A trademark is a mark which connects the goods and/or
services of a person with that person in the course of trade and thereby
distinguishes it from the goods and/or services of others. The Trade Marks Act,
1999 (‘the Act’) more specifically defines a trademark, inter alia, as a mark
capable of being represented graphically and which is capable of distinguishing
the goods or services of one person from those of others.1 Therefore,
a mark in order to be a trademark need not necessarily be registered. A
trademark may also either be used or proposed to be used. These factors as to
whether a trademark is used and/or registered are factors relevant for
determining whether an action for infringement of trademark and/or an action for
passing off may be instituted.
I shall initially explain what is meant by infringement of a
registered trademark and passing off, respectively, and then proceed to deal
with the broad distinctions.
Infringement of Registered Trademark :
Chapter IV of the Act deals with the effect of registration
of a trademark. The Act specifically provides that no proceedings for
infringement of an unregistered trademark may be instituted thereby clarifying
that an action for infringement can only be taken in respect of a registered
trademark. In fact, a right granted on registration is the right to take
recourse to infringement proceedings.2 The Act also clarifies that an
action for passing off will not be affected by the Act.3
S. 29 of the Act deals with and identifies the acts that
would constitute infringement of a registered trademark. The Section seeks to
protect a registered trademark and/or a mark deceptively similar thereto from
being exploited and/or used by an unauthorised person so as to defeat the rights
of the registered proprietor of the trademark of being entitled to exclusively
use the registered trademark. The scope and ambit of acts constituting
infringement has been substantially broadened under the present Act by bringing
in concepts like dilution of trademark, erosion of distinctive character of the
trademark, parallel importation and damage to reputation, etc.
The statutory law relating to infringement of trade-marks is
based on the same fundamental idea as the law relating to passing off. But it
differs from that law in two particulars, namely, (1) it is concerned only with
one method of passing off, namely, the use of a trademark and (2) the statutory
protection is absolute in the sense that once a mark is shown to offend, the
user of it cannot escape by showing that by using something outside the actual
mark itself he has distinguished the goods from those of the registered
proprietor.4
In an infringement action, the plaintiff is, ordinarily, only
required to prove that the defendant is using the registered trademark and/or a
mark deceptively similar thereto in respect of the same goods or services cause
that would be enough to show a violation of the rights conferred on the
registered proprietor. Infringement consists in using the mark per se as a
trademark and therefore, any other distinguishing factors that may be employed
by a defendant may not be relevant in an infringement proceeding.
Any person trespassing on the rights conferred by
registration of a trademark infringes the registered trademark. The rights
conferred by registration in a particular case must be determined in the context
of any restrictive conditions or limitations entered on the Register of Trade
Marks at the time of registration of the mark.
Infringement proceedings, thus, enable a registered
proprietor to prevent any unauthorised person from using his trademark and/or
mark deceptively similar thereto in respect of similar goods or services or as
contemplated u/s.29 of the Act.
Passing off :
On the other hand, the object of the law of passing off is to
protect some form of property — usually the goodwill of the plaintiff in his
business or his goods or his services or in the work which he produces. The
trademark represents the reputation and goodwill of a business and/or the goods
and/or the services. For example, the goods sold by ‘Nike’ are considered to be
of superior quality and have an immense reputation in the market. The goods sold
under the trademark ‘Nike’ carry immense value on the basis of the fact that
they bear the ‘Nike’ trademark. If the same goods were sold without the said
trademark thereon, they would not be as valuable.
Passing off is a form of tort of deceit and/or
misrepresentation. To put it in a nutshell, passing off is a tort whereby one
person tries to pass off his goods and/or services as and for the goods and/or
services of another. Passing off in effect is also a form of unfair competition.
It is a common law remedy and has been built entirely on the basis of case law.
In Halsbury’s Laws of England, 4th Edn., Volume 48, para 144
at page 98, the essentials of the cause of action for passing off, as restated
by the House of Lords in Erven Warnink B. V. v. J. Townend & Sons, 1980 R.P.C.
31, are set out as follows :
“(1) a misrepresentation
(2) made by a trader in the course of trade
(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, in the sense that this is a reasonably foreseeable
consequence, and
(5) which causes actual damage to a business or goodwill of
the trader by whom the action is brought or, in a quia timet action, will
probably do so.”
The aforequoted dictum of Lord Diplock is the locus
classicus on the subject and succinctly explains what is meant by the tort
of passing off.
Therefore, it may be noted that in order to enable the owner
of a trademark to sue for passing off, he would be required to show in the first
instance that the trademark is associated by members of the trade and public
solely and exclusively with the services rendered and/or goods sold by him and
that some other person by using an identical and/or deceptively similar mark in
respect of similar services and/or goods is trying to pass off his goods and/or
services as and for the goods and/or services of the owner. Confusion and
deception in the course of trade would be essential to an action in passing off.
