VNC Corporate & Legal

Laws related to Infringement/Passing-off of Trademark in India.

TABLE OF CONTENTS

  1. INTRODUCTION
  2. PASSING OFF
  3. INFRINGEMENT
  4. DIFFERENCE BETWEEN INFRINGEMENT AND PASSING OFF
  5. ELEMENTS AND CASE ANALYSIS
  6. LANDMARK JUDGEMENTS
  7. CONCLUSION
  8. REFERENCES

 

INTRODUCTION

Every single brand in the world have carved a niche for themselves in the market with gigantic goodwill. Uniqueness is what defines a trademark, it can be in the form of a picture, word, shape etc. a unique trademark enables the customer to identify a particular company. This is why it is important to prevent other companies from misusing the trademark which is exclusively owned and used by the owner. There are two ways in which legal action can be taken in case of any violation namely, infringement and passing off. It might be of interest to consider the difference between aforementioned two grounds for seeking legal protection. Both are applied in different scenario.

PASSING OFF

Passing off is “making false representation likely to induce person to believe that the goods or services are those of another.” The trademark is not deceptively identical to the trademark of another company and also create a confusion in the minds of the customer which leads to the severe damages to the company. It is common law tort which is used specifically for unregistered trademark. The law of passing off is mentioned in section 134(c) of the Trademark act, 1999. This prevents one person to disguise his goods as that of another person.  In the case of Honda Motors Co. Ltd v. Charanjit Singh and others [i]laid modern elements of passing off.:

  • Misrepresentation
  • Made by a person in the course of trade
  • To prospective of his or her ultimate consumer of goods or services supplied by him or her
  • To injure the goodwill of another business
  • Cause actual damage

INFRINGMENT:

Trademark is nothing but a logo, symbol which distinguishes one product from another. Infringement occurs when person who is unauthorized uses the trademark. As stated above the law of passing off is only for unregistered trademark whereas trademark infringement is for the registered trademark. Section 29 of the trademark act, 1999 deals with the infringement of the trademark, according the said section it states that a person uses the same trademark which is registered by another company or person and creates confusion in the minds of people, it will be liable for the trademark infringement. In the famous case of Apple Corps v. Apple Inc., the Beatles found the Apple Corps music before Steve Jobs used the same word for his company. Steve Jobs was sued by the Beatles and later he agreed not to enter the music company by paying compensation. But the case again arose when Apple Inc. launched iTunes, again the suit was filed and the case was resolved when Steve Jobs agreed to purchase the trademark rights from Apple Corps.

 

DIFFRENCE BETWEEN INFRINGMENT AND PASSING OFF:

Trademark infringement and passing off are both related to the infringement of rights of the authorized uses, however, certain differences between the two are noted as below

  1. Infringement is a statutory remedy provided under section 28(1) of the Trademark act, 1999 for which registration of a trademark is important, whereas passing off is a common law remedy and in passing registration of a trademark is not required.
  2. The other difference between both is that for passing off it is not essential for the defendant to use the trademark infringement of the plaintiff to bring an action of passing off but in trademark infringement, it is not the same.
  3. In case of trademark infringement it protects exclusive rights of the registered owner whereas in the case of passing off protects only limited interests.

In the case of Cadbury India Limited and Ors. V. Neeraj Food Products[ii], the High Court of Delhi explained the difference between passing off action and an action for trade mark infringement as under:

  • An action for trade mark infringement is a statutory remedy and on the other hand, an action for passing off is a common law remedy.
  • The use of the trade mark of the plaintiff, by the defendant, is also a prerequisite in the case of an action for infringement while it is not a necessity of an action for passing off.
  • In an action for infringement of the plaintiff’s trade mark, it is immaterial that the outfit, outer covering and other written marks on the goods originate from a different source than that of a registered proprietor’s trade mark. The liability of the defendant in such a case may be absolute. However, in case of passing off of trade mark, the defendant may escape liability if he can show that the material added by him is sufficient to distinguish his goods from that of the plaintiff’s goods.
  • In an action for infringement, the Plaintiff on account of it being a registered trade mark in dispute claims to have an exclusive right to use the mark concerning those goods. However, a passing off by a person of his goods as those of another, in essence, is an action of deceit.

