Passing off in IPR

Passing off in IPR

This article is written by Shubhangi Sharma and co-authored by Shriya Singh. It discusses in detail the concept of passing off action. It covers its meaning, characteristics, origin, and international position, along with its kinds, elements, principles, tests, remedies, and defences. Furthermore, it relates to trademark infringement and provides the differences between the two. In addition, it also brings forth the case law analysis.

Passing off action basically refers to the unauthorised use of goods, services, and the goodwill attached to another person’s business, which would amount to misrepresentation. In a way, such an authorised use causes confusion or deception in the marketplace, which leads to unfair competition.

In legal parlance, the action of passing off takes place when one party misrepresents the goods or services of another person as his or her own. It leads to confusion among customers and consumers, as well as proves detrimental to the business of the original or legitimate owner of the trademark. 

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Let us dwell on the concept in detail.

A trademark serves as an indicator that a certain business’s personalised goods are unique from those of other businesses. To put it in simple words, trademarks are a valuable form of intellectual property as they are associated with quality and consumer expectations for a product or service. It, being one of the most popular kinds of intellectual property, conveys to the buyers the source and nature of the products, and it helps in building a reputation throughout the business.

The trademark defines the source of the product and makes it unique from its substandard replicas or substitutes present in the market.

A mark is a symbol, and it is used in the course of trade to indicate that there is a business connection between the person or entity, even if it’s a corporate entity that uses the mark concerning such goods or services that are tagged with such a mark. Once this trademark is registered, it preserves exclusive markets and maintains profit margins by providing a market axis and freedom to operate. The registration prevents the other businessman from taking any unfair advantage of the reputation of another mark-bearing goods or services, as it provides remedies in the record of such conflicts.

The World Intellectual Property Organisation handbook on intellectual property information and documentation defines ‘trademarks’ as a sign that an individual is the goods of any given enterprise that distinguishes them from the goods of their competitors. 

With regards to trademarks, Article 15 of the Trade-related Intellectual Property Rights Agreement states that it is any kind of sign or even the combination of science that is capable enough to distinguish the goods and services of one undertaking from the other undertakings that are capable of constituting a trademark. The provision goes ahead and states that such signs, especially words including personal names, numerals, security elements, a combination of colour letters, or even a combination of such signs, qualify for registration as a trademark.

The Trademarks Act, 1999, defines ‘trademarks’ under Section 2(1)(zb) as a mark that is capable of being represented graphically and which is also capable of distinguishing the goods and services of one person from others. Furthermore, it states that trademarks are inclusive of the shape of goods, their combination of colours, and their packaging.

“If a person sells his goods as the goods of another,” then the trademark owner can take action as this becomes a case of passing off. Passing off is used to protect or safeguard the goodwill attached to an unregistered trademark. When the trademark has been registered by the owner and infringement happens, then it becomes a suit for infringement, but if the trademark has not been registered by the owner and infringement happens, then it becomes a case of passing off.

The principle of passing off, i.e., “Nobody has the right to represent his goods as the goods of somebody else,” was decided in the case of Perry v. Truefitt (1842). The passing-off law has changed over time. Previously, it was restricted to depicting one person’s goods as another. Later, it was extended to trade and services. This was later expanded to business and non-business activities. Now, it applies to many forms of unfair trade and unfair competition where one person’s activities harm the goodwill associated with the activities of another person or group of individuals.

It is difficult to prove passing off, as claimants need to demonstrate that at least some of the public is at risk of confusion between the two businesses. The most important question in passing off is whether the conduct of the defendants is such as to confuse the public that the business of the defendants is a plaintiff or a cause of confusion between the business activities of the two. This Act of misrepresentation often damages the goodwill of a person or business, causing financial or reputational damage.

Passing off action finds its origin in the common law principle, and the damages claimed in this action are unliquidated damages. The common law principle states that any person should not sell his goods, deceiving the other in a manner that person is buying, under the pretence that those goods are of another person. 

Although the passing-off action is not defined in the Trademarks Act, 1999, it has been referred to in the Act under Section 27. The provision recognises the rights of a trademark owner to take action against any person for passing off his goods as goods of another person but him.

