The concept of Trans border reputation

The change in the world Trade patterns has largely affected the advertising ways and means. The accessibility and dissemination of information on the internet have changed the protection and enforcement mechanisms for intellectual property rights.

The effects of globalised Trade, inter-continent travel, international circulation of literature, availability of news and periodicals on the world-wide web has made the accessibility of information very easy. Internet has not only remained a source of information but has become a big platform for advertisement.

Meta-tagging and cyber squatting which have now become common practices made it impossible for rights holders to seek protection under the conventional doctrine of likelihood of confusion.

The need was felt by WIPO and provisions for the protection of well-known marks in the member countries were introduced. In order to comply with Article 16 of TRIPS Agreement section 11(10) and 29(4) were inserted in the Indian Trademarks Act, 1999 so as to accord protection to well-known marks. However, when it came to the practice and implementation of the law, it was found to be crippled with many obstacles such lack of a proper definition for 'well-known' marks, the requirement of proving use of a mark in the country of its enforcement in order to prove reputation or goodwill.

It was then that the concept of trans-border or spill over reputation was acknowledged by the courts world wide. Here, it is imperative to understand that goodwill and reputation though used interchangeably, theoretically they are not one and the same concepts. The following statement might help:-

Where there is goodwill, there is reputation but the vice-versa is not true.

In England, in the Budweiser's case , the English Courts declined to protect trans-border reputation by striking a distinction between reputation and goodwill and holding that for a passing off action it was necessary to have a protected goodwill, which meant doing of business in the open market in England. In the said case, Budweiser being an American company was unable to restrain a Czeckoslovakian company from using the mark Budweiser because its products were not sold in the open market in England. It was not enough that the products were sold in the American Military bases as that amounted to having a reputation but not a protectable goodwill. The result was that a well-known Trademark could not be protected in England. The Indian Courts disagreed with the Budweiser decision of English Court.

In India, it is enough to prove reputation of the goods/service i.e. the consuming public's knowledge of the goods/service is sufficient to initiate an action for passing off based on trans-border or spill over reputation.

In N.R. Dongre & Others v. Whirlpool Corporation & Another, the Indian Supreme Court has held that "the knowledge and awareness of a Trademark in respect of the goods of a trader is not necessarily restricted only to the people of the country where such goods are freely available but the knowledge and awareness of the same reaches even the shores of those countries where the goods have not been. When a product is launched and hits the market in one country, the cognizance of the same is also taken by the people in other countries almost at the same time by getting acquainted with it through advertisements in newspapers, magazines, television, video films, cinemas etc. even though there may not be availability of the product in those countries because of import restrictions or other factors. Dissemination of knowledge of a Trademark in respect of a product through advertisement in media amounts to use of the Trademark whether or not the advertisement is coupled with the actual existence of the product in the market.

In para 44 of the above judgment the Division Bench also referred to a decision of the High Court of Australia in The Seven Up Company v. O.T. Ltd. wherein it was observed as follows:- The Court frowns upon any attempt by one trader to appropriate the mark of another trader although that trader is a foreign trader and the mark has only been used by him in a foreign country. It Therefore seizes upon a very small amount of use of the foreign mark in Australia to hold that it has become identified with and distinctive of the goods of the foreign trader in Australia.

The concept of confusion in the mind of consumer is critical in actions for Trademark infringement and passing off, as well as in determining the registrability of the Trademark but, not all use of identical/similar mark result in consumer confusion and, therefore, the traditional principles of likelihood of confusion has been found to be inadequate to protect famous and well known marks. The world is steadily moving towards stronger recognition and protection of well known marks by doing away with the requirement of showing likelihood of confusion to the consumer, by implementing anti-dilution laws and recognizing trans-border or spill over reputation wherever the use of a mark is likely to be detrimental to the distinctive character or reputation of an earlier well known mark.

Protection of trans-border reputation is not limited to like, cognate or allied products, it is very well accorded to dissimilar and non-competing goods/services as well.

In a leading case the manufacturers of Mercedes Benz sought an injunction against the Defendants who were using the famous "three pointed star in the circle" and the word "Benz". The Court granted injunction against the Defendants who were using these marks for selling inner-wear. In the Kamal trading Co. v. Gillette UK Limited, injunction was sought against the Defendants who were using the mark 7'O Clock on their toothbrushes. This was further reaffirmed by the Bombay High Court, which held that the Plaintiff had acquired an extensive reputation all over the world including India by using the mark 7'O Clock on razors, shaving creams and the use of an identical mark by the Defendant would lead to the customer being deceived.

The entire idea is to prevent a man from selling his own goods under the pretence that they are the goods of another man.

