Creativity is a catalyst for innovation in society, propelling it towards the greater good. Intellectual property law ensures the preservation of such creative interests while advancing technology and preserving the creator’s rights at the same time. But these creators often find themselves in a tough position when it comes to building a worldwide reputation for their Brand. Because trademark law is based on the concept of territoriality and trademark rights may only be enforced within the territorial limits of the nation in which the mark has been registered or used.
Countries that follow the Common Law regime have embraced the rule of ‘first to use,’ granting brand owners common law rights in their marks. Even in the absence of statutory rights through trademark registration, a brand owner can establish exclusive rights over its mark by “use” in commerce. Indeed, in certain countries, notably India, ‘use’ of a mark has grown to be seen as conferring a greater right than ‘registration.’ But countries that follow civil law, the norm is ‘first to file,’ where ‘usage’ plays no part in establishing the strength of a brand owner’s rights over its mark and only ‘registration’ may grant a brand owner enforceable right.
Another challenge faced by the creators is from Trademark squatters which made it harder for proprietors to seek protection under the doctrine of the likelihood of confusion. According to WIPO, Trademark squatting is the registration or use of a generally well-known trademark that is not registered in the country or is invalid due to non-use. It is quite frequent in civil law countries when squatters get registrations for international/foreign trademarks that have not yet been used or registered in their country by the brand owner. This became a scrouge for multinational corporations like McDonald’s, Starbucks and Apple who have faced legal issues in nations where trademark rights are decided by first to file rather than first to use.
To reconcile the contradictory legal perspectives on the ‘famous marks doctrine in different countries, brand owners frequently rely on Article 6bis of the Paris Convention and Article 16 of the TRIPS Agreement. These clauses recognise trans-border reputation and provide that if a mark has not been used in a specific country but has established some reputation in that country as a result of its international usage, the trademark may be protected in that country. In Toyota Jidosha Kabushiki Kaisha v. M/S Prius Auto Industries Ltd. & Ors. The plaintiff (Toyota of Japan) claimed registration of the name ‘Prius’ in 1990, whereas the defendant (Prius Auto Industries of India) claimed registration in 2002 and established usage since 2001. Toyota claimed that the ‘Prius’ mark had been actively used and publicised in significant media channels since 1997, resulting in its international reputation, and therefore the defendant’s registration in India qualifies for a passing-off action. Supreme Court determined that a passing-off lawsuit must meet three criteria: goodwill, misrepresentation, and damages. In a pass-off action, a foreign claimant can only win if he can establish goodwill for his products in the contested geographical territory.
The expansion of global trade and digital media promotion has increased the importance of brand and product awareness. Brand protection has become essential not just locally but also globally. Even if companies have not registered their brands in India, they should do appropriate marketing to claim goodwill. As evidenced by the Supreme Court’s decision in the Milmet Oftho case, such purpose aids in establishing a valid passing-off claim. In the absence of ads, foreign firms can conduct surveys through independent agencies to demonstrate that large sections of society know their marks. The evidentiary aspect is critical in these circumstances.
Due to the worldwide market’s expansion and development, a trade mark’s trans-border reputation must be properly recognised and safeguarded in different nations. The Indian courts have recognised and protected a trade mark’s trans-border reputation. It is generally recommended that overseas businesses register their marks in as many countries as possible to prevent any form of controversy. The current situation in India is that unregistered and international trademarks are recognised and protected based on their trans-border reputation.
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