Transborder Reputation of Trademarks: Examining the Indian Trend

INTRODUCTION 

A trademark is a symbol that graphically depicts a product, service, or other commodity. By visually expressing a business group's trade name or brand name in an aesthetically pleasing manner, it facilitates the association of its goods and services. It is merely a depiction that uses a combination of colours, product shapes, and invented terminology to indicate the brand name or trade name. It's a unique method of assigning a mark to a business group so that it may demonstrate its affiliation with the relevant trade. It aids in differentiating the products and services offered by different traders and indicates the source of the goods.

A trademark can develop a sense of reputation and goodwill when it is routinely used in conjunction with a particular corporate entity for a considerable duration of time. As a result, the trade name or brand is known to the general public, and a direct association is made between the trademark and the specific products and services it stands for. This gradual procedure helps build a trademark's goodwill and reputation, which can eventually transcend national borders to achieve global recognition through workshops, ads, and other means in addition to the actual presence of the goods and services in that jurisdiction. This recognition of a trademark across international borders is often called the trademark's "trans-border reputation."

BACKGROUND

Alongside the policies of globalisation, liberalisation, and privatisation, the concept of trans-border reputation was first presented in the 1990s. Through these policies, the concept of physical boundaries was essentially eliminated, and foreign businesses were allowed access to the Indian economy. Consequently, it also rendered the Indian economy susceptible to competition in the international market. The idea of territoriality in trademark protection met numerous difficulties as trade grew across international borders. These laws, along with the explosive expansion of e-commerce, eliminated the country's geographical borders, allowing trademarks to become globally recognised brands. In fact, legitimate businesses are finding it more challenging to protect their trademarks globally as a result of these policies and international competition. Even if they invest a lot of time and money, they frequently discover that trademarks are violated in other nations, which can seriously harm their brand's reputation in the marketplace. Unlike their English counterparts, Indian courts did not initially distinguish between "goodwill" and "reputation" in the context of trademark law. This is demonstrated by one of the earliest rulings, the Kamal Trading case, in which the main issue put to the court for resolution was whether the goodwill and reputation attached to the "7 O' Clock" trademark had declined because there were no more blades bearing this mark in India after 1958. Later the judgement rendered by the court hinted that the terms "goodwill" and "reputation" might be used interchangeably. The court emphasised that in today's interconnected global trade environment, goodwill is not limited by national boundaries and held that it could not be assumed that goodwill or reputation ceases to exist simply because the goods are temporarily unavailable within a specific country. Moreover, a manufacturer's goodwill or reputation may not be limited to the jurisdiction in which the goods are physically available; rather, it may extend to jurisdictions in which the goods have been heavily advertised through media channels like newspapers, magazines, and other publications.

 In general, evolving international trade dynamics, technical breakthroughs, and legislative initiatives aiming at adjusting trademark protection to the needs of a globalised society are the sources of trademarks' trans-border repute. By recognising their intangible value and their ability to influence consumer preferences and decisions beyond national borders, this understanding humanises the significance of trademarks.

JUDICIAL TRENDS IN INDIA

The concept of trans-border reputation states that a product or service can transcend jurisdictional boundaries and acquire an ‘extra-territorial reputation’ through advertisements in addition to imports. India saw the application of this concept in case of N.R. Dongre vs. Whirlpool Corporation. In this instance, the Respondent—the international corporation Whirlpool Corporation—was based in the US and engaged in the production, marketing, and distribution of washing machines throughout multiple nations. The Respondent registered their trademark, WHIRLPOOL, in India in 1956, but they neglected to renew it, therefore it expired in 1977. However, the Indian business that filed the appeal registered the trademark "WHIRLPOOL" for their own washing machines. Since the Respondent had neglected to renew its trademark registration after 1977, the Supreme Court essentially had to decide whether the Appellant's action could be justified. The Respondent had a trans-border reputation in the Indian market, according to the Supreme Court, because it had been widely promoted, sold, and used of the mark for a considerable amount of time worldwide. Because of this, the Supreme Court ruled in favour of the Respondent, holding that the Appellant lacked a valid purpose for registering a mark that was identical to one for goods that were similar. The Supreme Court of India's aforementioned historic ruling significantly altered the history of trademark rules by recognising the idea of trans-border reputation.

The Karnataka High Court ruled in Haw Par Bros. International Ltd v. Tiger Balm Co. (P) Ltd. and Ors that past use of a mark carries more weight than prior trademark registration. Since the appellant in this case was the first party to utilise "TIGER BALM" and "TIGER" in Chinese and English in India and other foreign nations, they had established a reputation for this mark across international borders. The appellant had established a reputation for its mark in other countries, thus the Court ruled that the non-registration of the mark in India did not restrict the appellant's rights. In this instance, the notions of prior usage and transborder repute were affirmed and recognised by the Court.

Later, a foreign pharmaceutical producer filed a lawsuit in MilmetOftho Industries v. Allergan Inc. to stop the use of the trademark "Ocuflox" in India because it had already been used in other countries. The foreign manufacturer used journal articles and marketing to show that it was well-known in India. In order to clear up any doubt about pharmaceuticals, the court ruled in favour of the plaintiff. However, it issued a warning to companies not to obstruct commerce in India if they had no intention of providing goods or services there.

However, the Supreme Court ruled in the Toyota-related case Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. that a trademark's previous use in one jurisdiction does not grant its holder exclusive rights to use that trademark in another. It was also decided that the trader's existence in Indian markets had to be supported by credible proof, and that information on websites and magazine ads alone would not be enough to demonstrate a trader's goodwill or reputation in Indian markets. Additionally, the Court declared that the territoriality concept had received international recognition; yet, it appears that the Court did not take into account any earlier rulings that had consistently ruled against the territoriality principle's stringent application. Since the Indian courts have a permissive stance towards the trans-border reputation of trademarks, adhering to this ruling may impede their advancement.

Thus, while considering the concept of trans-border reputation in these cases it is clearly evident that different cases have different interpretation as to the concept of trans-border reputation.

CHALLENGES

Trademarks' reputation across borders poses a number of difficulties and issues for the legal system.
The possibility of trademark infringement and unauthorised use across jurisdictions is one of the main problems. A trademark's reputation grows outside of its nation of origin, making it more susceptible to abuse by uninvited parties looking to profit from its popularity and goodwill. In the end, this could hurt the legitimate owner of the trademark by confusing consumers and diluting its distinctiveness. The difficulty of establishing transnational repute in court is another obstacle. A significant amount of proof, such as widespread advertising campaigns, media attention, and consumer recognition in other countries, is frequently needed to establish a trans-border reputation.

All in all, issues with illicit use, obtaining proof, enforcing the law, and the influence of online trading are brought up by the trademarks’ international reputation. In order to overcome these obstacles, global collaboration, uniform legal requirements, and strong trademark protection systems are needed in an increasingly interconnected world economy.

CONCLUSION

From the explanation above, it is clear that Indian courts have consistently ruled that maintaining business operations within the jurisdiction is not required to safeguard a trademark's reputation outside. Therefore, it is thought that one element that could sufficiently spread reputation throughout the legal system is the promotion of goods and services inside the jurisdiction. The Toyota ruling represents a departure from the Indian courts' nearly universally liberal understanding of trademarks' transnational repute. To minimize conflicts, it is advisable for foreign traders to register their marks in multiple countries. Currently, in India, unregistered and foreign trademarks enjoy recognition and protection based on their transborder reputation.