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Infringement and Passing Off
Infringement and Passing Off
A trademark is often defined as: a word, name, symbol or device that is used in trade with
goods to indicate the source of the goods and to distinguish them from the goods of others.
A service mark is the same as a trademark except that it identifies and distinguishes the
source of a service rather than a product. The terms "trademark" and "mark" are commonly
used to refer to both trademarks and service marks.
Every businessman who has spent considerable amount of money making his mark popular
will try to secure it from usage by unscrupulous competitors. Protection of trademark is
important not only from the business point of view but also for the protection of consumer
from fraud and imposition.
The Trademark Act of 1999, both in letter and spirit, lays down that, while it encourages
fair trade in every way and aims to foster and not to hamper competition, it also provides
that no one, especially a trader, is justified in damaging or jeopardizing anothers business
by fraud, deceit, trickery or unfair methods of any sort. This necessary precludes the trading
by one dealer upon the good name and reputation built up by another.
It has been a frequently debated question in India, whether the registration of a trade mark
confers an absolute right in respect of the trade mark to a registered proprietor, and if so, are
there any threats or legal hurdles that can threaten such a right.
At the outset, the rights of a registered proprietor under the Act need to be analyzed. The
Act provides that the registered proprietor has an exclusive right to the trade mark in respect
of the goods for which the mark has been registered and can obtain reliefs against those who
use a similar mark. (Section 28(1) of the Act) The Act also specifies that a person is entitled
to institute proceedings to prevent the infringement of a registered trade mark and damages.
(Section 27(1) of the Act) Normally, the following conditions have to be satisfied to initiate
an action for infringement: (a) the plaintiff must be the registered owner of the trade mark;
(b) the defendant must use a mark deceptively similar to the plaintiffs mark; (c) such use
must be in relation to the goods in respect of which the plaintiffs mark is registered; and (d)
the use by the defendant must not be accidental, but in the course of trade. Thus, where a
registered trade mark is infringed by an unregistered mark, and the aforesaid conditions are
satisfied, the registered proprietor can obtain an order of injunction against the infringer.
(Section 29 of the Act)
In addition, to protect a registered owners exclusive right to use, the Act provides that a
trade mark which is identical or deceptively similar to another proprietors registered trade
mark in respect of the same goods or description of goods cannot be registered. (Section 12
(1) of the Act) However, there is an exception to Section 12(1) of the Act, in case of honest
or concurrent use, or use in special circumstances, when the Registrar of Trade Marks has
the discretion to permit more than one proprietor to register identical or similar trade marks
in respect of the same goods. (Section 12(3)) With regard to the hypothetical, prima facie,
Company As interests will be protected and Company B will not be allowed to register the
same trade mark, because Company A has registered its trade mark first and has diligently
renewed it. However, Company Bs mark may be allowed to be registered, if it can prove
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that it has been using its mark over a long period of time in pursuance of honest trade and
business. To counter and negate this, Company A will have to tender evidence that
Company B had knowledge of Company A, its business and its registered mark, and
leveraged this information to promote its business.
Every registered trademark has some exclusive rights attached to it; the violation of such
rights without the authorization of the trademark owner is termed as trademark
infringement.
Infringement occurs when someone else uses a trademark same or similar to a registered
trademark for the same or similar goods/services. Section 29 of the Trademark Act,1999
states about the various aspects related to infringement as given in S. 29(1) 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 describe that in course of the use of the trademark it is said to be
infringing the rights of other company due to use of similar or identical trademark using for
marketing of similar kind of goods and services or use of identical or deceptively similar
trademark for any other kind of goods and services. It is further given in the Sub Section (9)
of this section that the infringement can also be done by the spoken use of those words as
well as by their visual representation.
An action for infringement is taken in case of a registered trademark. An infringement
action is a statutory remedy and in order to establish infringement with regard to a
registered trademark, it is necessary only to establish that the infringing mark is deceptively
similar to the registered mark and no further proof is required. In an infringement suit, the
use of the mark by the defendant need not cause any injury to the plaintiff.
