UNIVERSITY OF PETROLEUM & ENERGY

STUDIES
COLLEGE OF LEGAL STUDIES
B.B.A., LL.B. (Hons.)
SEMESTER VIII
ACADEMIC YEAR: 2012-17 SESSIONS: JANUARY - MAY
ASSIGNMENT

FOR

Intellectual Property Rights

Under the Supervision of: Dr. Anuradha Nayak
NAME:

MUSKAN OCHANI, 29
PARUL RAGHUWANSHI, 34

1 | Page

PRIYANKA DIXIT, 42
SOUMYA BHUSHAN, 52

INTELLECTUAL PROPERTY RIGHTS ASSIGNMENT

TRANS-BORDER REPUTATION OF TRADEMARK: A
CRITICAL ANALYSIS

Where the globalization is the symbol of socio-economic development of any nation through
the development of its company or brand, the reputation or goodwill of any brand cannot be
restricted within the boundaries of the any country. Since the purpose of trademark is to
create a unique identity of a trade so it must be protected from getting infringed and passing
off. A trade mark which can be a word, name, symbol, device, design, label, colour or brand,
is a visual representation which distinguishes one product from the other and indicates the
trade source from which it comes. According to Article 15 of TRIPS1 A trademark is a sign
or combination of signs that distinguish goods or services of one person or enterprise from
those of another. It is the brand identity that links the customers mind with the product,
service and the company. For the purpose of claiming a passing off action, the reputation of
the trademark is an important factor. Reputation implies the knowledge, popularity and
awareness of a particular trademark among people across the world. Traditionally, the
reputation of trademark was recognised only within a country. But with globalization, the
goods and services have surpassed the geographical borders and have gained reputation on
international frontiers. The reputation of the trademark is an important factor in order to claim
for its protection. When any brand develops its reputation in international market it is known
as Trans-border reputation and is protected under Section 35 of the Indian Trade Mark Act,
1999 which offers protection to foreign trade marks on the basis of their international
reputation. Section 35 of Trade Marks Act, 1999 reads as Saving for use of name, address
or description of goods or services.Nothing in this Act shall entitle the proprietor or a
1

Trade Related Aspects of Intellectual Property.

2 | Page

registered user of a registered trade mark to interfere with any bona fide use by a person
of his own name or that of his place of business, or of the name, or of the name of the
place of business, of any of his predecessors in business, or the use by any person of any
bona fide description of the character or quality of his goods or services. Inserting this

provision, India complied with the condition under Article 16 of TRIPS that seeks better
protection and treatment of trademarks.
The concept of trans-border reputation has become more comprehensive and wider day by
day and it cannot have a blanket application. This is for the reason the status and benevolence
of any product launched in any country are of inherent importance and shall reach to every
nook and corner of the globe through magazines, newspapers, television, telephone, cinemas
and Internet. Therefore due to advertisement it builds its reputation all over the international
market and has a Right to be protected.
The concept of reputation and goodwill are seems to be overlapping but a line of disparity is
present between both the concept. Goodwill is an asset and therefore amounts to a property
which law protects. On the contrary to it, reputation is complex and is manifested in various
factors. The factor leads the customers and individuals to relate/associate the business to the
plaintiff, e.g. name of business, real or adopted mark, design, colour of mark/design etc. To
have goodwill without reputation is impossible but the reverse of it is not true. In case of
Anheuser Busch Inc. V. Budejovicky Budvar2, the Judge explained the difference between the
same, That, as it seems to me, is to confuse goodwill, which cannot exist in vacuum, with
mere reputation which may no doubt and frequently does exist without any supporting local
business, but which does not by itself constitute a property which the law protects.
Rather the application of the principle of trans-border reputation needs to be done on the facts
and circumstances of every case. Though the courts have set up various parameters for
judging a case on the basis of trans-border reputation there still continue to remain numerous
loopholes in the application of the principle. There have been noteworthy precedents in the
regard of question of trans-border or spill over of international reputation. This article tries to
explore the genesis of trans-border reputation in order to ascertain the factors for establishing
whether a trademark is a well-known trademark and its reputation is well known or not.

