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Can Unregistered Trademarks Be Protected?

Introduction

The term “Passing Off” refers to the unlawful use of a trademark that is similar to the same products and services. It is similar to trademark infringement, but applicable to unregistered trademarks. Passing off occurs when an identical trademark is utilized by someone other than the prior user, on comparable products or services with the intent to deceive trade members and destroy the preceding user’s goodwill.

In this case, the former user of the mark has favored rights due to his established use of his trademark. In the instance of passing-off, the owner (prior user) of a trademark may bring an action against the person or entity that, in the course of business, misrepresents its products or services in such a way that customers assume they are coming from the source of the original owner.

The sole object of passing off is to protect the goodwill and reputation from encroachment by dishonest competitors. The passing-off action arose in the 19th century and depended upon the simple principle that “nobody has the right to misrepresent his goods as the goods of another.” Section 27 of the Trade Marks Act, 1999 Common law rights entitle the trademark owner to sue anybody who misrepresents their goods or services as the goods or services of another person.

Elements of passing-off action

The characteristics of passing off are discussed and explained in several English and Indian cases. However, five factors have been stated by Lord Diplock in Erven Warnik B.V. v. Townend as-

[i] Misrepresentation 

[ii] Made by a person in the course of trade,

[iii]To prospective customers of the or final buyers of his goods or services.

[iv] Which had calculated to injure business or goodwill of another trader.

[v] Which resulted in genuine harm to a business or the goodwill of the trader against whom the case has taken, or in a quia timet action would probably do so.

Nature and scope of passing-off

Passing-off action aims to restrain a trader from passing-off his goods as and for the interests of another trader from passing off his goods as and for the goods of another trader. Generally, the following methods are adopted by the persons for representing their goods or business as the goods or business of another person[1] :-

[i] Direct false representation

[ii] Adoption of the trademark, which is the exact or colorable imitation of the trademark of the rival traders

[iii] Adoption of an essential part of the rival trader’s name

[iv] Copying the get-up or color scheme of the label used by the trader

[v] Limitation the design or shape of goods,

[vi]  Adopting the word or name by which the rival trader’s goods or business is known in the market.

Types of passing-off

There are two types of passing off-

v  Extended Passing-Off

The expanded version of passing off, in which a deception as to the unique quality of a good or service causes injury to another’s goodwill, is one of the cases when passing off is actionable.

v  Reverse Passing Off

A trader market sells or produces the goods or services of another person or business.

Difference between Passing-Off and Infringement of Trademark

Though trademark and passing-off are the most intertwined themes of intellectual property, there are legally discernible differences between them. The fundamental differences between them are discussed and explained by the Supreme Court in several cases, such as 

[i] In Kaviraj Pandit Durga Datt Sharma vs. Nav Rattan Pharmaceuticals, – an action for passing-off is a common law remedy, being in substance an action for deceit. On the other hand, infringement is a statutory remedy conferred on the registered proprietor of a registered trademark. Additionally, The use of the plaintiff’s trademark by the defendant is not essential in action for passing-off, but it is a sine qua non in the case of an infringement action.

The Court also noted that in an action for infringement, the plaintiff must make out that the use of the defendant’s mark is likely to deceive. But in the case of passing-off, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods. The other differences are,

In P.L Anwar Basha vs. M. Natarajan, thecourt held that an action for trademark infringement, the plaintiff claims that the defendant infringed on his trademark by adopting it in its whole, a significant portion of it, or by colorably mimicking it.  And he asserts his statutory right to the exclusive use of the disputed mark for products of a particular type. But in a passing-off action, the plaintiff’s case is less specialized, for he complains that the defendant is using means calculated to pass-off or cause to pass off the goods of the defendant as well as standards that may or may not comprise or consist of the trademark, whether registered or unregistered.[2]

Conclusion

The protection of a trademark is required both for commercial purposes and to safeguard customers from fraud and deception. The passing-off action might be used in the case of unregistered goods and services. As opposed to trademark infringement, the scope of passing off is far broader. Even if the method and remedies for a passing off claim are the same for registered and unregistered marks, the burden of proof increases for unregistered marks since establishing goodwill and reputation is more difficult. To allow unregistered trademarks, the Act grants some relief to some users who would otherwise be unable to seek legal redress for violations of their marks. Injunctions are an efficient remedy for preventing trademark infringement, whether registered or unregistered. Injunctive remedies are available under Section 135 of the Trademark Act of 1999.

Author: Usha Saha, Legal Intern at PA Legal.

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