Court Restrains Local Company from Using Volvo Trademark After Swedish Automaker Files Suit

An Ahmedabad domestic court has issued an order prohibiting an Indian company from using the well-known "Volvo" trademark, following an infringement suit brought by Swedish automobile manufacturer AB Volvo. Almost 30 years old case underlines the robust protections granted to renowned trademarks in India and serves as a significant precedent in terms of brand protection and passing off under the Trade Marks Act, 1999.

The court case has its roots in 1995 when the world leader in car manufacturing, AB Volvo, brought an action against two Indian companies, Volvo Terry Industries Limited and Volvo Finance Limited. The Swedish company accused them of deliberately employing the "Volvo" mark—or similar imitative versions such as "Vovlo"—for their goods and services, specifically for manufacturing terry towels and financial services, in a bid to illegitimately benefit from Volvo's well-nurtured international goodwill.

AB Volvo had already registered its trademark in different classes in India, starting as early as 1975 for diverse categories, ranging from not just motor vehicles but even garments and textiles, showing both extensive use and extensive protection of trademarks.

The case was founded on a cause of action for trademark infringement and passing off. AB Volvo asserted that the defendants' application of the "Volvo" mark was neither innocent nor accidental. They claimed that it was intentional, free riding on Volvo's reputation and thereby cause confusion or deception of consumers as to the origin or quality of goods. The automaker substantiated its claim with evidence of its registration history and a lengthy list of its products to demonstrate the size of its market and reputation linked to its mark.

The Indian company, incorporated in 1992 and engaged in a towel-making unit in Sanand, was accused of using the international trade mark despite not having any real connection with the Volvo group of companies. The company was also operating investment and banking subsidiaries under the disputed mark, which concerned AB Volvo due to potential dilution of brand and confusion of consumers.

Though the court gave them enough opportunities to defend themselves, the local firm did not even cross-examine any of the witnesses presented by AB Volvo. This not so strenuous defense once again undermined their case.

The Court's Ruling

In the final verdict, the court decided in favor of the Swedish automaker. The judgment emphasized that the defendants and their promoters have "deliberately used the word 'VOLVO' as part of their business and infringed the rights of the plaintiffs which are reserved under the Trade Mark Act, 1999". The court has acknowledged the huge documentary evidence and held that the Indian company's action was not an accident but an intentional act of misrepresentation and unfair competition.

As remedies, the court ordered:

• Permanent injunction preventing the domestic company from using the "Volvo" or any confusingly similar mark in relation to towels, apparel, or money services.

• Such restraint was extended to all its subsidiaries, except use of the mark in the investment and banking industries.

• Rs 1 lakh nominal damages were ordered to be paid by the company to AB Volvo for the misuse.

• This decision is a significant reaffirmation of Indian courts' willingness to protect well-known foreign brands against unauthorised use in any business, not just industries in which the original mark has a direct market presence. It raises some significant legal concerns:

Well-Known Marks: Registration in different classes (non-vehicular and vehicular) by a well-known international entity augments trademark protection under Indian law and the Trade Marks Act, 1999.

Passing Off: Even in the absence of direct competition, passing off a reputable mark to mislead consumers or ride on another's fame is actionable passing off.

Deliberate Adoption: Courts are unwilling to grant defendants benefit of doubt or leniency where adoption by celebrity brand appears deliberate, especially where documentary evidence and silence of defense attest to known malicious intentions.

Overlap in Sectors: The situation demonstrates that trademark rights can be asserted by a genuine proprietor of a brand even outside their primary business classes, provided they establish registration and reputation in such classes.

Conclusion

The Ahmedabad court's ruling for Volvo is a pillar in Indian jurisprudence on trademarks, demonstrating how slowly delayed cases may still uphold crucial principles of brand protection, consumer justice, and market integrity. It serves as a cautionary warning to indigenous businesses considering unauthorized use of famous international names that courts will strongly protect reputation mark holders' rights against any unauthorized

Author: Tanishka Sharma, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.