Both trademark infringement and passing off laws are very important for the goodwill of one’s business. As a registered trademark is known to be as a property and same cannot not be used by other companies. In the same way, passing off arises when there is a misrepresentation and mainly there is an intentional damage caused. The remedy provided is both the scenario is generally the same. Lastly, the comparison brings us to the conclusion that registering a trademark is always a better way as statutory confers the proprietor with exclusive ownership of the mark. Moreover, in the case of infringement, allows the owner to raise a claim for damages.

MEANING OF PASSING OFF

According to Duhaime’s law dictionary, Passing Off is “making some false representation likely to induce a person to believe that the goods or services are those of another.”(1)

In simple language, passing off means when a trader/business person /or some other person make false representation to his/her customer or consumer, to make him/her believe that the goods or services he/she is providing is of another person.

To avoid this kind of practice, Law of Passing-Off was passed which is covered under Intellectual Property Rights in India. The law of passing off is provided under Section 134 1 (c) of Trademark Act 1999. (2) And Section 27 of the Trademark Act 1999 provides a common law remedy. It is a common-law tort which is used for unregistered trademark rights ( a trademark which has not been registered under trademark or patent office is known as an unregistered trademark).

The law of passing off prevents one person from disguising his goods or services as that of another person.

In the beginning, the concept of passing off was not very broad, it has gone under many changes since time. At first, the law of passing off was related to goods only. That one person cannot misrepresent goods as those of others.

At later stages with goods, business and services were also considered under this. Subsequently passing off was extended to professions and non-trading activities.

In today’s time, it is also applied to unfair trading and unfair competition in which one person’s activity causes damage to the Goodwill of another person or group of people.

The basic question which arises in the law of passing off is whether the person’s conduct is to mislead the public or to cause confusion between two business activities.

Elements of Passing-Off

There are three main elements of Passing-Off which were stated in the famous case law of Reckitt & Colman Ltd. v/s Borden Inc.[iii] by the house of lords, which are as follow

  • Reputation
  • Misrepresentation
  • Damage

In the above case law, it was stated that a plaintiff must establish

  1. Goodwill or reputation attached to his/ her goods or services
  2. He/she should prove that a misrepresentation is done by the defendant.
  3. He should prove that he/she has suffered a loss due to the defendant’s misrepresentation.

 

Modern elements of Passing-Off

  • Misrepresentation
  • Made by a person in the course of trade
  • To prospective customers of his or her ultimate consumers of goods or services supplied by him or her
  • To injure the Goodwill of another person’s business
  • Causes actual damage to the plaintiff’s business Goodwill

The modern elements of passing off can be explained better with the case-law of Honda Motors Co. Ltd v/s Charanjit Singh and others.

 

Facts of the case:

In this particular case, Plaintiff was using the trademark ‘HONDA’ for his automobile and power equipment business, while on the other hand, the defendant was using the same trademark of ‘HONDA’ for his pressure cooker business. Looking at this plaintiff filed a case against the defendant.

Held in the case:

In this case, it was held that the use of trademark ‘ HONDA’ by the defendant causes confusion in the minds of people and hence liable for the law of passing off.

There are many cases related to passing off in India, some of which are:

  • Mahendra and Mahendra Paper Mills v/s Mahindra and Mahindra Ltd on 9 November 2001

 

  • Itc Ltd v/s Godfrey Philips India Ltd on 7 December 2010.

 

When does Passing Off arise?

The action of passing off arises when there are misrepresentation and harm to the Plaintiff’s existing Goodwill.

What should be established by the Plaintiff in a Passing Off action?

In a Passing off action, the plaintiff must prove that the trademark he/she is using for their business has a distinct identity for his/her product and if someone uses the same thing, it will create confusion in the minds of people and will cause harm to his/her business reputation.

