Passing Off Action In Trademark

Author – Bharat Sharma , Pragya Vaishnav

Introduction:-

The unique purpose of the trademark was purely to indicate the origin of goods, by identifying the person who produced them. The compulsion for safeguarding the goodwill and name of a trademark was therefore felt in all nations which led to the adoption of the trademark law all over the world. The common law has always acknowledged that one goal of trademark law is to prevent mistake, deception and confusion concerning origin. Protection against public fraud is one of the most significant features of the common law trademark.

When a defendant does trade under a name which is adequately similar to the name under which the plaintiff is dealing and that name has acquired a status and the community at large is likely to be deceived that the defendant’s company is the company of the plaintiff, or is a division or department of the petitioner, the respondent is liable for an action in passing off.1

If any party is using the registered trademark of another company without consent, that means it is not only committing a crime but also causing loss to the business of the company and harming the brand name of that company. The party might be using others brand to use its market reputation and market stake to expand its own business without any effort, but such corporation are not using the same mark of other corporation but they usually go for use of similar marks and here the problem came into existence.

Passing off action cannot be initiated just if someone has applied the trademark for registration in the registry and the appellant cannot seek for an injunction to restrain the respondent on that basis only as other requirements are not present to initiate such action of passing off.2

These types of activities primarily fall in two heads Infringement and Passing Off.

Evidence of Reputation:-

An action for the violation, which is a legislative right, is dependent on the validity of the registration of the mark. Passing-off is not an exclusive right in the name or the get-up, which has been embezzled by the defendant. It is an illegal incursion of a property right vested in the plaintiff. A passing-off action is, hence, free of a statutory right and is recognised by proof of status and goodwill of the business.3

Commercial Goodwill and commercial dishonesty:

The reason of this tort is to defend commercial goodwill to guarantee that peoples’ business reputation is not exploited. It protects a judicious area of dominance to traders. However, there is dissimilarity between statute law relating to trademarks and the passing-off action for, while registration of relevant mark itself gives title to the registered owner, the burden in a passing-off action lies upon the complainant to establish the existence of the business reputation which he seeks to protect.

The word ‘well recognised’ with respect to trademarks become known from the term ‘reputation’ which was recognized for the first time in the age-old case of JG v. Stanford4  wherein it was held that the law of passing off prevents commercial dishonesty on the part of traders. The very foundation of the said action is the presence of goodwill or reputation attached to the specific goods and the degree of symbol that is likely to deceive the public.5

Consumer Confusion:

If the two disputing parties are involved in a similar line of business, there are a grave and huge likelihood for confusion and therefore, there is the probability of sufferance of damage.

In the case of Card service International Inc. vs McGee 6  it was held that the domain name provides the same function as the trademark and is not a mere address or like finding the number on the Internet and, therefore, it is allowed to equal protection as a trademark. The principle of passing off under the Trade and Merchandise Marks Act 1958 meant that if a defendant was conducting his business under a name that was similar to the ‘well-reputed’ domain name of applicant, and both the parties were in the same line of trade, the similarity in two names could deceive the public into believing that the defendant’s good or service belonged to the applicant.7

The common doctrines of the law applicable to cases where a person uses a name or intends to use a name which is likely to deceive and divert the companies of the plaintiff to the defendant or cause misunderstanding between the two business are similar to the principles which are valid to ordinary cases of passing off.

In Rediff Communication Ltd vs Cyber booth, it was held that the two titles were almost alike and there is every possibility that the Internet user may be deceived and disarray. Therefore, the court accepted the prayer of the plaintiff, and restrained the defendant from using the disputed domain name.8

Establishment of Passing Off in Trademark:

The action is generally accessible to the titleholder of a unique trademark and the person who, if the word or character is a designed one, invents and uses it. If two trade competitors claim to have exclusively invented the same mark, then the trader who is capable to found the prior user will succeed. It is not vital for the plaintiff to substantiate long user to establish a reputation in a passing-off an action. It would rely upon the amount of sales and extent of advertisement.9

In the case of Kaviraj Pandit Durga Das Sharma vs. Nav Rattan Pharmaceuticals the Supreme Court held and differentiated between infringements and passing-off action as the latter is a remedy under Common Law and the former is statutory relief under the Act to protect and get the exclusive right in the trademark10.A passing off action is established on the goodwill that a trader has in his title distinct an action for breach of a trademark where a trader’s right is based on property in the name as such. Another aspect of passing off is the possibility of misunderstanding with potential injury to the public and significant loss to the appellant.

Conclusion:

Corporations spent an enormous amount of money for the promotion of their goods, and services, when the particular products and brand names become well-known, the unfledged entrepreneur and general public try to duplicate the same to turn into money the goodwill and reputation established by the reputed companies.

In this, what is to be observing is that the falsification made by the respondent is of such a nature as possible to cause misperception in the mind of a general customer to mistake the goods of the defendant as that of the plaintiff due to similarity of marks and other surrounding factors? The goodwill received by such trade houses have long-term effect on the consumers of such goods. In a passing of action, what is to be seen is whether the defendant has try to turn into cash the name of the widespread industry house with a view to increase his sales deceptively.

This principle is based on the conviction that no one has right to represent one’s goods as the goods of other. To get the remedy of passing off the petitioner has to authenticate that he is the titleholder of the mark, and the same has gained status and goodwill and falsification has been done by the respondent due to which the complainant has suffered huge damages.

About the author

Bharat Sharma
  1. Monetary Overseas Vs. Montari Industries Ltd 1996 PTC 142
  2. Civil Appeal No.4480-4481 of 2002 decided on 5th August, 2008
  3. Harrods v. Harrodian School, (1996) RPC 697
  4. JG v. Stanford (1617) Cr Jac 468, 79 ER 400
  5. Banerjee Soumya, Trans border Reputation, Journal of Intellectual Property Rights, 11(4) (2006) 274-279.
  6. 42 USPQ 2d 1850
  7. Yahoo! Vs. Akash Arora 1999 IIAD Delhi 229, 78 (1999) DLT 285
  8. Rediff Communication Ltd Vs. Cyberbooth and Anr (AIR 2000 AIR Bom. 27)
  9. Satyam Inf. Ltd. vs Siffynet Solutions (P) Ltd (2004)
  10. AIR1965 SC980, 1965 SCR(1)737

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