Characteristics of passing off 

The action of passing off is completely dependent upon the goodwill and reputation of a business or the owner of the trademark. In light of the above-mentioned statement, the characteristics of the passing-off action are as follows:

  • There has to be a misrepresentation of the trademark of the owner.
  • The misrepresentation has to be made by the concerned person in the course or furtherance of trade.
  • This misrepresentation is made to the prospective consumers or customers who are the ultimate customers of goods or services supplied by the owner.
  • This misrepresentation must have been with ill intention and should have resulted in injury to the business or goodwill of the original owner of the trademark.

The substance of the remedy of passing off action is that the concerned goods or services are in effect speaking for themselves, a false story that is misleading the ultimate consumers or customers.

As the passing off action originated as a common law principle, it owes its birth to the United Kingdom. The reign of Elizabeth I was in the 16th century, when the action was legally recognised. It was also termed a classical trinity, which covered goodwill, representation, and the likelihood of damage as its essential elements. However, the protection under the remedy of passing off was only beneficial for those who had the trademarks registered at that time. The common law principle was open for all trademarks, irrespective of their non-registration.

In India, the passing off action is still not a statutory remedy, as the substantive trademarks of 1999 only deal with its procedural aspects and do not define it in toto. Time and again, the substantive meaning of the term passing has not distinctively changed from what was prevalent when it was initially developed.

Passing off, as is known and understood, means that the goods of the defendant are falsely represented as the goods of the plaintiff, usually by using a plaintiff indication as a means of misrepresentation. The root of the passing off lies in the tort of deceit (The tort of fraudulent misrepresentation or deceit is a legal action that arises when one party makes a false statement to another knowingly with an intention to deceive). The object of the law is to protect the goodwill of the plaintiff’s business, his goods or services, the work that he produces, or something of that kind.

Passing off prevention originated in the United Kingdom’s common law. In the United States of America, this thought is referred to as palming off and is commonly referred to as unfair competition in other places. 

Let’s understand the growth and development of the action of passing off in different countries.

The United States of America

The passing-off action under the law of the United States of America is treated as a form of unfair competition. To bring about a case under unfair competition, deception by the conduct of the defendant is not necessary, whereas it is sufficient to show that the deception will be a natural and probable result of the act of the defendant.

There is a doctrine of secondary meaning that is prevalent in the United States of America. According to the doctrine, terms or names that are not capable of being used exclusively as trademarks may, through repeated use in connection with the goods of a particular business, come across as being understood by the public in a way that reminds them of the goods and services of that particular business. This concept is intended to provide defence and redress against any person’s wrongful appropriation of their goods or corporate reputation, regardless of whether they are their rivals or not.

In the United States, unfair competition action comprises the use or imitation of the trademark of one person by another on his or her goods or services in such a manner that the purchaser is deceived or becomes liable to be deceived and is induced to believe that the manufactured or sold goods or services are owned by the owner of the legitimate trademark. 

The elements of unfair competition are twofold, as stated below 

  1. There has to be an economic injury that has been caused to the business, resulting in a loss of sales or consumer goodwill.
  2. The resulting economic injury has been due to deception or any other malpractice regarding business or trade.

The United Kingdom

The United Kingdom is the place of origin for the action of passing off. Initially, its definition was limited only to trademarks or trade names which the unauthorised owners used to deceive consumers by inducing them to believe that the goods and services offered were from the authorised owner. 

Subsequently, the scope of the remedy was widened, and the classical trinity test was laid down regarding it. The test stated that for a suit for passing off to come into existence, three things needed to be fulfilled:

  • There should be the goodwill of the authorised owner in the market.
  • There was deception caused by misrepresentation regarding the authorised owner by the unauthorised owner.
  • There was damage caused to the authorised owner due to such a misrepresentation.

The passing off action is seen as a deceit tort where the person takes advantage of the goodwill of the other person by misusing his or her goods’ trademarks, which are regarded with respect by the consumers.

