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GLO
OBAL BRAN
B
DS IN
N INDI
IA
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Indian Economy and Globa
al Brands
Accordin
ng to one e
estimate 17
7% of the world’s population re
esides in In
ndia as it is
s the secon
nd most
populous country in the world
d after Chin
na. Out of the
t
total po
opulation of
o 1.2 billion
n, the midd
dle class
comprises more th
han 300 million. The sheer size has the po
otential to drive the Indian
I
econ
nomy in
the fastt lane. Thiis scenario
o has trans
sformed In
ndia into a destinatio
on forcing global bra
ands to
venture, explore and exploiit the gran
nd pool off pristine resources/m
r
marketing capacity at hand.
ng to AT K
Kearney FD
DI Confidence Index,, India is ranked as the secon
nd most atttractive
Accordin
destinattion in the w
world after China to bring
b
in fore
eign direct investmentt.
The libe
eralization o
of Indian economy,
e
w
which
was initiated pursuant to the new Industrial
I
P
Policy
of
1991, has gradually resulted in attractin
ng global brands
b
such
h as NIKE, REEBOK, ADIDAS,
A
CA
ARTIER,
B
MAR
RKS & SPEN
NCER, cloth
hing retailerr/s such as
s BENETTON, ZARA, LACOSTE,
L
M
MANGO,
HUGO BOSS,
LOUIS VUITTON,
V
G
GIVO
etc., to venturre into the Indian ma
arket throu
ugh their Indian franc
chisees.
Addition
nally with tthe setting up of wes
stern style malls in almost all the major cities
c
of India, the
attitude and style o
of the India
an urban po
opulation is
s also fast changing.
c
y, in the latter part of 2012, India
an governm
ment took another
a
bold decision to open up
p Indian
Recently
economy to the foreign retail players (b
both for sing
gle and mu
ultiple brand
d stores). Thus
T
majorr brands
ng positions to take advantage of
o the new liberalizatio
on policy.
are takin
nd now
Then an
d above, th
he transitio
on from slow moving agrarian ec
conomy to the one be
ecoming
However, as stated
st sought affter, has be
een gradua
al. Through the 60’s, 7
70’s and much
m
of 80’s
s, the policy of the
the mos
Indian polity
p
was m
more inclin
ned towards
s socialist views
v
and it was focu
used toward
ds development of
the indiigenous industry. Du
uring this phase the governme
ent policy encouraged
d developm
ment of
Indian Industry
I
an
nd brands. The policies at that time were
e bit hostile
e and rigid
d which led
d to the
brands such
s
as IBM
M and COCA COLA to close down
n their shop
ps in India during the tumultuous phase
of the 70’s.
7
Therea
after for more
m
than a decade In
ndia remain
ned a close
ed door eco
onomy. Also
o, there
were cle
ear restrictiions in plac
ce for use of
o the foreig
gn brands. The investtment clima
ate offered little or
no incen
ntive to the
e foreign brrand owners
s to license
es their marks for use by Indian companies as no
hermore, tthere were
e restriction
ns on esta
ablishing
Payment of royaltties was allowed thereon. Furth
o
or m
majority own
ned subsidiiaries by fo
oreign comp
panies.
wholly owned
The glob
balization of
o world eco
onomy lead
d to change
e in the mindset of th
he Indian governmentt. In the
year 19
991 Indian governmen
nt embarke
ed upon lib
beralizing its industria
al policy an
nd opened certain
sectors of the economy to th
he foreign players tho
ough in a c
controlled manner.
m
By
y 1993, the
e Indian
ment brought about po
olicy chang
ge allowing use of fore
eign brands
s in India through fran
nchising
governm
arrangements.
Hybrid Brands in
n India
As the Indian
I
marrket was grradually op
pening, the early nine
eties witnes
ssed a larg
ge number of joint
ventures
s in autom
mobile secttor coupled
d with transfer of te
echnology.
