TRANSBORDER REPUTATION

As a lawyer trained primarily in the United States, the approach that Indian courts have taken on the issue of trans-border reputation has been a fascinating revelation for me.  This approach is quite diametrically opposite to the approach taken by US courts.

US courts have strictly enforced the territorial nature of trade marks.  A prime example is a case involving ITC and its BUKHARA mark.  In this case, a New York court held that ITC could not stop a local BUKHARA restaurant (set up by ex-employees of its famous Bukhara restaurant in India) because ITC did not use its BUKHARA mark in the United States.  As per the Court, although the United States is a signatory to the Paris Convention, the Paris Convention is not self-executing.  Accordingly Article 6bis of the Convention could not be read into US trade mark law.  Indian courts, on the other hand, have, since the 1990s, recognized trans-border reputation.  Thus, Indian jurisprudence has established that even if a mark is not used and/or registered in the country, it can acquire a reputation and enjoy protection here under certain circumstances.  Courts have noted that goodwill is not limited to a particular country because trade is spread all over the world and goods are transported freely across borders.  Thus, goodwill is not limited to countries where such goods are available because they may be advertised in those countries where they are not available.  A good example is Mind Gym Limited v. Mind Gym Kids Library Private Limited decided by the Delhi High court last year.  In this case, the court held that the plaintiff had made out a prima facie case for passing-off on the basis of trans-border reputation.

Clearly Indian law appears more in tune with the times and caters to the concept of the world being one big marketplace.  For foreign brand owners, seeking early registration of their marks in India is recommended even if their plans to enter the Indian market are not imminent.  However, even if a brand owner neglects to seek registration here, it may be successful in enforcing rights locally if it can show that owing to extensive use of its brand outside of India, consumers in India associate the brand with a single source.