Reading Resource: Necessity of Registration of a

Trademark, Passing off & Transborder reputation

This is a free reading resource for our Trademark Law course.

Check out our course here!

Learning Outcomes

In this Module, learners will understand about:

● Whether a Trademark registration is mandatory in India?

● What is passing off and how to enforce it?

I. Whether a Trademark needs to be Registered in India?

A trademark is not created upon its registration. A trademark exists independent of

the registration. The registration of a trademark only provides for an added means to
protect a trademark i.e. a statutory protection.

The Registration of a trademark will impart the protection under the statute while
the common law right subsisting in the trademark by its use will remain unaffected.

Section 27(2) of the Act provides for the common law remedy of passing off that can
be taken against an imitator. It is for the trademark holder to decide whether a
trademark needs to be registered or not.

A trademark registration is not mandatory in India but it is always advisable to

register a trademark as it assists in smooth enforcement of the statutory trademark
rights and grant an exclusive right to use the trademark in relation to the
goods/services in which it is registered.
II. Passing off

Passing off is an actionable wrong where a person passes off his goods/service as the
goods/service of another. Section 27(2) of the Trademark Act, 1999 states that:

“(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.”

To succeed in a passing off action the following three elements (‘classic trinity’ as
referred to in the Jif Lemon1 Case) have to be present:

● The goods or services have acquired goodwill or reputation in the

marketplace that distinguishes such goods or services from competitors;

● The imitator misrepresents his goods or services, either intentionally or

unintentionally, so that the public may have the impression that the offered
goods or services are those of the claimant; and

● The claimant trademark owner may suffer damages because of the

misrepresentation.

Thus, a tort of passing off action may succeed only when the classic trinity is satisfied.

The Supreme court differentiated an infringement action and passing off action in
Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories2
and opined that:

“In an action for infringement, the plaintiff must, no doubt, make out
that use of the defendant's mark is likely to deceive, but where the
similarity between the plaintiff's and the defendant's mark is so close

1
Reckitt & Colman Ltd v Borden Inc, [1990] 1 All E.R. 873
2
[1965]1SCR737
 either visually, phonetically or otherwise and the court reaches the
conclusion that there is a limitation, no further evidence is required to
establish that the plaintiff's rights are violated. Expressed in another
way, if the essential features of the trade mark of the plaintiff have
been adopted by the defendant, the fact that the get-up, packing and
other writing or marks on the goods or on the packets in which he
offers his goods for sale show marked differences, or indicate clearly a
trade origin different from that of the registered proprietor of the make
would be immaterial; whereas in the case of passing off, the defendant
may escape liability if he can show that the added matter is sufficient
to distinguish his goods from those of the plaintiff.”

In the case of Ruston Hornsby v. Zamindara Engineering Co.3 , the Hon’ble

Supreme Court explained the nature of the two actions as under:

“In a passing off action, the issue is as follows:

“Is the defendant selling goods so marked as to be designed or

calculated to lead purchasers to believe that they are the plaintiff's
goods?

But in an infringement action, the issue is as follows:

“Is the defendant using a mark which is the same as or which is a

colourable imitation of the plaintiff's registered trademark?”

Therefore, in the case of an infringement action the only question involved is whether
the imitator is using a mark which is the same as or which is a colourable imitation of
the Trademark owner’s registered trade mark.

Hence, it is much easier to contest a trademark infringement suit rather than a

passing off action as a passing off action is maintainable only upon satisfying the

3
1970 AIR SC 1649
 classic trinity. For example, suppose a trademark HEAVY FOODS in respect of a
restaurant exists and the trademark has obtained registration.

Now if an imitator opens a restaurant in the vicinity called HEVY FOODS, then in an
infringement action the court presumes confusion and as the marks are similar and in
respect of identical services.

But, if the trademark is not registered then for an action for passing off, the plaintiff
will have to prove goodwill, misrepresentation and a likelihood of damages which
may not be easily proved.

Further, a trademark passing off action can succeed even if a trademark infringement
action fails as a trademark registration can be invalidated by lapse of the mark due to
non-renewal or not obtaining registration for the goods/services in question.

III. Transborder reputation

Transboundary reputation means than the reputation that has spilled over to
India (or another jurisdiction) wherein there is no actual use or registration of
a trademark.

In India, the concept of transborder reputation was propounded in the seminal case
of N.R. Dongre and Ors v. Whirlpool Corporation and Anr 4 wherein the Supreme
Court in an action of passing-off ruled that mere advertisement of a trademark,
without physical presence of goods in the Indian market, was sufficient to establish
local use and goodwill.

The Supreme Court further substantiated this doctrine in Milmet Oftho Industries
& Ors. v. Allergan Inc.5 and held that a mark adopted and used in the international
market prior to adoption and use of an identical mark in India by a third party can be
protected even though the foreign mark had never been used in India. Since then,

4
AIR 1995 Delhi 300
5
(2004 (28) PTC 585 (SC)
 many companies have been able to successfully initiate passing off action against
imitators in India based on Transborder reputation. However, the law will not protect
foreign corporations who have no intention to come to India or who have no
intention to introduce their products in India.

To establish Trans-border reputation two factors have to be taken into

consideration:

● Reputation of the trademark in the foreign jurisdiction(s); and

● Knowledge of the trademark in India due to its reputation abroad.

The concept of transborder reputation will assist us, if a similar or identical mark to a
known foreign mark is fraudulently adopted/applied for by an entity, in a passing off
action or in an opposition/rectification action. We can rely on the transborder
reputation to establish priority over the contested mark and reputation in India.

Trans border reputation can be established by the presence of the mark in websites
accessible in India, presence in social media, online sales of the products/services
under the trademark, advertisements in magazines, availability in duty free shops,
etc. But in the recent case of Toyoto Jidosha Kabushiki Kaisha v. M/s Prius Auto
Industries Ltd & Ors 6, the Apex Court has held that the trademark PRIUS has not
acquired a reputation in India even after producing ‘advertisements in automobile
magazines, exhibitions of the car held in India and other countries, hits on the
claimant's website…seeking information of Prius car…and the information on the
internet’.

The Supreme court observed that:

“The advertisements in automobile magazines, international business

magazines; availability of data in information-disseminating portals
like Wikipedia and online Britannica dictionary and the information on

6
CIVIL APPEAL NOs.5375-5377 oF 2017
 the internet, even if accepted, will not be a safe basis to hold the
existence of the necessary goodwill and reputation of the product in the
Indian market at the relevant point of time, particularly having regard
to the limited online exposure at that point of time, i.e., in the year
2001.”

It further held that,

“All these should lead us to eventually agree with the conclusion of the
Division Bench of the High Court that the brand name of the car Prius
had not acquired the degree of goodwill, reputation and the market or
popularity in the Indian market so as to vest in the plaintiff the
necessary attributes of the right of a prior user so as to successfully
maintain an action of passing off even against the registered owner.”

****

We hope you liked our reading resource. Our online certificate courses contain
tons of practical knowledge delivered through:

● Weekly live lectures by experts to clear all your doubts

● Recorded lectures that compress years of learning into micro video

lessons Assignments and personal feedback to help you deepen your
learning and track your progress

● Constant follow-ups by a dedicated learning manager over email and

WhatsApp to ensure that our courses have rigour and an element of
care in an online environment

Check our course here.