As you are aware that a Trade mark may be defined as a lawfully protected abstract, word, symbol, color, mark, slogan or a mixture of those related to an organization or a selected product that differentiates it from the others accessible within the market.

We know that “Passing Off” is an actionable wrong and treated as a common law tort, in which a person passes off his goods as the goods of another. It means that a person intentionally selling his goods by using marks, symbols etc. of another person so that purchasers assume that goods manufactured by another person or goods are connected with some bother person has repute and standard for his goods in the market. In common law and to protect general innocent public it is necessary that person could not, therefore allowed to use names, marks, letters or other Indica, by which he might induce purchasers to believe that goods which he was selling were manufactured by another person.

The concept of passing off has undergone changes in the course of time. At first it was restricted to the representation of one person’s goods as those of another. Later it was extended to business and services. Subsequently it was further extended to professions and non-trading activities. Today it is applied to many forms of unfair trading and unfair competition where the activities of one person cause damage or injury to the goodwill associated with the activities of another person or group of persons.

The basic question in this tort turns upon whether the defendants’ conduct is such as to tend to mislead the public to believe that the defendants’ business is the plaintiff’s or to cause confusion between the business activities of the two.

The tort of passing off is sufficiently wide to give relief to charities engaged in trading type activities.

In British Diabetic Association V Diabetic Society, both the parties were charitable societies. Their names were deceptively similar. The words ‘Association’ and ‘Society’ were too close since they were similar in derivation and meaning and were not wholly dissimilar in form. Permanent injunction granted.

THE THREE FUNDAMENTAL ELEMENTS OF PASSING OFF ARE;

i) Reputation,

ii) Misrepresentation and

iii) Damage to goodwill.

These three elements are also known as the CLASSICAL TRINITY, as restated by the House of Lords in the case of Reckitt & Colman Ltd V Borden Inc [(1990)RPC 341(HL)]. It was stated in this case that in a suit for passing off the plaintiff must establish;

i) Firstly, goodwill or reputation attached to his goods or services.

ii) Secondly he must prove a misrepresentation by the defendant to the public i.e. leading or likely to lead the public to believe that the goods and services offered by him are that of the plaintiff’s.

iii) Lastly he must demonstrate that he has suffered a loss due to the belief that the defendant’s goods and services are those of the plaintiff’s.

MODERN ELEMENTS OF PASSING OFF

In the case Erven Warnink Vs. Townend , Lord Diplock[ 1980 RPC 31] gave the essential modern characteristics of a passing off action. They are as follows: –

1. Misrepresentation

2. Made by a person in the course of trade

3. To prospective customers of his or ultimate consumers of goods or services supplied by him.

4. Which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and

5. Which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so.

The above concept of passing off can be explained with the help of few case laws: Honda Motors Co. Ltd V Charanjit Singh & Others

Facts: Plaintiff was using trademark “HONDA” in respect of automobiles and power equipments. Defendants started using the mark “HONDA” for its pressure cookers. Plaintiff bought an action against the defendants for passing of the business of the plaintiff.

Held: It was held that the use of the mark “Honda” by the defendants couldn’t be said to be an honest adoption. Its usage by the defendant is likely to cause confusion in the minds of the public. The application of the plaintiff was allowed.

PLEASE NOTE THAT : The fundamental principle behind the tort of passing off is that “A man is not to sell his goods under the pretence that they are the goods of another man” (Perry v Truefitt (1842)).

INFRINGEMENT:

Section 29 of the Trade mark Act, 1999 states about various aspects concerning the infringement as given in Section 29(1) that A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.

Other subsections of the provision outlined that in course of the use of the trade mark, it is said to be infringing the rights of other company due to use of identical or similar trade mark using for marketing of alike goods and services or use of a deceptively similar or identical trade mark for any other kind of goods and services. It is further given in the Sub Section (9) of this provision that the infringement can also be done by the spoken use of the words as well as by the visuals.

PASSING OFF:

Trade mark Act, 1999 does not have an explicit provision that specifically describes passing off but there are numbers of common law judgments that lets the courts draw its meaning as to whether the infringement of trade mark done is in such a way that the mark is not only deceptively similar to the trade mark of that other company but it-is also capable of creating or is creating confusion for the customers, which ultimately results in damage for business of the company.

In the case of Cadbury India Limited and Ors. V. Neeraj Food Products[(2001)5 SCC 73] the High Court of Delhi explained the difference between passing off action and an action for trade mark infringement as under:

i) An action for trade mark infringement is a statutory remedy and on the other hand, an action for passing off is a common law remedy.

ii) The use of the trade mark of the plaintiff, by the defendant, is also a prerequisite in the case of an action for infringement while it is not a necessity of an action for passing off.

iii) In an action for infringement of the plaintiff’s trade mark, it is immaterial that the outfit, outer covering and other written marks on the goods originate from a different source than that of a registered proprietor’s trade mark. The liability of the defendant in such a case may be absolute. However, in case of passing off of trade mark, the defendant may escape liability if he can show that the material added by him is sufficient to distinguish his goods from that of the plaintiff’s goods.

iv) In an action for infringement, the Plaintiff on account of it being a registered trade mark in dispute claims to have an exclusive right to use the mark concerning those goods. However, a passing off by a person of his goods as those of another, in essence, is an action of deceit.

