A trademark and the product associated with can develop a trans-border reputation when they go beyond the territorial restrictions of the area and become well-known across the border or elsewhere as a result of marketing campaigns, commercial publicity, advertisements, and general market presence. Even if the commercial does not refer to the product's actual market existence or use, the transmission of information about a trademark associated with a product via advertisements and media exposure counts as trademark use. It doesn't matter where or how people learn about a trademark.
As a consequence of the expansion of organisations and the removal of obstacles, there has been an increase in globalisation and liberalisation, and as a result, the idea of trans-border reputation has found expression in society. Nobody is allowed to copy or buy a trademark that may confuse or deceive members of the public or the business community. Using the idea of transnational reputation, a company may safeguard its well-known brand on a global scale. The idea of global reputation assists in preserving any well-known brand from one country's reputation in other countries. As a result, foreign third parties are prohibited from registering identical or related trademarks under their own names.
TRANSBORDER TRADEMARKS: INTERNATIONAL CONVENTIONS
- Madrid Protocol Relating to the International Registration of Marks
The Madrid system offers a solitary process for the registration of trademarks across several jurisdictions. The "Madrid Protocol concerning the international registration of marks" (often known as the "Madrid Agreement") and the "Protocol related to the Madrid Agreement" are the two treaties that control it (briefly known as Madrid Protocol). Responsibility for regulating these agreements is the International Bureau (IB) of the World Intellectual Property Organization (WIPO) in Geneva, Switzerland. The Madrid method, commonly referred to as the Madrid system, was developed in 1891 for the international registration of trademarks. By filing a single application to their own national or regional trademark office, it allows a trademark owner to register their mark across numerous countries. An international mark that is thus registered via this application is equivalent to a mark that is directly influenced by an application for or registration of the same mark in each of the nations mentioned by the applicant. Therefore, if the trademark office of the chosen nation does not reject the protection within a certain period, the mark's protection is the same as that of a registered mark of that country. The Madrid technique significantly simplified future mark maintenance by making it possible to register further changes or renew the registration via a single procedural step. Despite not having signed the Madrid Agreement, India adopted the Madrid Protocol in 2013.
- Paris Convention
According to the "well-known Marks" idea (also known as the "Famous Marks" concept) under Article 6bis of the Paris Convention, a trademark or service mark may be eligible for protection in a country even if it has never been used or registered there. According to Article 6bis of the Paris Convention, a member state is obligated to deny or cancel a trademark's registration and dissuade its use if it is assumably to lead to bewilderment with another trademark that is already well-known in that member state for the same or comparable products.
- Trade-Related Aspects of Intellectual Property Rights (TRIPS)
Articles 16.2 and 16.3 of the TRIPS Agreement offer particular rights to the owners of well-known trademarks and service marks. They include distinctive goods and service marks while still being protected by Article 6bis of the Paris Convention. Several countries protect well-known trademarks that are not registered in accordance with their obligations under the Paris Convention for the Protection of Industrial Property and the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement). Because of this, both big companies and small enterprises may have a fair chance of developing enough customer goodwill so that their marks might become well-known and get protection without registration.
The Paris Convention and the TRIPS Agreement have both been approved by India. The idea of national treatment and reputation across borders is thus a recognised legal term. The Trademarks Act, 1999, provides protection to well-known trademarks or foreign trademarks based on their worldwide reputation. India complies with the Article 16 provision of the TRIPS Agreement, which enhances the management and protection of trademarks. As a consequence, if a foreign trade mark owner believes that their mark is being used inappropriately in India, they may sue for passing off.
INDIAN VERDICTS ON TRANSBORDER TRADEMARK REPUTATION
Usually, reputation is regarded in terms of the goodwill associated with the brand. This reputation had to be registered in the country in question since it was once restricted to that nation's borders. But as of late, the mark's notoriety has transcended national borders and is now widespread across the whole globe. In India, the Trade Marks Act, 1999's Section 35 grants protection to foreign trademarks based on their global reputation, including the concept of transboundary reputation.
The transborder reputation verdicts were followed by two landmark events. The first was the liberalisation of the Indian economy, which began in 1991–1992, and provided a large portion of the economic dynamism required for global brands to enter India. The second was the Supreme Court's endorsement of what is more often referred to in the common law community as "transnational reputation" in its NR Dongre v. Whirlpool Corporationdecision.