The elements of the passing off action in the United Kingdom are as follows:

  • The plaintiff was required to prove that the disputed trademark has become distinctive in the sense that the use of that mark automatically appears in the minds of consumers or customers. 
  • Further, the plaintiff is also required to prove that the use of the name of the defendant or the mark of the defendant was calculated to deceive and confuse the general public in order to injure the goodwill of the plaintiff’s business by keeping him away from the profit that he could have made on the concerned products. 
  • Most importantly, it is necessary to adjudge if there is misrepresentation in existence, and goodwill is itself generated through trading activities, which basically become the source of reputation, but the mere existence of reputation does not automatically establish goodwill for any business.

China

The remedy of passing off action is present in China, and the anti-unfair competition law is prevalent there. It is also considered an important unfair competition act in the business. However, the elements of the remedy available there are not very clear, and the legal liability there does not follow international trends. Furthermore, the relationship between passing off action and trademark law is very vague. 

The elements of the remedy for passing off in China are as follows:

  • There should be goods that are well known, which means that the goods are known in some areas of China and familiar to the relevant public, and the name, sign, or trademark are well known in China and protected under Chinese law. The goods are well known even when they are not known by all the public or in all the markets but are only well known among the relevant public.
  • The characteristic of distinctiveness should be present. The distinctiveness of a trademark in China can induce two meanings, which are:
  1. one is that the mark, which itself is distinctiveness, is used to get identification, and 
  2. the other is that the mark which gets secondary meaning is the course of use. 
  • From the subjective point of view, the consumers must feel confused about the indication of the source that is legitimate regarding the goods or services involved, and from the objective point of view, the indication of the person infringing and the indication of the mark infringed are the same.
  • Also, the person infringing has done so with the intention to use another person’s goodwill or ornamentation of his trade name. In light of the said statement, it is significant to note that the state of mind of the person who has wronged the legitimate owner must clearly indicate the intention due to which he has done what he has done.

Canada

In Canada, the remedy of passing off action is available, but under a different name. The chords of Canada recognise the passing off by recognising the wrongful appropriation of the plaintiff’s personality. 

The Canadian law affirms that the plaintiff has proprietary rights in the exclusive marketing for gain in his personality, and it goes so far as to cover the unregistered trademark within the purview of the defence as well. The wrongful appropriation of the plaintiff’s personality finds its origin in the Canadian common law, which recognises the tort. However, the scope of the protection of unregistered trademarks is significantly restricted compared to the trademarks that are registered. 

Under Canadian law, no person shall make a false or misleading statement tending to discredit the business or services of a competitor. One can also not direct public attention to his goods and services in such a way that it causes or is likely to cause deceit among the public between his goods and services and his competitor’s goods and services. 

The elements of the remedy forpassing off in Canada are as follows:

  • There must exist goodwill in connection with the business of the authorised or legitimate owner. 
  • The deception of the public was done due to the misrepresentation. 
  • And there has been actual or potential damage to the plaintiff. 

There are three tests that are prevalent to recognise the need for the remedy of passing off, which are as follows:

  1. The conduct test: It states that it is the conduct of the person that brings direct public attention to the defendant’s goods and services.
  2. The confusion test: This test states that the deception has been made in such a way that it has or has been likely to cause confusion among the public of Canada.
  3. The timing test: The best of time states that it was at the time when the defendant commenced to direct attention towards them when the deception began.                      

There are two kinds of passing off

Extended passing-off

Where misrepresentation as a particular quality of a product or service damages the harmony or goodwill of another person or business.

Reverse passing off 

Where a trader markets, sells or produces the goods or services of another person or business. Reverse passing off arises when the defendant markets the products of the plaintive as being his own. This action of reverse passing off involves substitution in terms of the concerned trademark. 

What actually happens here is that a person does not manufacture his own goods but purchases the products of a different source and portrays them as his own selling them under his own trademark.

There are three basic elements of passing off. The three elements are also known as the Classical Trinity, as restored by the House of Lords in the case of Reckitt & Colman Ltd v. Borden Inc. (1990). They are

  1.  Misrepresentation,
  2. goodwill, and 
  3. damage. 

Let us discuss them in depth.

