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Overview On The Problem Of Trademark Infringement And Passing Off In India

A very well known principle was established pertaining to trademark infringement in one of the landmark judgements of southern vs. how,1617 that states "nobody has any right to represent his good as the goods of somebody else" and "nobody has a right to pass off the goods as somebody else". This was the first case to recognise trademark infringement, and as a result of this case, the courts adopted some of the important principles and passed legislation to safeguard the rights of the owners of goods and services.

If we go back far enough in the history of trademarks, we can see the first enactment for protection of trademarks was formulated by Britain thereafter it was recognized by india in the year 1940 and laid down its first Trademark Act named The Trademark Act,1940 ,after the independence india made amendments in the act and changed it to Trade & Merchandise Mark Act, 1958, currently the act is known as The Trademark act 1999.

Coming back to the definition of a trademark, it is a proprietary right of goods and services that protects them from infringement or harm that can really damage a company's reputation. It also protects the owner's legal rights to a product or service. Trademark may be used for each goods and services however in case you see mainly a service mark is used for services, it could be any symbol, mark, phrase, layout or a phrase which confers identification to the product a organization or an company owns, it's how a consumer can also additionally apprehend the product owned via way of means of company and differentiate it from different comparable product in the marketplace.

Trademark in itself builds up brand and consequently it enables to distinguish a firm from other different firms, it frequently does the job of true salesman as it's far a visible representation of Goodwill and quality.

There is a common misconception that owning a trademark entitles you to own a specific word or phrase and allows you to effectively stop others from using it, but this is not the case. Extensively in various scenarios, you do not have the right to own a phrase or a word; instead, you have control over how that phrase or word is used or associated with your brand of goods and services.

If you use a logo as a trademark for your apparel business to identify and distinguish your goods from those of others in the industry, for example. This doesn't imply you can't use a comparable logo for non-clothing-related products.

A good businessman who has invested a lot of money to create a brand and has protected it with a trademark will go to great lengths to defend it from any unfair advantage that competitors may get. Trademark infringement has now become a crime akin to thievery since new business owners want to gain fame and money quickly, so they prefer to climb on an existing firm rather than improving or building their own.Trademark protection is critical from both a business and a consumer perspective, as customers may be exploited by counterfeit products on the market.

Thus, in order to have a better understanding, the author of this article has focused only on trademark passing off and infringement, as well as possible remedies in the event of a trademark violation.

How is infringement differentiated from passing off?
Infringement in basic terms and in a layman's dialect agreeing to the oxfords word reference implies to break a law or a rule that's to breach or abuse any law, passing off on the other hand concurring to the oxfords word reference implies an unlawful act of selling other parties' item which are legitimately secured by trademark in its title or duplicate others item in such a way that one might accept the item to be genuine or original.

Section 29 of the trademarks act of 1999 deals with several aspects of the term infringement. section 29(1)states that:
A registered trademark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark".

This simply means that infringement actually takes place when an unauthorised person uses a trademark that is identical or deceptively similar to a registered trademark. Under the proviso of the trademarks act, passing off has no legal definition, but it is founded on the common law principle that "no one has the right to imitate another's goods and represent them as his own." The term "passing off," also known as "palming off," is sometimes used to describe the act of passing off. The true definition of passing off is not specified in the trademarks act 1999 or by any other legislative body, however it is mentioned in sections 27(2), 134(1)c, and 135 of the Trademark act.

Section 27(2) states that the provisions of the trademarks Act 1999 will not affect the rights to bring a passing off action against a person, section 134(1)c refers to the jurisdiction of courts to try passing off cases, and section 135 lists the remedies available in any passing off case arising from malicious use of a trademark.

The primary distinction between the two is that trademark infringement concerns registered rights, whereas passing off concerns unregistered rights of a person, organization, or corporation or any entity etc,

The following are some of the other significant differences:
  1. Passing off has a standard common law remedy whereas infringement will have a statutory remedy.
  2. The burden of proof lies on the user in trademark infringement.
  3. In comparison to passing off cases the criminal proceedings in infringement cases go smoothly.
  4. For passing of cases one can seek remedy under section 20 of civil procedure code and in the case of infringement under Section 134 of the Trademarks Act 1999.
  5. Registration of trademark is very much essential in the cases of infringement but in passing one has to prove damage, what harm has been caused to the reputation and whether there is misrepresentation.

