After a months-long dispute between US owned Jeep and Indian car giant Mahindra over its apparent plans to import into Australia its ‘Mahindra Thar’ – a Jeep Wrangler lookalike, a June Federal Court outcome has potentially ‘shut the door’ on Mahindra’s Australian expansion plans.
In a May statement, Jeep outlined its belief that “Mahindra is seeking to intentionally infringe the intellectual property rights of our Jeep brand, specifically the Jeep Wrangler,” and further that it would “pursue all available avenues to stop Mahindra from continuing to make misleading and deceptive representations in relation to our Jeep brand, pass off their Thar as a Jeep Wrangler, and infringe our design rights.”
However, in June 2021, the Indian company finally gave an undertaking to the Federal Court that it will “not import, market or sell in Australia the model of the Thar vehicle”. Mahindra also agreed to give Jeep at least 90 days written notice if it intends in the future to import the vehicle. Another Federal Court case management hearing has been scheduled for 30 July 2021 to determine legal costs and “the terms on which (both parties) propose to discontinue this proceeding.”
Speaking on the outcome, Jeep stated that it “illustrates our commitment to protect the iconic trade dress and trademarks of the Jeep brand here and overseas”.
This litigation is part of wider proceedings against Mahindra for alleged misleading and deceptive conduct, passing off, and infringement of registered designs, for a car that it is argued is a ‘copycat’ of the Jeep Wrangler.
Testing the Australian terrain
The Australian litigation started when, earlier in the year, Mahindra invited expressions of interest in the Thar through its Australian website. Jeep responded swiftly, taking Mahindra to court, and requesting that “Mahindra immediately cease and desist from all activities related to the import, distribution and sale of the Thar product in Australia”.
Prior to initial proceedings, and in an attempt to avoid litigation, Mahindra provided written assurances to Jeep that it had no intention of importing the Thar into Australia. In addition, it removed the expressions of interest page from its Australian website.
Maintaining that it did not intend to import the vehicle, Mahindra initially sought a 45 day notice period for outlining future intention to import, in place of the 90 day period ultimately imposed.
However, Jeep argued that a shorter notice period could potentially enable Mahindra to promote or bring a car to market prior to commencement of the certification process. Jeep also noted that although Mahindra had removed its expression of interest page, it had nevertheless already commenced a direct marketing campaign with Australian consumers, and told respondents via email that they would remain informed as the company got “closer to launching this exciting new vehicle in Australia”.
Before imposing the 90-day notice period, Justice John Halley also questioned whether the 45 day proposition was at odds with the assertion that Mahindra had no intention to import the vehicle.
Discussing the outcome, a Mahindra spokesperson said, “we’re seeing very strong demand for the all-new Thar 2020 in India, therefore have no immediate plans for launch of the current variant of the Thar in markets outside India. As a result, it was pointless to engage in a litigation at this stage”.
However, it is clear that Mahindra is not walking away from potential future expansion plans, stating, “when we decide to launch any new variant of the Thar in Australia, we will provide 90 days’ notice to FCA [Jeep parent company] and take all steps to protect our rights to market and sell the product. [The case] has no bearing on our future plans in Australia as we continue to pursue expansion of our business across a number of vehicle categories.”
True innovation in the modern era is particularly fraught because of the proliferation of designs, inventions and ideas, and the attendant growing reach and application of intellectual property law.
In this environment, when developing designs of products that are based on existing designs, business owners and brand creators walk the razor’s edge between fresh inspiration on one side, and dangerous appropriation on the other.
This case is also an important reminder to corporations and their directors , that in cases of intellectual property infringement, passing off, and misleading and deceptive conduct, courts will look beyond the corporate veil, leaving shareholders vulnerable to prosecution.