Trademark is a tool of identification that identifies a source of business that can be distinguished from other sources of business in a given market. Sec 2 (zb) of trademark defines what a trademark actually is. Trademark have 2 statutory requirements of a mark are:
(i) Distinctiveness -This is a parameter which distinguishes two products or service are different from each other
(ii) Graphical representation- It is a 2-d in a toto paper-based representation of trademark.
Thus in India trademark can be protected under both the trademark act 1999 and also under the law of passing off. The law of passing off has not to be mentioned under the trademark act expressively. Passing Off and Infringement of Well-Known Trade Mark’s is of immense importance in view of the several infirmities and drawbacks in implementation of the existing laws. Passing off action is based on the common law principle. The damages claimed in an action for passing off are “un-liquidated damages”. Passing off essentially occurs where the reputation in the trademark of party A is misappropriated by party B, such that party B misrepresents as being the owner of the trademark or having some affiliation/nexus with party A, thereby damaging the goodwill of party A. The “passing off” product is very detrimental for trade as it takes away the market share of genuine producers as well as customers are also cheated by receiving the sub-quality product. On receiving the sub-quality product, without knowing the fact of “passing off”, customer may choose some other trademark in the future with the false impression that the manufacture is producing an inferior quality product. The imitation product in trade is also known as counterfeited product. For an action of passing off it is not required that the mark should be registered, whereas for the action of infringement under trademark act 1999 the mark should be registered under the act.
Passing off is on the principle that no one has the right to represent one’s good as of someone else. The Supreme court of India in the famous case of Cadila Health care Ltd. v. Cadila Pharmaceuticals[1]defined passing off as “the species of unfair trade competition or off actionable unfair trading by which one person through deception attempt to obtain the economic benefit of the reputation which other has built for himself”
Some companies being unknown of registration may not register or their products may not qualify for the registration as they could not qualify the statutory provision. But these products have a good reputation in the market. Thus these products are protected under the law of passing off. The characteristics of passing off are discussed and explained in a number of cases especially in Lord Diplock in Erven Warnik B.V. v. Townend [2] ,
1. Misrepresentation;
2. Made by a person in course of trade,
3. To prospective consumers of his or ultimate consumers of goods or services supplied by him,
4. Which was calculated to injure business or goodwill of another trade (in the sense that this is reasonably
foreseeable consequence), and
5. Which caused actual damage to a business or goodwill of a trader by whom the action was brought.
There are three main elements of the tort of passing off which were also referred as “classical trinity” in Harrods v. Harrodian School [3] is:
(i) Reputation;
(ii)Deception; and
(iii)Damage
In Racit vs colemen case it was said that every passing off action should be passed through the trinity test
(i) Goodwill has to be attached with the passing off
(ii) Person bringing the case there should be misrepresented.
(iii) There should be damage or likelihood of damage
Protection of well-known trademarks is important not only from the business point of view but also for the protection of consumers from fraud and imposition. However, it is beneficial if combined action for infringement and passing off is brought in one suit as incorporating a plea of infringement, if the mark gets registered can always amend the plaint. But in an action for infringement alone, the plaintiff may not be allowed to include a fresh cause of passing off in order to save the action. Since the scope of passing off action is wider than an infringement action, if an action fails, there is a chance of another succeeding. As stated in the preamble of the Trademarks Act, 1999, the law provides for better protection of trademarks, the fact that the trademark law provides protection to well-known trademarks has come out to be a reality. The present Act expressly recognizes the common law remedy and thus saves both the registered and unregistered trademarks from being misused.
[1] 2001 (2) PTC 541 SC
[2](1980) RPC 31
[3] [1996] EWCA Civ 1315