To gain a better knowledge We can look at the case of Syed Mohideen v. P. Sulochana Bai, in which both the respondent and the petitioner owned a shop called 'Iruttukadai halwa.' ,In the following case, the respondent proved that they have owned the brand for a long time and have been selling it since the 1990s.

They have also developed a market position for which the court stated that the name has become a goodwill for the respondent and that no one should use it. The court further stated that the passing off right has a broader remedy than the one listed in the statute. This is because passing off is predicated on the general norm that no one should address their business as that of another.

Factors that must be proven in a passing off case
When a trademark is not registered by the owner, it is considered an instance of passing off. For many years, the law governing passing off cases was limited to only representing one person's goods as those of another; later, it was expanded to include trade and services, and then all other non-business activities; and finally, it now encompasses all types of unfair trade and unfair competition where one person's goodwill is harmed by the actions of another person or group of individuals.It is difficult for a plaintiff to prove a passing off lawsuit because the plaintiff must show that the mere fact of confusion between the two businesses puts at least portion of people at danger.

The "classical trinity" refers to the three basic elements of passing off, which were established in the case of Reckitt and Colman products ltd v. Borden INC, in which the house of lords held that the three elements that must be considered before filing a suit of passing off are damage, goodwill, and misrepresentation.

Goodwill
The worth of an entity's goods and services is referred to as goodwill. The company or individual must demonstrate that the product or service has earned a public reputation that encourages customers to buy or hire the goods or services in question.

Misrepresentation
Misrepresentation is often subjected to Misrepresentation is often subjected to making the public believe that the goods and services the defendant is offering are of plaintiff, that leads to false representation by the defendant of his product in the market, a false recommendation by the defendant that the business of defendant is somewhat connected to the plaintiff's business would damage the goodwill and reputation of plaintiff's business.

Damages
The plaintiff must prove that they have suffered actual loss or are likely to suffer loss as a result of the alleged misrepresentation, and that the misrepresentation has damaged the plaintiff's reputation and goodwill in order to stop the infringing party from causing further harm and to succeed in taking action.

Factors that determine infringement of Trademark:
Section 29 of the trademarks act 1999. Puts forth the following actions that may Be considered as infringement.
  1. If the infringing trademark is misleading or identical to the products and services for which the trademark is registered.
  2. If the infringing trademark creates or is likely to cause consumer confusion as a result of its likeness to a registered trademark's goods and services.
  3. If the trademark is advertised in such a way for which it may gain unfair advantage or if it is contrary or detrimental to the distinct character or reputation of the registered trademark.
  4. If a registered trademark is used in materials intended for packaging and labelling of other items without sufficient licence or maliciously, it is considered trademark infringement.
  5. If one constitutes distinct elements or characteristics of the registered trademark through visual representation or spoken language.


Acts that do not constitute infringement
Section 30 of the Trademarks act, 1999 lays down certain acts that cannot be termed as infringement. These acts can be used as defense in the suits of civil nature and the defendant can get away from the liability imposed if the acts fall under the ambit of this specific section.

Infringement would not be considered if the infringing trademark was used to indicate the quality, quantity, or other characteristics of the goods and services.

An infringed trademark used in a way which is outside the scope of the registration for example, a trademark named "Cream bell Ice Cream" may be registered with a clause that states that the registered owner of the trademark does not have exclusive rights over the use of the words "cream" and "bell." In such cases, the use of the words "cream" and "bell" by an infringer will not amount to trademark infringement.

If the infringer has implied consent to use the registered trademark, or if the trademark has been applied once and not removed.

It is not infringement if the trademark is used for parts and accessories in relation to other goods and services because the use is reasonable and unlikely to deceive its originality.

It is not considered infringement if one of two or more registered trademarks that are similar or identical to each other are used.

Remedies and reliefs
Remedies are generally actions that can be taken in the event of a trademark infringement. In India, section 29 and 30 of the trademarks act of 1999 establishes remedies for trademark infringement. These remedies are divided into three categories, as follows:

Civil remedies
Civil remedies can be initiated by filing suits for any infringement or passing off cases in the competent court, following are some of the reliefs available under section 135 of trademark Act 1999.

Injunction
Injunction is the most effective remedy for preventing infringement or passing off. An injunction is a sort of relief that an aggrieved person can get in any dispute, whether or not his trademark is registered or unregistered.

