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Passing Off Of A Trademark

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Passing off is a civil offence which infringes the rights of another individual or business entity. In trademarks, it means the act of representing one’s goods as the ones manufactured by another reputed manufacturer and selling it. This is done by selling them with visually similar trademarks that make customers mistake them for genuine products. The protection given to unregistered trademarks in India is limited to action for passing off and criminal action under Section 27 of the Trade Marks Act, 1999. Passing off must be distinguished from an action for infringement which is open for registered trademarks only.

Goodwill is the most important aspect in a passing off action. It is goodwill that is created by a business in the long run that is sought to be protected through passing off action. This is the reason why such action lies against even registered trademarks though the goodwill may belong to a company whose trademark is not registered- but became popular through continuous usage.

Trademark passing off

Passing off can apply not just to trading activities, but also to non-profit/ non-trading activities with goodwill. Sometimes, it is considered to be passing off when one proprietor represents his/her business or goods to be connected to the business or goods of another proprietor.

What Needs To Be Proven In A Passing Off Action?

The important requirements for an offence to be considered passing off are:

  1. There should be a misrepresentation or false representation.
    The misrepresentation must be proven in order to constitute passing off.
  2. The misrepresentation may be express or implied, but not necessarily fraudulent
    Express misrepresentation is very unlikely in passing off. A trademark is usually imitated in a way that can make a customer believe that the goods were manufactured by someone else.
  3. The act should affect the goodwill of the affected party

In Erven Warnink v. Towend, Lord Diplock stated some points that are to be considered to prove passing off.

  1. There must be misrepresentation
  2. It must be made by a person in the course of trade
  3. It must be made to prospective customers of the trader or the ultimate customers of goods and services supplied by him
  4. It injures the business or goodwill of another trader as a reasonably foreseeable consequence.
  5. It causes actual damage to a business or goodwill of the trader by whom the action is brought or will probably do so.

Remedies For Passing Off

Common remedies for passing off a product as another recognisable product includes the following:

  • Injunction
    The offender may be asked to stop production and sale of items bearing similar marks along with other remedies.
  • Damages
    The offender may be asked to pay a sum of money to the aggrieved proprietor.
  • Account of profits
    Here, the profits made by selling of goods bearing imitated trademarks may be appropriated by the court to be granted to the aggrieved party.
  • Delivery up of offending article for destruction
    Many times, the offending goods may be confiscated by making the offending proprietor deliver up the goods which shall be suitably destroyed.

What Are The Ways In Which Passing Off Is Committed?

Passing off is committed in the following ways.

  1. Direct misrepresentation
    It is rare that there would be direct falseful representation by a trader regarding connection since that may result in serious consequences. Hence, many traders resort to tactics like adopting a similar trademark which can mislead consumers.
  2. Adoption of trademark or colour scheme of rival trader
  3. Using an essential part of a rival trader’s name
  4. Imitating the label graphics of another trader
  5. Imitating the design or shape of goods of rival trader
  6. Using a word with which the rival’s goods are known in the market

Few Instances Of Passing Off

Usage of words like ‘equal to’ is a ground of passing off. For example, usage of ‘Equal to Day and Martin’ was held to be passing off and liable for injunction. However, words such as ‘similar to’ or ‘better than’ may not be grounds for passing off action. Words showing the former connection to a trademark holder may not be considered passing off unless there is an intention to show present connection. For instance, Hero motorcycles may legitimately use the words ‘formerly hero honda’ which shows the erstwhile connection with Honda Motorcycle company. Selling of adulterated goods of a trademark owner as genuine can also be a ground for passing off.

30 Oct, 16

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