Remedy for Passing off Trademark
keywords – passing off, trademark, intellectual property rights, remedies under trademark
written By – Diksha Bhargava
Introduction
As the economy is growing, and with the increasing pace of start-ups in the country it is important to understand the concept of trademarks. To symbolize and recognize the products and services associated with the business, the business associate itself with the name or mark by which the products and services of the business are known to the general public. This mark or name is known as a Trademark. Trademark is usually a logo, emblem, formatting, term, image, or something which differentiates one product from another similar product. In India, the Trade Mark Act, 1999, read with the Trade Mark Rules, 2002, provides rights related to the Trademark, these rules and regulations give various rights to the holder of the registered Trademark and to the person whose application is pending for Registration with the Trademark registry.
However, this article is not about Trademark but a specific aspect of Trademark i.e. Law of Passing-off. In this article, we will learn about the meaning, applicability, and remedies relating to this principle in India.
What is passing off
Law of Passing-off is applicable when a person whose application for Trademark registration is pending and such person wants to stop the use of similar or identical marks by the Law of Passing Off of Trademark.
When any infringement for a registered Trademark happens, then a suit for Infringement can be filed, on the other hand, if the Trademark is not registered by the owner and then the Infringement happens in such case, it becomes a case of Passing Off. The Passing-Off of a Trademark is not a statutory remedy, instead, it is a common law remedy.
The principle of Passing Off was laid down for the first time in the case of Perry vs. Truefitt [1842]. In the Trademarks Act, 1999, the provisions dealing with Passing Off are given in Section 27 (2), 134 (1)(c), and Section 135. Under Section 134 (1)(c) of the Trademark Act, 1999, the provisions related to trying the suit or issuing an injunction are provided.
Essentials of Law of Passing off
There are three essential elements of Passing Off. In Reckitt & Colman Ltd v Borden Inc. the House of Lords reiterated and established the three elements of Passing Off. These elements are also known as the Classical Trinity. These three elements are as follows:
- Misrepresentation
The defendant must misrepresent in a way that there is actual confusion or deception among the common public. The plaintiff is required to show false intention or misrepresentation on behalf of the defendant.
- Goodwill
It should be proved by the plaintiff that the mark used by the other person holds some kind of reputation, and such an act of using an identical or similar mark will cause confusion to the public with the specific goods or services of the plaintiff. The concept of goodwill is more broadly defined in the case of Trego vs. Hunt.
- Damage
In order to stop the infringing party, the offended party should prove that he/she has suffered an actual or reasonable loss due to the alleged misrepresentation of the infringing party.
Remedies for Passing Off
To succeed in passing off claims, the plaintiff must show that the misrepresentation made by the defendant, has damaged the goodwill. In a passing-off action, the aggrieved party can claim any of the following remedies:
- Apply for an injunction prohibiting the business from using your trademark or goodwill: The injunction is an effective remedy in the prevention of Infringement of registered trademarks or unregistered trademarks. Section 135 of the Trademark Act, 1999 furnishes injunctive relief.
- Damages on account of profits or Damages: The amount of damages is granted by the court after considering the actual loss of the owner of the trademark. The purpose of the profit account is not to punish the defendant but to avoid unjust enrichment resulting from passing off.
- Custody of materials infringed: This sentence means that the court may ask or give an order to the infringer to deliver all the goods which are labeled with the brand name that is a well-known trademark or registered trademark or the court may direct the authorities to destruct all the goods in which trademark is used by the infringer.
Case Laws
- Honda Motors Co. Ltd. v. Mr. Charanjit Singh and Ors (2003)
Brief facts
In this case, the plaintiff is Honda Motors a well-established company over the world in the field of electronic appliances, cars, and motorcycles. The defendant company was manufacturing pressure cookers and used the name “HONDA” as a trademark. The defendants here have also applied for the registration of this trade name however the registrar rejected it. Then, the plaintiff filed suit claiming that the action of the defendant was equivalent to passing off. The appealing party contended that his company has acquired a reputation around the world by the name of Honda.
Judgment
The bench applied the test of Goodwill in this matter and held that the act of the defendant caused damage to the reputation of the plaintiff as the defendant’s trademark “HONDA” for a pressure cooker is deceptively similar to that of the plaintiff’s. It creates puzzlement for the purchasers by manipulating their psyche. Hence, the court restricted the usage of the trademark “HONDA” by the responding party.
- Smithkline Beecham v. V.R. Bumtaria (2005)
Brief facts
SmithKline Beecham claimed that the acts of the defendants amount to trademark infringement, passing-off, etc. of its registered trademark ARIFLO, which is being used for pharmaceutical purposes. The responding party was using the trade name ACIFLO in India, which was similar to that of the Appealing party. However, the appealing party was not doing any type of business in India and contended that they have a trans-border reputation if they are not doing business in India, many advertisements get published in the medical journal regarding their businesses.
Judgment
The bench gave its decision in the favor of the defendant and held that mere publication of advertisements does not create a trans-border reputation. Such reputation if any is only confined to that class of people that have subscribed to the said specialized journals, and the same can’t be said to be extended to the general consumers. Hence, any ill effect inflicted on the corporation in such a situation can’t be equivalent to passing-off. In this case, a compromise was made between the plaintiff and the defendant, and the plaintiff was granted permission to use the trade name ACIFLO in India.
- Akash Arora v. Yahoo Inc 1999 ARB L.R. 620
Brief facts
Yahoo Incorporation, the owner of the well-known trademark with Yahoo and the domain name Yahoo.com, both the trademark and the domain name have a distinctive name, goodwill, and reputation. Yahoo.com registered with Yahoo Inc Network Solution in 1995 and offers a whole range of web-based services. The trademark Yahoo had been registered in 69 countries. However, Yahoo Inc had not registered its domain name in India. Mr. Akash Arora commenced offering web-based services similar to those offered by Yahoo.com under the name Yahoo India. Yahoo Inc sued Akash Arora for using a trademark deceptively similar to its own and passing off his services as those offered by Yahoo Inc.
Judgment
Yahoo Inc contended that Akash Arora used the domain name of Yahoo to offer services that are similar to those of Yahoo Inc and then it sought to cash on the goodwill of Yahoo Inc. It is very possible that an Internet user gets confused and deceived, believing that both the domain names, Yahoo and Yahoo India belong to Yahoo Inc. It was, therefore, argued by Yahoo Inc. that Akash is liable for passing off. Since the two trademarks ‘Yahoo!’ and ‘Yahoo India!’ was almost similar and the latter also offered services similar to those offered by the former, the court held Akash liable for passing off and restrained him.
Conclusion
Passing off and trademark infringement suits are not very apart. The only difference is that trademark infringement deals with registered rights, and passing off with unregistered rights.
Although the process and remedies of passing off suit are the same for both registered and unregistered marks, however, the burden of proof is greater when it is for unregistered marks as it becomes difficult to establish goodwill and reputation.
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References
- Passing off by Clarke Willmott
- The Tort of Passing Off by Diva rai, iPleaders.
- Law of Passing off of Trademark in India by Sakshi Sarda, Corpbiz.
- Passing Off and Infringement of Trademark, Taxguru
