Protecting Well-Known International Trademarks In India: Judicial Approach On Transborder Reputation And Squatting

The registrar has to take into consideration the principles laid down in Clauses (6) and (7) of Section 11 of the Act before declaring a mark as Well Known Trademark.

Evolution of Law on Well Known TMs in India

Prior to the enactment of The Trade Marks Act, 1999, the Trade and Merchandise Marks Act, 1958 was in action which lacked any statutory provision for the concept of well known trademarks. Section 47 of the Trade and Merchandise Marks Act, 1958 talked about the defensive registration of a well known trademarks in the categories other than that in which it is primarily used. It overridden the effect of Section 46, which allowed the removal of the unused marks. Defensive Registration is the practice of registration of a mark in various categories other than the one in which the product is known to the public. Now, there was no statutory remedy that existed in the Act of 1958 to restrain someone from using the mark in other categories, if defensive registration had not done by the original owner. However, the court protected the rights by way of Common Law remedies like Passing Off. In the case of Sunder Parmanand Lalwani v. Caltex India Ltd.^[2], the Bombay High Court upheld the opposition by Caltex India to stop the registration of the mark CALTEX for watches. Caltex India was very well known in India for gasoline and other similar products and there existed a likelihood of deception or confusion if the mark is allowed for watches. Therefore, court's stance even before the enactment of the Act of 1999 was to protect the rights of a well known trademark owner against registration in other categories. The Caltex case along with various other cases in which there were likelihood of deception or confusion if a mark is allowed in other categories lead to the addition of the concept of 'Well Known Trademarks' in The Trade Marks Act, 1999. A mark needs to get the recognition as a well known trademark. As per rule 124 of the Trade Marks Rules, 2017^[3], an application has to be made before the Registrar of trademarks along with prescribed fee has to be made in order to get the status of well known trademark. The registrar shall take into consideration the conditions prescribed under clauses (6) to (9) of Section 11 of The Trade Marks Act, 1999.

What are the benefits enjoyed by Well Known TM over regular TMs?

While an ordinary trademark enjoys protection over the mark for the particular class of goods and services, a well known trademark has given extra layer of protection under Section 11(2) and Section 29(4) of the Act for subsequent registrations in different class of goods and services as that of the well known trademark's class.

For example, "Amul" is a well known trademark for milk and dairy products. Now, if a person tries to register this mark for bags and allied goods he may be successfully opposed by the original owner of the mark, as it would take unfair advantage or be detrimental to the distinctive character of the earlier mark.

What if a mark is a well-established international mark and unregistered in India, seeks protection in India?

In N.R. Dongre v. Whirpool Corpn.^[4], the appellants registered the mark "Whirpool" in respect of washing machines. The respondents Whirpool Corpn. filed a suit for passing off. It was held that the passing-off action was maintainable even against the registered owner of the trade mark. Whirpool was associated for long with respondents and that it has transborder reputation even in India. Here, advertisement by the respondents in international magazines amounted to "user" in India. The doctrine of Transborder reputation was discussed for the first time in this case.

In Carrefour v. V. Subburaman^[5], Carrefour, a foreign retail store company based in France and operating in various countries including India was given protection for their trademark CARREFOUR, which was being registered by an Indian furniture business. Despite, the plaintiff not registering their mark for furniture category in India, it was granted interim injunction via a suit for passing off as it had transborder reputation or spill over reputation. However, transborder reputation can only grant protection for same or similar products, thereby making it different from statutory grant of well known status. In this case, Carrefour was not explicitly granted well known status by the court. Transborder reputation is not the sole criteria for declaring a mark as well known in India. The need to establish "user" in India is essential for the plaintiff to claim remedy. Need of user cannot be given a total go by^[6].

In the case of Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries^[7], the law underwent a paradigm shift. Here, the 'Territoriality Doctrine' replaced the doctrine of transborder reputation. Therefore, it is now required to be established that the plaintiff has acquired substantial goodwill in a country to succeed in a passing off claim.

International brands which are not well known worldwide but granted protection in India due to bad faith adoption by an Indian Squatter

Section 34 of the Act talks about the rights of the prior user over the rights of the subsequent user. According to the section, if a person has started using a mark before another person, who seems to be the proprietor or registered user, then he cannot be restrained from using it by the very reason of registration. However, the essential condition for claiming the benefit of prior user is that the prior use must be continuous and not intermittent or seasonal.

In Neon Laboratories v. Medical Technologies^[8], the rights of the prior user have given superior pedestal as compared to the rights of the subsequent user.

In a recent judgement of Delhi High Court in Goodai Global Inc. v. Shahnawaz Siddiqu^[9], decided on January 28, 2025, directions were given to remove the respondent's registered trade mark u/s 57 of the Act. The respondent had registered identical mark and device mark as that of the appellant. The appellant is a well-established Korean skin care brand by the name of "Beauty of Joseon" and it was found that the respondent's registration of the impugned mark was a result of clear intention to appropriate the appellant's mark and to block the appellant's rights to have it registered in India. Such act of respondent is known as 'Trade Mark Squatting', which is not expressly mentioned in the Act, but certainly amounts to 'bad faith' u/s 11(10)(ii)^[10].

As per Section 11(10)(ii) of the Act, bad faith is considered by the registrar at the time when an application is made to it or when an opposition to such application is made.

It is not defined in the act but the court in BPI Sports case observed that bad faith is opposite of good faith and synonymous to dishonest intention. Further, in Kia Wang case, it was observed that bad faith is an unfair practice involving lack of dishonest intention and a conscious doing of wrong, which is not just a mistake. It includes dealings which fall short of standards of acceptable commercial behaviour.

With the advent of the Prius judgement, concerns arose against the practice of Squatting as it would benefit the squatters and bad faith adopters to restrict a well-established international brand to register in India. But, Section 34 of the Trade Marks Act, 1999, reinforces the rights of prior users, ensuring that genuine users retain their rights despite subsequent registrations. Recent judicial pronouncements, such as Goodai Global Inc. v. Shahnawaz Siddiqu and BPI Sports LLC, have further strengthened the position of international brands by recognizing trademark squatting as bad faith under Section 11(10)(ii) and allowing the removal of fraudulently registered marks under Section 57. Overall, India's judicial approach and legislative framework provide a robust mechanism to safeguard the interests of well-known international marks, fostering a more equitable and competitive business environment.

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