Passing off is an important common law tort that protects the goodwill and reputation of a trader from being appropriated by another trader through deceptive use of similar trade names, marks, get-up, or other indicia. Unlike trade mark infringement (which requires a registered trade mark), passing off protects unregistered trade marks and trade names. The law of passing off is not codified in India but has been developed through judicial decisions. However, Section 27(2) of the Trade Marks Act, 1999 expressly preserves the right to bring a passing off action.
Meaning of Passing Off
Passing off occurs when a trader misrepresents his goods or business as being those of another trader, thereby passing off his goods as the goods of that other trader. The essence of passing off is that the defendant is trying to take advantage of the goodwill and reputation that the plaintiff has built up in his trade name, mark, or get-up.
Lord Diplock in the landmark English case of Erven Warnink BV v. J. Townend & Sons (Hull) Ltd. (1979) described passing off as protecting the trader's "attractive force which brings in custom."
Essential Elements of Passing Off — The Classic Trinity
The classic statement of the elements of passing off was made by Lord Oliver in Reckitt & Colman Products Ltd. v. Borden Inc. (1990) — the "Jif Lemon" case — where he identified three essential elements, commonly called the "Classical Trinity":
1. Goodwill The plaintiff must have goodwill — i.e., an established reputation and customer base associated with his trade name, mark, or get-up. Goodwill is the attractive force that brings customers to the plaintiff's business.
2. Misrepresentation The defendant must have made a misrepresentation to the public — whether intentional or unintentional — that his goods or business are connected with the plaintiff's goods or business. The misrepresentation must be likely to deceive the public.
3. Damage The plaintiff must have suffered or must be likely to suffer damage to his goodwill as a result of the defendant's misrepresentation. Damage may include loss of sales, loss of reputation, or dilution of goodwill.
Forms of Passing Off
Passing off can take various forms:
1. Classic Passing Off — The defendant sells his goods as those of the plaintiff by using a similar name, mark, or get-up.
2. Reverse Passing Off — The defendant sells the plaintiff's goods as his own.
3. Extended Passing Off — Where a group of traders share a common goodwill in a descriptive term (like "Champagne" for sparkling wine from the Champagne region of France), any trader outside the group who uses that term may be liable for passing off.
4. Instruments of Fraud — Passing off can also occur where a person supplies another with instruments (like labels or packaging) knowing they will be used to pass off goods.
Passing Off vs. Trade Mark Infringement
| Passing Off | Trade Mark Infringement |
|---|---|
| Common law action | Statutory action under Trade Marks Act |
| Protects unregistered marks | Protects registered marks |
| Must prove goodwill and damage | Registration is prima facie proof of validity |
| Available even without registration | Requires registered trade mark |
| More difficult to establish | Easier to establish |
Important Case Laws
1. Perry v. Truefitt (1842) This early English case established the foundational principle that a trader cannot represent his goods as those of another trader. This is considered the origin of the modern law of passing off.
2. Reckitt & Colman Products Ltd. v. Borden Inc. (1990) The "Jif Lemon" case where the House of Lords established the classical trinity of goodwill, misrepresentation, and damage as the essential elements of passing off.
3. Cadbury India Ltd. v. Neeraj Food Products (2007) The Delhi High Court held that the use of a similar get-up (packaging design) to that of Cadbury's "Gems" chocolate constituted passing off, even though the word mark was different.
4. Hindustan Pencils Pvt. Ltd. v. India Stationery Products Co. (1990) The Delhi High Court granted an injunction against passing off where the defendant used a mark similar to the plaintiff's "Nataraj" pencil brand.
5. Laxmikant V. Patel v. Chetanbhai Shah (2002) The Supreme Court held that passing off is a species of fraud and that a person who has built up goodwill in a trade name is entitled to protect it against misappropriation by others.
Remedies for Passing Off
The following remedies are available in a passing off action:
1. Injunction — The most important remedy. The court can grant a permanent or interim injunction restraining the defendant from continuing the passing off.
2. Damages — The plaintiff can claim compensation for the loss suffered due to the passing off.
3. Account of Profits — Instead of damages, the plaintiff can elect to receive the profits made by the defendant through the passing off.
4. Delivery Up — The court can order the defendant to deliver up all infringing goods, labels, and packaging for destruction.
Conclusion
Passing off is a vital common law remedy that protects traders from having their goodwill and reputation misappropriated by dishonest competitors. The classical trinity of goodwill, misrepresentation, and damage provides a clear and workable framework for establishing a passing off action. Indian courts have developed a rich jurisprudence on passing off, drawing on both English precedents and Indian cases, to ensure that honest traders are protected from the unfair competition of those who seek to trade on another's reputation. Passing off complements the statutory protection of registered trade marks and together they form a comprehensive system for protecting trade identity in India.
Comments
Post a Comment