transborder reputation of trademarks

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KRISHNAVENI.SHEAD -RESEARCH

TRANSBORER REPUTATION OF

TRADEMARKS



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INTRODUCTION

A trade mark is a visual symbol applied to an

article with a view to indicate the trade source

from which it comes. It can be a word, device,

label, name, letter, numeral, brand, heading or

colors. The purpose of the trade mark is to

distinguish goods or services of one origin

from those of the others. It advertises the

product and creates an image for it. As the

trade mark creates a separate identity of a

product, it should be protected from

infringement and passing off.



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ExTRA TERRITORIAl

Reputation is the knowledge and awareness

among the public about a product of

particular trade source or trade mark.

Reputation is the means by which a trade

mark is recognized. Traditionally,

reputation of a trade mark used to exist

within territory of the concerned country.

Thus, the trade mark was needed to be

registered in that country only. Reputation

of a trade mark is an important factor in

case of a passing off action



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EFFECT OF E- COMMERCE

In this age of e-commerce, where physical boundaries between

countries have become virtually redundant, brand recognition is

considered the foundation for any successful business and probably

its most valuable asset. Brands no longer serve just the basic

function of guaranteeing the origin of a product or service but now

also hold the aura of attraction because of the reputation they

command.



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TRANS BORDER REPUTATION

With the modern communication

technology like TV, internet, newspapers,

magazines, cinemas, the knowledge about

the products reach the other countries,

long before the actual availability of the

product. The reputation of a trade mark is

not limited to the country of its origin, but

has surpassed the geographical frontiers

and is nowadays spread all across the

world. This is known as trans border

reputation of a trade mark.



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goodwill

On many occasions it comes as a shock for famous business houses

to learn that they are foreclosed from chartering into a new territory

as their brands have been completely misappropriated and owned

by third parties who have no connection with the brand whatsoever.

In such cases, in order to combat misuse of their trademarks,

foreign entities have to rely on their brand goodwill and prove,

under an action of passing-off, that their mark’s reputation has

spilled over in the territory of dispute.



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Evolution

Trans border reputation has its genesis under the English law and

in Indian law the concept is embodied in Section 35 of the Trade

Mark Act, 1999 wherein the Indian courts have recognized action

by foreign plaintiff on the basis of passing off solely upon the

reputation of his goods/services on the foreign soil. Trans border

reputation has also evolved from the concept of “well known mark”

a concept which acquired statutory recognition in India after

amendments to the Trademarks Act in the year 1999 were carried

as a part of TRIPS compliance..



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ingrEdiEnts of intErnational rEputation

• A foreign trader having no place of business can maintain an action of passing off in India on fulfilling the following condition.

The goods and services are of International reputation Indian travelers have purchased or brought such goods to India in

the form of importation Such goods and services are marketed or sold on a large scale in

India Advertised in international Journal or magazine , which has

circulation in India and many customers or potential consumers or subscribers of the said journal.

The defendant has failed to give a satisfactory explanation for adoption of the said mark.



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indian JurisprudEncE

There is a long line of cases in India that have established that despite not being marketed in India, trademarks that acquire trans-border reputation will enjoy protection in India irrespective of its actual user or registration in India.

In Kamal Trading Co., v. Gillette, UK Ltd., [1988 PTC 1] of the Bombay High Court. the Bombay High Court restrained Kamal Trading from using the mark 7’O CLOCK on toothbrushes. It held that the plaintiff had acquired an extensive reputation all over the world – including in India – by using the mark 7 O CLOCK on razors and shaving creams. Therefore, use of an identical mark by the defendant would lead to customer confusion. This goodwill is not limited to countries where goods are freely available because they are nonetheless widely advertized in the media of countries where they are not available



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trinitY—wHirlpool , MilMEt&

BlEndErs pridE

The Supreme Court in NR Dongre Vs Whirlpool Corporation was

concerned with passing off action brought by Whirlpool

Corporation to restrain the Appellants from manufacturing, selling,

advertising or in any way using the trade mark Whirlpool . The

claim was based on prior user and a trans-border reputation

indicating that any goods marketed with the use of the mark gave

the impression of it being a good marketed by it. The Court

accepted that Whirlpools’ trans-border reputation extended to India.



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TRINITY…

The decision of the Supreme Court in Milmet Oftho Industries v. Allergen Inc. [(2004) further consolidates the position. Both an Indian pharmaceutical company and a foreign company were manufacturing Ocuflox – a medicine for eyes. The foreign company first used the mark in 1992 after which it marketed the product in countries around the world. However, it was yet to enter the Indian market. When the Indian company applied for registration of the mark in 1993, the foreign company filed a suit for injunction for passing off against the Indian manufacturer. The Court held that the non-use of the mark in India by the foreign company would be irrelevant if they had entered the world marker first.



