Cross-Border Trademark Protection In The Digital Era: Enforcement Challenges And Legal Solutions

Introduction

Digital commerce has significantly altered the way companies do business and reach customers. Online market places, social media advertising and global logistics have allowed brands to become international without having themselves open a physical market. Yet, this border-free commerce accessibility has also resulted in grave trademark issues such as counterfeited listings, misuse of domains, and pretensions of brands in overseas platforms. The territorial principle upon which trademark laws rest leads to enforcement challenges, as cross-border infringements tend to implicate multiple jurisdictions, unknown infringers, and complex supply chains. Hence, the global enforcement of trademark rights in the global digital economy is and will remain an important legal challenge.

Challenges in Combating Online Trademark Infringement

Digital Commerce and the Shift in Trademark Abuse

Previously, the reach of trademark infringement was physically limited, and it was easier to take legal action because the infringer and the consumer were generally within the same jurisdiction. Today the infringers are taking advantage of borderless digital technologies to steal brand equity. They can market to Indian buyers from servers located in another nation, or they can mail counterfeit merchandise straight from overseas warehouses. These cross-border arrangements present challenges for enforcement.

Infringement in digital commerce typically occurs in the form of

(i) counterfeit products promoted on e-commerce sites;

(ii) cybersquatting and related misleading domain name registrations;

(iii) unauthorised brand application in social media; and

(iv) infringing use of trademarks in virtual markets and digital properties.

Infringers take advantage of the anonymity provided by the internet that allows them to use fake names, abandonable accounts, false addresses, making it hard to track and take them down. Even by takedown actions, the identical infringer can immediately reappear with a different account or domain and keep on committing the same offense. That diminishes the strength of trademark protection in the Internet marketplace.

[Image Sources: Shutterstock]

Jurisdictional Conflicts and Cross-Border Recognition of Trademark Rights

Trademark is a territorial concept and a trademark is protected only within the country or countries in which it is registered. This presents a problem when violations occur over the Internet where the infringer is located in one country, the web site is hosted in another and the customer is located in yet another country. Courts, therefore, have moved away from emphasizing the place of the infringer's conduct, and towards the place where the injury and consumer confusion actually occur.

The case of N.R. Dongre v. Whirlpool Corporation[i] has been a precedent-setting ruling for shaping this principle in India. The Court observed that, although Whirlpool was not selling washing machines in India at that time, the Indian consumers were already aware of the brand as a result of global advertising and through cross-border exposure. When an Indian entity adopted the “WHIRLPOOL” mark for its washing machines, customers were expected to be confused into thinking that they were purchasing washing machines from the real Whirlpool company. The Court held that it must uphold trans-border reputation because the confusion was taking place in India, although the product causing confusion had nexus out of India. Thus, the case marks the precedent that world-wide goodwill can be extended across boarder, and relief can be granted by the Indian court if:

1. the mark is significantly well-known to the Indian customers and

2. the infringing usage confuses the customers as to the source of goods.

This development will ensure enforcement of trademark rights in the Internet age based on impact on consumers rather than on geographical assumptions.

Platform Liability: From Passive Intermediaries to Active Participants

The online marketplaces had previously asserted that they were simply intermediaries and therefore not liable if sellers on their platforms were peddling counterfeit or trademark-infringing goods. But platforms are now deeply enmeshed in the sale process i.e, advertising the products under brand names, warehousing the products, accepting payments and, potentially, delivering the orders. When they do that kind of thing, they’re not just helping host infringing products, they are actually helping products that infringe the law reach consumers.

It is a strong recognition of principle in Christian Louboutin SAS v. Nakul Bajaj & Ors.[ii], that the Delhi High Court observed that by holding itself out as an intermediary, Darveys.com cannot absolve itself from liability. The Christian Louboutin mark was used on the website; the site advertised the products; guaranteed the authenticity of products. Due to this active role, the Court considered the platform as a seller and held it liable for trademark infringement. The decision signals that online platforms can be held responsible for fake or unauthorised branded goods that are available for purchase on their site.

Brand Misuse in Domain Names and Online Advertising

Misuse of trademarks in the internet environment is also evident in the phenomenon of cyber squatting, where one registers domain names that are similar to the trademarks of well-known companies and tries to attract customers or misuses the reputation of the brand. Domain names are now considered like trademarks by courts as they serve as source identifiers on the Internet.

A leading Indian case is Yahoo! Inc. v. Akash Arora & Anr.[iii] (1999) where the Delhi High Court passed an interim injunction the defendant from using “yahooindia.com”. The Court found that the domain name was confusingly similar to “Yahoo!”, and that Internet users searching for the real Yahoo website could be confused. It also said the use of the word “India” was not sufficient to dispel the confusion and that disclaimers cannot eliminate misrepresentation in the online world. The Court noted that “even sophisticated users of the Internet can inadvertently end up on an infringing website,” underscoring the importance of online trademark protection.

Another problem is keyword advertising, which occurs when infringers buy a brand's name as a search keyword so that their listings appear when consumers search for the real brand. This leads to confusion and it damages the reputation of a brand. There are particular systems for dispute resolution related to domain names for dealing with misuse of trademarks in domain names. UDRP (Uniform Domain-Name Dispute-Resolution Policy) is an international instrument developed by ICANN to assist brand owners in the swift recovery of domain names such as .com or .net registered in bad faith without the time and cost of a litigation proceeding.   

