Goodwill accrues to a trade mark through sales in a specific territory, while reputation can be built without actual availability of goods/services in that territory. Trans-border/cross-border reputation occurs when a foreign entity, without business in India, gains recognition through activities like advertisements, workshops, newspapers & magazines circulated in India, websites (visitors with Indian IP addresses), mobile application downloads by people living in India, social media, news articles/blogs, presence in the world market, etc. The impact of these activities should be such that the goodwill from other jurisdictions has extended and influenced the mark’s reputation in India. Recognition across the entire country or by every individual isn’t necessary for the mark to have a reputation in India.
Proprietors of trade marks which are in use or registered in foreign countries but have not yet offered any goods or services under the mark in India, and may intend to do so in the future, have started opposing the registration of trade marks in India if filed by any other proprietor or initiating a passing-off action against the proprietor.
It is important to consider the Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd case, popularly known as the Prius Case, in which the Honorable Supreme Court of India held that foreign entities alleging passing off in India can claim rights only if they have acquired prior goodwill by having customers in India and not otherwise. Whereas, the entity claiming itself as the proprietor in India in a counter has to establish itself as the prior and honest adopter of the said trade mark in India. Foreign entities cannot restrict proprietors in India by establishing prior usage in other jurisdictions and cross-border reputation in India.
It is important to note that people living in India who visit foreign countries where the mark is used and purchase goods or take any service cannot be grounds that goodwill is generated in India as well, as per The Trustees of Princeton University v. The Vagdevi Educational Society & Ors. The decision of the Prius case was reaffirmed by the Honorable Delhi Court in Bolt Technology Ou v. Ujoy Technology Private Limited & Anr., wherein it was stated that the Court must not permit large multinational corporations, which have no intent of coming to India, to throttle an Indian company by not permitting it to sell its product in India. The Toyota case makes it clear that the “first in the market” principle has to be applied with respect to the Indian, and not the international, market. The territoriality principle has overtaken the universality doctrine.