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TRINITY…

In Austin Nichols and Co. v. Arvind Behl

(or the Blenders Pride case, 2005), the

court, while upholding the foreign

claimant’s rights in he mark “Blenders

Pride” in relation to alcoholic beverages,

held that although actual commercial

operations may not have commenced,

active promotion of the brand would

constitute use of mark, even if such

marketing predates actual existence of the

promoted article in the market



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Recently, the IPAB ruled in favour of Nestlé and dismissed an appeal by Kolkata-based Kit Kat Food Products to be allowed to use the same trademark 'Kit Kat'. A Kolkata based company by the name Kit Kat Food Products claimed proprietary rights over the mark and argued that the name 'Kit Kat' was derived from the word 'chit chat‘ .

Nestlé's rights have to be protected as it was the first in the world market to use the Kit Kat mark. The tribunal noted "The mark was in use since 1935 outside India and the company got it registered in 1942. The Kolkata firm has admitted that it had adopted the mark only in 1991. The marks are identical, the products are also similar and they are mainly bought by small children. The courts accepted the prior use of the mark



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GuIdING pRINcIples

• Companies who have no intention of coming to India or introducing their products here should not be allowed to throttle an Indian Company by not permitting it to sell a product in India, if the Indian Company has genuinely adopted the mark and developed the product and is first in the market;

• Dissemination of knowledge of a trademark in respect of a product through advertising in the media amounts to ‘use’ of the trademark whether or not the advertisement is coupled with the actual existence of the product on the market.

• that the world has to be viewed as one common market;

• the existence of a merchant on web pages which are of foreign origin and social media are sufficient to show the transborder nature of reputation without having any activity in India at the relevant time;



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eXcepTIONs

A natural corollary is that trans border reputation is not an independent ground for protection of trademark unless accompanied hand in hand with evidence of use of trademark in the territory where such relief is being sought. Demonstration of this use is a question of fact and would vary with the circumstances of the matter in hand.

For instance, the presence OF ADVERTISEMENTS IN FOREIGN LANGUAGE MAGAZINES (Spanish and French) without any proof of circulation in India was regarded by the Delhi High Court, in Roca Sanitario SA v Naresh Kumar Gupta (2009), as being unlikely to be accessible to probable consumers of the product. Consequently, the requirement of usage failed to be discharged.



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ACQUISIENCE

If a foreign claimant has gained knowledge of misappropriation of its marks in India he should within a reasonable amount of time, initiate court proceedings. Delay sometimes can be fatal for the rightful claims of a foreign entity even in the most blatant cases of trademark violation. This can be inferred from the case of Khoday Distilleries Ltd. v. Scotch Whisky Association wherein the Scottish claimant failed in its passing-off action against the use of the mark ‘PETER SCOT’ in relation to Scotch Whisky despite the fact that the claimant had been previously successful in a number of similar cases before Indian courts.



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WIth DISClAImEr

• In Country Inn Pvt Ltd., Vs Country Inn And Suites By Carlsons Inc and Another considering the trans-border reputation of the Defendants and also the use of the Trademark by the Plaintiffs for a long time and prior to Defendant in India, the Delhi High Court allowed both parties to continue to use the trade name in question. However the Plaintiff Indian Company was mandated to make a disclaimer that it has no connection with the Defendant Company in future advertisements made by them.



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PoSItIoN IN US

• US courts have strictly enforced the territorial nature of trade marks. A prime example is a case involving ITC and its BUKHARA mark. In this case, a New York court held that ITC could not stop a local BUKHARA restaurant (set up by ex-employees of its famous Bukhara restaurant in India) because ITC did not use its BUKHARA mark in the United States. As per the Court, although the United States is a signatory to the Paris Convention, the Paris Convention is not self-executing. Accordingly Article 6bis of the Convention could not be read into US trade mark law. .



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rEmEDIES AVAIlABlE For trANSBorDEr rEPUtAtIoN INFrINGEmENt

• Trans-border reputation can be established only by letting in evidence before the Registrar of Trade Marks that the mark is so well-known or familiar in India and most of the general public is fully aware of such mark connecting the trade mark.

• Since such a remedy is available against the registered user of a trade mark, an interim injunction restraining him to use the mark can also be granted to make the remedy effective.

• The protection afforded to unregistered marks is also extended to foreign marks, which have a reputation in India on the basis of extensive advertisements and publicity.

• Indian courts, too, recognize the existence of transborder reputation and grant injunction in cases where one tries to derive economic benefit from the reputation established in a particular trade by another[



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CoNClUSIoN

• The rapid growth in international trade makes it imperative

that IP rights are properly recognised in different countries.

The Courts in India are increasingly recognizing trans border

reputation of the trademarks and have, rightly, frequently

protected trans border reputation – even where the mark has

not been used in India – and been concerned to prevent the

misappropriation of foreign marks. However it is crucial for

the foreign right holders to act proactively for enforcing the

goodwill established internationally by registration of

trademarks and institution of timely and appropriate

proceedings for enforcement.

transborder reputation of trademarks

Law