(1981) 42 ALR

3 | Page

With the rapidly developing international trade, where physical frontiers are no more a
limitation and the products are broadly accessible in every country of the world, it is
important to recognize the trans-border reputation joined to the products of an international
company.
Section 35 of the Indian Trade Mark Act, 1999 restricts a person from using a trademark
which is likely to cause deception and confusion in the eyes of the public and divert the
income of a person owing to its goodwill and reputation in the market, irrespective whether it
has domestic or trans-border sale of its good/products. Earlier to succeed a passing off action
in England, it was not only necessary to prove the reputation of a particular trademark in
England but also that the trademark has a goodwill and thus to prove goodwill it was essential
that the goods are sold in the open market of England of that trademark. However, in the past
years, Indian courts have diverted from this traditional point of view. In Star Industrial Co.
Ltd. V. Yap Kwee Kor3, it was highlighted that The mere fact that plaintiffs have never
manufactured in the country does not prevent them from acquiring goodwill here. Thus, the
Indian Courts have recognised that the mere existence of goodwill is enough to claim a
passing off action irrespective of the facts whether the goods/products are sold in India or not.
The Indian courts has recognized the claims of infringement and passing off by overseas
plaintiffs exclusively based on the reputation and good will of the of the goods and services
on the foreign land. The concept of first past the post was renowned by Delhi High Court.
The Indian Courts protect the concept of trans-border reputation. The Supreme Court in
Ruston & Hornby Ltd. v. Zamindara Engineering Co., held that there does not seem to be
any requirement that the plaintiff must carry on business in India before bringing an action
for passing off for he can prove that he has otherwise acquired reputation in the country.
Later, the Bombay High Court and the Delhi High Court reiterated the view in Kamal
Trading v. Gillette U.K. and also in Blue Cross and Blue Shield Association v. Blue Cross
Health Clinic respectively. In N.R. Dongre v. Whirlpool Corporation , the doctrine of transborder reputation was considered in detail for the first time. It was held that "In todays
world it cannot be said a product and the trade mark under which it is sold abroad, does not
have a reputation or goodwill in countries where it is not available. The knowledge and

[1976] FSR 256

4 | Page

awareness of it and its critical evaluation and appraisal travels beyond the confines of the
geographical area in which it is old."
In Apple Computer Inc. V. Apple Leasing & Industries 4the High Court of Delhi held that if
the reputation of a trader, trading or carrying on business in another country, had travelled to
a country where he did not have any business, his business acquired a reputation in regards to
the products marketed by the company outside the country. On the basis of extensive
advertisements and publicity, another trader could be commanded to protect the reputation of
the trader who was not trading in the country.
In 1996 the Supreme Court of India has recognized the Right of Trans-border Reputation of
Trademark in N.R.Dongre and Others v. Whirlpool Corporation and Anothers.5 While giving
the judgment over the issue Supreme Court established that international companies having
an international trademark and enjoying a cross border reputation outside of India, protects
their IPR in India without the need of having an actual presence in India. This is the first case
in which a detailed consideration of the doctrine of cross border was made. The basic
question before the Delhi High Court was whether the aggrieved party, not selling the goods
in India could claim the benefit of trans-border reputation in the trade mark WHIRLPOOL
so as to maintain a Passing Off action in India or should its goodwill and reputation be
confined to territories in which it has proved actual use of the trade mark in the market? The
court decided in favour of the aggrieved party and later in appeal the Supreme Court
reaffirmed the decision of High Court.
Another case in the same contest is Milmet Oftho Industries & Ors. v. Allergen Inc. 6 In this
case the Appellant company has its business in manufacturing pharmaceutical products in
different countries excluding India. The respondent company was also dealing with the same
business in Indian used the mark OCUFLOX which was used by the Appellant company.
The question to be decided was whether a foreign manufacturer had the right to restrain use
of a mark outside the country? Deciding the case in favor of the Appellant Supreme Court
explained that the Appellant had sufficient worldwide reputation connecting the name
OCUFLOX and that it was entitled to seek protection in respect of the said name to
medicinal products against the respondent. The Court quoted, "the mere fact that the
4
5
6

