Transborder Reputation in Pharmaceutical Trademarks: Protecting Global Goodwill In The Indian Market

10th May, 2025 - 6:38 am Categories: Trademark Trademark Infringement Trademark Litigation 0 Comments

In the pharmaceutical industry, brand trust is critical as patients and healthcare professionals rely on established reputations to ensure drug safety and efficacy. The concept of transborder reputation plays a crucial role in protecting internationally recognized pharmaceutical trademarks from misappropriation in domestic markets like India. With India’s booming drug industry and complex regulatory landscape, the protection of foreign pharmaceutical trademarks has been the subject of extensive legal scrutiny.

One of the key landmark cases in this area is Milmet Oftho, where the Supreme Court recognized the transborder reputation of a foreign pharmaceutical trademark, despite the product not being available in India at the time. However, as seen in subsequently recent cases, Indian courts have begun demanding more concrete evidence of goodwill within the Indian market. This article explores the evolving legal landscape of transborder reputation in pharmaceutical trademarks, examining the challenges posed by India’s strict drug regulations, the risks of generic drug makers leveraging international goodwill, and how India compares to other jurisdictions in protecting global pharma brands.

The Importance of Transborder Reputation in Pharmaceuticals

Pharmaceutical brands are built on trust and reliability. Unlike other consumer products, the reputation of a medicine or medical device is directly linked to public health and safety. Patients and doctors often associate certain brands with efficacy, rigorous testing, and safety approvals from international regulators like the U.S. FDA or EMA (European Medicines Agency). Consequently, pharmaceutical companies invest heavily in clinical trials, research, and global marketing to build brand recognition across borders.

However, brand misappropriation, where domestic companies adopt identical or deceptively similar trademarks, poses a serious risk in India’s highly competitive generic drug market. This can lead to consumer confusion, where a patient mistakenly purchases a locally made drug believing it to be the trusted international brand. It can compromise patient safety, if the domestic drug does not meet the same quality standards and erode the brand goodwill, affecting the global reputation of the foreign company.

Milmet Oftho and the Recognition of Global Pharmaceutical Brands

One of the first seminal rulings on transborder reputation in pharmaceuticals came in Milmet Oftho Industries v. Allergan Inc.[1] The case involved a dispute over the trademark ‘Ocuflox’, which was used for an eye medication. The foreign pharmaceutical company had introduced the drug under this name internationally before the Indian firm attempted to register and market it locally.

The Supreme Court of India, in its ruling, made an important observation that, if a foreign trademark holder with a good reputation can demonstrate that they intend to conduct business in India, their failure to use the mark in India is irrelevant, as long as they entered the global market with the mark first. It set out a strong precedent, recognizing that prior use and global reputation could override domestic first use, particularly in sectors where brand trust is paramount, like pharmaceuticals. However, the court also issued a cautionary note, stating that multinational corporations should not stifle domestic players unless they can prove a genuine intent to operate in India. This balancing act has shaped subsequent judicial decisions.

The principle laid down in Milmet Oftho was reaffirmed in Syed Mohideen v. Sulochana Bai,[2] where the Supreme Court upheld the prior use principle in passing-off cases, recognizing that reputation built over time should not be unfairly appropriated by a later entrant in the market.

The Challenge of Spillover Goodwill in a Strict Regulatory Framework

Unlike other industries, pharmaceutical trademarks are subject to dual compliance, The Trade Marks Act, 1999, which protects registered and well-known marks and The Drugs and Cosmetics Act, 1940, which regulates drug approvals and branding.

The spillover of goodwill in the pharmaceutical industry is more complicated than in other sectors because even if an international brand enjoys strong reputation globally, it cannot be sold in India without drug approval. Courts have often faced a legal conundrum: Should foreign pharma brands be protected even if their product is not legally available in India? This issue was raised again in the Prius case, where the Supreme Court ruled that mere global reputation is not enough and the mark must have actual recognition among Indian consumers at the relevant time.