In this context, the ingredients of Section 29 (1) are as follows:1. The plaintiffs mark is registered.
2. The defendants mark is identical with, or deceptively similar to plaintiffs registered
mark;
3. The defendant has taken any essential feature of the mark or has taken the whole of
the mark and then made a few additions and alterations.
4. The defendants use of the mark is in course of the trade in respect of goods/services
covered by the registered trademark.
5. The use of the infringing mark must be printed or usual representation of the marking
advertisements, invoices or bills. Any oral use of the trademark is not infringement.
6. The use by the defendant is in such manner as to render the use of the mark likely to
be taken as being used as a trademark.
7. The defendants use of the mark is not by way of permitted user and accordingly
unauthorised infringing use.
While the above is the general proposition of law as per Section 29 (1), the various
circumstances in which the trademark is infringed are enumerated in sub-sections 29(2) to
(9) of Section 29.
Deceptively and phonetically similar trademarks: The law can be summarised as
follows:
1. The registered proprietor of a trademark has exclusive right to the use of the
trademark in relation to the goods and services in respect of which the trademark is
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infringing mark. Furthermore, if the association between the marks causes the
public to wrongly believe that the respective goods come from the same or
economically linked undertakings, there is a likelihood of confusion.
e) Use of reconditioned or second articles: - the use of plaintiffs mark on
reconditioned goods may constitute infringement even if it is clarified that
goods are not original but reconditioned.
f) Printing of labels: - unauthorised printing of labels of the plaintiff will
constitute infringement. Moreover, if a copyright subsists in labels, it will
constitute infringement of copyright as well.
g) Goods manufactured by third party would constitute infringement: when the owner of a mark gets the goods manufactured by a third party under
a contract, solely for the mark, sale of the goods bearing the mark by such a
manufacturer to other person would constitute infringement.
h) Marks used along with others mark: - use of the plaintiffs mark along
with the defendants name even if prominently displayed constitutes
infringement.
i) Similar marks in medicinal products: - when the goods or products
involved are medicinal products, confusion of sources or drugs or medicinal
preparation caused by similar marks of the defendant would constitute
infringement, although similarity in the marks would have been very less.
j) Marks with international reputation used unauthorisedly: - in case of
marks which have acquired international reputation, an action for its
protection against un-authorised use will lie even if the owner of the
trademark does not have any business activity in India.
Who can sue for infringement?
The plaintiff in an infringement suit may be either:
1. The proprietor of the registered trademark or his legal successor.
2. A registered user of a trademark subject to a prior notice to the registered proprietor
and consequent failure of the registered proprietor to take any action against the
infringer.
3. An applicant for registration of a trademark. He can file an infringement suit to
protect his right to continue with the suit which will sustain only if his trademark is
registered before hearing the suit.
4. Legal heirs of the deceased proprietor of a trademark.
5. Any one of the joint proprietors of a trademark.
6. A foreign proprietor of a trademark registered in India when Infringement occurs in
India.
Who can be sued?
1. The infringer who directly by his action causes infringement or who uses or
contemplates or threatens to use a trademark infringing plaintiffs right.
2. The master responsible for his servants act of infringement. For example, a worker
who is engaged in the business of making false labels is a servant of the master who
orders the making of such labels. It is the master in such a case who is to be sued.
3. The agents of an infringer.
4. Directors and promoters of a limited company cannot be joined as co-defendants
unless they have personally committed or directed infringing acts.
The fact of registration of the plaintiffs mark is to be proved by production of a copy of the
entry on the register certified by Registrar and sealed with the Trademark Registry. The
certified copy will contain all the entries in the register relating to the mark including the
conditions, if any, subject to which a mark is registered. In all legal proceedings relating to a
registered trademark, the original registration of a trademark and all subsequent assignments
and transmissions will be prima facie evidence of the validity. The plaintiff must establish
that the use of the mark complained of comes within the scope of definition of infringement.