Misrepresentation

Misrepresentation can be noted to have taken place wherever and whenever the defendant takes or tries to make the public believe that the goods and services that he is providing are of the plaintiff.

Any representation that gives rise to the action of passing off implies that there had been a misrepresentation by the defendant that the goods or services, which were in actuality the plaintiff’s, were possessed to be in fact his or hers. 

It cannot be ignored that where a plaintiff and defendant are not rival traders in the line of business, even a trivial suggestion by any of them that their business is connected would damage the business as well as the goodwill of the other. As the basis of the passing off action is a requisite of false representation, it becomes material to prove in each case that a misrepresentation was indeed made.

Goodwill

It must be proven that the person or the goods and services own some kind of reputation in the market that associates the public with those specific goods or services. It has been more broadly defined in the case of Trego v. Hunt (1896) by Lord Macnaughten. He stated that it often happens that goodwill is the very soul and life of the business, without which the business would yield very little or no profits. It is the whole advantage, whatever it may be, of the reputation and connection of the firm, which may have been made up by years of honest work or gained by the bountiful expenditure of money.’

In the case of CIT v. B.C. Srinivas Seti (1981), it was held that goodwill is influenced by everything related to the business: the personality of the owners, the nature and character of the business, its name and reputation, its location, its influence on the contemporary market, and the current socio-economic psychology.

Goodwill can be noted as the benefit or advantage of a good name or reputation that is connected to the business of the concerned products and services. It works as an attractive force for the business which differentiates it from other businesses in terms of quality, stability, expectations, and growth. It is that attribute or force that helps the business expand and an injury to it would benefit the business, thus attracting action whenever an infringement takes place. 

However, the goodwill or reputation has to be generated not only among a very few people but in such a way that it gets acknowledged and accepted among a substantial number of potential customers, even though they are not necessarily the majority of the population. Therefore, the passing off action arises where there is the possibility of damage to goodwill recognised as such level regarding any business. Also, the plaintiff is not required to wait to show the damage that has resulted from such misdeeds; rather, he or she can bring about the action as soon as the passing off can be proved. This is one such case where the law presumes that the plaintiff has suffered damage due to the misuse.

Damage

At last, to succeed in taking action to stop the infringing party, the offended party must prove that it has suffered an actual or reasonable loss of business due to the alleged misrepresentation. This is generally difficult to prove and involves the inspection of the books of account of both parties on practical grounds. This is sufficient to prove the possibility of loss. It must be proved that the misrepresentation must have harmed the goodwill or caused a loss to the reputation.

To avail the defence of passing off action, the plaintiff must satisfy that he has suffered or is in a quia timet action. The Latin phrase ‘quia timet‘ action means ‘because he fears’ and in trademark, it means that it leads the plaintiff to seek an injunction in the court because there is an apprehension to him that there can be injury caused to his rights in the future by the defendant. 

The passing off action extends to a situation where a plaintiff is likely to suffer damages because of a belief that he could be endangered by the false representation regarding the source of the goods or services and this damage is resumed even if there is a likelihood of deception.

It has been widely accepted that no person is entitled to represent the goods or services of another person as his own where such representation is made by the use of the name, sign, or trademark of that product. If such representation is made, it is liable to be actionable wrong for the person to pass off his goods or services as those of another by whatever means he used to achieve such an outcome. 

Halsbury’s Law of England very specifically states, “It is not enough that the goods are merely capable of being used by dealers to perpetrate fraud on the customers, the goods or other materials supplied with them must be intended or must be of such a nature as to suggest readily or easily lend themselves to such passing off otherwise, the consequence is too remote to be attributed to the supplier of the goods.” In light of the above-stated law, the principle that underlies the action of passing off states that a man is not to sell his goods under the pretence that they are the goods of another man, and accordingly, a misrepresentation achieving such a result is actionable because it amounts to the invasion of proprietary rights vested in the original owner of such products or services. 

However, such misrepresentation has to deceive the customers and consumers, and just mere confusion that does not lead to the sale of the concerned product or service is not sufficient to attract liability.