In a recent case of S. Syed Mohideen v. P. SulochanaBai, the Apex Court of the country stated that passing off right is a wider remedy than that of infringement. This is because the passing off doctrine operates on the general principle that no person is entitled to represent his or her business as the business of another person. The said action of deceit is maintainable for diverse reasons other than that of registered rights which are allocated rights under the Act.

In Cadila Health Care Limited Vs. Cadila Pharmaceuticals Limited [(2001) 5 SCC 73] the Supreme Court of India laid down certain tests for ascertaining passing off. The Court observed that in an action for Passing Off on the basis of unregistered trade mark gerenally for deciding the question of deceptively similarity the following factors were to be considered;

i) The nature of the marks i.e. whether the marks were word marks or label marks or composite marks i.e. both words and label marks.

ii) The degree of resemblaness between the marks, phonetically similar and hence similar in idea.

iii) The nature of the goods in respect of which they were used as trade marks.

iv) The similarity in the nature, character and performance of thee goods of the rival traders.

v) The class of purchasers who were likely to buy the goods Bering the marks they required , on their education and intelligence and a degree of care they were likely to exercise in purchasing and/or using the goods.

vi) The mode of purchasing the goods or placing orders for the goods.

vii) Any other surrounding circumstances which might be relevant in the extent of dissimilarity between the competing marks.

The Apex Court further held that- the decisions of English Courts would be relevant in a country where literacy was high and marks used were in language which the purchaser could understand. While English cases might be relevant in understanding the essential features of trade mark law but while dealing with the sale of consumer items in India, it was important to see and keep in mind the difference in situation between England and India.

The Apex Court further held on question -could English Principles apply in their entirety in India with no regard to India conditions?- we think not. In a country like India where there is no single common language , a large percentage of population is illiterate and a small faction of people know English , then to apply the Principles of English law regarding dissimilarity of marks or the customer knowing about the distiguishment characteristics of the plaintiffs goods seems to overlook ground realities in India. While examining such cases in India , what has to be kept in mind is the knowledge of English language or of the language in which trade mark is written and to whom different words with slight difference in spelling may sound phonetically the same.

REGISTRATION IS NO DEFENCE TO PASSING OFF ACTION Registration of Trade Mark offers no complete defence to Passing Off action. Passing Off action can succeed on the same evidence where trade mark action has failed. The Trade Marks Act affords no bar to a Passing Off action.

Section 27 The Trade Marks Act, 1999:

No action for infringement of unregistered trade mark.—

(1) No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark.

(2) Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another person, or the remedies in respect thereof.

The provisions of Section 27(2) as stated above was a statutory recognition of the principle that the remedy of Passing Off was available and was founded in common law.

WHAT THE PLAINTIFF MUST ESTABLISH IN A PASSING OFF ACTION?

It is essential for success in a passing off action based on the use of a mark or get up that the plaintiff should show that the disputed mark or get up has become by user distinctive of the plaintiff’s goods so that the use in relation to any goods of the kind dealt in by the plaintiff of that mark or get up will be understood by the trade and the public as indicating the plaintiff’s goods.

Passing Off A Trade Mark and its Effect

WHEN THE PASSING OFF ARISE?

The passing off action is arise when there is misrepresentation, when it is harm the existence plaintiff’s goodwill, when it is made by a trader in the course of trade, which is injure the business of another trader and which cause actual damage to the business or goodwill of the trader by the whom action is brought.

But these requirements were reduced to three in Reckitt & Colman Products Ltd. V. Borden Inc. now there are three essential requirements for the passing off action: [ we have mentioned in earlier paragraph]

The Claimant’s Goodwill: Although damage is the gist of an action for passing off, but the plaintiff must show that there is a reasonable reason of his being injured by the defendant’s action, even if the conduct of the defendant might be calculated to deceive the public. A private individual cannot institute a suit for passing off even if the defendant practices deception upon the public, unless it is proved that the defendant’s action is likely to cause damage to the individual.

Misrepresentation: Misrepresentation in the simplest form of passing off. If A says falsely these goods I am selling are B’s goods. It is a clear case of passing off. In simple way we can say that misrepresentation should lead Or be likely to lead confusion on the part of consumers.

In case of Khemraj v. Garg, in this case the defendants had copied the get up, layout, design and colour scheme, etc. and the name “manavpanchang,mani ram panchang” and “shri vallabh Mani Ram panchang” of the plaintiff’s panchang.

