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The Principle of Territoriality and Well-Known Trademarks

The Principle of Territoriality and Well-Known Trademarks

The Principle of Territoriality explained

Laws and legislations are aspects of civilised society that are subject to the concept of jurisdiction – they are only applicable in the country or state where they are implemented. Of course, there are laws that most countries have in common – despite this, a state can only be applied within the country’s borders. Intellectual property rights are not an exception to this – not only are the legislations that govern the application and registration of Intellectual property confined within particular borders, but the effect of the registrations is as well; it is limited to the territory of the state – the principle of territoriality. 

Essentially, a trademark that has been registered and is in use in country A will not be applicable in country B, in most circumstances. This principle allows countries to tailor and establish laws that are suited to their level of technological and economic development, and in ways that aid in achieving domestic and societal goals such as the growth of home-based industries and public health. 

The concept of territoriality was perpetrated in the 17th century in a response to the emergence of states and nations, especially from a euro-centric perspective. It is stated by Lundstet, the Swedish Jurist notes, the history of patents and trademarks emerges from the “privileges” that were granted to European sovereigns dating back to the 15th century. These privileges were strictly limited to specific territories under the control of the sovereigns, and these were used to benefit and aid the development of the society in the direction that the sovereigns desired. The international system regarding intellectual property and attached rights developed as a result of this principle – with the increase in cross-border trade, states felt the need to protect the IP rights of their citizens. 

For this purpose, various bilateral treaties were signed by states, leading to the establishment of two multilateral treaties on international intellectual property rights. They are commonly referred to as the Paris and Berne conventions. These treaties upheld the principle of territoriality while giving states the liberty to decide their laws and regulations, as long as the principle of national treatment, which mandated equality for all nations in the eyes of the rest, was respected. 

This, in turn, led to the incorporation of IP into the international law system through the world-trade organization’s agreement on Trade-related Aspects of Intellectual Property. Unlike the former two conventions, the TRIPS agreement encroached upon the principle of territoriality by implementing minimum national requirements; however, it does provide flexibility as well, keeping in mind the differences in development that vary with the country. Hence, despite globalization and ease of access to products and services, the concept of territoriality is still a crucial part of international intellectual property law – meaning that lacunae between the desire to create uniform protection and laws and to tailor laws to suit the needs of particular states still exists. 

Well-Known Trademarks

Trademarks are signs made up of words, symbols, designs, art, jingles, or a combination that are capable of distinguishing a brand from others. They can be either registered or unregistered by their owners – the principle of territoriality applies to this intellectual property as well; most trademarks are confined to the territories of the states that they are registered in. However, there are certain exceptions to this rule or principle – the principal one being well-known trademarks. As the name suggests, and according to Section 2(1) (zg) of the Trademarks Act 1999, these are trademarks that have garnered recognition internationally, and amongst a reasonable portion of the public that use the product or service in question. 

They are considered to be an intellectual phenomenon – a show of a firm’s capacity to develop, increasing value for themselves as well as other stakeholders. It is essential to note that well-known trademarks are a result of significant amounts of effort and investment, and such must be protected under the law. If any other brand were to use a trademark that is the same or deceptively similar to that of a well-known trademark, consumers and customers are likely to associate the former with the latter – this is a violation of the IP rights that the trademark owner holds, as well as it could cause damage to the image of the well-known brand. 

In this context, The Trademark Registry is prohibited under Indian law from granting trademarks that resemble well-known trademarks, even if they are not registered in India. Section 11(6) of the Act provides various factors that the Registrar has to take into consideration while determining whether a trademark is well-known or not, including the duration, extent and geographical area of use, promotion and registration of the mark, as well as the extent to which the mark has been recognised as a well-known one in the past by other jurisdictions. Section 11(7) states that the registrar must take into account the number of potential and actual customers of the mark, the persons involved in any channel of promotion as well as the business circles that the mark appears in. Section 11(8) holds that if the mark has been held to be a well-known mark in any public section or court by any registrar in India, then it should be considered as such nationwide. 

Landmark Indian Cases

    • Daimler Benz Aktiegesellschaft vs Hybo Hindustan – the Court held that the Benz trademark (the Plaintiff’s) had a trans-border reputation and goodwill and that using said mark was an infringement of the owner’s rights and granted an injunction against the defendants.                                                                       
    • Whirlpool Co & Anr vs N R Dongre – the Plaintiff, Whirlpool did not have a registered trademark in India, but did sell their products here. The Defendants were using the impugned mark on their machines – the Court held that Whirlpool had established a cross-border reputation through promotion and granted an injunction against the defendants.                                                                                                                    
    • Caterpillar Inc. vs Jorange – the defendant attempted to use the mark “CAT”, which is significant to the firm Caterpillar (the Plaintiff) on clothing apparel. It was contended by the plaintiffs that there could be confusion regarding the brand of the products due to the deceptively similar marks; the court was inclined to agree, and the defendants were prohibited from using the mark “CAT”. 

Intellectual property is undoubtedly unlike other forms of property, and unsurprisingly, so are the laws that regulate them and the rights surrounding them. While the principle of territoriality was key in the development of international IP laws and continues to be useful today in various circumstances, the concept of well-known trademarks is as important when it comes to IP rights. Considering the sheer effort and investment that firms and brands put into developing and expanding their reach and increasing value, it is essential for states to recognize and reward this; it is also crucial that they prevent others from using the goodwill and work that is not their own. If there were no laws that provide the aforementioned protection, then there could be a stagnancy that develops with regard to innovation, which in turn could lead to both monopolisation and decreased motivation. 


Hence, the protection of well-known trademarks as well as the implementation of the principle of territoriality is key to the IP regime. In an ideal situation, there would be a perfect balance of international IP protection and laws that are tailored to suit the country – the international community is working toward this; as is seen in the rapid developments of the intellectual property sector.

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