Passing Off and infringement under Trademark

In this age of consumerism, businesses are often known to profit off other brands’ identity and reputation by deceiving customers and selling the ‘same’ product at a lesser price range. Such practices are unethical and often impair the original business. These products are often inferior in quality and could be harmful to consumers too due to lack of guarantee.

Trademark

Any symbol, logo, color, phrase, etc. which acts as an indicator of a product becomes the ‘trademark’ or brand of that particular product. Oftentimes brands associated with a product colloquially become the name of the product itself. For instance, we ask shopkeepers for xerox and not a photocopy; Colgate is a toothpaste brand and surf is a detergent company, surf excel and not a synonym for detergent.

What is the Trademark Act, 1999?

Companies must protect the brand value they represent because if businesses copy their idea they could not only lose customers but also malign their reputation if those products turn out to be faulty.

Thus, a trademark forms an integral part of a business’s identity, market value, branding, and overall reputation. It benefits and protects the consumer too as it’ll help them in identifying and developing a trustful relationship with that particular product or service.

The Trademarks act was passed in 1999 in India, it complies with the TRIPS Agreement of the World Trade Organization to protect its trademarks.

The Trademark Act, 1999

Companies must protect the brand value they represent because if businesses copy their idea they could not only lose customers but also malign their reputation if those products turn out to be faulty. Thus, a trademark forms an integral part of a business’s identity, market value, branding, and overall reputation.

It benefits and protects the consumer too as it’ll help them in identifying and developing a trustful relationship with that particular product or service. The Trademarks act was passed in 1999 in India, it complies with the TRIPS Agreement of the World Trade Organization to protect its trademarks.

Since India follows common law practices it is not essential to register a trademark. Section 135 of the act provides statutory remedies for both registered and unregistered trademarks. However, registering it will give them a lot of benefits. Two types of remedies are available under the act

• Trademark infringement
• Passing off

Meaning of trademark infringement and Passing off

Trademarks in India are guaranteed under the Trademarks act, 1999. As per Section 28, registering under this act will give proprietor exclusive rights and benefits to his registered product. Trademark Infringement happens when these exclusive rights are violated.

Passing off, on the other hand, is a common law and is used to protect unregistered trademarks. This normally happens when a product is deceptively similar to the plaintiff’s product i.e. passing off as something else hence confusing the consumers. Although Passing Off has not been explicitly mentioned anywhere in the Act there are enough common law remedies available to get an understanding.

According to the landmark case, Perry v Truefitt [(1842) 49 ER 749] the basic reasoning behind Passing off is “A man is not to sell his goods under the pretense that they are the goods of another man”

Conditions for claiming damages

Trademark infringement has been described in Section 29 of the Trademarks Act. Conditions to claim damages under Trademark infringement are:

• an unauthorized person uses a trademark that is identical or deceptively similar to a registered trademark
• identical or deceptively similar hence causing confusion amongst consumers.

Section 27(2) of the Trademark Act, 1999 does provide for remedies for unregistered trademarks. They can oppose an application for registration but they will have to prove prior use.

To claim remedies under Passing off three prerequisites need to be fulfilled:

• Trademark has to be reputed or well known amongst consumers especially in the area where the said knockoff is being distributed.
• There has to be a misrepresentation i.e. the product has to be deceptively similar to the plaintiffs hence confusing the consumers
• This causes injury, loss, and ultimately damage the business of the company.

Is fraud essential for passing off- Although most passing off cases have fraudulent intentions it is not a necessary element for the right of action? One simply has to prove that the defendant’s product/ good can be passed off or deceived to be the plaintiffs.

Benefits of registering- In the case of trademark infringement, the first condition would not be required since registration gives it recognition not only in India but in many countries all over the world. Hence it speeds up the process of getting a remedy. It also ensures that a brand similar to ours does not get registered.

As per the landmark case James Chadwick & Bros. Ltd. v. The National Sewing Thread Co. Ltd [AIR 1951 Bom 147] in case violation of a registered trademark is being alleged then only proof required is if the mark in question is identical to that of the plaintiff’s or not. If proved to be identical then without a doubt infringement has taken place. If it is not identical then it has to be least deceptively similar.

The case also held that although the products in question do not have to be placed side by side the relevant surrounding circumstances which could contribute to the confusion have to be taken into consideration

The burden of proof- According to the Bombay High court case Thomas Bear and Sons (India) v. Prayag Narain [(1940) 42 BOMLR 734] we have to test the probability of deception on a person who takes at least reasonable precaution and not someone who can easily be misled.

As per the Kaviraj Pandit Durga Dutt case [1965 AIR 980], the Supreme Court held that the burden of proving infringement lands on the plaintiff. He has to prove that the product the defendant used is deceptively similar

The Delhi High Court case of Atlas Cycle Industries Ltd. v. Hind Cycles Limited [ILR 1973 Delhi 393], says to prove infringement the plaintiff has to prove that the mark in question is visually phonetically or otherwise such a close resemblance to that of the plaintiff’s work that it could easily confuse or deceive someone.

Jurisdiction and remedies

Both civil and criminal remedies are available in case of trademark infringement and there are no time constraints for filing a suit.

For a civil remedy, a suit can be filed under section 134 of Trade Mark Act, 1999 in the district court. The jurisdiction could be either where the plaintiff’s head office is or where the cause of action arose. If an infringement has been proved the court can give remedies such as

• Injunction or stay order against the use of the trademark i.e. stop the defendant from using the trademark
• Give an account of the profits that the infringer got by selling the copied products
• Claim for appropriate damages such as loss of business
• If the court sees fit the court can grant an ad interim ex parte injunction i.e. if applied an application under Order 39 of CPC you will get a temporary injunction if there is sufficient evidence to prove infringement

Criminal remedies are available in Chapter XII of the Trademark Act,1999. If a person uses a property that is trademarked either deceptively or unauthorizedly will be held guilty under Section 102 of the act. The penalties for the same are mentioned in Section 103 including a punishment ranging from 6 months to three years with fine ranging from 50,000 to 2 lakhs.

In case they are held guilty for contributory infringement i.e. indirectly involved in the act punishments range from 6 months to 6 years with a fine ranging from 50,000 to 2 lakhs.

Under Section 105 if a person is held guilty under Section 103 and 104, he will be liable for subsequent offenses too

Differences (tabular)

The High Court of Delhi elaborated on the differences between passing off and trademark infringement: 

Frequently Asked Qestions:

Is registration mandatory for a trademark?

No, it is not mandatory but it is recommended as it provides an added layer of protection and also speeds up the process of seeking remedy in case of infringement.

Can you get a criminal remedy for passing off?

No, since passing off comes under the common law, you can seek remedies as per the Civil Procedural Code (CPC).

On whom does the burden of proof fall?

The plaintiff has to prove that there has been an infringement and also how the defendant’s product is identical or similar to the plaintiff’s trademarked product.

For a registered trademark is it also necessary for the plaintiff’s product to be well known at the area where the infringement took place?

No, since it is registered they only have to prove it is similar to seek remedies.

Edited by Shikhar Shrivastava

Approved & Published – Sakshi Raje