Introduction to the Principle of Passing off
The first instance where the principle of Passing off under trademark applied was in the case of Perry v Truefitt[1]. The court derived the nature of Passing off and pointed out how, despite the lack of registration of marks, the act of using someone else’s mark through pretense and deception is equivalent to misrepresentation and tarnishing the goodwill of the plaintiff. While India got its landmark judgment on Passing off in 2001 with the case of Cadila Healthcare Ltd vs. Cadila Pharmaceuticals Ltd[2]. Here, the Supreme Court defined the tort of Passing off as “the species of unfair trade competition or of actionable unfair trading by which one person, through deception, attempts to obtain an economic benefit of the reputation, which the other has established for himself in a particular trade or business”.
Prerequisites of Passing off under trademark
There are mainly three essential ingredients to acknowledge liability of passing off, and the onus of proof lies on the plaintiff. To begin with, the plaintiff needs to establish its public goodwill and reputation. The expression of “goodwill” can have a larger scope as it can include:
- The knowledge of such marks in minds of the general public;
- Turnover, sales, money spent on an advertisement;
- The demand of the goods or/and services with the disputed mark in the minds of the general public.
Moreover, there needs to be “deception”, which is established with prima facie evidence of misrepresentation. This may be intentional or unintentional where the accused utilizes the mark in a manner where the consumer is made to believe that the marked goods and/or services supplied by the defendant are somehow associated with the original ones (plaintiff’s goods and/or services).[3]
In addition, the plaintiff must show that they suffered or are likely to suffer “damage” as a result of the defendant’s misrepresentation of the origin of their goods or/and services.[4]
Drawing Contrast between Infringement and Passing off
The action for infringement is considered to be a “statutory remedy” for the proprietor whose trademark is already registered, thus granting exclusive rights over the trademark.[5] Whereas, in the case of Passing off, only common law remedy is granted to the proprietor due to lack of registration of the trademark.[6]
In 2013, the Supreme Court held that passing off rights has a broader remedy compared to the statutory remedy granted in infringement.[7] This is because the passing off doctrine operates on the general principle that no person is entitled to represent his or her business as the business of another person. The said action of deceit is maintainable for diverse reasons other than that of registered rights, which are allocated rights under the Act.
Recent cases in India
Last year, a pharmaceutical company named Cutis Biotech filed a suit of passing off against the Serum Institute of India for the deceptive use of the mark ‘Covishield‘. Though Cutis Biotech has not yet registered the mark, they allegedly claimed that their goodwill was damaged and their identity was misrepresented. The facts of the case clearly stated that there was a difference in classes, the SII is utilizing the mark for the Covid vaccines, whereas, Cutis was using it for the sale of goods such as sanitizers and disinfectants.
The court examined the case based on those three prerequisite components and held that Cutis failed to ensure any of them. Firstly, due to their lack of noteworthy turnover and sales, they failed to prove goodwill in society. Moreover, there was an absence of deception from SII’s side rather, the defendant was manufacturing those vaccines in the public interest. While elaborating the judgment, the court pointed out how invoices are not enough evidence to establish a prima facie case. Moreover, the process of “manufacturing” a vaccine cannot be considered equivalent to the ‘use’ of the mark.
Talking about remedy as an injunction for Passing off, a temporary injunction can be granted under Section 94(c) and (e) of the Code of Civil Procedure, 1908 and Section 37 of the Specific Relief Act, 1963. However, the remedy shall be supported by factors such as “prima facie evidence, irreparable injury and balance of convenience.“
These criteria were not fulfilled in the above-mentioned case. Rather the SII would have been suffered damages on account of interlocutory orders about any kind of injunction.
Similarly, in the case of Plex, Inc vs. Zee Entertainment Enterprises Limited[8], where the plaintiff is a media server and the defendant is a large multi-media conglomerate. Injunction or quia timet action was claimed in Passing off. The court found no prima facie evidence to establish the goodwill and reputation of the plaintiff. In addition, there were many notable differences between both these platforms, i.e., class, mode, character and performance of the parties. Thus, injunctions were not granted based on the main three aspects.
Conclusion: A trademark is bound to be protected from a business standpoint as well as for the protection of customers from deception. In comparison to trademark infringement, the scope of passing off is far broader, and thus it has always been subject to judicial discretion and alleged biases. This is due to the ambiguous nature of establishing evidence like goodwill and reputation for unregistered marks. However, the Trademarks Act provides a sense of protection by allowing unregistered trademarks to claim relief and legal action for violation of their marks.
References:
[1] (1842) 49 ER 749.
[2] (2001) 5 SCC 73.
[3] Baker Huges Ltd. vs. Hiroo Khushalani (2000) 102 Comp Cas 203 (Del).
[4] Reckitt & Colman (1990) RPC 341.
[5] Durga Dutt vs. Navratna Pharmaceuticals Laboratories AIR 1965 SC 980.
[6] Cadbury India Limited and Ors. vs. Neeraj Food Products 142 (2007) DLT 724.
[7] S. Syed Mohideen vs. P. SulochanaBai 2016 (66) PTC 1 (SC).
[8] COMM IP SUIT (L) NO. 3736 OF 2020.
[9] https://www.indianbarassociation.org/wp-content/uploads/2013/02/Passing-off-action-under-trade-mark-law.pdf
Disclaimer: The present article intends to provide general guidance on the subject, and you can also consult us in your specific case.
