Introduction
Trademark as an intellectual property is any name or symbol attached to any good or service that has its own identity and can be distinguished from competitors. The Trade Marks Act of 1999 governs all kinds of trademarks and its rules in India. One important legal concept in trademark law is “passing off.” Passing off, in standard terms, is a tort where one sells his product in the name of others.
Passing off in trademark is in place to safeguard the interests of unregistered trademarks, protecting the interests of consumers from the confusion or misrepresentation that the passed-off product causes and safeguards the interests of the business to whom the good or service belongs. This notion first came into force from the English case law of Perry v Truefitt (1842), where the Court held that one could not sell his products or goods under the pretence that they belonged to another, thus articulating the tort of passing off. It established a precedent that is still very crucial in the law concerning trademarks, whereby it always supported the basis of the perception that brands should have their protection against misrepresentation while making businesses look pure or authentic to clients.
What is Passing Off in the Trademark Act?
Though there is no direct provision under the Trademark Act for defining passing off, section 27 of the Act still gives a commoner a right to initiate legal proceedings in cases where any person tries passing off any goods or service as that of another person. Passing off arises when any individual misled the customers into believing that any good or service of his is, in fact, the goods or service of another person, thereby causing an illegal use of a trademark or trade name. The Act recognizes passing off as a means for the protection of unregistered trademarks and to prevent unfair competition. It provides that if someone uses a mark deceptively similar to another mark, likely to cause confusion amongst consumers or dilute the original trademark’s distinctiveness, the right owner can seek remedies. This would include an injunction against such use and damages for harm suffered.
In addition, passing off is not only against goods and services but extends to the whole line of wider ranges of commercial activities. This includes trade, business, and other non-commercial ventures. This reveals the dynamic process of unfair practices and why misrepresentation must be prevented on different economic and social grounds. Under the Indian Trade Marks Act of 1999, passing off is an essential tool in protecting the rights of the trademark owner and maintaining the integrity of the trademarks.
Different type of Passing Off under the Trademark Act
Passing off can occur under trademark law in several forms, each of which raises its problems and after-effects for the trademark owner. These categories illustrate the different ways the wrongful use of trademarks causes confusion and infringes on the goodwill of the rightful owners.
Direct Passing Off
This means using a mark that is either identical or deceptively similar to another party’s mark when a probability of confusion exists among consumers. It is, therefore, an unmistakable and intentional misrepresentation of the origin of products or services and may damage the reputation and distinctiveness of the original trademark.
Indirect Passing Off
Indirect passing off is a situation where a person uses a trademark or trade name that, although not identical, creates confusion or association with another party’s mark. This occurs when there are subtle similarities in the overall impression of the marks, which causes consumers to mistakenly attribute the goods or services to the wrong source. Indirect passing off is complex regarding determining the quantum of confusion and the resultant loss to the mark’s goodwill.
Reverse Passing Off
The other person substitutes his goods for the original trademark owner’s goods and sells them to the customers under another name. At some point, the public begins to believe that these goods are of him. The public then starts linking the qualities of the original trademark owner’s product with substituted products. The original trademark, over some time, gets diluted goodwill.
Requirements of Passing Off under Trademark Act
Under the Trademark Act of 1999, a passing-off action would succeed only if it shows that there was misrepresentation and that such misrepresentation caused harm to the goodwill of the legitimate trademark owner. These are the two elements on which a passing-off case would be proved in Court.
Goodwill And Reputation
The existence of goodwill and reputation of the unregistered trademark is essential to raise a passing-off claim. The applicant should prove that the disputed mark has gained awareness and familiarity amongst consumers, hence a good reputation and goodwill in the market. Such goodwill will protect against unauthorized use and misrepresentation of the trademark owner’s rights.
Misrepresentation
Misrepresentation is an essential aspect of a passing-off claim. This implies that it refers to an act whereby someone, without authority, uses a trademark to confuse the public regarding where goods or services are from. The complainant has to demonstrate that such action by the defendant leads or would lead to confusion among members of the public who connect the defendant’s products with the trademark owner’s trademark.
Damages
Along with misrepresentation and a likelihood of confusion, the applicant must also show that there is some actual or potential harm. These can be financial losses, damage to the trademark’s reputation, or dilution of its distinct characteristics and goodwill. Evidence of such harm is paramount in proving passing-off.
Distinguising Trademark Infringement from Passing Off
Trademark infringement and passing off are two very different legal constructs. Trademark infringement is considered a statutory remedy, whereas the grounds for passing off are based upon common law. Both, though, serve the purpose of trademark integrity and the interest of business through different legal prisms. A registered trademark owner’s exclusive rights are violated through trademark infringement. Trademark registration is essential for any infringement claim as it entitles the owner of the mark to the exclusive right to use the mark about the particular products or services it is registered with. Trademark infringement occurs when a person uses a mark that is confusingly similar to the trademark about its similar products and services, giving rise to confusion in consumers’ minds.