According to NR Dongre, there must be considerable product ads, sales and purchases, and intended use of a well-known mark to establish a passing-off claim for a product with across-the-board stardom. "There does not seem to be any essential that the plaintiff must conduct business in India before initiating an action for passing off since he can establish that he has somehow earned repute in the nation," the Supreme Court stated in Ruston. Additionally, in Kamal Trading and Blue Cross and Blue Shield Association, the Bombay High Court and the Delhi High Court reaffirmed the standing "respectively. It was acknowledged "In the modern world, it is impossible to claim that a product, as well as the trademark under which it is marketed overseas, lacks a reputation or goodwill in nations where it is unavailable. Beyond the boundaries of the region where it is marketed, it is known and understood, as well as subject to critical assessment and critique."
In MilmetOftho Industries. The court applied the universality principle and found that if the parties were the first in the world to use a certain mark, it does not matter whether the product is being sold in India.In the cases of Volvo of Sweden and McCain Food (Australia) Pty Ltd, the courts have emphasised that in trans-border reputation claims, it is sufficient if the product's good reputation is evident in a certain nation, and that proof of the product's sale is not necessary.In Laverana, it was emphasised that the website's product information was sufficient to establish transnational repute. The aforementioned cases indicate that marketing and product advertisements, the use of social media, misleading adoption, acquired goodwill, a stronger claim, and a title are all sufficient reasons to sustain a passing-off claim. As long as goodwill and reputation are evident, the absence of tangible products in a country does not impede the creation of global reputation claims. The Delhi High Court presented the traditional argument that advancements in technology, travel and the internet have made it simpler for Indian buyers to acquire foreign trademarks. But for the first time, it established the link between this real-life condition and its legal ramifications: that, in the hands of foreign Claimants, an overflow of transnational reputation into India was "quite easy to show". The main contribution of Laverana was to the substance of her worldwide renown. It said that "everything is done on a business basis" and must comply with a global reputational standard. Specifically, the Court made it plain that sales volume, mentions in periodicals, and evidence of trademark registrations abroad was significant in evaluating the worldwide reputation strength of a brand.
In the ZARA case, the plaintiff was actually saved by the recognition and protection of the marks' international reputation. The court ruled in their favour on the following grounds: The court had noted that it was prima facie showing that the plaintiff had adopted the mark ZARA in the year 1975 and the defendant had done so in the year 2003. Additionally, at the time the defendant adopted the contested mark, it was well-known and regarded even in India, as evidenced by some of the articles, such as "ZARA, a Spanish Success Story." "CNN.com published an article titled "The reign of Spain" on June 15, 2001. The Guardian published an article titled "Retail g the speed of Fashion" on October 28, 2002. An Indian named Devanshu Dutta wrote the article in the years 2002 and 2003. Even though there weren't any ZARA outlets in India before 2010, the brand had already begun to spread there before 2003. Ad interim injunction was granted against the defendant preventing him from using the contested mark after the court determined that the defendant's adoption of the mark was dishonest and deceptive in light of these factors. We can see from this ruling made by the Delhi High Court that Indian law is in favour of preserving well-known marks with a global reputation and that any attempt to infringe on those rights would not be tolerated.
Toyota Jidosha Kabushiki Kaisha Vs. M/S Prius Auto Industries Limited
Plaintiffs registered the trademark in 1990 and marketed the first hybrid car under the name "Prius" in the United States, the United Kingdom, Australia, and Japan between 1997 and 2001. The plaintiff requested a permanent injunction against the defendant, Prius Auto Industries Ltd (who registered its trademark in 2002-2003), on the grounds that it was unfair and unreasonable for the defendant to fraudulently utilise the plaintiff's well-known name. In addition to ordering the defendants to pay damages and imposing a restraining order barring the defendant from using the name "Prius," the Single Chamber's ruling acknowledged the plaintiff's prior use and worldwide reputation. The Division Bench determined that the injunction against the respondent was unnecessary, prompting the petitioner to file an appeal with the Supreme Court. The Supreme Court cites a ruling by the U.K. Supreme Court in Starbucks v. British Sky Broadcasting, in which the court upheld the decision that a trader cannot claim passing-off in an area where he has no clients or partners in commerce. Applying the idea of territoriality versus the doctrine of universality, TOYOTA, despite his international fame, has not been able to make his argument in India due to a lack of good reputation.