The court held that it is similar to the plaintiff’s product and Interim injunction was granted.

In the case of Rupa & Co. Ltd v. Dawn Mills Co. Ltd. In this case the defendant manufacture an underwear which named dawn as similar to the plaintiff’s manufactured underwear don, which is creating confusion in the minds of people because the layout, get up and colour combination is same to the plaintiff’s product.

Damage: Damages are available in a passing off action. And remedy is available in both cases whether the infringement suit or passing off action in both the cases remedy is given.

HOW THE PASSING OFF ACTION ARISES?

THE CASE OF AKASH ARORA VS. YAHOO INC. [1999 ARB.L.R.620]

Facts: Yahoo Incorporation is the owner of the well known trade mark, Yahoo and of the domain name Yahoo.com; both the trademark and the domain name acquired a distinctive name, goodwill and reputation. Yahoo.com had been registered by Yahoo Inc with Network Solution Inc since 1995 and offers a whole range of web based services. The trade mark Yahoo had been registered or was close to being registered in 69 countries. Yahoo Inc had not registered its domain name in India.

Mr. Akash Arora started to offer web-based services similar to those offered by Yahoo.com under the name of Yahoo India. Yahoo Inc had sued Akash Arora for using a trade mark deceptively similar to its own and passing off his services as those offered by Yahoo Inc.

ISSUE: Whether the act of Akash Arora in registering the domain name Yahoo India, to offer services similar to those offered by Yahoo Inc, is an infringement of the trade mark of Yahoo Inc and amounts to passing-off under the relevant sections of the Trade and Merchandise Marks Act?

RULE OF LAW

When a defendant does business under a name which is sufficiently close to the name under which the plaintiff is trading and that name has acquired a reputation and the public at large is likely to be misled that the defendant’s business is the business of the plaintiff, or is a branch or department of the plaintiff, the defendant is liable for an action in passing off.

THE HEARING:

Yahoo Inc contended that Akash Arora adopted the domain name of Yahoo to offer services similar to those of Yahoo Inc and had attempted to cash in on the good will generated by Yahoo Inc. because there was every possibility of an Internet user getting confused and deceived, believing that both the domain names, Yahoo and Yahoo India belong to Yahoo Inc.. Therefore, Yahoo Inc. argued that Akash is liable for passing off.

As the two trade marks/domain names ‘Yahoo!’ and ‘Yahoo India!’ were almost similar and the latter offered services similar to those offered by the former and as the latter passed them off as being offered by Yahoo Inc., the court held Akash liable for passing off and restrained him from using the deceptively similar domain name.

The decision of the court in this case is based on the rationale that where the value of a name lies solely in its resemblance to the name or trade mark of another organization, the public is likely to be deceived by the use of such name and such act would amount to passing off.

CONCLUSION: from above discussion it is clear that Passing Off action is applied in case of unregistered goods and services, on the other hand Infringement Action applies in case of registered trade mark related to goods and services. The action of passing off arises when there is injury of claimants goodwill, misrepresentation of facts related to goods or services and damage to the trade. Section 27(2) of the Trade Mark Act, 1999 has given statutory protection of passing Off Action and generally treated as Common Law Tort. There are numerous judgments of Apex as well as other courts for deciding and further actions to be taken in case of Passing Off Action.

Footnotes:

1. https://www.bananaip.com/ip-news-center/yahoo-inc-akash-arora/

2. http://www.legalservicesindia.com/article/1254/Passing-off-under-trademark.html

3. https://www.indianconstitution.in/2021/12/section-27-trade-marks-act-1999.html

4. https://www.mondaq.com/india/trademark/902156/difference-between-passing-off-and-infringement-of-the-trade-mark

DISCLAIMER: the article produced here is only for information purpose. The article has been prepared on the basis of available information on various forums at the time of preparation and same has been utilised only for information of the readers. The views expressed here are the personal views of the author and same should not be considered as professional advice. In case of necessity do consult with professionals.

Tags:

Author Bio

Qualification: CS
Company: SBI GENERAL INSURANCE COMPANY LIMITED
Location: MUMBAI, Maharashtra, India
Member Since: 25 Aug 2018 | Total Posts: 361
A Qualified Company Secretary, LLB , LIII , Bsc( Maths) BHU, Certification in Insurance Risk Management ( ICSI-III) have completed Limited Insolvency Examination and having more than 20 years of experience in the field of Secretarial Practice, Project Finance, Direct Taxes ,GST, Accounts & F View Full Profile

My Published Posts

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Telegram

taxguru on telegram GROUP LINK

Review us on Google

More Under Corporate Law

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

December 2022
M T W T F S S
 1234
567891011
12131415161718
19202122232425
262728293031