and held that this modification made the two marks visually and phonetically distinct. Because the plaintiff had not yet launched its vehicle, it lacked established goodwill, which made it difficult to prove that there was a real likelihood of confusion in the market. As a result, the Court concluded that the plaintiff had not shown a prima facie case for trademark infringement or passing off.

The plaintiff’s application for an interim injunction was therefore dismissed.

Facts

1. Plaintiff’s Background:
   • The plaintiff is a company that manufactures electric vehicles and has developed a vehicle under the mark ‘EZIO’.
   • The plaintiff’s vehicle design began in September 2022, and the name ‘EZIO’ was coined and registered with the Trade Marks Registry in May 2024.
   • The plaintiff had not yet launched its vehicle into the market, but had received a certificate from the Automotive Research Association of India (ARAI) and was planning to launch in January 2025.
2. Defendant’s Actions:
   • The defendant, a subsidiary of Mahindra and Mahindra Limited, also manufactures electric vehicles and announced the launch of a commercial electric vehicle under the mark ‘eZEO’ in September 2024.
   • The defendant subsequently modified its mark to ‘MAHINDRA ZEO’, after being made aware of the plaintiff’s trademark.
   • The defendant argued that its adoption of the mark was done in good faith and following a thorough trademark search, which did not reveal any conflict with the plaintiff’s mark at the time.
3. Plaintiff’s Discovery:
   • The plaintiff discovered in September 2024 that the defendant was using a mark resembling ‘EZIO’, prompting them to file a lawsuit seeking to prevent the defendant from using the mark ‘eZEO’ or ‘ZEO’.

Issues

1. Whether the defendant’s use of the mark ‘eZEO’ infringes upon the plaintiff’s registered trademark ‘EZIO’.
2. Whether the defendant’s modification of its mark to ‘MAHINDRA ZEO’ makes it sufficiently distinct from the plaintiff’s mark ‘EZIO’, thus negating the likelihood of confusion.
3. Whether the plaintiff is entitled to an interim injunction, considering that the plaintiff’s vehicle has not yet been launched and lacks market goodwill.

Petitioner’s Arguments

1. Trademark Confusion:
   • The plaintiff argued that the defendant’s use of the mark ‘ZEO’ is likely to cause confusion among consumers, as it is too similar to their registered mark ‘EZIO’.
2. Trademark Registration:
   • The plaintiff emphasized that they had registered the mark ‘EZIO’ in May 2024 and had already taken steps towards the launch of their vehicle by early 2024.
3. Plaintiff’s Market Readiness:
   • The plaintiff contested the defendant’s claim that their vehicle was still in the prototype stage. The plaintiff had already obtained a certification for the vehicle and intended to launch in January 2025.
4. Similarity of Marks:
   • The plaintiff argued that the defendant’s use of the mark ‘MAHINDRA ZEO’ does not provide enough distinction to avoid confusion in the marketplace.

Respondent’s Arguments

1. Bona Fide Use of Mark:
   • The defendant argued that it adopted the mark ‘eZEO’ in good faith and had performed a thorough trademark search prior to using the mark. It was contended that the plaintiff’s mark was not yet publicly disclosed when the defendant made its announcement.
2. Change of Mark:
   • The defendant noted that it had modified its mark from ‘eZEO’ to ‘MAHINDRA ZEO’ to avoid confusion, adding the house mark ‘MAHINDRA’, which would make the mark sufficiently distinct from ‘EZIO’.
3. No Likelihood of Confusion:
   • The defendant highlighted that the marks were not identical, and there would be no confusion between the two since the defendant’s vehicles are sold only through authorized dealers, and consumers are discerning when purchasing high-value products like electric vehicles.
4. Market Segmentation:
   • The defendant pointed out that the plaintiff’s product is a passenger vehicle, while the defendant’s vehicle is a commercial vehicle, which targets different consumer segments. This difference further reduces the possibility of confusion.

Analysis of the Law

1. Likelihood of Confusion:
   • The Court analyzed whether the marks ‘EZIO’ and ‘MAHINDRA ZEO’ were deceptively similar. It noted that the change made by the defendant, from ‘eZEO’ to ‘MAHINDRA ZEO’, made the marks visually and phonetically different. The Court emphasized that consumers in the automobile industry are typically more discerning, and there is less likelihood of confusion between two similar marks in such a market.
2. Trademark Infringement and Passing Off:
   • The Court discussed the standard for trademark infringement and passing off. It considered the precedent cases F Hoffmann-La Roche and Cadila Health Care Ltd. to determine that the marks’ similarities and the products’ intended target consumers should be evaluated. The Court found that the plaintiff’s claim did not meet the legal requirements for either infringement or passing off, especially as the plaintiff had not yet launched its vehicle and thus lacked market goodwill.
3. Prior Use and Goodwill:
   • The Court noted that the plaintiff had no established goodwill as its vehicle had not yet been launched. In contrast, the defendant had an established market presence and a long-standing reputation in the commercial electric vehicle sector, which further supported the defendant’s claim.

Precedent Analysis

The Court referred to several precedents to support its decision:

1. F Hoffmann-La Roche v. Geoffrey Manners & Co. Ltd. – Marks that differ in their uncommon parts are not considered deceptively similar.
2. Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. – Highlighted that consumer awareness and intelligence are crucial in assessing whether confusion will occur.
3. Goenka Institute of Education and Research v. Anjani Kumar Goenka – Applied the passing off test where the marks are similar but not identical.
4. MESO Pvt. Ltd. v. Liberty Shoes Ltd. – Established that for high-value products, consumers are more cautious, reducing the likelihood of confusion.

Court’s Reasoning

1. Change in Mark: The Court found that the defendant’s change of the mark from ‘eZEO’ to ‘MAHINDRA ZEO’ was sufficient to distinguish it from the plaintiff’s mark ‘EZIO’. This modification addressed the concerns of potential confusion.
2. Market Readiness: Since the plaintiff had not yet launched its product, the Court noted that the plaintiff lacked market presence or goodwill, which is a necessary factor in claims of passing off.
3. Consumer Discretion: The Court emphasized that automobile consumers are generally more discerning, especially when purchasing expensive items like electric vehicles. They are likely to make informed decisions and not be misled by similar marks.

Conclusion

The Court concluded that the plaintiff failed to make a prima facie case for granting an interim injunction. Given the defendant’s bona fide adoption of the mark, the change made to the mark, and the lack of the plaintiff’s market presence, the application for an interim injunction was dismissed.

Implications

1. Trademark Infringement Cases: This case reiterates the importance of proving both the similarity of the marks and the likelihood of confusion, especially when the plaintiff has no market presence.
2. Modification of Marks: The Court’s acceptance of the defendant’s modification of its mark highlights how changes to a trademark can mitigate potential confusion and form a valid defense.
3. Consumer Awareness: The judgment stresses the importance of considering the sophistication of the target consumer market, especially for high-value products like automobiles, when determining the likelihood of confusion between marks.
4. Market Goodwill: The ruling emphasizes that a lack of market goodwill weakens claims of infringement or passing off, especially when the defendant has an established reputation.

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