The Issue Of Transborder Reputation Of Trademarks

28th May, 2022 - 11:54 am Categories: Trademark 0 Comments

With the rapid growth of technology, it is possible to be aware of the most significant and insignificant events in the world, be it political awareness, social awareness, entertainment as well as the reputation of a brand. The trans-Border reputation of brands in general means when a brand is gaining popularity not only in its place of origin but is growing worldwide; not taking into the fact whether such a mark apart from its place of origin is registered globally or not. The Indian Judicial system has periodically delivered judicial precedents regarding the multiple legal complications faced by well-known marks involving trans-border reputation. Some notable judgments are:

NR Dongre & Ors v. Whirlpool Corporation & An which explains that various forms of advertisements of the product, sale and purchase of the product, malicious adoption of the well-known mark are essential prerequisites to maintain a claim of passing off of a product which has multinational prominence. Milmet Oftho Industries & Ors v. Allergan Inc  opting universality principle observed that it is irrelevant whether the product is not being up for sale in India, for a claim of passing off if the parties were first in the world to adopt a particular mark. Aktiebolaget Volvo of Sweden v. Volvo Steels Ltd of Gujarat  and ConAgra Inc. vs. McCain Food (Australia) Pty Ltd, the courts emphasized that it is sufficient if goodwill and reputation of the product in a particular country is evident and its sale is not necessarily to be proven in trans-border reputation claims. MAC Personal Care Pvt Ltd & Ors v. Laverana GMBH & Co KG & Or, gave prominence to information of a product available on the webpage’s as sufficient to show transborder reputation. The cases discussed above highlight that marketing and advertisements of products, the role of social media, dishonest adoption, acquired goodwill, better claim, and the title is sufficient to maintain a claim of passing off. And non-availability of the product in a country does not come in the way of establishing Trans-border reputation claims provided goodwill and reputation are evident.

TOYOTA JIDOSHA KABUSHIKI KAISHA vs. M/S PRIUS AUTO INDUSTRIES  LIMITED 

FACTS:

Plaintiffs manufactured the first commercially-available hybrid car in 1997 – 2001 called ‘Prius’ in the USA, United Kingdom, Australia, and Japan and registered the trademark in 1990. The plaintiff filed a permanent injunction against the defendant (Prius Auto Industries Ltd; registered its trademark in 2002-2003.) for using their well-known trademark dishonestly and argued that it was unjust and unjustified. The Single Chamber issued a judgment confirming the prior use and world reputation of the plaintiff’s product, ordered the defendants to pay damages, and issued a restraining order against the defendant preventing them from using the word Prius. The injunction against the respondent was deemed unjustified by the Division Bench and led to an appeal by the applicant to the Supreme Court. The Supreme Court relies on a decision of the U.K. Supreme Court on Starbucks v. British Sky Broadcasting where it endorsed the findings that a trader cannot complain of passing-off in a territory where he does not have any customers or anyone to whom he is in trade relations. Thus, applying the doctrine of territoriality versus the doctrine of universality, TOYOTA being well known internationally has not been able to prove the same in India without the goodwill and reputation enough to establish his case.

IMPACT

The ruling in the PRIUS will result in traders placing more emphasis on the scope of their products in India rather than on their international market awareness. Apart from the Classical Trinity test, that is to say, Misrepresentation, Damages, and Reputation laid down by Reckitt & Colman Ltd V Borden, Inc which is fundamental is proving passing off claims, the parties have many other essential elements to prove, such as the rationale for the trademark owners’ delay in protecting their trademark by applying to be registered in India. The ruling also raises the issue of whether the sale and purchase of a product in India would play a significant role in establishing cross-border reputation evidence as against decisions held in Aktiebolaget Volvo of Sweden v. Volvo Steels Ltd. Of Gujarat and ConAgra Inc. vs. McCain Food (Australia) Pty Ltd which pointed out that it is sufficient if the goodwill and reputation of the product in a particular country is obvious and the sale is not necessarily to be proven in trans-border reputation claim. As explained in the Paris Convention, Article 6, interested parties can apply for the prohibition of the use of trademarks that are confusingly similar to a well-known mark which further increases the threshold for parties to prove probable confusion between the users of a well-known trademark serving its purpose. Reaching local and domestic markets in India with a population of more than a billion people plays a very strong role in building goodwill, thus, traders have the burden not only to disseminate information about their products in certain states but also to expand and reach diverse local markets of different States having different languages, cultures, etc., which again affect evidence of goodwill. Thus, this decision paved the way for an examination of the territoriality of well-known trademarks while neglecting its worldwide reputation.

Author: Daksha Gowda S.N (intern) – a student of  Ramaiah College Of Law, in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com  or at Khurana & Khurana, Advocates and IP Attorney.