What Is Passing Off In Trademark?

A brand is a living entity and it is enriched or undermined cumulatively overtime, the product of a thousand small gesture. – Michel Eisner, Walt Disney company.

The passing off is a common law tort, which can be used to enforce unregistered trademark rights. The tort is known as “passing off” in the British Isles and most of the commonwealth. In USA, it is known as “palming-off” and unfair competition elsewhere.

The root of passing off lies in tort of deceit. The object of law is to protect goodwill of the plaintiff’s business or his goods or his services or in the work of which he produces or something of that kind.1 The goodwill in business is an asset and therefore a species of a property, the law protects is against encroachment. What is protected is an economic asset.2

ORIGIN OF PASSING OFF:

Origin of passing off can be linked to the origin of the trademark which is linked to the origin of 5000 B.C. The use of marking to establish ownership is ancient. The reason behind the development of trademark was that the trader is wanted to distinguish their goods from those of rivals, they wanted to inform consumers of the quality of their products, wanted to create goodwill, prevent counterfeiting and obviate confusing and deceptive.3 The history of passing off can be traced back to 17th century in UK and 19th century in USA and India.

UK: The action of passing off prevents a man from selling his goods as that of another man by taking advantage of the latter’s reputation. The passing off was recognized as early as the sixteenth century. Though the case is not directly reported, Justice Dodderidge referred to it in the 17th century in Southern Cases4and Dean cases5. In Perry V. Truefit,6 the law regarding passing off was defined in by Lord Langdale as “ A man is not to sell his own goods under the pretence that they are the goods of another man.” The Reddaway Frank and co. v. George Banham and co. Ltd., 7 extended doctrine to descriptive terms of every type and Lord Halsbury observed, “nobody has any right to represent his goods as goods of somebody else”.

USA: Trademark protection existed as an important aspect of a larger body of law, namely, unfair competition law.

INDIA: In India, intellectual property is called as vidhya meaning property which has been invented or made known. Since the goods of Indian make were of supreme quality and nobody else could copy those goods, hence they didn’t have any trademark or brand name of their goods and the restricting provisions of trademark law never creeped into their mind. But when east India company capture certain part of India and trademark law started in practice and later evolved from of successive enactment on the law of trademarks.8

DEVELOPMENT OF TRADEMARK IN INDIA:

The Specific Relief Act 1877, Trade Mark Act 1940, Trade & Merchandise Marks Act, 1958 and Trade Mark Act, 1999 were enacted which are related to trademark and passing off. Specific Relief Act, 1877 made provision for permanent injunction and Trademark Act, 1940 made provision for system of registration of trademark and statement for particular of registered trademark was established. Trade Marks Act, 1999 was introduced in Rajya Sabha on 1st December 1999 and brought into force on 15th September 2003. The term passing off is not defined but referred in statute in following sections:

• S. 27(1) states that no person shall be entitled to institute any proceeding to prevent or to recover damages for passing off of unregistered trademarks.

• S. 27 (2) indicated that nothing in unregistered trademark shall effect the right to action against any person for passing off the goods or services as the goods of another person or the service provided of another person and the remedies in respect thereof.

• S. 134(1)(c) speaks of the jurisdiction of the court to try a suit for passing off arising out of use of trademark stating that such suit shall not be instituted in any court below district court which has jurisdiction to try the case

Classical Trinity: In Reckitt & Coleman Products Ltd. V. Borden Inc & other, three essential elements of passing off were recognized.

The plaintiff must prove three elements in order to succeed in the litigation of passing off, which are as follow:

• First and foremost, the plaintiff must possess goodwill.

• Secondly, the defendant must have misrepresented goods which is likely to deceive people buying goods.

• thirdly, plaintiff has suffered and likely to suffer, damage as a result of misrepresentation.

These three elements are referred as classical trinity of passing off.

Misrepresentation: The defendant who passes off goods or business of plaintiff as that of his own may be made in any manner, whether by using in relation to his goods a mark which is identical with or colourable imitation of trademark of plaintiff or by using some features of his goods as that of the plaintiff’s goods is said have misrepresented. Misrepresentation may be implied or expressed and intentional and material.9

Goodwill: The action of passing off seeks to protect the goodwill of the owner. Lord Macnaughten gave a definition of goodwill as: “what is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of good name, reputation and connection with a business. It is attractive force which begins with custom…”10

Damage: The plaintiff must demonstrate that he suffered or he is likely to suffer damage by misrepresentation of the goods by defendant.

DIFFERENCE BETWEEN INFRINGEMENT AND PASSING OFF:

• If the mark is similar to a registered trademark used on similar goods or services, which is likely to confuse the buyer, that constitutes infringement. If the trademark offended against unregistered trademark only an action for passing off is permissible.

• Infringement is remedy for violation of statutory law and passing off is common law remedy.

• In an action for infringement, the use of mark by defendant is essential but it is not necessary in an action of passing off.

KINDS OF PASSING OFF:

• Extended passing off: The doctrine of extended passing off was created in J. Bollinger case.11 it protects the use of a descriptive term associated with a distinction and recognized product. In this case, geographical indication is not required.

• Reverse passing off: Reverse passing off takes place when defendant’s misrepresentation is not that the goods and/or services are that of the plaintiff but rather where the misrepresentation is that the plaintiff’s goods are that of the defendants. In India, the case of reverse passing off was aptly described by the division bench of Bombay High Court in Sheila Mahendran Thakkar case.12

RELIEF IN SUIT OF PASSING OFF:

Under Sec.135 of the Trade Marks Act, 1999 the reliefs which a court may grant for passing off are as follows:

1. Accounts of profit is an actual profits which the defendant has made by infringing the legal rights of the plaintiff.

2. Damages are the compensation awarded to the plaintiff by the defendant for the legal injury caused by him to the plaintiff.

Injunction: Sec.135 provides for following types of injunction:

(a) Anton Pillor order

(b) Mareva Injunction

(c) Interlocutory Injunction

(d) Perpetual injunction

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