Where the defendant has absolutely copied the mark and made a facsimile representation of
it, no further evidence is required. Where the mark used by the defendant is not identical
with the registered trademark, the court has to determine the two marks are deceptively
similar. Opinion evidence is not admissible, but statement of witnesses to the effect that
they themselves would be deceived; are admissible. Evidence as what constitutes the
essential feature of the mark is admissible.
Acts Not Constituting Infringement (Section 30):Following acts do not constitute infringement of the right to the use of a registered
trademark:
a) Where the plaintiff has no title to sue;
b) Where the registration of the trademark is not valid and liable to be expunged;
c) When the use of the mark by the defendant is not an infringement under Section 29;
d) When a person uses a trademark in accordance with honest practices in industrial and
commercial matters that do not take unfair advantage.
e) When a person uses a trade mark in relation to goods or services indicating character,
quality or geographical origin
f) When a person uses a trade mark in relation to services to which the proprietor has
already applied the mark or registered user the object of the use is to indicate that the
proprietor or the registered user has performed the services.
g) When a person uses a trademark, which is subject to any conditions or limitations,
beyond the scope of such conditions or limitations will not constitute infringement.
h) When a person uses a mark in relation to goods to which the mark has been lawfully
applied, or where the registered proprietor has consented to the use of the mark. This
applies to cases where goods are purchased in bulk and sold in retail applying the
mark.
i) When a person uses a mark in relation to parts of a product or accessories to the
goods in respect of which the mark is registered if the use is reasonably necessary to
indicate that the goods so adapted.
j) When a person uses a mark or a similar mark in the exercise of a right conferred by
independent registration.
k) When a person assigns a trademark to another, this will not affect the right of that
person to sell or deal in the goods bearing that mark.
Jurisdiction:
Suit for infringement or for passing off is to be filed in the court not inferior to a District
Court having jurisdiction to try the suit. District Court having jurisdiction includes a District
Court within the local limits of whose jurisdiction, at the time of the institution of the suit or
other proceedings, the person instituting the suit or other proceedings, or where there are
more than one person, any of them who:a) Actually and voluntarily resides; or
b) Carries on business; or
c) Works for gain; can bring in an action against the defendant.
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Moreover, a registered trade mark may be totally removed from the Register upon
application made by an aggrieved person if: (a) the mark has not been used bona fide in
relation to the goods concerned for a period of five (5) years and one (1) month before the
date of the application for removal; and (b) the application proves that the mark was
registered without any bona fide intention to use it. (Section 46 of the Act) However,
Section 46 provides an exception to non-use due to special circumstances of trade.
Reliefs in suit for Passing-Off and Infringement:
Under Section 135 of the Trademarks Act, 1999, the reliefs which a Court may grant for
passing off and for infringement includes the following:a) Accounts of Profit: Account of profits are the actual profits which the defendant has
made by infringing the legal rights of the plaintiff. Sub-section (1) of Section 135
provides for grant of relief which includes, at the option of the plaintiff, either
damages or an account of profit. In taking account of profits, the damage the
plaintiff has suffered is totally immaterial. The object of account of profit is to give
to the plaintiff the actual profits the defendant has made and of which it is
established that the profits were improperly made. Section 135 (3) expressly enacts
that where the court is satisfied that it is a case of innocent infringement, it shall
grant only nominal damages. Further, in such situation, the Court shall not grant an
account of profits.
b) Damages: Damages are the compensation awarded to the Plaintiff by the defendant
for the legal injury caused by him to the plaintiff. Damages are the notional
compensation paid to the plaintiff irrespective of the actual amount of loss suffered
by the plaintiff.
Following are the matters which are generally taken into account in awarding
damages include the following:
I. Any loss of trade actually suffered by the plaintiff directly from the acts
complained of, or properly attributable to injury to the plaintiffs reputation,
business, goodwill and trade and business connection caused by the acts
complained of.