Interes
stingly, suc
ch joint
ventures
s gave rise
e to the fo
ormation of
o what we
ere called as hybrid brands wh
hereby the foreign
company and its Indian partn
ner would combine
c
th
heir main corporate names and form such brands.
xamples off such marrks are TAT
TA-TIMKIN for bearin
ngs, KAWASAKI-BAJAJ for moto
orcycles,
Good ex
HERO-H
HONDA for two wheele
ers, LML-V
VESPA for two wheelers, MARUTI-SUZUKI for
f cars, SWARAJMAZDA for automo
obiles, LEHAR-PEPSI ffor aerated
d drinks etc
c. The India
an market would hold
d such a
eed to deve
elop such hybrid
h
bran
nds in turn
n risking
sway for the foreign players that they even agre
their ow
wn brand na
ame’s distin
nctiveness per se. In terms of brand familiarity it was
s thought to
t be an
easy wa
ay to get closer
c
to In
ndian consu
umer. Howe
ever the ye
ear 1993 onwards
o
an
nd pursuant to the
Uruguay
y Round Ag
greement and consequ
uent to the economic reforms in India, com
mpanies hav
ve more
or less given
g
up on
n registratio
on/use of th
he hybrid brands.
b
Localiza
ation of Global Bran
nds in India
Localization of the global brands in India is an imp
portant issu
ue when it comes to acceptance
a
of wellw
bra
ands by the Indian co
onsumer. On
O the surfface it seem
ms that acceptance of
o global
known western
brands should
s
be e
easier given
n that English is widely spoken. However In
ndia has 22
2 official lan
nguages
beside English
E
and
d Hindi. Fu
urther each
h state in India
I
has different
d
history, lang
guage, and culture
making it difficult for brand owners to
o devise a strategy that fits all. What perrhaps adds
s to the
complex
xity is that in India the
e old and th
he new modern world exists side
e-by-side.
ernational brand
b
that has achieved widesprread local acceptance in India is McDonald’s
s. If one
One inte
was to learn
l
from McDonald’’s experience it seems
s if you spend time in
n convertin
ng yourself into an
Indian company
c
th
hat caters to
t Indian taste,
t
you stand
s
a better chance
e to succee
ed. The res
staurant
chain ha
as made an
nd strives to make numerous effforts to loca
alize its me
enu. In Indiia it offers Chicken
McGrills and McAlo
oo Tikki burrgers with mint
m
sauce which suits
s the Indian
n taste bud
ds. Further the
ny also kee
eps in view
w the religious susceptibilities o
of Indian people
p
whic
ch, of courrse is a
Compan
sensitive
e issue for Indian peo
ople.
McDonald is not alone,
a
Peps
si’s snack division
d
had
d to come out with snack
s
food preparatio
ons that
d or rather suited to the Indian palate
p
such
h as potato chips with powder of salted mint leaves
matched
sprinkled on them or assortm
ment of saltty treats made
m
from rice flakes to the exte
ent that they used
d/mark KURKURE (wh
hich means
s crisp in Hiindi). The latest in thiis list is QU
UAKER bring
ging out
the word
Oat recipes and ready mix to suit Indian
n taste buds.
In the automobile
a
e sector, es
stablished internation
nal giant players such
h as Ford, Toyota, Hyundai,
H
General Motors have even gone to the extent of setting up of ma
anufacturin
ng plants in
i India
ng cars tha
at are in more consisttent with th
he attitude
e and mind set of Indians to go for fuel
producin
efficientt vehicles and
a
at the same time
e introducing features and mak
king cars th
hat that arre more
attuned to the roug
gh and dus
sty Indian conditions.
c
pular strate
egy for ma
any brands
s has been to globaliize logos, brand nam
mes and
To sum up a pop
arks while introducing
g product variations at the loc
cal level. Thus,
T
it is apparent that
t
the
tradema
Compan
nies are ma
aking an effort
e
to be
e accepted as local brands haviing global appeal. Hindustan
Lever (a
a subsidiary
y of Unileve
er) has quitte successffully built on
n that strattegy. Not many
m
consu
umers in
Indian realize
r
that LUX, SURF
F or SUNSIILK are global brands. These bra
ands are no
ot only well known
to urban
n population but also to
t rural and
d are accep
pted as loca
al brands.
Judicial Trends - Protection of Globa
al Brands in India
t
70’s an
nd 80’s due
e to restric
ctive investment clima
ate, India was
w
not a priority
p
ma
arket for
During the
multinattional corporations. Resultantly
R
companies
s were not willing to invest in protection of their
IPR’s. In
n many cas
ses the com
mpanies would not ev
ven seek to
t register their brand
ds as they saw no
potentia
al to use th
hem in nea
ar future. The
T
judiciall thinking was
w
also tilted toward
ds protecting local
industry
y. Thus unle
ess a foreig
gn brand wa
as in use in
n India, the
e courts would generally not interfere its
use by an
a Indian c
company. The
T
court prrocedures were
w
compllex and lengthy. On th
he ground that
t
the
foreign brand was not in use
e the courtt would con
nclude thatt balance of
o convenience is in fa
avors of
c
T
Therefore, no
n interim relief would be grante
ed. Ultimattely the lon
ng time and
d delays
Indian company.
