Trades are increasing at a quick pace as the economy grows. The traders of a trade associate themselves with a brand or mark by which the products and services of traders are known to the general public at large to symbolise and recognise the products and services associated with the trade. Trademark refers to this mark or name.
The Trade Mark Act of 1999, as amended by the Trade Mark Rules of 2002, grants trade mark rights. These rules and regulations give the holder of a registered trademark and the person whose application for registration in the Trademark registry is pending a plethora of rights. The person whose trademark registration application is pending may prohibit the use of similar or identical marks using law of passing off of trademark in India.
Understanding Trademark Infringement and Law of Passing Off of Trademark in India
The law of passing off in trademarks in India refers to the legal concept where one individual sells their goods under the guise of another person’s goods, leading to potential confusion or deception among consumers. This action can be addressed by the owner of the trademark that is being misrepresented. Passing Off serves to protect the reputation and goodwill connected to an unregistered trademark.
When a registered trademark faces unauthorised usage or infringement, it constitutes a case of trademark infringement. Conversely, if an unregistered trademark is subject to unauthorised usage, it is considered a case of Passing Off. It’s important to note that Passing Off is not a statutory remedy, but rather a remedy rooted in common law.
Different Types of Passing Off of Trademark in India
Under the law of passing off of trademark in India, two types of passing off exist as given below:
Extended Passing Off
Under the law of passing off in trademark in India, extended Passing Off is a legal concept that encompasses a specific form of Passing Off. This form involves instances where a defendant engages in misrepresentation regarding a certain quality of products or services, leading to damage to the plaintiff’s goodwill. An illustrative example of extended Passing Off can be observed in the case of Erven Warnink vs. J Townsend & Sons (Hull) Ltd. In this case, the creators of advocaat took legal action against manufacturers of a similar beverage, not entirely identical to advocaat, yet successfully marketed as advocaat throughout the market. The misrepresentation in this case harmed the goodwill of the creators.
Reverse Passing Off
Under the law of passing off of trademarks in India, reverse passing off constitutes another category of Passing Off. In this scenario, an individual or trader sells, markets, or produces products or services belonging to another person or business entity, with the intention of portraying their own business as an affiliated branch of the original person or business.
Essential Elements of Law of Passing Off of Trademark in India
The law of passing off in trademark in India involves three crucial elements, often referred to as the Classical Trinity. These elements were reaffirmed by the House of Lords in the case of Reckitt & Colman Ltd v Borden Inc. These elements are as follows:
1. Misrepresentation
For applying the law of passing off of trademark in India, the plaintiff must demonstrate that the defendant has engaged in false intention or misrepresentation. This misrepresentation typically involves the defendant attempting to make the general public believe that the goods or services they provide are actually affiliated with the plaintiff. The misrepresentation should lead to actual confusion or deception among the public.
2. Goodwill
Secondly, the plaintiff needs to establish that their products, services, or their person have gained a reputation associated with the specific mark used. The defendant’s use of an identical or similar mark should create confusion among the public regarding the origin of the goods or services, linking them to the plaintiff. The concept of goodwill was broadly defined in the case of Trego vs. Hunt.
3. Damage
Also, to seek legal recourse and halt the infringing party’s actions, the plaintiff must prove that they have suffered actual or reasonable business loss due to the defendant’s alleged misrepresentation under the law of passing off of trademark in India. Demonstrating this loss can be challenging, often involving an examination of the financial records of both parties. The potential for loss is sufficient to establish damage to the plaintiff’s goodwill. Therefore, the plaintiff is obligated to prove that the defendant’s misrepresentation has harmed their goodwill or caused a decline in their reputation.
So, for a successful case of Passing Off in India, these three essential elements – misrepresentation, goodwill, and damage – need to be demonstrated by the plaintiff.
Remedies Under Law of Passing Off of Trademark in India
When a case of trademark passing off occurs in India, there are several remedies available to the plaintiff to protect their rights and reputation:
1. Injunction
The primary remedy sought under law of passing off of trademark in India is an injunction, which restrains the defendant from further using the plaintiff’s trademark or damaging their goodwill. An injunction is a powerful tool to prevent both registered and unregistered trademark infringement.
Types of Injunctions
Anton Piller Order: This order allows the plaintiff to inspect the defendant’s premises to prevent destruction of evidence related to the trademark in question.
Mareva Injunction: This injunction freezes the defendant’s assets, preventing the dissipation of property to ensure that any future judgment can be enforced.
Interlocutory Injunction: Commonly granted, it restrains the defendant from ongoing trademark infringement. In the case of unregistered trademark infringement, it prevents further violation of the plaintiff’s rights.
Perpetual Injunction: This injunction permanently bars the defendant from engaging in activities that violate the plaintiff’s exclusive trademark rights. It is typically granted at the conclusion of the infringement lawsuit.
2. Destruction of Infringing Goods
Courts can order the destruction of goods that bear the infringing trademark or branding, preventing their distribution or sale. The defendant may also be required to disclose accounts related to such goods.
3. Damages and Lost Profits
The plaintiff can seek compensation for the loss incurred due to passing off. This includes both actual financial loss and the loss of reputation associated with the trademark.
The remedies under law of passing off of trademark in India includes a range of injunctive orders to prevent further infringement, including Anton Piller, Mareva, interlocutory, and perpetual injunctions. Additionally, the court can order the destruction of infringing goods and award damages or lost profits to the plaintiff as compensation for the harm caused by passing off.
Defences Available to the Infringing Party Under Law of Passing Off of Trademark in India
When facing a case of trademark passing off in India, the infringing party can avail themselves of various defences to counter the allegations. These defences include:
1. Dissimilarity or Lack of Confusion
The infringing party can argue that the sign, name, or other marks they are using are not similar or specific enough to cause confusion with the plaintiff’s goods or business. Establishing dissimilarity is crucial in defending against claims of passing off.
2. Absence of Goodwill
If the infringing party can show that there is no goodwill associated with the mark they are using, it weakens the plaintiff’s case. Goodwill is an essential element in passing off claims, and proving its absence can be a defence strategy.
3. Consent or Licence
The infringing party can assert that they have obtained consent or licence from the plaintiff to use the mark in question. If the plaintiff has given explicit permission or has encouraged such usage, it can undermine the passing off claim.
4. Independent Right to Use
The defence of an independent case of passing off involves the infringing party arguing that they have built their own reputation and goodwill in connection with the mark, independent of the plaintiff’s rights. They may assert that their usage doesn’t necessarily rely on the plaintiff’s established goodwill.
5. Dissimilarity of Goods or Services:
If the goods or services offered by the plaintiff and the infringing party are entirely distinct, the infringing party can argue that there is no likelihood of confusion among consumers. This defence is particularly strong when both parties are sharing a similar or same trademark but catering to different markets.
These defences allow the infringing party to challenge the passing off claims made against them by demonstrating differences in terms of trademark usage, goodwill, consent, independent reputation, or dissimilarity of goods or services. Each defence aims to weaken the plaintiff’s case and establish that there is no actionable passing off occurring due to the defendant’s actions.
Final Thoughts
Understanding the law of passing off of trademark in India is important in safeguarding intellectual property rights in India. The three key elements, misrepresentation, goodwill, and damage form the core of passing off cases. Effective remedies as mentioned in this blog are available to protect the rights of trademark owners.