II. Damages may be awarded even though there is no deception.
III. Where the defendants goods are similar in quality to the plaintiffs goods, the
defendants wrongful act may cause injury to the plaintiffs business
reputation.
c) Injunction: Injunction is one of the reliefs which an aggrieved person may obtain in
any suit for infringement of a registered trademark or for passing off of the
registered trademark or unregistered trademark. The remedy of injunction is an
effective remedy in preventing the infringement of registered trademark or
unregistered trademark. Section 135 of the Trademarks Act, 1999 grants the relief
of injunction. While granting an injunction, the Court should always rely on the fact
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that whether the balance of convenience lies with the plaintiff and whether an
irreparable damage or injury would occur to the plaintiff if injunction is not
provided for against the defendant. Section 135 (2) further provides for ex parte
injunction or any interlocutory order for any of the following matters, namely:a) For discovery of documents;
b) Preserving of infringing goods, documents or other evidence which are related
to the subject-matter of the suit;
c) Restraining the defendant of or dealing with his assets in a manner which may
adversely affect plaintiffs ability to recover damages, costs or other pecuniary
remedies which may be finally awarded to the plaintiff.
Injunction may be of following types:I. Anton Piller Order: these are ex parte orders to inspect defendants premises.
A Court may grant such an order to the plaintiff where there is a possibility of
the defendant destroying or disposing of the incriminating material.
II. Mareva Injunction: in such an order, the Court has the power to freeze
defendants assets where there exists a probability of the assets being
dissipated or cancelled so as to make judgement against him worthless or unenforceable.
III. Interlocutory Injunction: is the most commonly sought and most often
granted form of injunction. It serves to take action against the defendant on the
basis of past infringement. The interlocutory injunction is an order restraining
the defendant from continuance of the acts which amount to infringement. It
serves the purpose of preventing further infringement.
IV. Perpetual Injunction: it is an order restraining the defendant totally, for all
times to come, from doing any act which infringes the right of the proprietor
of the trademark. Perpetual injunction is generally granted when the suit is
finally decided.
Passing Off
Passing off action is based on common law principle. The damages claimed for; in an action
for passing off is un-liquidated damages. The action against passing off is based on the
principle that a man may not sell his own goods under the pretence that they are the goods
of another man.
The passing off action depends upon the simple principle that nobody has any right to
represent his goods as the goods of somebody else. In a passing off action, the priority in
adoption and use of trade mark is superior. Passing off is not defined in the Trademark Act,
1999. It is referred to in Section 27 (2), 134 (1)(c) and 135 of the Act.
Section 27 (2) states that the rights of action against any person for passing off as the goods
of another person or the remedies in respect thereof are unaffected by the provision of the
Act. Section 134 (1) (c) refers to jurisdiction of courts to try suits for passing off arising out
of the use of any trademark. Section one 135 specifies the remedies available in respect of
passing off arising from the use of a trademark.
Passing off cases are often cases of deliberate and intentional misrepresentation, but it is
well settled that fraud is not a necessary element of the right of action and the absence of the
intention to deceive is not a defence in an action for passing off though proof of fraudulent
intention may materially assist a plaintiff in establishing probability of deception.
The concept of passing off which is a form of tort has undergone changes in the course of
time. At first it was restricted to the representation of ones goods as those of another. Later,
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3. Damage: the plaintiff must demonstrate that he suffered or, that he is likely to suffer
damage by reason of the erroneous belief endangered by the defendants
misrepresentation that the source of the defendants goods or service is the same as the
source of those offered by the plaintiff. In a passing off action, damage is presumed
even if there is likelihood of deception.
In the case of Erven Warnik Besloten Vennootschap & Anr. Vs. Townend & Sons
(Hull) Ltd. & Anr. (Advocaat case), the House of Lords identified five characteristics
which must be present in order to create a valid cause of action for passing-off. The House
of Lords held that passing-off is:
1. A misrepresentation;
2. Made by a trader in course of business;
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 which can
reasonably be foreseeable; and
5. Which causes actual damage to a business or goodwill of the trader by whom the
action is brought (because he fears or apprehends) action will probably do so.
