TERRITORIALITY ACT OF TRADEMARKS IN A WORLD WITHOUT BORDERS

Introduction

The Indian trademark laws safeguards ‘well-known’ trademarks. Well known trademarks have been described under the trademarks act, 1999 as a mark which is related to a specific type of goods and services, by the public, and if such kind of mark is used on some other goods and services, then it raises a dilemma that there is some kind of relation between the two. The provision of trans-border reputation and goodwill of a corporation was identified by the Honorable Supreme court of India in the year 1996, in the well-known case of N.R. Dongre and ors. Vs. Whirlpool Corporation and Anr. However, the opinions of the judiciary have also altered with the passing of time.

Territorial doctrine

This principle states that the intellectual rights do not go beyond the territory of the sovereign state which had given the rights in the first place. It states a fact that the reputation of a product or service is within the territory of the country in which that trademark was granted the status of a well-known trademark.

The doctrine is also acknowledged by the Indian courts. In the case of Jones Investments Co. v. Vishnupriya Hosiery Mills, the Intellectual Property Appellate Board (IPAB) has ordered against the rule of safeguarding Indian entities from using trademarks even though the MNCs have no intention to introduce their product in the Indian market.

Universality Doctrine

As per this doctrine once a trademark is acknowledged in one country; then it enjoys worldwide recognition. It is with a trans-border reputation and is against the Territoriality doctrine. This really means that if a trademark gains a status of a well-known trademark in the USA, then it would have the same status with regards to its goods and services in India as well, or any other country for that fact.

The Supreme Court has held the same in several cases. For instance, in the case of Milmet Oftho Industries and Ors. V. Allergan Inc the Honorable court after stating the trans-border reputation of the respondents said that the mere fact that the respondents have not been using the mark in India would be of no use if they were the first in the world market.

Rise of territoriality over universality

Both the doctrines have been acknowledged by the Indian courts. This gives a point of doubt relating to a well-known trademark that whether they should be governed by the territoriality doctrine or the universality doctrine.

The judicial and academic is of the view and in favor of territoriality doctrine as it safeguards the local traders against MNCs based and settled in other countries. The favored point is that the entity asking the status of a ‘well-known’ trademark in a specific territory should actually have a reputation in that particular territory. For example, the Supreme Court of the U.K in the case of Starbucks vs. British Sky Broadcasting held that no trader can complain off passing-off against him in any territory in which he has no clients and nobody else who is in trade relation with him.

The facts supporting the Universality doctrine is that the image of a trademark is not contingent upon the real sale of goods in India bearing the mark in question. Advertisement and promotion of the mark through different kinds of media is enough to form image and goodwill within a specific area. But this idea is not in accordance with the idea of equality because if two things have to be compared, they must be the same in the first place. Hence if the corporation has not launched its product, nor does it have any customers as well, and neither any goodwill in a particular market then it cannot be compared with the corporation which has an existing product as well as a client base in the market. It must be stated that the image of the corporation has crossed its boundaries of its home country and has passed to other nations.

This very same point raised before the supreme court of India in the case of Toyota Jidosha Kabushiki Kaisha V. M/S Prius Auto Industries Limited and it stated that it must be determined if there has been a spillover of the image of the mark used by the claimant who has brought the passing off action in the country in question. The decision sets a benchmark for others for testing of evidence to assert trans-border reputation in India. Hence it is a must for a trademark to be recognized and to have a separate existence in each sovereign country. The Supreme Court has held that the issue of trans-border reputation would be governed in India on a territoriality basis and not by the principle of universality. The position which is there in India now is that although the meaning is acknowledged in India and the presence of actual business establishment is not a necessary point for maintaining trans-border reputation. The existence or non-existence of trans-border reputation is a subject of the question. Proof to support the contention must be really strong. The image of the trademark is not limited to the country of its origin but passes the geographical frontiers and is spread across the world.

The nature of goodwill as a legal property with no physical existence means that when a business is carried on in more than one country, there must be different goodwill in each. Hence it can be said that the territoriality doctrine takes precedence over the universality doctrine.

Know more about the applicability of trademark laws in the reservation of a company's name, see the video below-

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SHRUTI KULSHRESTHA