EZIO v. ZEO: A Glimpse into the EV Trade Mark battle

Picture this: A promising automotive startup has spent years developing their first electric vehicle, an innovative urban mobility solution. They secured trademark registrations, lined up their supply chain, and are merely months away from their big launch. Just then, one of the largest automobile manufacturers announces their new electric vehicle with a remarkably similar name.

Such an instance raises several key questions that courts must grapple with, such as the significance of the manufacturer’s name as a distinguishing factor in the mark, the likelihood of consumer confusion between both parties etc.

The Delhi High Court, in the recent case of Gensol Electric Vehicles Pvt. Ltd. vs Mahindra Last Mile Mobility Limited,[i] refused to grant interim injunction in favour of the Plaintiff, finding that there was no instance of passing off, or potential confusion which may be caused owing to the inclusion of the house mark by the Defendants in their name. The natural question that arises at this juncture is the facts and considerations that led to this judgment by the Court.

Facts at a glance:

• The plaintiff [Gensol Electric Vehicles Pvt. Ltd.], incorporated in the year 2022 with a vision to accelerate electric vehicle (EV) adoption towards a sustainable future, coined and adopted the mark ‘EZIO’ along with a distinctive logo.

• The plaintiff applied for registration of the word mark ‘EZIO’ in Class 12 on a ‘proposed to be used’ basis with the Trade Marks Registry in June 2023, and obtained registration for the same in May, 2024.

• The Plaintiff also obtained requisite permissions from the Automotive Research Association of India (‘ARAI’) and design registration for its vehicle, in January 2024.

• On 18th September, 2024, the plaintiff came across a newspaper article dated 9th September, 2024, containing the defendant’s announcement of the launch of a new commercial electric four-wheeler under the mark ‘eZEO’ /ZEO ‘. The defendant had also filed trade mark applications in Class 12 on ‘proposed to be used’ basis for the word mark and device mark ‘ZEO’ and ‘eZEO’ on 29th August, 2024 and 10th September 2024, respectively.

The Plaintiff then filed a suit for interim injunction.

• The Defendant [Mahindra Last Mile Mobility Limited], is a subsidiary of Mahindra and Mahindra Limited, and has been a prominent player in the market for the last two decades through its parent company, presently holding almost 50% market share of the commercial electric vehicle market.

• The Defendant argued that during the development phase of the proposed vehicle, the defendant bona fide coined and adopted the mark ‘ZEO’ / ‘eZEO,’ which is an acronym for ‘Zero Emission Option’, and had duly conducted a search in the records of the Trade Mark Registry and in the market.

• The defendant is ‘first in the market’ in relation to the defendant’s trademarks.

• To address the Plaintiff’s concerns, they had discontinued the conflicting marks and had adopted the mark ‘Mahindra ZEO’ for its vehicles.

Major Considerations:

 

• Similarity between the marks and use of the house mark:

The Court found that since the defendant had changed the mark to ‘Mahindra ZEO’, there cannot be an automatic presumption of confusion.

The Court found that the change effected by the defendant in its mark from ‘eZEO’ to ‘ Mahindra ZEO ‘ makes the two marks visually and phonetically dissimilar so as to not cause any confusion among the public, and the inclusion of the house mark ‘MAHINDRA’ to the Defendant’s mark ‘ZEO’ makes the mark distinctive different from the mark of the plaintiff, both structurally and phonetically.

• Goodwill in the market:

The plaintiff has not launched any vehicle, whether commercial or otherwise, in the market till date and consequently, it cannot be said the plaintiff has any goodwill in the market in relation to its vehicles.

However, on the other hand, defendant is a well-known player in the field of commercial electric vehicles, all the vehicles sold by the defendant uses the mark of its parent company, ‘Mahindra’.

• Likelihood of confusion/ deception and passing off:

The Court relied on the well-established principle that one of the relevant factors to be considered for determining deceptive similarity between competing marks would be the purchaser’s education, intelligence and degree of care exercised while buying the goods.[ii]

The plaintiff and the defendant are engaged in the similar business selling motor vehicles, which are high end products. A customer purchasing a vehicle typically makes a well-informed, thoughtful decision rather than an impulsive one.

The plaintiff’s vehicle is an electric passenger vehicle, whereas the defendant’s vehicle is an electric commercial vehicle. Naturally, their shape, size and configuration as well as prospective customers would be different.

While purchasing a motor vehicle, an average consumer would not only consider the model of the motor vehicle but also its manufacturer. There is an amount of brand equity, goodwill and reputation attached to the name of the manufacturer. In this regard, the Court gave instances of cars such as Mercedes E220, Toyota Camry, Honda Accord, Maruti SX4 etc., wherein the name of the manufacturer becomes a distinguishing factor.

In the light of the above considerations, the Court held that the plaintiff has failed to make out a prima facie case for grant of interim injunction.

Conclusion:

This case proves to be significant with respect to the use of house marks, and questions involving passing off and infringement in such matters. It also offers several key takeaways, particularly concerning trademark rights and brand differentiation, which are important to be noted:

1. Use of House Marks: Mahindra’s inclusion of its parent company’s name, ‘Mahindra’, alongside the ‘ZEO’ mark, was deemed to make the trademark distinctive. This strategy underscores the effectiveness of leveraging established brand equity to differentiate new products and reduce the likelihood of consumer confusion.

1. Distinct Market Segments and Product Differentiation: The Delhi High Court noted that Gensol’s vehicle is an electric passenger vehicle, whereas Mahindra’s vehicle is an electric commercial vehicle. This distinction in target audiences and product categories also played a significant role in the court’s decision, highlighting the importance of clearly defining and communicating your product’s unique market position.

1. Trademark Search and Due Diligence: The defendant had initially conducted a trademark search in the records of the Trade Marks Registry, as well as a market search, and had found no conflicting marks before adopting ‘eZEO’. Documents evidencing the same were also adduced before the Court. This emphasizes the necessity for businesses to conduct a thorough search of existing trademarks to avoid potential infringements and legal disputes, or to act as evidence thereof in case of such disputes.

1. First-Mover Advantage: Mahindra’s early market entry with the ‘eZEO’ vehicle, prior to Gensol’s product launch, provided a competitive edge to the company, in addition to the enormous goodwill earned in the mark. The Plaintiff on the other hand, despite obtaining early registrations for their mark, being new in the industry, and not having launched the vehicle, could not prove any goodwill or reputation. The plaintiff first disclosed its marks to the public only on 25th September, 2024 which is a day before the institution of the suit. This therefore highlights the strategic advantage of being first to the market, and the significance of time, which can be crucial in establishing brand recognition and customer loyalty.

1. Legal Precedents and Consumer Perception: The court referenced previous cases where the inclusion of a house mark in a product’s branding was sufficient to distinguish it from other marks. This reinforces the idea that consumer perception, influenced by brand reputation and product differentiation, is a critical factor in trademark disputes.

Thus, these factors significantly contributed to the Court’s judgement in the above case. As the legal framework continues to evolve in India, it remains to be seen how such disputes will shape and contribute to the further development of trademark jurisprudence, setting new precedents in the area.

Minnu Bridgit Sebastian

[i] Gensol Electric Vehicles Pvt. Ltd. vs Mahindra Last Mile Mobility Limited, CS(COMM) 849/2024

[ii] Cadila Healthcare Limited vs Cadila Pharmaceuticals Limited, 2001 (2) PTC 541 SC