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Bolt Technology v. Ujoy Technology: The Reputation and Goodwill Crossover

Republished By Plato
Republished By Plato

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[This post is authored by SpicyIP Fellow Tejaswini Kaushal. Tejaswini is a 3rd-year B.A. LL.B. (Hons.) student at Dr. Ram Manohar Lohiya National Law University, Lucknow. She is keenly interested in Intellectual Property Law, Technology Law, and Corporate Law. Her previous posts can be accessed here.]

The Delhi High Court, on 30 November 2023, determined that a mark’s global reputation or asserted goodwill alone would not suffice to establish a trans-border reputation claim. In a (rather verbose) verdict in Bolt Technologies OU v.  Ujoy Technologies Pvt. Ltd. delivered by a division bench (DB) comprising Justice Yashwant Varma and Justice Dharmesh Sharma, the bench emphasized that the claimant suing for the tort of passing off based on transborder reputation needs to establish substantial reputation and goodwill for the mark within the relevant territory. This case has brought to the forefront the discussion on transborder reputation, goodwill, and territoriality principles again (previously discussed on the blog here, here, and here). 

The 118-paged order by the DB is set to have far-reaching implications for cases involving the issue of transborder reputation. While the DB has underscored and highlighted the jurisprudence backing the role of goodwill and reputation for establishing transborder reputation, it considered them as two separate factors. This comes at a time when goodwill and reputation are generally being treated as synonymous terms in today’s global interconnected commercial world. 

The Background

Bolt Technology OU, an Estonian platform for ride-hailing and various services, alleged that its “BOLT” brand, established in 2018, carried a substantial international reputation. Bolt contended that using the “BOLT” mark for EV charging stations by Ujoy Technology Private Limited in India infringed on its established reputation, supported by data indicating prior app access by drivers in key Indian cities. 

A Single Judge Bench (SB) had noted earlier this year that Bolt’s limited engagement in providing EV charging services in select locations across the globe did not warrant its trans-border reputation, particularly one extending to India. The questions at hand for the DB encompassed whether Bolt possesses a substantial reputation and goodwill in India to allow a claim for ‘passing off.’ 

What The DB Held

The DB endorsed the prior decision by the SB that had denied an interim injunction favoring Bolt Technology OU against Ujoy’s use of the “BOLT” mark in Indian EV charging stations. The DB noted that the assertion of global reputation or goodwill is insufficient for the courts to answer a transborder reputation claim. Rather the claimant must prove substantial reputation and goodwill in the concerned country among a sizable and noteworthy number of concerned consumer segments. The court held that adopting this standard is essential to avoid stifling local industry and balance global brand reputation with the interests of national enterprises and consumers. Since Bolt Technology OU lacked a commercial presence in India, its app downloads in the country were rendered inconsequential as users could not access Bolt’s services locally, failing to establish a “substantial reputational spillover” into the Indian market

Reputation and Goodwill: Not Really ‘Tomato-Tomahto’?

In coming to the above finding, the DB considered whether goodwill and reputation are to be given distinct connotations. The court inter alia referred to the understanding in the Intex case where it has been explained that goodwill represents the value tied to the name and requires a local presence in the country where the claim of passing off is made, while reputation exists even without a local business presence. 

This conundrum of whether goodwill and reputation are synonymous or not along with the need of the physical presence of the business enterprise in India witnessed an impressively thorough discussion by the DB from both international and national perspectives. Following the Australian (Conagra Inc. V. McCain Foods (Aust) Pty Ltd. (1992)) and English precedents, the court has previously held in N.R. Dongre v. Whirlpool Corpn. (1996), Milmet Oftho Industries v. Allergan Inc. (2004), and Cadbury UK Limited Vs. Lotte India Corporation (2014), that a claim of passing off in a cross-border reputation case is viable independent of goodwill. MAC Personal Care Pvt. Ltd. & Anr. v. Laverana GMBH and Co. KG & Anr (2016) has further held that a product need not have a “commercial” presence in India for a passing-off action, However, in the subsequent Intex Technologies (India) Ltd. & Anr. Vs. AZ Tech (India) Ltd. (2017) case, the court shifted focus, asserting that goodwill within the jurisdiction is essential for passing-off actions and marks will lack protection unless there are sales and an established market in India.  

In the same year, the position was reverted in Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. (2017), where the Indian Supreme Court endorsed the broader concept of goodwill as elucidated by Prof. Christopher Wadlow as in the English case of Starbucks (HK) Ltd. v. British Sky Broadcasting Group (2015), considering the “customer base” in a jurisdiction rather than a “physical place of business”. 

In the present case, the DB highlighted the enhanced significance of reputation and concluded that mere global reputation or asserted goodwill of the mark is insufficient to establish a transborder reputation. The DB differed from the SB’s view that mere reputation would not be enough and significant goodwill needs to be established. While the SB has emphasized the territoriality principle very narrowly, the DB instead recognized the evolving trends in global commerce, internet knowledge dissemination, and increased travel, aligning with the perspective of “goodwill and reputation” rather than the “goodwill or reputation”. The Court considered the impact of technology that has eroded traditional boundaries, supports the acknowledgment of marks with a global reputation, transcending the need for localized support within local markets. It rejected the insistence on goodwill as a prerequisite for a passing-off action and highlighted that accepting reputation as relevant doesn’t contradict the territoriality principle. 

The Conundrum Analysed

The DB has adopted appropriate reasoning to curate the order passed by the SB by placing goodwill and reputation into distinct categories and insisting on proof of reputation to justify the claim of transborder reputation. As mentioned above, the conventional distinction between goodwill and reputation had till now been largely considered obsolete, given the global extent of businesses and the interconnectivity of trade. This is so since, initially, the Indian Courts didn’t distinguish between ‘reputation’ and ‘goodwill’ as their English counterparts did. This lack of differentiation led to a limited discussion on the standalone importance of the reputational aspect associated with trademarks.

While trademarks are territorial rights received for after registration in a country, even those marks not registered locally can demand protection against passing off as well-known trademarks. However, adopting the strict “territoriality principle” requires foreign companies to demonstrate a customer base in India to establish goodwill which can potentially put India at odds with its commitments under Article 6bis of the Paris Convention (Well–Known Marks).  Article 6bis stipulates that countries must, either automatically or upon request, refuse, cancel, and prohibit the use of trademarks resembling well-known marks to prevent confusion. This can further risk violating Article 16 of the TRIPS agreement (rights conferred on the owner of a registered trademark), which aligns with Article 6bis. Such a decision would have left owners of internationally well-known trademarks not yet registered in India with no legal recourse in the country, contradicting these provisions.

It would have raised significant concerns for potential foreign investors and might empower cyber-squatters to grab domain names, including trademarks of renowned companies not yet operating in India. Several local businesses may similarly benefit by using marks of foreign brands to unscrupulously build a domestic reputation when these companies do not have a local presence. At the same time, it would be unfair for local businesses that are using a mark, to suddenly be told they cannot, because a company with some international presence but with no real intention of coming to India, wants to protect their mark. The DB has progressively recognized the interconnectedness of markets to relax the territoriality requirement while also insisting on substantive proof of reputation among consumers.

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