The Hon'ble Delhi High Court in Blue Cross and Blue Shield Association v. Blue Cross Health Clinic, granted an exparte injunction relief on the ground that there was an international reputation of the plaintiff's mark although there was no registration or use of the said Trademark in India. The Hon'ble Calcutta High Court in Kabushiki Kaisha Toshiba v. Toshiba Appliances Co., attached more importance to 'use of mark' in relation to goods than trans-border reputation. But the Division Bench of the same court in M/s J.N. Nicholas (Vimto) Limited v. Rose and Thistle, observed that the use of a Trademark does not necessarily imply actual sale of the goods bearing such mark.

The judgment of Supreme Court of India in Milmet Oftho Industries & Ors. v Allergen Inc, has added further clarity to the Indian legal position on this point. In this case the appellants were the prior user of the Trademark OCUFLOX internationally. The defendant had started manufacturing a similar drug in India under the same name. The Supreme Court laid down the 'first past the post' principle and held that even though the defendants were the prior users of the mark in India, the appellants claimed superior rights on the mark as they had accumulated a huge reputation through sale of the medicines internationally and thus they were first past the post. The Supreme Court's has applied the 'first past the post' principle in Blender's Pride case as well.

It is today well settled that international and world wide reputation are indicators of the goodwill attached to a Trademark. Courts have repeatedly accepted promotional activity in India as one of the factors which evidences the reputation of the plaintiffs' products being sold under such Trademark.

In Austin Nichols and Co. and Anr. v. Arvind Behl and Anr., which is popularly known as the Blender's Pride case, the Delhi High Court had held that 'Blenders Pride' whisky which was manufactured by the Plaintiffs enjoyed a worldwide reputation, being available for sale in a large number of countries since 1973 onwards. The product was not unknown in India. The predecessor in interest of the plaintiffs had an intention of directly exploiting the Indian market. They had applied for permission from the Government of India to manufacture 'Blenders Pride' whisky which was granted and they had been manufacturing 'Blenders Pride' whisky in India since 1995. They however manufactured 'Blenders Pride' whisky for a couple of months in 1993-1994 and stopped manufacturing till sometime in 2005 that is for a period of almost 11 months. The Court held: "the Plaintiffs having come out with 'Blenders Pride' whisky first in the international market were first past the post; even though the Defendants were the first to do so in India. The fact that the product of the plaintiffs was not manufactured or sold in India from 1973 when it first entered the market) till 1995 when it became freely available in India, is of no consequence."

Indian courts have time and again made their stand clear on the protection of trans-border reputation. There is a plethora of cases where the courts have held that the reputation of a trader, trading or carrying on the business in another country, can travel to a country where he had carried no business. The traders' trans-border reputation can be on the basis of extensive advertisements and publicity. Such a trader could obtain injunction in a Court where he was not trading to protect his reputation. The Indian Courts also recognize the existence of trans border reputation , a product and its Trade name transcends the physical boundaries of a Geographical region and acquires trans border overseas or extra territorial reputation not only through import of goods but also by its advertisement. The knowledge and awareness of the goods of foreign trader and its Trademark can be available at a place where goods are not being marketed and consequentially not being used.

Trans-border or the international reputation acquired by a Trademark has been held to justify an injunction in India, even though the plaintiff had not entered the market so far.

In Solian Ink v. Doctor and Co., the Court held that mere advertisement in the other country i.e. the country where injunction is sought is sufficient if the Trademark has established its reputation and goodwill in the country of its origin and the countries where it is registered. It is not necessary that the association of the plaintiff's mark with its goods should be known in the country other than its origin or to every person in the area where it is known at best. In this behalf, it was again observed that in the modern world, advertisements in the newspapers travelled beyond the country where the party is engaged in business through overseas editions or otherwise. Mobility has rendered international awareness of the commodities and reputation travels faster than man.

Icrave, LLC v. Icrave Designs Pvt. Ltd. was a case on similar lines wherein the firm (ZeusIP Advocates) had presented the plaintiff for an action for injunction against the passing off activities of the defendants. ICRAVE is the invented Trademark of the plaintiff used for its services relating to designing of hotels and casinos. The defendants started using a a deceptively similar Trademark and Trade name Icrave Designs Pvt. Ltd. for similar services.

The hon'ble Single Judge of the Delhi High Court held that the plaintiff had invented and adopted the mark ICRAVE and had acquired sufficient reputation through its quality services. The extensive advertisements campaigns undertaken by the plaintiff was held to have formed formidable trans-border and spill over reputation of the plaintiff's mark in India even in the absesnce of availability of its services in India. The Judge applied the established principles of trans-border reputation, as discussed in the cases above, along with the doctrine of first past the post in the international market and held that the plaintiff was entitled to protection of its rights in and to the said Trademark. It was further held that the a likelihood of confusion on the part of the consumers coupled with the tripartite test of i) prima facie case, ii) balance of convenience and iii) irreparable loss or injury lied in favour of the plaintiff and thus an ad interim injunction was awarded in favour of the plaintiff.

Disclaimer: The sole purpose of this article is for information only; and not to be construed for any legal advice. The article was drafted, based on the information considered upto 2nd November, 2012.