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This article is written by R Sai Gayatri, from Post Graduate College of Law, Osmania University. This article deals with the landmark case of N.R. Dongre and Ors. v. Whirlpool Corporation and Ors. concerning transborder reputation, passing off and well-known marks.

Introduction

The trademark law in India enables innovators to have exclusive rights over their products or service by providing them a unique identity. Section 2(1)(zb) of the Trademarks Act, 1999 defines a trademark as a mark that is capable of being represented graphically to identify and distinguish the goods and services of a particular owner from those of the others. A trademark provides exclusive rights and various advantages to its owners such as an increase in the sales, advertisement of the product or service, establishing the reputation of the product or service, etc.

It is an established principle under the trademark law in India that whoever uses the trademark first will be considered the owner or the creator of it. This principle is known as the doctrine of prior use. It is a judicial principle which states that the prior user of the mark will have superior and exclusive rights against that of a registered proprietor claiming for such mark. In this article, we will discuss the landmark case of N.R. Dongre and Ors. v Whirlpool Co. and Anr., 1996 wherein Whirlpool claimed a mark based on the principle of ‘prior use’ and its transborder reputation stating that the goods being marketed by using such mark gave the impression that such goods belong to Whirlpool.  

Provisions under Indian Trademark Law  

Section 28 of the Trademarks Act, 1999 provides an exclusive right to use a trademark if such trademark is registered for trade purposes, however, an exception to this provision is mentioned under Section 34 of the Trademarks Act, 1999. This provision states that the rights of an actual owner of the mark cannot be violated on an identical trademark which has been registered by another. This means that the rights of the original owner or creator of the mark will be protected by the Trademarks Act, 1999 even if not registered, however, such mark must be in use prior to the date of registration done by the proprietor.

Position of transborder reputation in India

Section 35 of the Trademarks Act, 1999 deals with the concept of transborder or spillover reputation. It provides protection to foreign trademarks based on their reputation at the global level. By virtue of this Section, the Indian Courts have dropped the conventional approach which required the registration or use of a trademark in India for establishing a case of passing off. By recognizing the ownership of a trademark by a foreigner on the basis of the reputation of their goods or services in a foreign land, the concept of transborder reputation has been sown in the trademark law of India. This principle of transborder reputation was dealt with extensively in the case of N.R. Dongre and Ors. v Whirlpool Co. and Anr., 1996.

Details of the case

NAME OF THE CASEN.R. DONGRE AND ORS. V WHIRLPOOL CO. AND ANR., 1996
CITATION OF THE CASE(1996) 5 SCC 714
NAME OF THE COURTHON’BLE SUPREME COURT OF INDIA
PLAINTIFF-RESPONDENTWHIRLPOOL CORPORATION AND ANOTHER
DEFENDANT-APPELLANTN.R. DONGRE AND OTHERS
HON’BLE BENCHJUSTICE JS VERMAJUSTICE K VENKATASWAMI
DATE OF JUDGEMENT30TH AUGUST 1996

Facts of the case

The Whirlpool Corporation was the original and prior user of the trademark ‘whirlpool’ since the year 1937. The said trademark was used for their electrical goods which included washing machines. Whirlpool Corporation got its trademark registered in India in the year 1956 which was renewed regularly, however, in the year 1977 the respondents failed to do the renewal on account of which the registration expired. The Whirlpool Corporation, a multinational company incorporated in the United States and TVS Whirlpool, a company incorporated in India (respondents, initially the plaintiffs) entered into a joint venture in the year 1987 to sell machines. Prior to this, the machines were sold to the US embassy in India bearing the mark of whirlpool.

In the year 1986, N.R. Dongre and others (appellants, initially defendants) applied for the registration of the trademark ‘whirlpool’ with the registrar for selling certain goods which included washing machines and in the year 1988, the said trademark was advertised for the first time in the trademark journal. Subsequently, an objection was raised by the respondents which was dismissed by the registrar on the basis of lack of reputation and non-usage of the trademark ‘whirlpool’ in India. It was further said that the usage of the trademark ‘whirlpool’ by N.R Dongre for selling his goods would not create any confusion in the market.

The appellants herein were granted the registration in the year 1992. In 1994, the appellants invited dealers for washing machines under the trademark of whirlpool. The respondents purchased a washing machine from the appellants and discovered that it is of inferior quality when compared to the washing machines manufactured by the respondents. Aggrieved by this, the respondents filed an action for passing off and grant of an interlocutory injunction. The learned single judge of the Delhi High Court granted a temporary injunction in 1994 and thereafter, on appeal, a division bench of the same Court affirmed the decision of the learned single judge in the year 1995. Aggrieved by this, the appellants herein approached the Hon’ble Supreme Court.

