Infringement and Passing Off 2
Infringement and Passing Off 2
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 another’s 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 plaintiff’s mark; (c) such use
must be in relation to the goods in respect of which the plaintiff’s 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 owner’s exclusive right to use, the Act provides that a
trade mark which is identical or deceptively similar to another proprietor’s 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 A’s 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 B’ smark 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 plaintiff’s mark is registered.
2. The defendant’s mark is identical with, or deceptively similar to plaintiff’s 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 defendant’s 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 defendant’s use of the mark is not by way of permitted user and accordingly
unauthorized 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 summarized 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
registered and to obtain relief in respect of infringement of the trademark in manner
provided by the Act.
2. Whether it is deceptively or has become publici juris is a question of fact to be
established.
3. When a number of marks, all have a common element, may it be prefix, suffix or
root, i.e. essential part or the core of the mark, they come to be associated in the
public mind as an indication of the same source, which misleads or causes deception
or confusion.
4. It is the common element that has to be identified in an impugned mark and the
registered trademark and if such common element is highly distinctive and is not just
a description or a commonly used word, the likelihood of deception or confusion
would be very much there, despite the fact that it might differ in similarity in certain
letters.
5. The nature of the commodity, the class of purchasers, the mode of purchase and other
surrounding circumstances must also be taken into consideration.
6. Marks must be looked at from the first impression of a person of average intelligence
and imperfect recollection.
7. Marks must be compared as a whole, microscopic examination being impermissible.
8. The broad and salient feature must be considered, for which the marks must not be
placed side by side to find out the differences in design.
9. Overall similarity is the touchstone.
10. It is not the color of the container or the difference of the product, but it is the
statutory right to the word that has to weigh.
11. The plaintiff need not in general show prima facie case that is required to be shown
must be something more than a case that will avoid the action being struck out as
frivolous or vexatious and even if the chance of success at the trial are only twenty
percent, the statutory protection is absolutely necessary by way of an injunction in
order to prevent confusion or deception arising from similarity of marks.
Following are the instances where the acts constituted infringement of trademark:-
a) Taking substantial feature of the mark: - a mark is infringed by another
trader, if, even using the whole of it upon or in connection with his goods, he
uses one or more of the essential features.
b) Additions: - addition of extraneous matter, inconspicuous additions is
infringement. If a person incorporates whole or part of a registered Trademark
of another, the addition of other or matter would not save him from the charge
of infringement.
c) When a mark is copied: - if the defendant absolutely copied the mark and
made a facsimile representation of it, no further evidence is required. When
the similarities are so close as to make it impossible to suppose that such
marks were devised independently of each other, in absence of evidence of
common origin, the conclusion that one party copied the mark of another.
d) Marks likely to cause confusion: - Likelihood of confusion occurs in
situations where consumers are likely to be confused or mislead about marks
being used by two parties. The plaintiff must show that because of the similar
marks, many consumers are likely to be confused or mislead about the source
of the products that bear these marks. Where the visual, aural and conceptual
similarities is caused by the defendant’s trademark which causes confusion in
the minds of the public as to its origin, then the mark is held to be an
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 plaintiff’s mark on
reconditioned goods may constitute infringement even if it is clarified that
goods are not original but reconditioned.
f) Printing of labels: - unauthorized 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 other’s mark: - use of the plaintiff’s mark along
with the defendant’s 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 unauthorizedly: - in case of
marks which have acquired international reputation, an action for its
protection against un-authorized 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 plaintiff’s right.
2. The master responsible for his servant’s 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.
Evidence in Infringement Actions:
The fact of registration of the plaintiff’s 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.
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 plaintiff’s 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 defendant’s goods are similar in quality to the plaintiff’s goods, the
defendant’s wrongful act may cause injury to the plaintiff’s 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
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 plaintiff’s 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 defendant’s 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
defendant’s assets where there exists a probability of the assets being
dissipated or cancelled so as to make judgement against him worthless or un-
enforceable.
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 one’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. Now days, 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 law of
passing off applies whenever there is the prospect of confusion between marks and getup or
where there is the prospect of confusion of identity through the unauthorised use of similar
marks or get-up. It is because the main consideration of passing off is whether deception or
confusion is likely to arise, passing off can be used to protect any kind of distinctive name,
mark, logo or get-up used to identify a company or business as well as products or services.
Elements to be proved for passing off action:
1. Goodwill:- the Plaintiff has to establish a goodwill or reputation attached to the goods
and services which he supplies, in the mind of the purchasing public by association
with the identifying get-up under which his particular goods and services are offered to
the public as distinctive specifically of his goods or services. As Lord Macnaghten has
stated: ‘Goodwill is the benefit and advantage of a good name, reputation, and
connection of a business. It is the attractive force which brings in custom. It is the one
thing which distinguishes an old established business from the new established
business at its first start. The goodwill of a business must emanate from a particular
center or source.’
However, widely extended or diffused its influence may be, goodwill is nothing unless
it has power of attraction sufficient to bring customers home to the source from which
it emanates. Goodwill is thus the benefit and advantage of a name and get-up, and it is
the attractive force which brings in business. A passing off action is a remedy for the
invasion of a right of property in the business or goodwill likely to be injured by any
actionable misrepresentation, not in the name or get-up itself. Goodwill need not be
established in the mind of every member of the relevant public, but in a significant
section of it. A reputation generated among a very few people will not do. There must
be a substantial number of potential customers although not necessarily a majority.
The action of passing off lies where there is a real possibility of damage of goodwill to
some business or trading activity. Therefore, the plaintiff has to establish goodwill in
his business or his goods or services with which the trade or public will be led to
associate the defendant’s activities.
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.