The Risk of Generic Drug Makers Leveraging International Goodwill

India is the world’s largest producer of generic medicines, supplying over 40% of generic drugs used in the United States and Europe. While this contributes to affordable healthcare, it has also led to several instances of passing-off actions, where domestic companies attempt to capitalize on international goodwill.

For instance, Indian generic companies might use identical or deceptively similar marks to famous international drug brands and/or market drugs with similar packaging and trade dress, leading to consumer confusion. To combat this, foreign pharmaceutical companies file passing-off suits, arguing that Indian courts must uphold global goodwill to prevent misleading marketing practices. William Grant v. McDowell,[3] although not a pharma case, set an important precedent in trade dress protection, which is now used to protect pharmaceutical packaging and branding. A similar issue arose in PepsiCo v. Magfast Beverages,[4] where an Indian company attempted to use the trademark “Mountain Dew” for packaged drinking water. The court ruled in favour of the prior user, demonstrating the challenges of enforcing transborder reputation in India when the claimant does not have a local presence.

Comparative Analysis: India vs. Other Jurisdictions

In the United States, the Lanham Act recognizes prior foreign use, provided the brand can establish consumer recognition in the U.S. Unlike India, the U.S. also has the famous marks doctrine, which protects well-known foreign marks even if they are not registered domestically. The United Kingdom follows a stricter approach. UK law distinguishes reputation from goodwill, as mere international reputation is insufficient. A claimant must prove goodwill through local business presence. This aligns with the Prius case in India. In the European Union, international brands must show substantial reputation in any EU member state for protection. However, if an international pharma company files an opposition against a local registration, the EUIPO may accept prior global reputation if backed by strong evidence.

The evolving jurisprudence on transborder reputation in pharmaceutical trademarks in India demonstrates a delicate balance between protecting global brands and fostering local industry growth. In today’s interconnected world, businesses are no longer confined by geographical boundaries. With the ease of global trade, advancements in transportation, and the rise of digital media, brand recognition is no longer limited to the country of origin. Pharmaceutical companies, in particular, benefit from their global reputation, as patients and medical professionals rely on well-established brands for safety and efficacy.

However, this global reach comes with the challenge of protecting trademarks across multiple jurisdictions. While registering trademarks in every country may not always be feasible, the doctrine of transborder reputation serves as a crucial safeguard against brand dilution and misappropriation. Indian courts have historically been receptive to this doctrine, as seen in cases like Whirlpool[5] and Milmet Oftho, where foreign trademarks were granted protection based on their global reputation.

The recent rulings in Prius[6] and Century 21[7] indicate a shift toward a stricter evidentiary standard. Courts now require foreign claimants to demonstrate actual consumer awareness in India, primarily through advertisements or surveys. This means that multinational pharmaceutical companies must be proactive in establishing their brand presence in India, not just through trademark registrations but also through marketing efforts that build local goodwill. As India continues to be a key player in the global pharmaceutical market, its legal framework for protecting transborder reputation will evolve further. The challenge for courts remains in balancing the rights of foreign brands with the interests of domestic enterprises. Moving forward, strategic advertising, independent market surveys, and timely legal action will be crucial tools for foreign pharmaceutical companies seeking to protect their trademarks in India.

Author: Gunjan Sharma, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

[1] Milmet Oftho Industries v. Allergen Inc. 2004 (12) SCC 624

[2] S. Syed Mohideen v. P. Sulochana Bai 2016 SCC (2) 683

[3] William Grant & Sons Ltd. v. McDowell & Co. Ltd. 1994 FSR 690

[4] PepsiCo v. MagFast Beverages CS (COMM) 350/2020

[5] N.R Dongre v Whirlpool Corporation (1996) 5 SCC 714

[6] Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. (2018) 2 SCC 1

[7] Century 21 Real Estate Llc vs Century 21 Builders And Promoters CS(COMM) 637/2023