January 1, 2015
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INDIA: Trans-Border Reputation Extended to Use on the Internet and Social Media
Royal Bank of Scotland v. Sharekhan Limited, decided by the Delhi High Court on November 7, 2014, is the culmination of a series of cases that lay down the law in India relating to the concept of trans-border reputation.
In the present case, the plaintiff, the Royal Bank of Scotland (Royal Bank), offers a wide variety of banking and financial services under the trademark MAXTRAD. This mark was acquired by the plaintiff from ABN Amro in 2007. MAXTRAD is an Internet-based system that allows clients to access financial services globally. The Royal Bank obtained registration of the trademark MAXTRAD globally. The mark was registered in India, lapsed, was filed again and pending on the date of filing of the suit. The defendant is a financial consultant and share broker. In late 2012, Royal Bank learned that the defendant had started using the mark MAXTRADE in connection with its financial and share broking services.
Royal Bank alleged that the trademark MAXTRADE was deceptively similar to its MAXTRAD trademark and asserted common law rights based on advertising in other countries and on the Internet resulting in spillover reputation in India.
The concept of trans-border reputation was first formulated in India in the Whirlpool case. N R Dongre And Ors v. Whirlpool Corporation And Anr, Appeal (civil) 10703, 1996, August 30, 1996, Supreme Court.
Trans-border reputation was defined as being present when “a product and its trade name transcend the physical boundaries of the geographical region and acquire a trans-border or overseas or extra territorial reputation not only through import of goods but also by its advertisements.” The knowledge and the awareness of goods of a foreign trader and its trademark can be present in a place where the goods are not being marketed and consequently the trademark is not being used. The source from which one’s knowledge has been acquired is immaterial. This concept was approved by the Supreme Court of India in the case of Allergan Inc v. Milment Oftho Industries (Supreme Court of India, May 7, 2004, Appeal (civil) 5791, 1998). which clarified that the presence of a localized business is not necessary. A plaintiff with an established international reputation can sue to protect in India even if it does not have any business activity in the country provided that there is an awareness of the mark or its reputation in India. This case also laid down the proposition that the person who registers a trademark anywhere in the world has a right to stop all others from using it in India, with the ultimate test being who was first in the international market.
In the Royal Bank case, the court further extended the principle to the existence of a merchant on web pages of foreign origin and social media and held that such presence would be sufficient to show and establish a trans-border reputation, even though that merchant did not have any activity in India at the relevant time. As international businesses grow and the distances between markets decrease, said the court, eventually the world will be treated as one market. Based on the facts mentioned above, the court held that the defendant must have been aware of the plaintiff’s trademark, MAXTRAD, when it adopted the trademark MAXTRADE for its services, and therefore, at the interim stage, enjoined the defendant from using the trademark MAXTRADE.
Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.
© 2015 International Trademark Association