Impact of the judgement
As a result of the decision that was reached in the PRIUS, company owners in India are going to place a greater emphasis on the range of items that they provide in India rather than on how well they grasp the global market. The delay that the trademark owners experienced while registering their mark in India may be attributed, at least in part, to one of these issues. They see India as a significant business opportunity. This result prompts the issue of whether or not sales and purchases in India would play a substantial role in establishing cross-border reputation proof, in contrast to the decisions in Volvo of Sweden and McCain Food, which indicated that it is sufficient if the good reputation of the product in a given nation is clear and that the sale is not needed to be demonstrated. In order to nurture goodwill, it is of the highest significance to reach the local and domestic markets in India, which has a population of more than a billion. As a result of this, retailers are expected not only to communicate information about their items in certain areas, but also to extend and reach a range of local markets in a number of different states. These states are home to a wide range of linguistic families, cultural traditions, and other distinguishing features, all of which have an effect on the evidence of benevolence. To prove the value of their wares, merchants are required to carry out all of these actions. This judgement did not take into account the broad awareness of famous trademarks, but it did leave open the potential of re-examining the territoriality of famous trademarks in the future.
COMPARATIVE ANALYSIS OF TWO SIGNIFICANT DECISIONS
Because of the whirlpool case, India's international reputation is under the limelight. In this case, the court determined that the mark WHIRPOOL has acquired a reputation in India and that the public associates it with the washing machines sold under this mark. The court decided that broad advertising of a mark in a country where the items under that mark are not physically present constituted trademark usage and helps to the establishment of a transnational reputation. The ruling made it possible for marks that have created a reputation in India via print media or commercials, but have not been sold or used in India, to gain trademark protection under Indian law.
Notwithstanding, the Toyota-Prius ruling significantly broadened this court's stance by requiring substantial evidence that the claimant has acquired substantial goodwill in the Indian market. The court noted that the "Prius" brand did not appear on the Indian market until 2009-2010. The court said that the mere appearance of advertising is inadequate; it must be established how extensive and impactful these promotions were, as well as how much goodwill and reputation the mark gained due to these advertisements. The mere existence of adverts and articles in print media would not generate a worldwide reputation if they had no impact on the broad population of the Indian market.
In addition, nowhere in the Whirlpool case did the court emphasise that the mark had to have acquired an international reputation in India prior to the opposing party's use of the mark. In the Toyota-Prius case, a relevant schedule for analysing trans-border reputation was established, and the Supreme Court concluded that just acquiring goodwill worldwide is inadequate; the mark must have acquired goodwill in India prior to its adoption by the opposing party.
In the Toyota-Prius case, the court further emphasised territoriality, saying that there must be a spillover of global reputation and goodwill into Indian markets for passing-off actions to be successful. As stated above, a global reputation and goodwill are insufficient for a brand's success; the brand must also have a reputation and goodwill in its domestic market.
Speaking of evidence, the Supreme Court emphasised the existence of adequate information to indicate that the claimant has created a substantial reputation for its goods on both the Indian and international markets. Additionally, the danger of misunderstanding was taken into account. Once goodwill and reputation are established, the court concluded that the claimant does not have to prove a genuine mistake. The court ruled that it is easy to demonstrate the probability of misunderstanding by pointing to the qualities of the mark and the circumstances surrounding the sale and marketing of the items.
Essentially, the Toyota-Prius verdict highlighted not just the brand's established global image, but also how it is perceived by the general public and how pervasive it is in Indian markets. Taking into account the concept of global reputation in both situations, it is evident that the phrase is construed differently in each situation.
The expansion and development of the worldwide market have necessitated that the transnational reputation of a trademark is properly recognised and safeguarded in many nations. The Indian courts have accorded the transnational reputation of a brand the appropriate weight and protection. Further, it is generally recommended that overseas businesses register their trademarks in as many countries as possible to prevent any kind of controversy. The current situation in India accords such recognition and protection to unregistered and international trademarks based on their transnational repute.