THE LAW OF PASSING OFF
Author: Mr. Ananya Choudhary, B.Com.,LL.B.(Hons.)
“Nobody has any right to represent his goods as the goods of somebody else.”. This is the basic principle that underlines the concept of passing off. As per the law of Passing off no person has right to sell his goods or services by misrepresenting them to be as that of another.
Passing off is constituted as under common tort law. And this passing off law is used to seek protection of unregistered trademarks. This law protects the owner of the trademark from the any damage caused to the goodwill by an act of misrepresentation by defendant. This misrepresentation may be aimed for deceiving the potential buyers of goods and services, by making them to believe that such goods or services are of the original trademark owner. And this misrepresentation can be done by way of fraudulent use of trademarks or tradenames or any other indication in order to deceive the public, making them to believe that the goods are of the original trademark owner.
Passing off under Trademark Act, 1999
Passing off fails to find an explicit definition as under the Trade Marks Act, 1999. But the Trade mark Act, 1999 has some clauses in regards to the same.
As per section 27 (2) of the Trademark Act, 1999:
“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”
Hence this clause provides for a remedy for an unauthorized use of an unregistered trademark. Recognizing the common law rights of the trademark owners, this section allows them to claim remedy for the passing off their goods and services. Further under this clause, registration of trademark cannot be taken as a defence in the proceeding of passing off.
Further also in the case of Koninkhijke Phillips Electronics v. Kanta Arora, the court held that it is made clear by the section 27 (2) of the Trademarks Act, 1999 that in a case of passing off, the registration of a mark in the trademark registry is completely irrelevant.
With the growth in trade and market competition, the purview of the passing off concept has also extended. First the passing off only provided protection in case of a misrepresentation of one’s person goods as that of another. Further its applicability was extended to cover business and services also. And later it was extended also to professional and non-trading activities. And today, this concept covers multiple forms of unfair trade practices and unfair competition, wherein one party aims to cause damage to the goodwill of another party.
Elements of Passing off
For a tort of Passing off, there are three fundamental elements which are also referred to as “classical trinity” and were upheld in the case of Reckitt & Colman Products Ltd. v. Bordan Incorporation.
These three elements are:
Firstly, it must be essentially established by the plaintiff that he owns some reputation in the mark, with which the purchasing public associates such goods and services. It must be established that his goods or services own a goodwill and the public buys aims to buy good or services of the plaintiff only.
Secondly, it must be established by the plaintiff that the defendant had deceived the public by misrepresenting the goods or services to be as of the actual owner of the trademark or the plaintiff.
Thirdly, the plaintiff must prove that he suffered an actual loss to the business as a result of the act of misrepresentation of the defendant. And the loss can be damage to the goodwill or may cause actual and financial loss to the business or a loss to the reputation.
Difference between trademark infringement and passing off
There exists a vast difference between these two concepts. The difference between the two concepts were observed by the honourable Supreme court in the case of Durga Dutt vs. Navaratna Pharmaceutical
One of the most important and the key difference between the trademark infringement and passing off is that the remedy for an action of trademark infringement is conferred on registered trademarks only, while in an action for passing off the remedy is also available for unregistered trademarks.
While a claim for trade mark infringement constitutes as a statutory remedy, but at the same time action for passing off constitutes as a common law remedy.
In case of a trademark infringement it is a pre-requisite for a claim that the trademark must have been used by the defendant, but in a case of passing off, it is not necessary.
Remedies for passing off
After fulfilling all the elements and establishing a successful claim for passing off, the plaintiff can claim remedy. The plaintiff may claim damages as under section 134 (1) of the trademarks act. The said section allows for the court to grant injunction restraining the further use of the trademark by the defendant and at the option of the plaintiff, either damages or an account of profits for the purpose of restoring the loss as suffered by the plaintiff as a result of the act of misrepresentation of the defendant, together with or without any order for the delivery-up of the infringing labels and marks for destruction or erasure.
Judicial decision over passing off
Colgate Palmolive Company v. Anchor Health and Beauty Care: In this landmark case of passing off, the plaintiff alleged that the colours and the pattern of colours as used by the defendant in their products are very similar to that of plaintiff. Further it was contented by the plaintiff that since they were established in the market since 1955, they hold a great goodwill and reputation as compare to the defendant which were established in the year 1961.
The court in this case held that the product of the defendant was quite similar with that of plaintiff, which was being sold in the market for nearly 50 years. And this might deceive and crate confusion in the minds of the public. And thus, the court held the defendant liable for an action of passing off.
Honda Motors Co. Ltd. v. Charanjit Singh and Ors: In this case the plaintiffs were an established brand. And the defendants were engaged in business of manufacturing cookers under the name of “Honda”. The plaintiffs initiated the proceeding of passing off against the defendant, alleging that name “Honda” was very well associated by the public with the company of the plaintiff which owns a high reputation and goodwill. And use of the same name, by the defendant creates a confusion in the minds of the purchasing public, making them to believe that the good belong to the plaintiff’s company. The court ruled in favour of the plaintiff and ordered an injunction against the defendant for using the name.
With the growth of economy, there have been a significant growth in the trade and commerce also. And in this competitive market in order to protect the goodwill and reputation as under law, it is required to get the trademark registered. But it does not mean that those who don’t have their trademark registered cannot protect their rights.
The law gives them protection by way of Law of passing off. Passing off is a common tort law, and it aims to protect the goodwill and reputation of the owner of the trademark from any act of misrepresentation, by the defendant with the aim of deceiving the purchasing public to buy the goods believing it to be of the original trademark holder. And such misrepresentation leads to damage to the original trademark holder. And hence the law of passing off aims to protect the reputation and goodwill of the original trade mark owner, even if the mark is unregistered.