Facts of the Case
Mercedes-Benz, one of the world’s most iconic luxury car manufacturers, has long used the trademark “Benz” as part of its brand identity. The term “Benz” holds global recognition and symbolizes high-quality automobiles engineered with precision, performance, and elegance. The brand enjoys a stellar reputation, not only among automobile enthusiasts but also in general consumer perception.
In an unexpected twist, a garment manufacturer based in India started marketing and selling undergarments under the same trademark name—“Benz.” While the garments and automobiles fall under different product categories, the adoption of the identical trademark sparked legal tensions. Mercedes-Benz contended that this use constituted trademark infringement and dilution of its brand.
Issues of the Case
- Can two unrelated businesses legally use the same trademark if their products are not similar?
The primary issue hinges on the question of whether a trademark registered for a luxury car can be protected against its use by a manufacturer of unrelated products, such as undergarments. - Does the use of a well-known trademark for unrelated goods amount to infringement or dilution?
The concern arises whether the use of a reputed mark for non-competing goods creates confusion among the public or weakens the uniqueness of the original brand. - Can reputation alone serve as a ground for legal protection against non-identical product usage?
The court had to examine if the well-established goodwill associated with the trademark “Benz” warrants broader protection beyond its traditional automotive industry.
Principles and Related Case Law
This case rests on two foundational principles of trademark law: likelihood of confusion and trademark dilution.
- Trademark Infringement (Section 29 of the Trade Marks Act, 1999):
A registered trademark is infringed when an unauthorized party uses an identical or deceptively similar mark for goods or services. Even if the goods are unrelated, the law protects trademarks with a “reputation in India” from being exploited by others for unfair advantage. - Trademark Dilution:
Dilution occurs when a famous mark’s uniqueness is weakened through unauthorized use, regardless of competition or consumer confusion. In this case, Mercedes-Benz argued that using “Benz” for undergarments tarnishes its elite brand image. - Relevant Case Law: Daimler Benz Aktiengesellschaft v. Hybo Hindustan (1994 PTC 287)
This landmark judgment directly addressed this situation. The Delhi High Court ruled in favor of Daimler Benz, stating that “Benz” is not just a name, but a symbol of excellence and class. It stated, “It would be a sacrilege to use the name of ‘Benz’ with undergarments… no one should be allowed to use this name in a way which will tarnish its image.”
The court emphasized that trademarks like Benz, with global fame, deserve the highest degree of protection—even against unrelated products—because of the distinctive goodwill attached to them.
Judgment
The Delhi High Court held that the garment manufacturer had infringed upon the trademark “Benz” and restrained them from using the name in connection with undergarments or any other product. The judgment reaffirmed that trademarks known worldwide carry a broader legal shield, extending even to unrelated goods, when the mark’s reputation is at stake.
The court clarified that the legal test goes beyond similarity of goods. When a name carries global significance and represents top-tier quality, its unauthorized use, even in distant markets and categories, creates a risk of dilution. The court concluded that using “Benz” for intimate clothing not only caused brand dilution but also bordered on unfair trade practice by riding on the reputation of a world-renowned company.