Injunctions are of following types
Perpetual Injunction
A perpetual injunction is a court order that prohibits a person from doing anything that infringes on or threatens the legal rights of another person and obligates that person to continue that conduct indefinitely.

Interlocutory Injunction
Interlocutory injunction is a temporary order issued by the court to compel a party to perform or continue to perform specific acts until the final judgement is issued. It is usually granted for a shorter period of time.

Mareva Injunction
Mareva Injunction, also known as a freezing injunction, is granted to safeguard the plaintiff's interests while the case is pending in court or in arbitration, or when the verdict has been rendered.

Anton piller order
The Anton Piller order, also known as the Ashok Kumar order, empowers authorities to seize evidence and examine a location without notice. It is usually issued to protect important and crucial evidence from destruction in cases of trademark and copyright infringement.

John doe order
A John Doe order is a legal action that protects intellectual property rights against unknown individuals who cannot be tracked owing to their disguised identity and may pose a harm to a party's artistic work or project.

Damages
An aggrieved party might sue for damages if he or his company has been denied access to exclusive rights to a product or service, resulting in a loss for him or the company.

Accounts of profit
The plaintiff has the option of suing for damages or accounts of profit under Section 135 (1) of the trademarks act 1999. The main goal of accounts of profit is to compensate the party whose rights have been infringed by way of loss incurred by depriving the party of its profits made by falsified use of the trademark by another party.

The goal is to give the plaintiff his share of profits made by the defendant by dishonest use of the trademark by the defendant. Section 135 subsection 3 additionally guarantees that if the case is one of innocent infringement, the court may award only nominal damages.

Destruction and delivery up
The court may order delivery up or destruction of the infringing marks or labels for the purpose of reassurance.

Criminal remedies
As trademark infringement is a cognizable offense under trademarks act 1999 remedies available are under section 103 and 104 of the Act, and criminal prosecution can also be initiated under various provisions of IPC.

Section 103 and 104 particularly deals with penalties for applying falsified trademarks and trade description etc., the provision for enhanced punishment is laid down under Section 105 of the Trade Marks Act, 1999.

Also, Section 115 (4) of the Trade Marks Act, 1999 gives powers to the police officials for the process of search and seizure of any such products which calls for action against infringement of the trademark.

Administrative remedies
Along with civil and criminal remedies The act also confers administrative remedies for the purpose of affording relief to the aggrieved party. The powers provided in the act may be exercised by the registrar under the supervision of the central government in respect of - 1.Granting to register a trademark, 2.Amending and correcting the register, 3.Removal or renewal of the registration, 4.Assignment and transmission of registered trade mark.

Penal Provisions for Infringement and passing off in India
Infringement of a trademark is a criminal as well as a civil offence in India, and the infringer faces respectively both criminal and civil charges. A trademark does not have to be registered to initiate a criminal or civil proceeding.

Penalties for trademark infringement and passing off are dealt with under sections 103, 104, and 105 of the trademarks act 1999. Section 103 and 104 lays down punitive measures for an individual who has falsified a trademark or has dishonestly applied to a service or product of any trademark, the person will be punished with imprisonment for not less than 6 months, which may extend up to 3 years, and therefore must pay a fine of not less than ₹50000, which may extend up to 200000.

Conclusion
As from preceding discussion, it is evident that trademark registration is not required, but if one does so, he can legally confer rights and ownership on the product or service. Because a registered trademark is inextricably linked to a company's goodwill, quality, and reputation, no one has the audacity to claim someone else's trademark as their own.

If you look at the remedies provided under passing off and infringement, the only difference is that one is a registered proprietary owner and the other is unregistered. In both cases, the owner can claim damages through a lawsuit, but even though the remedies are similar, the burden of proof in passing off cases is much higher because it is difficult to establish reputation and goodwill in the market for unregistered trademarks.

Reference:
  1. Mark P. McKenna,The Normative Foundations of Trademark Law, 2006
  2. IPR laws and Practice,The Institute of company secretaries in india,https://www.icsi.edu/media/webmodules/publications/9.4%20Intellectual%20Property%20Rights.pdf
  3. Trademarks Act 1999
  4. S.Syed Mohideen v. P. Sulochana Bai ,2016 (66) PTC 1 (SC)
  5. Marshall Hargrave, goodwill,2022 https://www.investopedia.com/terms/g/goodwill.asp
  6. Vaishali Mittal, Trade mark litigation in India: overview, https://uk.practicallaw.thomsonreuters.com/w-010-1547?

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