Passing off and Infringement and Relief under Trade Mark Act 1999

Introduction to Passing Off

It is quite common in today’s news articles to observe statements such as ‘Shop owner sells low grade products with logo of branded company’ or ‘Poor quality products passed off as branded’ etc. Even though the term ‘passing off’ is sufficiently being heard and referred to, however it still remains unclear among general public on what is the actual meaning of the term.

From a legal point of view, it would be fair to state that the term “passing off” would refer a situation when an individual or an entity misrepresents its goods or services as that of another to customers for the benefit of sale. This act is likely to give a misleading impression to the end-consumer with regard to the ownership of the products or services that are being provided.

Throughout history, passing off has been observed to have taken several forms, thus leading to widening of its scope. For instance, it was initially limited to only passing off one person’s goods or products as that of another but now it includes passing off services, business, occupations and non-trading activities as well. It also refers to a variety of unfair business practices and unfair competition in which one party’s actions harm or diminish the reputational value of another party.

The ‘law of passing off’, a common law tort, intends to prevent the illegal sale of goods or services as that of another’s. The law of passing off is also codified under Section 27 of the Trademarks Act, 1999 (“Act”) which refers to ‘passing off’ as “passing off of goods or services as the goods of another person or as services provided by another person”. It is pertinent to note that the intention behind the law of passing off is not only to safeguard the rights and interests of trademark owners but also to protect and prevent customers from deception.

Essentials for Passing Off Action

The general essential prerequisites for passing off are as follows [1]:

• misrepresentation to the customer with regards to the ownership of product / service;
• causing confusion among the consumers, resulting in deception; likelihood of damage and loss of reputation.

In addition to the foregoing, it may be noted that where a consumer’s initial interest in a product is based on the confusion or deception that there is some nexus between the said product and the products of another company, irrespective of whether the product was purchased or not, is also sufficient prerequisite for ‘passing off’. [2]

It is also significant to note that passing off may coincide with infringement of trademark if one uses an infringing trademark appearing to be a brazen attempt to mislead and deceive the customers and profit from their goodwill by passing off its goods as those of another’s. This is often considered to be an adequate requisite for an action under Section 134 of the Act which states that a suit for passing off can be instituted when passing off arises out of the use of trademark which is identical or deceptively similar to that of another, irrespective of whether it is registered or not. Further, the similarity or distinction between the product passed off as another’s and the products of such individual / entity is not relevant for an action of passing off. [3] The act of passing off the products as that of another company in itself is sufficient.

Distinction between infringement and passing off.

Remedies Available or Relief under Section 135

Since a suit for passing off may be initiated under Section 134 of the Act when passing off arises out of the use of a trademark that is deceptively similar to that of another’s, the remedies available for passing off and infringement are generally the same.

Section 135 of the Act lays down the remedies available for passing off which are as follows:

• Injunction for discovery of documents, preservation of infringing goods, labels, etc. and restriction on defendant from destruction of evidence; at the option of the plaintiff, either damages or an account of profits.
• In addition to the foregoing, the plaintiff may also seek the delivery of infringing labels and marks for the purpose of destruction.

It is pertinent to note that the above mentioned remedies will not be provided by the court if the defendant satisfies the court that he was not aware that the plaintiff’s trademark was in use and that when it was brought to his knowledge, he/she ceased to use the allegedly infringing trademark.

Conclusion

It has been briefly observed that ‘Passing off’ is often confused with infringement of a trademark due to the reason that, even though they sometimes co-exist, however, they are distinct from each other. Passing off refers to the illegal sale of one’s products as that of another’s, whereas infringement of a trademark refers to the use of a trademark that is similar to that of another’s.

An action for passing off registered or unregistered products / services when coupled with the use of a deceptively infringing trademark has the same remedy as that of an infringement of trademark. However, under a suit for passing off an unregistered trademark, the burden of proof to establish loss of reputation and goodwill is more often difficult from a practical point of view. In this regard, it may be noted that many principles relating to trademark law have evolved and are still developing.

Due to the aforementioned factors, a registered proprietor will always choose to file an infringement lawsuit rather than a passing off lawsuit. Many users who would otherwise not have been able to get any type of legal recourse for the infringement of their marks find relief in the Act’s allowance of unregistered trademarks to some degree of protection.