For example, the INDRP (Indian Domain Name Dispute Resolution Policy) is applicable for .in domain name disputes in India which allows the owners of a trademark to get rid of the cybersquatters infringing their mark name on the web. These allow for enforcement to be a little bit faster, but there are still issues with infringers being overseas or continually moving domains.

Fake Goods and Customs Enforcement

When counterfeit goods are routed through the internet and then by mail or express delivery to other nations, it is the responsibility of the customs officers to seize them.. India even permits trademark proprietors to file their marks with customs so that officers can identify and intercept counterfeit imports.

But online counterfeiters no longer make use of bulk shipments but dispatch goods in small courier parcels directly to consumers, making it increasingly difficult to spot illegal goods. These shipments often cross several borders, accompanied by fraudulent documents and facades of packaging concealing their true origins. With millions of small packages arriving each day, customs agents just can’t look at them all. They also do not have enough information about sellers on the e-commerce sites. As such, although the legal framework is strong, the application thereof is challenging given that traditional border checks are ill-equipped to deal with the rapidly evolving, highly segmented nature of online trade.

Legal Solutions for Stronger Cross-Border Trademark Protection

Enhancing International Enforcement via TRIPS

There is territorial aspects of the trademark laws but there are no borders for online infringements. The TRIPS[iv] (Trade Related Aspects of Intellectual Property Rights) Agreement provides that all members must ensure their trademarks are effectively enforceable (Article 41) under the WTO and that customs officials may suspend counterfeit shipments (Articles 51–60). These provisions guarantee that countries work together and take measures even when the infringers are based in another part of the world.

Yet, TRIPS was designed before online shopping was so ubiquitous, so it doesn't mention digital marketplaces, social media ads, influencer marketing, or cross-border-ecommerce scams. This gaps the enforcement when infringement is conducted online only.

WIPO’s UDRP as a tool for domain name protection

To combat domain-name abuse like cybersquatting, such as misleading domain names, the WIPO system known as UDRP (Uniform Domain Name Dispute Resolution Policy) provides for the cross-border recovery of fraudulent or misleading domain names. It enables brands to act fast without protracted litigation. But again, that is mostly for website names not for fake goods on e-commerce sites, or bogus promos on social.

Broadening Judicial Relief for Infringement on the Internet

Courts have sought to address the gaps by applying traditional law in the virtual world. They now also award damages for online brand harm, issue injunctions to take down infringing listings and prevent online sellers from selling to consumers in other countries. Still, international collaboration can be sluggish as each country has different enforcement measures and not every nation views online infringement as seriously.

Desirability of having a unified set of global digital trademark regulations

With digital markets opening up so rapidly through global e-commerce and social media channels, the existing international rules are not sufficient. There is increasing demand for clearer global standards to specifically deal with online misuse of trademarks, quicker international notice-and-takedown regimes, greater responsibility for e-commerce platforms that host counterfeit or infringing listings and enhanced co-operation between national authorities. These changes would enable enforcement of trademarks to keep up with the fast and borderless nature of the digital economy.

Stronger Collaboration with the Enforcement Agencies and Customs

Enhanced collaboration between owners of trademarks, enforcement agencies, and customs is essential to dismantle online counterfeit networks. Policy changes are also needed to hold digital platforms more accountable for trademark infringements taking place on their systems. Together, these strategies could go a long way towards helping to secure online brand protection in international trade.

Proactive Strategies for Brand Owners

Together with these international and national efforts, active brand owner participation is critical to enhancing the protection of trademarks on line. Companies should make sure that their trademarks are registered in all major markets and actively monitor e-commerce websites, social media and domain registrations for potential misuse. Rather than waiting out long court battles, businesses can also take advantage of more swift dispute-resolution processes such as online arbitration or mediation for domain name and trademark cases. Collaboration with law enforcement, payment processors and shipper services can aid in identifying cross-border infringers and more quickly dismantle illicit operations. A multi-pronged strategy with legal, technical and proactive brand activity capabilities all playing their part is needed to successfully enforce online trademark rights in a global environment.

Conclusion

The growth of global e-commerce has turned trademarks into global assets, but the means of enforcement are yet to evolve to match this fact of life. Anonymous sellers, advertising with no borders and commerce powered by platforms also contribute to making brand abuse easier and quicker to implement. While Indian as well as foreign courts are progressively recognizing the notion of trans-border reputation and are finding online intermediaries liable, enforcement is still constrained by jurisdictional barriers and varied assistance from across the globe. Although international conventions like TRIPS and UDRP[v] provide some guidance, they were not formulated to consider the complexities of online infringement. In order for brand identity to remain protected in the virtual marketplace, the law must further evolve to be more cooperative, technologically attuned and without true borders. Stronger international mechanisms, faster takedown systems and platform accountability are necessary to ensure consumer trust and the protection of the trademark in the current environment where everything is accessed online.

Author: Shreya Lal, 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.

[i] N.R. Dongre v. Whirlpool Corp., (1996) 5 S.C.C. 714 (India).

[ii] Christian Louboutin SAS v. Nakul Bajaj & Ors., 2018 SCC OnLine Del 12215 (India).

[iii] Yahoo! Inc. v. Akash Arora & Anr., 78 (1999) DLT 285 (Del. HC) (India).

[iv] Agreement on Trade-Related Aspects of Intellectual Property Rights arts. 41, 51–60, Apr. 15, 1994, Marrakesh     Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299.

[v] 5 A. Devi & A. V. N. Sundari, Trademark Law in the Digital Age: Challenges and Solutions for Online Brand Protection, Global International Journal of Innovative Research, Apr. 2024.