Meaning of trademark and trademark Infringement

According to the Trademark Act 1999, Section 2 (1) (ZB) ” trademark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include the shape of goods, their packaging and combination of colours.”

Trademark is nothing but a logo, symbol, design, phrase, picture or something else which distinguishes one product from another similar kind of product.

Trademark Infringement is when a person makes unauthorized use of a trademark or service mark. As stated above the law of passing off is for unregistered trademark whereas trademark infringement is for the registered trademarks.

Section 29 of the Trademark Act 1999 deals with trademark infringement. It says that if a person uses the same trademark which is registered by another company or person and creates confusion in the minds of people, it will be liable for the trademark infringement.

One of the trademark infringement case:

  • Apple Corps v/s Apple Inc[iv]

It is a long-run battle between the two major companies and one of the famous case law for trademark infringement. In this case, the Beatles found the Apple Corps music before Steve Jobs used the same word for his company. Steve Jobs was sued by the Beatles and later he agreed not to enter the music company by paying compensation. But the case again arose when Apple Inc. launched iTunes, again the suit was filed and the case was resolved when Steve Jobs agreed to purchase the trademark rights from Apple Corps.

 

Difference between Passing Off and trademark infringement. 

  1. Trademark provides protection to registered goods and services whereas Passing Off provides protection to unregistered goods and services. This is one of the most important differences between Passing Off and trademark infringement. But the point to be noted here is that the remedy provided in both Passing Off and trademark infringement is the same.
  2. The other difference between Passing Off and trademark infringement is that in Passing off it is not essential for the defendant to use the trademark of the plaintiff to bring an action of passing off but in trademark infringement, it is not the case.
  3. In the case of trademark infringement, the burden of proof lies on the plaintiff.
  4. Passing off is a common law remedy whereas Trademark infringement is a statutory remedy.
  5. For trademark infringement prosecution under criminal remedy is quite easy as compared in the case of Passing off.
  6. For the case of Passing off, the remedy has to be sought under Section 20 of Civil procedure code 1908, whereas trademark infringement suits can be solved under Section 134 of the Trademarks Act 1999.
  7. For trademark infringement registration is essential whereas for passing off Goodwill, damage, misrepresentation is essential.

There are two famous cases for the difference between trademark infringement and passing off which are stated below:

The distinction between these two was stated by judge Clauson in the case of Listen LTD. v/s Harley. [v] In this case, he opined that if you are restraining the infringement of a registered mark, you can restraint the man from using the mark, but if you restraint him from selling the article under the same label word which plaintiff or other person has been using without differentiating it from the Plaintiff’s good, then it is a different thing.

 

Another case is S. Syed Mohideen v. P. Sulochana Bai[vi]  In this case, both the appellant and respondent were the registered owner of ‘Irrutukadai Halwa’ but the respondent proved in the Supreme Court that it is not just about the use of trademark but it has become a household name for her family as they have been selling this halwa since the 1990s and have a different reputation to which court said that as it has become the Goodwill of respondent thus no one can use this particular trademark and it was also observed that passing off right is a broader remedy than trademark.

CONCLUSION

The Law of Passing-off and trademark infringement is very important for the reputation and goodwill of one’s business. If any person finds that his trademark registered or unregistered is being misused he/she can directly approach the court. A registered trademark is known as the property of the company and is directly associated with the Goodwill, reputation and quality of products. No one can use the same trademark which is used by other companies. In the same way, passing off arises when it injures the Goodwill of one’s business when there is misrepresentation and thirdly in the damages. The remedy provided in both the cases that are in the case of passing off and infringement is generally the same.

 

 

REFERENCES-

[i] 101 (2002) DLT 359

[ii] 142 (2007) DLT 724.

[iii]  [1990] 1 All E.R. 873

[iv] [2006] EWHC 996 (Ch)

[v] (1929) 4 RPC 11 (2)

 

[vi] 2016 (66) PTC 1