Mellowing down the rigour of the concept of ‘trans‐border reputation’ to accommodate bona fide domestic use: The Indian and Sri Lankan perspectives

Abstract In this era of global trade and digital communication, where geographical borders between states have become virtually redundant, the ‘aura’ of well‐known trademarks easily transgresses national borders. As an upshot of this, the reputation and goodwill attached to well‐known trademarks have become less and less commensurate with the territorial boundaries of individual states. This raises the question of whether strict adherence to the bedrock principle of ‘territoriality’ is both apt and justifiable in the backdrop of modern commerce—not only from a trademark holder's perspective but also from a consumer‐centric viewpoint. Although the judicially crafted concept of ‘trans‐border reputation’ is often hailed as a promising solution to this problem; sometimes it postulates a too‐liberal approach to protecting the interests of the foreign trademark owners. Most significantly, the concern has been raised that the application of an unbridled doctrine of ‘trans‐border reputation’ may unduly thwart the interests of local entrepreneurs. Thus, the argument that the ‘priority of innocent use’ by a local trader should not be superseded by the trans‐border reputation of a foreign well‐known trademark cannot be easily ignored. This paper aims to critically evaluate the application of the trans‐border reputation concept within the Indian and Sri Lankan legal landscapes, discussing in detail the implications of the landmark cases determined by the Indian and Sri Lankan judiciaries. Most importantly, it seeks to introduce a mechanism for minimizing prejudice to the bona fide domestic users of marks, by employing ‘bad faith’ as a balancing tool.