it would take in conducting a trial would
d mean thatt battle was
s as good as
a lost.
dicial thinkiing in the late 80’s to
o the exten
nt that in the
t
case
However there was a major shift in jud
Kamal Trading
T
Com
mpany vers
sus Gillette UK Limited
d, involving
g ‘Gillette’ company’s
c
7’O’ CLOCK brand
name co
overing saffety razors,, safety raz
zor blades, shaving crreams and brushes ettc., the cou
urt even
recogniz
zed brand’s
s residual reputation. The courrt took notte of the fact
f
that Gillette
G
Com
mpany’s
products
s under the
e brand na
ame 7’O’ CLOCK was available since
s
the ye
ear 1913 and
a
they ha
ad been
also sold in India through a licensing arrangeme
ent with th
he Indian company.
c
In
I the year 1985,
o know of the mark 7’’O’ CLOCK being used on brushe
es which
Gillette (the Plaintiiff Company) came to
ot of their manufacturre or under their licensing arran
ngement. This
T
led to brief exchange of
were no
correspo
ondence an
nd then the
e Plaintiff Company brrought a su
uit against the
t
Indian company. In reply
the Indian company contend
ded that th
here was no
n use of tthe mark 7 ‘O’ CLOC
CK after 19
958 and
er goodwill had accrue
ed it have been in fav
vor of the Indian
I
company as they are in business
b
whateve
since th
he year 19
982. The co
ourt accepted the co
ontention of
o the Plain
ntiff Compa
any that th
hey had
acquired
d worldwide
e goodwill and reputa
ation in the said trad
de mark an
nd the custtomers purrchasing
such goods would immediate
ely connect the goods to the Plaiintiff Comp
pany who were
w
the reg
gistered
e court rep
pelled the contention of
o the India
an company
y that the goodwill
g
owners of the trademark. The
pany stands
s extinguished due to
o non-use of the goods because
e of the
in favorr of the English comp
import restrictions
r
in place.
urt expresse
ed its disse
ent from th
he propositiion laid dow
wn by the UK court in
n popularly
y known
The cou
as BUDW
WEISER ju
udgment (1
1984 FSR 413)
4
which
h had laid down the principle namely thatt unless
there was
w
busines
ss activity in
i the local jurisdictio
on in the place
p
where
e passing off was alleged to
have be
een taking place, such
h an action cannot be
e maintaine
ed. The cou
urt while dissenting frrom this
principle
e observed that “it is
s not possiible to con
nclude that the goodw
will or the reputation
n stands
extinguished mere
ely because
e the good
ds are not available in the coun
ntry for some duratio
on. It is
necessary to note that the go
oodwill is no
ot limited to
t a particular country
y because in
n the prese
ent days
de is spread
d all over the
t
world and
a
the go
oods are tra
ansported from
f
one country
c
to another
the trad
very rap
pidly and o
on extensiv
ve scale. Th
he goodwill acquired by the manufacturer is not nec
cessarily
limited to
t the coun
ntry where the goods are freely available because
b
the
e goods tho
ough not available
a
are wide
ely advertis
sed in new
wspapers, periodicals,
p
magazines
s and in oth
her media. The resultt is that
though the
t
goods a
are not ava
ailable in th
he country the
t
goods and
a
the ma
ark under which
w
they are
a sold
acquire wide reputtation”.
her landma
ark Judgment passed in the yearr 1991 – Ap
pple Compu
uter Inc., v Apple leas
sing and
In anoth
Industriies, the co
ourt once again disse
ented from
m the BUD
DWEISER principle
p
an
nd recogniz
zed the
elementt of awaren
ness of the mark sans the physica
al presence
e of the goo
ods.
at reputatio
on and goodwill transc
cend bound
daries was once again upheld in another
The proposition tha
ar 1994, viz., Whirlpo
ool Corpora
ation v N.R
R. Dongre. Interestingly, the
landmarrk decision in the yea
Defenda
ants in this case had attained
a
registration of
o the mark
k WHIRPOO
OL. The cou
urt recogniz
zing the
trans-bo
order reputtation of the tradem
mark WHIRP
POOL held that “the Plaintiff was
w
trading
g in the
whirlpoo
ol products in several parts of the world and
d also send
ding the sam
me to India
a though in a
ociated with the Plain
ntiff was ga
aining reputation thro
oughout the
e world.