(1993) IPLR 63 (Del),

(1996) 5 SCC 714
(2004) 12 SCC 624

5 | Page

respondents have not been using the mark in India would be irrelevant if they were first in the
world market
In Kamal Trading v. Gillette U.K. Limited,7 the Bombay High Court observed that the
goodwill of any company is not limited to any particular country, but is spread all over the
world and the goods are also transported with a great easy from one country to another. When
the goods are freely available all across the globe so the company also cannot limit their
goodwill to any specific country. The result of this is although the goods are not available in
the country, the goods and mark under which the company products are sold acquires wide
reputation because of the increased advertisement through various modes.
Further addressing the issue, another question which disconcerted the Indian Judiciary was
that whether a trademark is infringed if a foreign company has no intention of selling its
products in India, while the Indian Company has genuinely adopted the mark and is first in
the market? The court through plethora of cases made a distinction between the Principle of
Trans-border Reputation and Principle of Prior Adoption and Use. One of the leading cases
in this regard was that of Jones Investment Co v. Vishnupriya Hosiery Mills whereby it was
stated that a foreign or a multinational company cannot claim passing off action on the
grounds of trademark infringement by a local Indian Company merely on the grounds of
international presence and reputation unless they clearly and expressly establish that their
presence of reputation extends to India or precedes that of an Indian Company. This is known
as the Principle of Prior Adoption and Use which is different from the principle of transborder reputation.
This principle can be well understood with the help of this case. The appellant, Jones
Investment Co. was an American company which carried out a business of apparel, hosiery,
footwear, etc. under Trademark Jones New York on the international frontiers. While the
respondent, Vishnupriya Hoisery Mills was a textile firm in Tamil Nadu. An application for
registration of registration of the trade mark Jones was filed by the respondent for their
textile products which was opposed by the appellant. The opposition filed by the appellants
was dismissed by the Deputy Registrar of Trademarks, aggrieved by which the appellants
preferred the appeal. The counsel on behalf of the appellants contented that they had been
7

1988 PTC 1

6 | Page

using the mark Jones New York since 1966, in such long time they had acquired transborder reputation. Furthermore, they contended that they had registered their trade mark in
India since 1997 so the use of same trademark by respondent would cause deception and
confusion among the customers. While on the other hand the respondents contended that the
main issue involved here was that whether the appellants had established the goodwill and
reputation of their trademark Jones New York in India on the date of application filed by the
respondent before the Registrar for the registration of the impugned trade mark. And in
response it was contended that till date the appellant is not using the trade mark Jones New
York in India. Therefore the question of trans-border reputation of the appellants mark need
not arise at all.
The court while considering all the facts and circumstances referred to the judgement of
Milmet Oftho Industries & Ors vs Allergan Inc., wherein held that, It is undisputed that the
appellant till date is not using their trade mark Jones New York in respect of their goods in
India and it is their categorical statement that they proposed to use the same in India. The
appellants failed to prove the use of the alleged trade mark since 1966 as they have filed their
documents only from the year 1997 whereas the respondent have proved their claim of use of
the trade mark since 1993 by producing relevant documents to substantiate their claim. Thus
the question of confusion or deception need not arise. The appeal was therefore dismissed.
Thus while considering the question of trademark infringement the intention of the
multinational company should be taken into consideration and a multinational company
which has no intention of introducing their product in India should not be allowed to throttle
an Indian company and the Indian company who has genuinely adopted the mark and
developed product and it is first in the market shouldnt be prevented from using the mark.
Here it is pertinent to note that this was adjudicated only for the reason that the Appellants
did not provide evidence to show that they had an established international reputation prior to
1997, whereas on the other hand the respondents substantially had their presence in India
since 1993.The operative test, therefore, in such cases is merely who is first in the
market. Thus the court held in favour of the small firm like Vishnupriya Hosiery and against
the big corporation solely in the interest of justice, equity and conscience. Had if the court
held otherwise, it would have lead to the growth of multinational corporations at the cost of
small firms which would have been undesirable.
7 | Page