Passing off, however, allows the owner of an unregistered trademark to cause an action against an unauthorized use of his mark. Passing off is quite different from infringement because it does not depend on registration but on the goodwill and reputation attached to the unregistered trademark in establishing a claim. The difference here is that this registration status makes the trademark in question. Trademark infringement refers to using registered trademarks illegally, while passing off refers to the improper use of unregistered trademarks. To effectively resolve trademark disputes and ensure one adheres to the relevant legal provisions, such a distinction must be well understood.
Legal remedies to counter Passing Off in Trademark Law
Several remedies are available to the trademark owner in passing-off cases. Such remedies constitute a vital instrument in protecting the trademark’s integrity and compensation for losses that might have ensued due to passing off. Among such remedies include the following:
Injunction
In most passing-off cases, the injunction is one of the main remedies a plaintiff seeks against the defendant, restraining him from unauthorized use of his trademark. An injunction acts as a protective order that saves the claimant’s goodwill from further misuse by the trademark. Section 135 of the Trade Marks Act states that an injunction may be awarded in case of passing off, and such an injunction may assume any form.
- Anton Piller Order– It is that form of injunction which can give partial order for the defendants’ premises for the search and has been ordered if there is an apprehension that the defendants destroy such items in their premises containing the plaintiff’s trademarks.
- Mareva Injunction – This freezes the defendants’ assets, preventing them from disposing of their properties and shunning the judgments.
- Interlocutory Injunction– An interlocutory injunction is usually granted during the trial. It temporarily restrains the defendant from doing certain things until the case is finally decided.
- Permanent Injunction– A permanent injunction is part of the final judgment. It permanently restrains the defendant from infringing the rights of the trademark owner.
Destruction of Infringing Goods
The Court may order the seization and destruction of goods infringing on the plaintiff’s trademark. This will bring the misuse of the trademark to an end. The defendant must surrender and destroy the infringing items to avert further damage.
Damages and Account of Profits
The rights holder can seek damages for the losses incurred by passing off. This shall include actual pecuniary loss as well as damage to goodwill. Courts, while determining the character and measure of the losses sustained, may award damages or an account of profits acquired by the respondent through the wrongful use of the trademark.
Case Laws
Syed Mohideen v. P. Sulochana Bai [(2016)
This judgment of the Hon’ble Supreme Court made it clear that an action for passing off can be filed even against the registered proprietor of a trademark. The respondent had been selling halwa under the name ‘Iruttukadai Halwa’ since 1900 in Tirunelveli and had obtained trademark registration. The appellant, who registered the name ‘Tirunelveli Iruttukadai Halwa’ in 2008, also sold halwa under this trade name. The Court pointed out that trademarks subsist independently of registration, so statutory rights may be granted but cannot supplant the rights of an earlier user. Where two registered proprietors are involved, common law determines which has superior rights. The Court decided in favour of the respondent. It found that the respondent’s earlier user rights were superior to the appellant’s registration and that the appellant could not interfere with the goodwill of the respondent.
Britannia Industries Ltd. v. ITC Ltd. (2017)
ITC Limited is the respondent, which had filed a suit against Britannia Industries Limited as the appellant for the trade dress of Britannia’s digestive biscuits infringing ITC’s product Sunfeast Farmlite All Good – No Added Sugar and No Maida Digestive Biscuits. The case was based on the trade dress, precisely the colour combination. The Court ruled that it is challenging to claim exclusivity over a colour combination unless it can be proven that the combination is uniquely associated with the product. In this case, the respondent could not prove the distinctiveness of the colour combination. Since the first element of passing off, establishing goodwill, was not established, the Court dismissed the claim without considering misrepresentation or damage.
Nirma Limited v. Nimma International and Anr. (2010)
In this case, Nirma Limited (plaintiff), who was the registered owner of ‘Nirma’ and ‘Nima,’ had alleged trademark infringement and passing off by Nimma International and Anr., who used the marks ‘Nimma International’ and ‘Nimson’s Nima Care’ for cosmetic products. The Court found that ‘Nimson’ and ‘Nirma’ were different in phonetics and meaning and belonged to various customer groups. Hence, it was held that ‘Nimson’ was not deceptively similar. However, the defendants’ use of ‘Nimma’ was bound to confuse the minds of customers associating it with the plaintiff’s well-established marks. The Court restrained the defendants from using marks ‘Nimma’ or ‘Nima’ or any other deceptively similar mark, thereby sustaining the plaintiff’s strong reputation and registration rights.
Conclusion
Protection of business interests, therefore, goes hand-in-glove with trademark registration. However, passing off confers protection on the owner of unregistered trademarks. While intricate, passing off protects the overall look and feel of goods and services even when the trademark is not registered. It extends protection far beyond trademark infringement. Instead of the trademark, it focuses on the similarity of goods or services. Regarding the similarity in process and remedies for registered and unregistered marks passing off, the proving process is more strenuous for the former because proving the latter can be more complicated than establishing goodwill. However, the law comforts those owners with unregistered trademarks by providing them with fair protection without misusing their trademarks.