Passing off and trademark infringement are distinctive and involve different concepts. Passing off is the protection of the goodwill of traders concerning goods and services. “Goodwill” is the reputation of the brand that was built concerning specific goods or services and that attracts customers. It can be shared between an individual merchant or, in some cases, all manufacturers of a specific product in a specific area.

A party who holds the rights to a certain trademark can sue other parties for trademark infringement. The possibility of confusion determines whether a person can sue another business or person for trademark infringement. If the use of another person’s trademark to sell a product or service is likely to cause consumer confusion about the source of the product or service, then the person poses a potential for trademark infringement.

The main difference is that trademark infringement is related to registered rights, and passing off is related to the unregistered rights of a person, company, entity, etc. In simple words, when the trademark has been registered by the owner and infringement happens, then it becomes a suit for infringement, but if the trademark has not been registered by the owner and infringement happens, then it becomes a case of passing off.

Let us understand the difference between the two.

Basis

Passing Off

Trademark Infringement

Type of remedy

Common law remedy

Statutory remedy

Registrability of trademarks

Trademarks need not be registered.

Trademarks must be registered.

What is required to be proved?

The plaintiff has not only to prove the deliberate similarity among two conflicting marks but also has to prove the presence of confusion among customers and the likelihood of damage to the plaintiff’s goodwill and reputation.

The plaintiff has to prove that the infringing mark is deliberately the same as the registered trademark in the matter of similar goods or services, and no further proof is required as there is an assumption of confusion.

Prosecution under criminal remedies

Prosecution under criminal remedies is higher as compared to trademark infringement. The plaintiff has to prove goodwill, misrepresentation, and damage have been caused on his part.

Prosecution under criminal remedies is easier than passing off. If any of the prohibited acts have been committed, the infringer will be liable unless a specified defence applies.

Initiation of a suit

In passing off, under Section 20 of the Civil Procedure Code, 1908 the suit can be instituted where the defendant resides, where the business is carried on, or where the cause of action has arisen.

The suit can be instituted under Section 134 of the Trademarks Act, 1999 where the registered user of the particular trademark actually or voluntarily resides or where the business is carried on. So, this is a benefit on the part of the plaintiff.

In the case of the action of infringement, the defendant’s use of the offending mark may be in respect of the goods for which the mark is registered or similar goods; however, the dependent goods need not be the same as those of the plaintiff in the case of passing off action; they may be allied or even different. 

An infringement action does not require the use of the mark, and the proprietor can bring an action for the infringement even if there has not been the use of the mark in the course of business. But in the case of a passing off action, the plaintiff must establish that the mark has been used in order to deceive the consumers of customers, which in turn causes injury to the goodwill of the business.

As stated time and again, in the passing off action, the identity or similarity of the mark is not sufficient and confusion must be present; even the likelihood of it would suffice, but in the case of infringement, the mark being identical or similar would not require any further proof. 

For the action for infringement, the use of a trademark of the plane tiff in relation to the goods is a sine qua non for the action, whereas for passing off action, it is not the use of the trademark that has to be proven but it is the deceit that has been practised on the public that becomes material.

In the case of Cadillac Healthcare Limited v. Cadilla Pharmaceuticals Limited (2001), the honourable Supreme Court reiterated a test of passing off and observed that the remedy of passing off action is dependent upon the principle that no person has a right to represent somebody else’s goods as his own. To put it in a more prominent way, it means that a person cannot sell his goods or services under the sham of being somebody else’s goods and services. 

For trademarks, the ownership of these marks is governed by their priority in terms of usage, as it defines the distinctive quality they process. The first user or first mover becomes the legitimate owner due to seniority in the usage of such a mark. In order to establish ownership over a mark, the plaintiff has to prove that, with respect to time, it was he or she who used it before anybody else did. 

Furthermore, in the case of Corn Products Refining Company v. Shangrila Food Products Limited (1959), it was observed by the Bombay High Court that the principle of similarity could not be applied, and if this dishonest intention on the part of the defendant in regard to the passing off of goods is established, it would be prima facie and an injunction would ordinarily follow, not making any delay in bringing the matter to the court a legitimate ground of defeat in such a case.

