Trademark: Reputation and Conflicts

In the current era, if a particular product is launched in a country its goodwill and reputation, which is the sole authority of the seller that he attained by selling his products in the market, is not limited to the four corners of that particular country. The status and benevolence of those goods are of inherent importance and shall reach to every nook and corner of the world through magazines, newspapers, television, telephone, cinemas and Internet.



With the passage of time our entire world has become almost like a big city in view of the tremendous advancements made in the field of today's technology. Today's world is a world of computers and internet, which are the basis of our technological achievements. These achievements are reflected in the field of transport such as railways, ships, and airlines also.

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In the current era, if a particular product is launched in a country its goodwill and reputation, which is the sole authority of the seller that he attained by selling his products in the market, is not limited to the four corners of that particular country. The status and benevolence of those goods are of inherent importance and shall reach to every nook and corner of the world through magazines, newspapers, television, telephone, cinemas and Internet.

Transborder Reputation Of Trade Marks In India

With the opening of the economy and expansion of the concept of globalisation the Indian law and Indian courts have recognised action by foreign plaintiff on the basis of reputation of his goods or services on the foreign soil and have departed from the traditional concept of requirement of use of the trade mark or registration in India for the success in the Passing Off action. Transborder reputation is embodied in Section 35 of the Indian Trade Mark Act, 1999 and it offers protection to foreign trade marks on the basis of their international reputation. 

In Kamal Trading Co., Bombay v. Gillette U.K. Limited Middle Sex, England, the Hon’ble Bombay High Court held:

“…It is necessary to note that the goodwill is not limited to a particular country because in the present days, the trade is spread all over the world and the goods are transported from one country to another very rapidly and on extensive scale. The goodwill acquired by the manufacturer is not necessarily limited to the country where the goods are freely available because the goods though not available are widely advertised in newspapers periodical, magazines and in other Medias. The result is that though the goods are not available in the country, the goods and the mark under which they are sold acquires wide reputation. Take for example, the televisions, and Video Cassette recorders manufactured by National, Sony or other well Japanese concerns. These televisions and V.C.R’s are not imported in India and sold in open market because of trade restrictions, but is it possible even to suggest that the word "National" or "Sony" has not acquired reputation in this country? In our judgement, the good will or reputation of goods or marks does not depend on its availability in a particular country. It is possible that the manufacturer may suspend their business activities in a country for short duration but that fact would not destroy the reputation or goodwill acquired by the manufacturer.” 

N.R. Dongre v. Whirlpool Corpn. is the landmark judgment which recognised the doctrine of ‘transborder reputation’ in detail. In this case, one of the questions before the court was whether the aggrieved party who was not selling in India could claim the benefit of transborder reputation in the trade mark ‘WHIRLPOOL’ so as to maintain a Passing Off action in India or should its goodwill and reputation be confined to territories in which it has proved actual use of the trade mark in the market? Answering the question in favour of the aggrieved party an injunction was granted by the Hon’ble Delhi High Court which was reaffirmed by the Hon’ble Supreme Court. 

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Remedies 

The protection provided to unregistered trade marks is also extended to foreign marks, which have a reputation in India on the basis of extensive advertisements and publicity. The international reputation of a trade mark could enable the owner to obtain injunction in the courts of a country in which he is not even trading. Indian courts have also granted injunction in cases of transborder reputation. In Jolen Inc. v. Shobanlal Jain, transborder reputation was established by the fact that the plaintiff marketed goods in other countries. Considering the fact that there was copy of the plaintiff’s trade mark, interim injunction was granted.

Constitutional Validity

As far as India is concerned the members of Parliament originally did not have powers to make laws regarding a subject matter which lay outside their geographical limit. Article 245 of the Constitution defines the ambit or territoriality of the legislative powers vested in the Parliament. Clause (2) of article 245 states that a law passed, made by parliament shall not be deemed invalid only on the ground that it has extra-territorial application. However, to prevent Parliament from being omnipotent in this regard a few principles are followed while making extra-territorial laws.

While making laws that will be applicable outside the territory of India t he Parliament has to conform to the principle of territorial nexus. This means that if the Indian Parliament makes such law which is intended to be applied outside India, it has to establish a connection or nexus between the object of such law and subject matter of the law. The Parliament must make sure that this connection is real and not illusory and the liability sought to be imposed must be pertinent to that connection.

The Supreme Court also noted that the sovereign power of the Parliament to make laws with extra-territorial operation must respect the sovereignty of other States and therefore, the provocation of law must be found in India itself. The object of enactment of extra-territorial law must be found in India.

Article 245 thus forms the basis of the validity of section 32 of Competition Act 2002 which talks about the extra-territorial application of competition law of India. Since there is a reasonable nexus between the object of section 32 (to protect Indian consumers) and the subject matter which lies outside India section 32 of Competition Act,2002 is constitutionally valid.

Judicial Decisions

In Apple Computer Inc. Vs. Apple Leasing & Industries,1993 IPLR 63 DEL, while adopting the same notion Delhi High Court held that it is not necessary in the context of the present day circumstances that the free exchange of information and advertising through newspapers, magazines, video television, movies, freedom of travel between various parts of the world, to insist that a particular plaintiff must carry on business in a jurisdiction before improper use of it’s name or mark can be restrained by the court.

Another case in which the Supreme Court gave a verdict affirming the doctrine was the Blenders Pride Case, the court held that it does not matter that whether the company is first in a country or not, the thing to be paid attention to is that, which company started its business first. The country, in this case, is not of much concern.  

Pic Courtesy- bostonglobe.com

Today international trade is rapidly growing in a pace with the developing technology and innovations in every field. These changes make it imperative that intellectual property rights need to be appropriately recognized and protected as a global community. Indian judiciary in its various decisions have increasingly recognized cross-border reputation of trademarks thereby repeatedly safeguarding spillover reputation even if the mark is not actually used in India. Most of the decisions reflect the concern in relation to the misappropriation of foreign marks.

However, it is pertinent for overseas traders who hold such marks to act proactively for implementing their goodwill internationally established through their products by registration of those trademarks and instituting timely action and suitable proceedings for enforcing the same.