Infringement and passing off are two pillars of trademark litigation. Trademarks are any logo, design, graphical presentation of marks, a combination of logo and words or words with unique appearance (font style, font types). When any third party apart from the original owner of the mark that is the mark’s proprietor, uses the mark without prior authentic permission of the owner- it constituents the Act of infringement or passing off. 

The modus operandi of both these concepts is the same, and either way, there can be visible involvement of Courts or IPAB in dealing with the matters. However, when it comes to unregistered marks or well-known marks, no infringement suit can be maintained. It is clearly stated in the Act that to sustain infringement claims, it is important that marks have to be registered with the registry. Unless registered, the aggrieved party cannot file the suit for infringement. 

This creates a threat on those unregistered marks but is well-known in the industry for its quality and quality; they manufacture or sell. The Law has given recognition to these brands and has accorded them protection under passing off. This means that even if the brands are unregistered but well-known, and if anyone uses the brand name, which can likely kill the brand mark’s uniqueness, passing off suit can be filed against that person.

The first section of the Article talks about passing off and its constituents, and the second section deal with infringement of the trademark. 

PASSING OFF- PREVENTS PASSING OF YOUR MARK TO the THIRD PERSON.

An unregistered trademark is placed at the same footing as a registered trademark in matters connected with offenses, penalties, and procedural actions concerning IPR and Civil actions contemplated under Section 134 and 135.

Section 27 of the Trademarks Act, 1999 deals with the maintainability of the suit of passing off. It states that “wherever there is a possibility of marks being registered, if any third party uses the mark, then the action of passing off of goods can be maintained.”

In the case of Baltimore v. Mosesit was laid down that “the Act encourages and fosters competition, but does not certainly allow any dealer to use the reputation or goodwill of another person to trade and build a business using the reputation of another.”

Passing off aims to protect traders against any form of unfair trade practices by using the benefits of the reputations build and acquired by a rival trader. The Law does not allow any person to misrepresent his goods and business that are the same as the goods and business.

CHARACTERISTICS OF PASSING OFF:

According to Lord Diplock, there are five characteristics of Passing off to sustain the case:

  • Misrepresentation
  • Made in the course of trade
  • To the ultimate or prospective consumer
  • Which injures to damage the reputation or goodwill or the trader

 

  1. Causing actual damage to the trader.

Whether all these elements are present in the case is a matter of fact, and each case of passing off is tried by evaluating the case’s facts. It was stated in the case of Bata India Limited vs. Pyarelal and Co. that “it is a question of fact to determine which there was any misrepresentation which led to the passing of goodwill causing damage to the plaintiff.”

Passing off is a common law remedy; reliance is placed on English judgments to define what constitutes the Act of Passing off and how can the suit be maintained?

To quote the example stated in Ruston Hornby Limited V. Z Engineering Co, Supreme Court explained that.

It is not mandatory for the plaintiff to prove that defendant has used his goodwill and reputation to trade. The mere appearance of the mark is in itself sufficient to the similarity of goods and the probability of confusion between the goods.” 

GENERAL PRINCIPLES OF PASSING OFF:  

The Law of passing off can be given ina gist as– no man may pass off his goods as those of another. It has to be expressed in terms of the plaintiff’s element in such action has to prove to succeed. 

 

  1. Goodwill or reputation of the plaintiff in the industry
  2. Act of misrepresentation
  3. Damage suffered or ought to suffer if no action is taken.

 

    • “The Act of passing off is not limited to the sale of goods. Encroachment upon trade name or mark of the person for any category of trade- goods or services can be bought against passing off”. This principle was laid down in Taco Bell Corporation v. Taco Bell, and the Court upheld the same in Virgin Enterprises Limited vs. Virgin Paradise Airlines Training Private Limited.

 

  • When the defendant does business under a name which is sufficiently close to the name of the plaintiff’s  trading and that the name has acquired a reputation over the course of time, the use of a mark by the defendant may create confusion in the public at large that defendant and plaintiffs business is same, then the defendant is liable for the action of passing off.”  This was given in the case of Montari Overseas v. Montari Industries Limited.

 

    • Another principle laid down in the case of N.R.Dongre v. Whirlpool Corporation explains that even “if a trademark is registered and then it is brought into light that registered trademark is similar to well-known trademark- a brand with an established reputation, suit of passing off can be maintained on the principles of rights to equity.”
    • To prove a prima-facie case of passing off, it is sufficient to show that “the mark had an established reputation in the territory of India,” even if the brand has its operation spread over the world. This principle was established in  Apple Computers Inc vs. Apple Leasing and Industries. 

 

 

  • It is a well-settled law that “registration of a trademark is not mandatory to constitute an act of passing off” and “registration of a trademark is no defense.”  This was explained in the case of Century Traders v. Roshan Lal Duggar.

 

 

  • The Law of passing off applies wherever there is a prospect of confusion between marks or get-up and where the prospective consumer can be confused about the mark’s ownership.

 

  • The passing-off action may succeed even if the action of infringement fails.

 

  • An injunction for the suit of passing off can be granted restraining the defendant from using the well-known mark even if the mark is used in a different product line.

 

FACTORS TO BE CONSIDERED IN CASE OF AN ACTION FOR PASSING OFF:

 

  • Nature of the mark
  • Degree of resemblance or similarity
  • Nature of goods for which mark is being used
  • Goodwill and reputation of the mark
  • The similarity in nature, character, or performance of rival goods
  • Mode of purchase
  • Any other surrounding circumstances.

 

WHO CAN FILE PASSING OFF SUITS AND AGAINST WHOM? 

An owner of the well-known mark who has established his reputation in the industry, on becoming aware of any third party using the mark or apprehends to use the mark has a right to file the suit of passing off against the person who uses the mark.

DEFENCES WHICH CAN BE TAKEN IN THE CASES OF PASSING OFF:

If the defendant can prove any one of the following and establish a clear case of no infringement, then courts have rejected the application of passing off- the defense has to be established with concrete evidence and proved beyond reasonable doubts. Some of the defense which have been accepted by the Court are:

  1. Plaintiff business is fraudulent or forbidden by Law.
  2. Mark of the plaintiff is not distinct or unique.
  3. Defendant has prior use of the mark.
  4. Defendants mark represents his name- the right to use the name is the defendant’s right.
  5. The defendant’s use of the mark is the bona fide description of the character or quality of goods or services.
  6. Plaintiff has abandoned his mark.
  7. Any other defenses.

Reverse passing off:

Another concept in passing off where the defendant markets the plaintiff’s product or service as his product. The defendant represents the product offered by the plaintiff to be his product and tries to drive the profits and pass off his business as the plaintiff’s business.

Remedies of passing off:

  1. An interim and permanent injunction
  2. Anton-Piller order
  3. Mareva injunctions
  4. Perpetual injunction
  5. Infringed goods to be destroyed and all the seal, logo, mark used in the packaging or seeling of the goods to be passed off to the plaintiff
  6. Sue for the accumulation of profit and loss of business.

To read the second part of the Article dealing with infringement of the trademark.