Following characteristics can be attributed to passing off action:a) Proof of fraudulent intent not necessary: it is not essential that the plaintiff must
establish fraud on the part of the defendant in a passing off action. While granting
injunction against the defendants using the trademark Horlioks, the Delhi High
Court held that the use of the offending mark by the defendants to imitate the
plaintiffs trademark appears to be flagrant and blatant attempt on the part of the
defendants to imitate the plaintiffs trademark with a view to deceive the unwary
purchasers and exploit and encash on their goodwill in order to pass off their goods
as that of the plaintiffs. The law does not permit anyone to carry on his business in
such a way as would persuade the customers in believing that the goods belonging to
someone else are his or are associated therewith. Where there is possibility of
confusion in business, an injunction would be granted even though the defendant
adopted the name innocently.
b) Passing off not limited to goods: Passing off properly so called is not confined to
the case of sale of goods. Passing off also restrains a defendant from trading under a
particular name though the defendant trader is not selling the goods. Thus, when a
name has become identified, by adoption and user with a particular trade or
manufacture or business, the person who so used or adopted it can obtain the aid of
the Court to restrain the use of it by others in such a way as to lead customers or the
public to think that the trade or business of the person sourcing is his trade or
business.
c) Evidence of false representation, but not deception necessary: false representation
made by the defendant, whether expressly or otherwise, must be proved as a matter
of fact in each case. Absence of actual deception is not determinative. The ultimate
question of whether the deception is likely to cause confusion remains a question of
fact for the courts to decide in the light of available evidence.
d) Plaintiff and defendant need not be in the same field: in passing off action, it is
immaterial whether the plaintiff and the defendant trade in the same field or trade in
different products. A remedy in the form injunction was granted in favour of the
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plaintiff on the basis of an action of passing off even though the plaintiff and
defendant were trading in altogether different products.
e) Prior user to be established: for inherently distinctive marks, ownership is
governed by the priority of use of such marks. The first user in the sale of goods is
owner and senior user. In order to succeed, the plaintiff has to establish user of the
mark prior in time than the impugned user by the respondents.
Issue in a Passing off Action
The issue in a passing off action may be stated as follows:
would the users of the defendants, either the actual user or the proposed user conceded for
the purposes of the action, be likely to lead persons, either members of trade or of the
public, to suppose that the defendants goods so sold were the product of the plaintiffs, or
that the business concerned in its production was the plaintiffs or was associated with the
plaintiffs business.
Factors to be considered in case of an action for passing off:The Honble Supreme Court in Cadila Health Care Ltd. vs. Cadila Pharmaceuticals Ltd.,
held that the following factors to be considered in case of an action for passing off action of
an unregistered trademark for deciding the question of deceptive similarity:1. The nature of the marks, i.e, whether the marks are word marks or label marks or
composite marks, i.e, both words or label works.
2. The degree of resemblance between the marks, phonetically similar and hence similar in
idea.
3. The nature of goods in respect of which they are used as trademarks.
4. The similarity in nature, character and performance of goods of the rival traders.
5. The class of purchasers who are likely to buy the goods bearing the marks they are
likely to exercise in purchasing and/or using the goods.
6. The mode of purchasing the goods or placing orders for the goods.
7. Any other surrounding circumstances which may be relevant in the extent of
dissimilarity between the competing marks.
Defences to a passing off action:In a suit for passing off, apart from denying the plaintiffs allegations generally, the
defendant may be able to plead the following in defence in his case:1. The defendant may prove that the plaintiffs business is either fraudulent or forbidden
by law. If any particular business could be shown to be a fraudulent business or one
forbidden by law or one which the public policy of law was to prevent, then in those
cases the proprietor cannot claim protection of the court. For example, if a trader who
sells through street markets counterfeit versions of sound recordings and DVDs bearing
a famous trademark might not be allowed to rely on his sales to maintain a passing off
action against another counterfeiter who has come into the market after him.
2. A false representation contained in the mark itself did furnish a defence at law and at
equity. Where a trademark is used exclusively in connection with a trade which was
itself fraudulent, the fraud in the trade which was itself carried on by the trademark is a
defence.
3. The mark complained of is not distinctive of the plaintiffs business and there is no
likelihood of passing off by reason of defendants use of the mark.