Where the trademark law provides protection to the registered goods and services, the action of passing off provides protection to the unregistered goods and services. The function of both trademark and passing off actions is similar but the material factor here becomes the registration or non-registration of the goods and services that are involved. 

The Supreme Court highlighted the differences between the two, recognising the necessity of both in the case of Durga Dutt Sharma v. Navratna Pharmaceuticals (1960). The apex court stated that the action of infringement is a statutory right which is conferred upon the registered owner of a trademark that is registered and the owner enjoys the exclusive right to use the trademark with regards to the goods, while the unregistered goods and services are given the benefit of the defence of passing off action.

An action regarding infringement fails where the plaintiff is not able to prove the register ability of the goods or services in question or it feels because the registration turns out to be invalid, but where the action of passing off is concerned, the imitating of the trademark becomes material.

To succeed in passing off claims, the plaintiff must show that the misrepresentation made by the defendant has damaged the goodwill. In a passing-off action, the plaintiff can claim any of the following remedies:

  1. Apply for an injunction prohibiting the business from using your trademark or goodwill: An injunction to prevent further use of the trademark by the defendant. An interim injunction may continue until the claim has been fully tested and is intended to prevent the goodwill of the claimant from further harm during the intervening period. The injunction is an effective remedy in the prevention of infringement of registered trademarks or unregistered trademarks. Section 135 of the Trademark Act, 1999, provides injunctive relief. An injunction can be given in various types:
  • Anton Piller Order: These are prior partial orders to inspect the defendant’s premises. The court may order the plaintiff where the defendant is likely to destroy or dispose of materials which contain the trademark of the plaintiff
  • Mareva injunction: In such an order, the court has the power to freeze the assets of the defendant where the property is likely to be dissolved or cancelled, so granting judgement against him will not be enforced.
  • Interlocutory Injunction: It is one of the most commonly used forms of an injunction. It acts to take action against the defendant based on the former violation. Interlocutor prohibition is an order to prevent the defendant from continuing usage of the trademark, which is leading to infringement of the unregistered trademark. It has the objective of preventing further infringement.
  • Perpetual injunction: It is an injunction that prevents the defendant completely, for all time, from performing any act that violates the rights of the owner of the trademark. A perpetual injunction is usually granted when the case is finally settled.
  • Infringing goods to be destroyed: A search and seizure order from the court prohibits the defendant from delivering all goods or products that are labelled with the brand name. Here, the court can direct the return of related material accounts and destroy all such goods.
  • Sue for damages or seek to account for lost profits: Damages are compensation for the loss that can be recovered by the real owner of the trademark from the defendant. The monetary value of financial loss or loss for the reputation of the brand is recovered under damage. The amount of the damage and the account of lost profits will be awarded by the court after taking into consideration the actual and certain loss of the owner because of the passing off.

Use of own name carefully: The defendant has the right to use his name, mark, or any symbol, and the fact that there may arise confusion. If any confusion arises, which comes to the attention of that defendant, it is the obligation of the defendant to take reasonable care to qualify the representation to avoid confusion among customers.

  1. The name, sign, or other marks that are sought to be withheld are not specific to the plaintiff’s goods or business.
  2. There is no presence of goodwill in the mark.
  3. The plaintiff has given consent or encouraged the use of the mark.
  4. A separate case of passing off.
  5. The goods and services or business of the plaintiff and the defendant are completely different. If both the defendant and plaintiff share the same trademark but are providing different goods and services or businesses, then they can take the defence in the case of passing off. For example, LLOYD is a trademark that is used by both the plaintiff and defendant, but one is an educational institution and the other provides electric appliances. So, in this case, one can use the defence of providing different services.

The passing off law is complicated, and it’s hard and expensive for the plaintiff to prove the claims as compared to trademark infringement. The plaintiff has to prove goodwill, misrepresentation, and damage has been caused on his part.