It is common understanding that an action for passing off cannot be instituted in respect of an unused trademark, however the same is incorrect. For in a given situation passing off may even be instituted in respect of a trademark which has not been used in the market, but which has acquired reputation and goodwill on the basis of other factors such as publicity, advertisements, etc. and has therefore, come to be associated solely with the owner of the trademark.5
Distinction :
The distinction between an infringement action and a passing off action is important. As explained above, both operate in different spheres. Hence, to illustrate there could even be a situation where a registered proprietor (Plaintiff) files a suit for infringement and the defendant files a suit for passing off against the same plaintiff. This would happen in a case the defendant has a prior user of the trademark but a subsequent registration.
The issues involved in an action for infringement and an action for passing off are different and distinct. In an action for infringement the basic issue would generally be whether the registered trademark and the infringing mark are identical and/or deceptively similar and whether or not they are being used in respect of similar goods and/or services. However, in an action for passing off, in the first instance the plaintiff would have to show that the said trademark is associated solely and exclusively with his services and/or goods and that use by the defendant of such mark would cause confusion and/or deception in the course of trade and thereby people would end up buying and/or procuring the goods and/or services of the defendant thinking they were of the plaintiff. Such acts would cause wrongful loss and harm to the plaintiff.
The Supreme Court has succinctly highlighted major differences between the two remedies and the approaches involved in an action for infringement and an action for passing of in the landmark judgment of Ruston Hornsby v. Zamindara Engineering, AIR 1970 SC 1649, wherein it has laid down, inter alia, as under :
“It very often happens that although the defendant is not using the trademark of the plaintiff, the get-up of the defendant’s goods may be so much like the plaintiff’s that a clear case of passing off would be proved. It is on the contrary conceivable that although the defendant may be using the plaintiff’s mark, the get-up of the defendant’s goods may be so different from the get-up of the plaintiffs goods and the prices also may be so different that there would be no probability of deception of the public. Nevertheless, in an action on the trademark, that is to say, in an infringement action, an injunction would issue as soon as it is proved that the defendant is improperly using the plaintiff’s mark.
The action for infringement is a statutory right. . . . .
On the other hand the gist of a passing off action is that A is not entitled to represent his goods as the goods of B, but it is not necessary for B to prove that A did this knowingly or with any intent to deceive. It is enough that the get-up of B’s goods has become distinctive of them and that there is a probability of confusion between them and the goods of A. No case of actual deception, nor any actual damage need be proved.”
Another important factor of distinction is the fact that under the Act, a registered proprietor is granted an additional right to institute an action for infringement of trademark where the plaintiff’s office is situate. This provision was introduced to enable the registered proprietors take appropriate proceedings against infringers without having to follow them to every corner of the country. On the other hand, however, passing off being a common law remedy, the jurisdiction of a Court to take cognizance of the same would be in accordance with the normal rules of jurisdiction as laid down in the Code of Civil Procedure, 1908 and/or the relevant Letters Patent i.e., either where the defendant resides or carries on business or where the cause of action has arisen, etc.
To illustrate the above points of distinction, take a situation where a trader in pens is the registered proprietor of a trademark ‘KODAK’ (word per se) and has been using the same for the last decade on a yellow and red background in respect of his pens. The defendant is using the trademark ‘TODAT’ in respect of his pens on a white and green background. In such a case for the purposes of an infringement action the Court would only consider whether the trademarks KODAK and TODAT are identical and/ or deceptively similar, since the goods are identical. On the other hand, for the purposes of an action of passing off, the Court would have to consider the entirety of the package including the difference in colour schemes, nature of consumers, packaging, etc. and consider whether on an appraisal of the entire evidence it can be proved that the consumers would be confused and/or deceived into buying the pens of the defendant on the belief that they were somehow connected with the plaintiffs.
In the aforesaid illustration let us assume that the pens are sold by both traders on a red and yellow background but the trademarks involved are the registered trademark KODAK (word per se) and the unregistered trademark PILOT. In such a case even though the trademarks per se are different, an action in passing off may still lie if by colour scheme, packaging, trademark being written in small letters, etc. the consumer and general public would be confused and/or deceived into buying the defendants pens on the belief that they emanate from the plaintiff.
A perusal of the above would evince the fact that the two wrongs are different. Therefore, it is essential for owners of trademarks to understand that even if their trademark is not registered, they may still maintain an action in passing off. In fact, in a given case a trader who may not have used the trademark in the Indian market, but whose trademark has acquired a transborder reputation in India may maintain an action in passing off. A situation may also arise where even if a trademark is registered, use of the same may be restrained by a prior user of the trademark.
Therefore, there can be no general answer as to which proceeding is better and/or preferred and the course of action and must be determined on a case-by-case basis.