Limited circle, Whirlpool asso
The rep
putation wa
as traveling
g trans-borrder to Ind
dia as well through commercial publicity made
m
in
magazin
nes which a
are available in or brought into In
ndia. These
e magazine
es do have a circulatio
on in the
higher and
a
upper m
middle inco
ome strata of Indian society.
s
Washing mach
hine is a ho
ousehold ap
ppliance
used by
y the middle and upp
per class of the socie
ety. The Pla
aintiff can bank upon
n the trans
s-border
reputation of its prroducts washing mach
hines for th
he purpose of maintaining the pa
assing off action
a
in
gly in this case in sp
pite of the fact that the
t
Plaintifff’s registra
ation for th
he mark
India’’. Interesting
POOL had lapsed, the
e court did
d safeguard
d and prottect the in
nterest of the
t
foreign
n owner
WHIRLP
against passing offf at commo
on law.
n
of the
e above dec
cisions, the
e provisions
s for protec
ction of well-known marks
m
was included
Taking note
in the new
n
Tradem
marks Act that came into force in 2003. Section
S
2(1
1)(zg) defines a ‘well-known
tradema
ark’ as one
e “which in
n relation tto any goo
ods, means
s a mark which
w
has become so
o to the
substantial segment of the public
p
which uses suc
ch goods th
hat the use
e of such mark
m
in rela
ation to
oods would
d be likely to be taken as indica
ating a connection in the course
e of trade between
b
other go
those go
oods and a person usiing the marrk in relatio
on to the firrst mention
ned goods”.
Differen
nt field of activity/b
business
ms faced by
y global brrand owners in the Indian market is thatt due to
One of the common problem
ndiscriminately copied
d by Indian companiies for com
mpletely
populariity of theirr brands they are in
differentt or unrelatted goods. Incidence of well-kno
own brands
s being use
ed as part of corporatte/trade
name is
s quite com
mmon. It is
s quite challenging to stop such use particu
ularly wherre it is adopted for
complettely differen
nt or unrela
ated goods
s. The obvious argum
ment of the traders in such cases
s is that
there be
eing no com
mmonality of trade ch
hannels and end userrs of products or serv
vices, no co
onfusion
will be caused.
c
gain to arrrest this trend the co
ourts came
e to the re
escue of brrand ownerrs. In yet another
Once ag
landmarrk judgmen
nt delivered
d in 1994 in
n a passing off action brought by
y Daimler Benz,
B
manufacturer
of famous BENZ ca
ars againstt a compan
ny using the brand na
ame BENZ with pointe
ed star dev
vice, the
w
granting an inju
unction res
straining misuse
m
of the mark and
a
logo observed th
hat “the
court while
Tradema
arks law is not intend
ded to protect a perso
on who deliberately se
ets out to take
t
the be
enefit of
somebody else’s re
eputation with
w
reference to the goods esp
pecially so when
w
the reputation
r
extends
de”. The Ju
udge observ
ved that “th
he word BE
ENZ as a na
ame of the car would be known to
t every
worldwid
family that has eve
er used the
e quality ca
ar. The nam
me BENZ as
s applied to
o a car has
s a unique place in
o
who is conscious of existen
nce of cars//automobiles who wo
ould not
the worrld. There iis hardly one
recogniz
ze the name BENZ use
ed in conne
ection with cars’’.
ourt/s have
e clearly enunciated and
a
acknow
wledged th
he well-kno
own status of such
Thus the Indian co
a
how un
nscrupulous
s use of suc
ch marks – even thou
ugh in relattion to unre
elated good
ds – can
marks and
dilute th
he distinctiv
veness ass
sociated witth the marrk of such an
a internattional statu
ure. The criteria to
be entitled to claim
m such a prrotection
n
well e
established that the party
p
seeking relief must
m
establish by way
y of eviden
nce that
is also now
mark is well known
n and used globally an
nd that there was awa
areness of the
t
mark in
n India.
Conclus
sion
To sum up India is a growin
ng econom
my and has enormous
s business potential. The global brands
have be
een presen
nt in India for seve
eral decad
des now. The
T
issue of concerrn was of course
safeguarding and protecting interest of
o brand owners.
o
Th
he judicial thinking in
n this rega
ard has
one drastic change ov
ver the yea
ars. The po
ositive think
king on the
e part of th
he Indian judiciary
undergo
has encouraged fo
oreign comp
panies to venture
v
ope
enly into th
he Indian market
m
whic
ch is of ben
nefit not
c as well as
s it would lead
l
to creation of ne
ew jobs.
only to the brand owners but to the Indian public
e Indian co
onsumer is spoilt for choices
c
of products
p
wh
hich are intternational in nature, content
Also, the
and stan
ndards.
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