Britannia Industries Ltd. v. ITC Ltd. (2017)

In this case, the respondent, i.e., ITC Limited, filed a civil suit against the appellant, Britannia Industries Limited, for the infringement of the copyright of the trade dress of the respondents’ product, Sunfeast Farmlite All Good, which is No Added Sugar and No Maida Digestive Biscuits. The court said that the appropriation of and exclusivity claimed vis-à-vis a get-up, and particularly a colour combination, stands on a different footing from a trademark or a trading name because colours and colour combinations are not inherently distinctive.

It should, therefore, not be easy for a person to claim exclusivity over a colour combination, particularly when the same has been in use only for a short while. It is only when it is established, maybe even prima facie, that the colour combination has become distinctive of a person’s product that an order may be made in his favour. We feel that the present is not such a case. When the first element of passing off, in our view, is not established, we need not examine the other elements of misrepresentation and the likelihood of damage. 

Nirma Limited v. Nimma International and Anr. (2010)

In this case, the plaintiff (Nirma Limited) was the owner of the trademarks’ Nirma ‘and Nima’, registered in 1979 and 1982, respectively, for dealing with detergent powder, toilet soap, etc. The plaintiff was facing infringement of his trademark by ‘Defendants’ (Nimma International and Anr.), The use of the marks’ Nimma International’ and ‘Nimson’s Nima Care’ for its cosmetic products.

The plaintiff sued for a permanent injunction against the defendants, who wanted to prevent the use of the aforesaid mark, as an amount for the plaintiff’s trademark infringement as well as the passing off. The court held that the two marks’ Nimson’ and ‘Nirma’ are phonetically as well as semantically different, and the trade channels and classes of purchasers of goods sold under these marks also differ. Hence, ‘Nimson’ is not deceptively similar to ‘Nirma’.

But in the case of ‘Nimma International’, it is different. Ownership of any registered trademark in the matter of ‘Nimma’ is not proved through the defendants’ documents, while the plaintiff’s registration in the matter of its mark ‘Nirma’ was strong and had a reputation in three decades. The use of ‘Nimma’ will create confusion in the minds of the public to believe that the goods and services belong to the plaintiff. Therefore, the defendants were permitted to use ‘Nimson’ but were restrained from using ‘Nimma’ or any other mark, including ‘Nima’.

The protection of the trademark is necessary for the business point of view as well as for the protection of customers from fraud and cheating. The passing-off action is applicable to unregistered goods and services. The scope of passing off is wide as compared to infringement of the trademark.

Even though the process and remedies for passing off suits are the same for both registered and unregistered marks, the burden of proof becomes greater when it is for unregistered marks as it becomes difficult to establish goodwill and reputation. To allow unregistered trademarks, the Act provides relief to a certain extent to several users who would otherwise not be able to take any kind of legal remedy for infringement of their marks.  

What is brand proliferation?

When one company creates multiple brands then the process is called brand proliferation, and such a company is termed a parent company. The parent company basically acquires multiple smaller brands in the similar market area that it is working in and makes them its own.

For example, the Coca-Cola Company, which is marketed all over the world, is a classic example of brand proliferation as it is on a variety of brands such as Sprite, Fanta, and Powerade.

What is product differentiation?

The term product differentiation is meant by an imperfection in the substitution of the products of the cells that are competing in the industry, for the customers are consumers. It is an image of the product that is so deeply ingrained in the minds of the customers or consumers that when they need the product of such description, they would straight away think about the sign of the product they have purchased before or the mark of which has been embedded in their minds as a good one. 

For instance, we tend to use the word Xerox more often than we use the term photocopy. It is important to note that Xerox is a trademark, and in no dictionary, it would ever mean photocopy.

What is genericide?

When an absolutely fancy, fully invented word goes on to remain in the public memory for so long that it becomes attached to the goods itself is genericide. 

For example, Xerox for photocopy.

What are well-known trademarks?

Balloon trademarks are those trademarks that are considered to be quite well known when it is known to a substantial segment of the public as they are prone to using such goods and services for which they are registered. It is defined under Section 2 (1)(zg) of the Trademarks Act of 1999.

For example, Amul is a registered, well-known trademark.



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