Issues raised in the case

  • Whether or not the action for passing off is maintainable against the registered proprietor of a trademark by the respondents who are not the registered proprietors of the ‘whirlpool’ trademark concerning washing machines?
  • Whether or not the respondent acquired a transborder reputation?
  • Whether such transborder reputation transcends the territorial boundaries or not?

Contentions of the parties

Contentions of the appellants

The main contentions put forward by the appellants before the Court are –

  • That the respondents have no reputation in India provided that the mark ‘whirlpool’ was not in use within the territory of India. Since there is a lack of reputation and non-usage of the mark in India, the respondents have no right to stop the appellants from using the said mark.
  • That the usage of the trademark ‘whirlpool’ by the appellants for selling their goods would not create any confusion among the people as the said mark was not being used in India.
  • That there is a culpable delay, laches and acquiescence on part of the respondents. The appellants also stated that the respondents have abandoned the mark themselves. 

Contentions of the respondents

The main contentions put forward by the respondents before the Court are –

  • That the appellants only registered for the mark ‘whirlpool’ in 1986, however, the respondents have been using the said mark since 1956. The registration lapsed in 1977 but it is still prior to the earliest claim made by the appellants in 1986.
  • That the washing machines which are being manufactured by the appellants are of inferior quality when compared to the ones manufactured by the respondents. If the sale of such inferior quality washing machines is allowed then it will most likely affect the goodwill and reputation of the respondents.
  • That there is a lack of evidence that can be relied upon to establish that the appellants have in fact marketed the washing machines manufactured by them for any considerable period of time prior to the date of grant of injunction. 

Judgment of the case

The Hon’ble Supreme Court observed that the Whirlpool Corporation was the prior user of the trademark since the year 1937, however, the appellants applied for the said trademark only in 1986. The Court stated that the principle on which passing off action is based states that no person must sell his goods as the goods of another.

The Court further stated that ‘whirlpool’ is the registered trademark of the respondents since 1937 in 65 countries wherein they have continuously been in business. It was also noted that even though whirlpool products were only sold to the US embassy in India, however, the brand name ‘whirlpool’ was often advertised in international magazines having wide circulation in India and as a result, it was gaining a well-known reputation in India. Subsequently, the respondents acquired a transborder or spillover reputation with ‘whirlpool’ mark by which people identified washing machines and other such electrical goods.

The Court also stated that since the mark ‘whirlpool’ has become synonymous with washing machines and other such electrical appliances of the respondents, the people intending to buy their goods will most likely be confused or deceived if the appellants continue to sell their goods under the same mark ‘whirlpool’. If the appellant is allowed to sell his goods under the same mark then the respondents might suffer heavily as the goods sold by the appellants are of inferior quality than that of the respondents. Based on the above-mentioned grounds, the Apex Court upheld the decision of the Delhi High Court and dismissed the appeal with a cost of Rupees 10,000.

Few case laws referred to by the Court

Century Traders v. Roshan Lal Duggar & Co., 1977 – Century Traders i.e, the appellant manufactured voiles which were processed by Roshan Lal Duggar Co. i.e, one of the respondents. This arrangement went on for a period of two years i.e, from the year 1973 until 1975. The responsibility of the respondent as directed by the appellant was to add the trademark ‘Raja Rani’ on the voiles after they were processed. Later in 1976, the voiles manufactured by the appellant were being processed by another party. During the same year, the appellant found out that the other two respondents were using a similar mark for their voiles that were processed by Roshan Lal Duggar Co. and aggrieved by this, the appellant filed a suit in the Delhi High Court. The court ruled that neither the appellant nor any of the respondents can claim a proprietary interest in the said mark as there is prima facie evidence of earlier registrations of the same mark. Having no other choice, the appellant filed an appeal against the order of the Delhi High Court. After considering the appeal, it was held that in an action of passing off the registration of a mark is irrelevant and to establish a case of passing off, the manufacturer has to prove the prior use.