The rapid growth in International economic and social relations makes the trade possible
among various nations making it imperative that the Intellectual Property Rights are properly
and liberally recognized by all countries. The Courts in India are therefore increasingly
recognizing the trans-border reputation even under those situations where the mark has not
been used in India. This shows the concern of Indian Courts to prevent misappropriation of
foreign mark. At the same time it is important that a foreign right holder should act pre-hand
for enforcing the goodwill established internationally.
Firstly the major lacuna is the absence of exact definition of the terms goodwill and
reputation which is interpreted in the widest sense and are interchangeably used. There is no
observation by any Indian court distinguishing residential reputation and shared reputation.
Courts have repeatedly done the mistake of understanding the terminologies i.e. goodwill and
reputation resulting into their use interchangeably. It should be understood that, the term
goodwill is property which restricted to the local jurisdiction whereas the action of passing
off is based on reputation which crosses the boundaries.
Secondly, this concept of has been applied by the Indian Courts but not entirely. The
important aspects of this concept i.e. residual reputation and shared reputation has been
ignored. The classic example of residual reputation is Whirlpool case, also ignored these
aspects. These aspects has been very well described in the case of Ad Lib-Club Ltd. V.
Granville where, the plaintiff relied on their reputation in their name after four years of their
business got closed. Even after closing of their business and ceased to use the mark, the
plaintiff can still rely on the residual reputation from the past use of the name/mark.
The present approach of Indian judiciary has important implications on the trading society
and general public as a whole. The adoption of this concept of trans-border reputation has
redefined trademark laws in our country and it is only time which will reveal the vigour of
these parameters in the light of ever changing economic world reputation along with other
factors including prior use or future entrance in the market while arguing the case of passing
off, can be easily succeeded in India. In the present scenario the technological advancement
has given the extraterritorial right to reputation just by the way of advertisement without even
physically entering into any such national market. The knowledge of the existence of any
product is sufficient for claiming and even the source of such knowledge is not a relevant

8 | Page

factor and is completely immaterial. Courts have repeatedly protected the trans-border trade
mark right. But it is advisable to get the trademark registered to ensure complete protection.

REFERENCES:
Chetan Chadha, Chadha & Chadha, Advocates, Trans-Border Reputation and
Protection Extended to Foreign Brands in India, INTA Bulletin FeaturesPolicy &
Practice Subcommittee Vol. 63 No. 4 ON February 15, 2008 .
Vijay Pal Dalmia, Advocate Partner & Head of Intellectual Property Laws Division,
Vaish Associates Advocates, New Delhi India, India: Trademarks Law In India
Everything You Must Know, ON 31 March 2011
Srividya T.S. PSA LEGALS, Not in India, but still protected, in February 2011
PRABHANSHU-3rd YEAR, CHANAKYA NATIONAL LAW UNIVERSITY,
PATNA, TRANS-BORDER REPUTATION OF TRADEMARKS
Vinitha Prasannan, TRADE MARK: CROSSBORDER REPUTATION CONFLICTS,
APRIL 3, 2011
Sbasera, Trans-border Reputation of Trade Marks, May 05, 2010
Soumya Banerjee, Trans-border Reputation, June 18, 2006
Shravan Kumar Bansal, First Past the Post

9 | Page