4. The plaintiff is guilty of acquiescence, latches, etc. or the defendant has prior used the
mark.
5. The defendants mark represents his own name which he has the right to use. A man is
entitled to carry on his business in his own name so long as he does not do anything
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more than that to cause confusion with the business of another, and so long he does it
honestly.
6. The field of activities of the parties are completely different.
7. The defendant claims right of concurrent use of his mark of his mark. Honest and
concurrent user of a trademark when established will constitute a defence.
8. The defendants use of the mark is the bona fide description of the character or quality
of goods or services. However, the defence of the name being surname or personal
name, though available to individuals, is not applicable to a corporate body.
9. Innocent misrepresentation by the defendant also constitutes a valid defence against
passing off action. Under Section 135 (3)27, where the defendant satisfies the court that
he was unaware of the existence and nature of plaintiffs trademark, and that when he
became aware he ceased to use the trademark complained of, the Court shall not grant
relief by way of damages or an accounts of profit.
10. The defendant is using the Plaintiffs mark by way of a license. Under Section 12 an
honest concurrent user would be protected. Under Section 30 (2)(c)(i), a defence is
always open that the proprietor of a registered trademark has expressly or impliedly
consented to the use of the said trademark by the defendant. This defence, if laid, would
need a trial.
11. The defendant may successfully plead and establish that the alleged
misrepresentation was made by his employee outside the scope of his authority and
contrary to express instructions.
12. Lastly, the defendant may plead that the plaintiff has abandoned his mark and that the
defendant has either already moved for rectification of register for removal of mark or
proposed to do so. Where a mark is abandoned, it may become common to trade. When
abandoned, the mark may be appropriated by another person. The onus is on the
defendant to prove abandonment.
Difference between Passing-Off and Infringement
An action for passing off is a Common law remedy, being in substance an action for deceit,
that is, a passing off by a person of his own goods as those of another. But that is not the
gist of an action of infringement. The action for infringement is a statutory remedy
conferred on the registered proprietor of a registered trade mark for the vindication of the
exclusive right to use the trade mark. Following are the differences between Passing-Off
and Infringement:
1. Passing off action is based on common law principle that nobody has any right to
represent his goods as somebody else. Such action is recognised both in respect of
unregistered as well as registered trademark. An action for infringement on the other
hand is based on the right acquired by registration and is possible only in respect of
registered trademarks.
2. An action for infringement is a statutory right. It is dependent upon the validity of the
registration and subject to other restriction laid down in the Act. On the other hand,
in a passing off action registration of trademark is not relevant. It is based on
property in goodwill acquired by use of the mark.
3. The proprietor of an unregistered trademark whose mark is unauthorisedly used by
another cannot sue for infringement of a trademark. His only remedy lies in bringing
a passing off action.
4. In an infringement action, the plaintiff is not required to prove the reputation of his
mark, which is not the case in case of passing off. In passing off action, the plaintiff
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has to prove that his mark has acquired reputation in relation to any goods dealt with
by him.
5. An infringement action can result in the restraining of defendant from using the
registered trademark whereas in a passing off action the defendant is restrained from
selling the article without clearly distinguishing from the goods of the plaintiff.
6. In an action for infringement, the use of trademark of the plaintiff, in relation to
goods is a sine qua non for the action. In contradiction, in a passing off action, it is
deceit as practiced on the public and not the use of the trademark that is to be shown.
7. An infringement action does not require the use of the mark. The proprietor could
have never used the mark in the course of the business and still bring an action for
infringement whereas in a passing off action the plaintiff must establish that the mark
by usage has become distinctive of his goods i.e. the goods are identified by the
mark.
8. In case of a passing off action, the defendant's goods need not be same as that of the
plaintiff; they may be allied or even different. In case of an action for infringement,
the defendant's use of the offending mark may be in respect of the goods for which
the mark is registered or similar goods.
Combined action for infringement and passing off
Where a mark is registered, the plaintiff may combine his action for infringement along
with an action for passing off, where the plaintiff has used his mark and can establish
goodwill and reputation in connection with his business. This provides for a better
protection of trademark.
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