Kamal Trading Company v. Gillette UK Limited, 1988  – The Gillette Company and its subsidiaries did business at a global level which included the manufacturing and sale of safety blades, shaving brushes, shaving cream, safety razors, etc since 1901. The respondent herein being a subsidiary of the Gillette Company, had been using the registered trademark ‘7 O’CLOCK’ for their goods since 1913. Later, the respondent entered into a collaboration agreement with an Indian company i.e, Indian Shaving Products Ltd., for the manufacture and sale of safety razor blades in India. The said agreement was entered into because of the import restrictions imposed after 1958. However, as per the said agreement, the said Indian company was allowed to use the trademark ‘7 O’ CLOCK’ including the word ‘EJTEK’

In the year 1985, the respondent realized that the appellants were selling toothbrushes bearing the trademark ‘7 O’ CLOCK’. Consequently, the respondent filed a suit before the District Court for an injunction to restrain the appellants from manufacturing, selling or offering for sale the toothbrushes and any other similar goods bearing the trademark ‘7 O’CLOCK’. The District Court granted an interim injunction in favour of the respondent and restrained the appellants from using the trademark ‘7 O’CLOCK’. As a result, the appellants filed an appeal before the Hon’ble High Court of Bombay. In this case, it was held that even though the goods of a particular manufacturer are not available in a particular region for a certain period of time the goodwill or reputation of such manufacturer still exists. More importantly, it is irrelevant as to whether the goods are being sold or not in a country, if the manufacturer by means of advertisements in media makes it known to the people that a particular product belongs to their brand. This case established that trading in India is not a mandate to protect one’s goodwill.

Wander Ltd and Anr. v. Antox India P. Ltd., 1990 – In this case, there was a dispute regarding the trademark ‘Cal-De-Ce’ (a vitaminsed calcium gluconate tablet) between Wander Ltd. i.e, the appellant and Antox India P. Ltd., i.e, the respondent in the matter of granting an injunction. It was held that in an appeal before the Division Bench against the exercise of discretion by the Trial Court, the appellate court shall not interfere with the exercise of such discretion of the Trial Court and substitute its discretion except where such discretion has been exercised arbitrarily, or capriciously or perversely or where the court has failed to act upon the settled principle of law regulating the grant or refusal of interlocutory injunctions.

WWF International v. Mahavir Spinning Mills Ltd, 1994  – An action for passing-off was brought by the plaintiff, i.e, World Wildlife Fund (WWF) International to stop the defendant, i.e, Mahavir Spinning Mills Ltd. from using the plaintiff’s mark and artistic device in respect of their threads. In this case, it was held that merely because a party has never manufactured any products in India, it cannot be restricted from acquiring the reputation or goodwill in its trademark. However, before seeking relief for passing off, a manufacturer has to prove that a certain reputation or goodwill exists in their mark among the people of the country.

William Grant and Sons v. McDowell & Co. Ltd., 1995 – William Grant & Sons Ltd., the plaintiff filed an action to restrict McDowell & Co. Ltd., the defendant from copying the trade dress of GLENFIDDICH Scotch whisky, a product of the plaintiff. The plaintiff claimed passing off and trademark infringement alleging that the defendant used a label with a similar trade dress as the GLENFIDDICH label, that includes a green bottle, stag, thistles devices and a black cylindrical carton. However, the defendant denied the allegations of the plaintiff regarding passing off and trademark infringement. In this case, it was held that for the grant of the injunction, it is essential that some material discloses the fact that the public associates the product or mark in dispute with that of a particular manufacturer. This case deals with the general nature of trade dress and what constitutes passing off. 

Critical analysis

In the present case of N.R. Dongre and Ors. v Whirlpool Co. and Anr., 1996, the Hon’ble Supreme Court through its division bench held that mere advertisement of a trademark was sufficient enough to establish local use and goodwill even if there is no physical presence of goods in the Indian market. This case clearly supported the transborder reputation concept of a mark even against the registered proprietor of the trademark.

However, the Apex Court through a division bench in the case of Toyota Jidosha Kabushiki Kaisha v Prius Auto Industries Ltd. (2017) came up with an opposing decision. It was stated that the reputation and goodwill of a mark have to be established in the Indian market to attain well-known status in India.

The incongruity established between the cases of N.R Dongre and Pirus Industries is yet to be explained by the Apex Court. Since both the cases were decided by division benches of the Hon’ble Supreme Court, the only way out is to determine this issue by appointing a bench having higher strength than that of a division bench.

Conclusion

For the first time in the Indian legal regime, the concept of well-known marks and transborder reputation was discussed in detail through the case of N.R Dongre and Ors. v Whirlpool Corporation and Anr in 1996. This case laid down that the registration of a trademark is not an essential requirement to establish a successful action of passing off. It further laid down that in case of misuse, the owner of a well-known mark can seek an injunction.

References


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