Trademark infringement and passing off : Legal Distinction and remedies in India – All you need to know.

INTRODUCTION

“A man is not to sell his own goods under the pretence that they are the goods of another man.”

– Lord Langdale

Trademark Infringement in India and the jurisprudential principle of Passing Off in Trademark Law form the primary monetary mechanism under intellectual property rights, empowering the proprietary claims of the business and extending protection to the consumers from possible deception and confusion.

A trademark, it its legal personality, can be any sign capable of graphical representation and contain wordmarks, logos, symbols, designs, or their combination which function is to differentiate the offerings or services of a business entity from the products of its competitors.

The source of trademark regulation and enforcement is the Trade Marks Act, 1999. In this context, the trademark serves two purposes: Firstly, it grants its holder a legally enforceable right to control and prevent the unauthorized use of the mark and, secondly, it indicates its owner and the scope of the latter’s activity.

Trademarks also occupy a peculiar place in the realm of commerce and alcohol as unique living symbols of the identity and worth of the business. As a binding form of reputation and ethos, a mark is its main aspect of recognition and seals the basis for consumer conscience, trust, and memory. Moreover, it also carries intrinsic economic and commercial worth, making them an invaluable part of our commercial environment.

It is important to ensure that trademarks are given legal protection as the intangible assets because it prevents misappropriation and confusion of consumers. Under the Trade Marks Act of 1994, infringement occurs if a trader (who is not permitted to do so) engages in the course of trade, a sign which is identical or similar to a registered trade mark, in respect of goods or services in relation to which the trade mark is registered.

In contrast, passing off is a common law doctrine which provides proprietors of unregistered marks an equitable substitute for a claim for trade mark infringement. Passing off stops competing traders from representing their goods or services as the plaintiff’s goods or services and, therefore, improperly and unlawfully benefiting from the plaintiff’s previously established goodwill or reputation in the mark.

In conclusion, the legal basis upon which the issue of trademark infringement and passing is based outline the balance of the various laws. The law of infringement and passing off strives to portray the protection of the proprietor’s rights and their business whilst at the same time protecting the customer from cheats and confusing adverts.

However, since the trademark is intrinsically connected to the trade’s identity, additional protection against infringement and passing off is required. This is because even when intentional or unintentional infringement does not cause confusion or deception, it affects the mark’s distinctiveness and causes passing off in relation to the owner’s repute and economic facets.

Thus, Indian trademark law encompasses a nuanced and well-honed system that balances the rights of owners, the interests of the consumer, and the very important interest of fair competition.

TRADEMARK INFRINGMENT UNDER INDIAN LAW

In India, when an unauthorized sign is used on a registered trademark, or a confusing sign is used, or the rights of a sign, are infringed to create confusion, or the deceptive sign is used to take unfair commercial advantage of the sign of a registered trade mark in consistence with the source of image creation.

In a case where the consacred sign is a well-known sign, the sign owner may resolve the use of the sign. The law that contains the relevant regulation is, in this case, Section 29 of the Trade Marks Act 1999 which says that;

Fundamental parts of trademark infringement consist of the following:

• Identical or Deceptively Similar Mark: The mark at issue must be either identical to or very similar to the registered trademark. The deceptiveness standard is whether the average consumer would find the marks confusingly similar.
• Use in the Course of Trade: The infringing mark must be applied in trade (for example, selling, labeling, advertising goods, and even the importation or exportation of goods), without permission from the trademark owner.
• Likelihood of Confusion: The use of the mark must be likely to cause confusion with the public, making them believe the goods or services originate from the trademark owner. The inquiry looks at consumer perception and the facts of the sale.

PASSING OFF IN TRADEMARK LAW

Passing off is an effective common law remedy that gives the owners of unregistered marks the right to protect against other traders misrepresenting their goods or services as that of the owner of the original mark. Passing off is not defined by law, however, Section 27 of the Trade Marks Act provides embracing recognition of the right of a legitimate trader to sue for passing off.  Passing off essentially prohibits a trader from misrepresenting to the public that their product or services are from, or associated with, another trader.  It is the law’s way of ensuring that a business does not take an unfair advantage of another business’ reputation.

In common law, passing off is a tort aimed at stopping misrepresentation in trade that could injure another’s goodwill. Lord Diplock described passing off (in the English case Erven Warnink v. Townend) as a false representation to customers that causes damage to another trader’s business. Indian Courts follow similar principles. To succeed in a passing off claim, the plaintiff must prove the three elements of the “Classical Trinity”:

• Goodwill: Finally, the plaintiff must fulfill the element of goodwill, proving that its mark, name, or get-up has gained a reputation among relevant consumers. Essentially, goodwill describes the intrinsic value of a brand that attracts customers to the plaintiff’s services and products. For example, the word “Taj” has acquired considerable goodwill in relation to the provision of hotel services. Therefore, the use of the word “Taj” or any other similar word in connection to a hotel business would immediately signal a connection to the chain of famous Taj hotels.
• Misrepresentation: The fifth component of a claim for passing under the Act presumes the misrepresentation to the relevant public while selling the defendant’s products or services. This element would be fulfilled if the misrepresentation to the plaintiff’s products was the mark, logo, packaging, or any other issue contributing to the identification of the brand;
• Damage: To the extent that the misrepresentation causes or is likely to cause damage to the plaintiff’s goodwill. This damage can come from trade diversion, dilution, loss of house ownership, or lack of consumer confidence. The case of an overly sensitive business, such as the drug industry, says a conferencing court will find harm in the event of confusion, as it presupposes a public health risk.

In India, passing off is not explicitly defined in the Trade Marks Act, but Section 27(2) explicitly allows owners of unregistered trademarks to sue in passing off. Simply put, one trader cannot represent their own goods or services as those of another if it is likely to deceive the public and hurt the other’s business. The common law principle has been integrated into Indian law, to the extent that a business may safeguard its brand identity and goodwill even in the absence of a registered mark.

Examples of passing off are:

• Fashion/Apparel: A new clothing manufacturer could label its garments “Adibas” and utilize a tri-stripe logo to imitate the well-known “Adidas”. A person who is not aware of the distinction may be misled to think they are buying Adidas clothing. That is passing off, as the new clothing manufacturer is capitalizing on the established goodwill associated with Adidas.
• Educational Institutions: An educational institute calling itself “Oxford International School” in a town, might mislead people to think the institute is affiliated with the prestigious Oxford head name, irrespective of whether or not it is. If this use takes advantage of the cache associated with the famous “Oxford” designation, it might amount to passing off.
• Hospitality: A small hotel designating itself as “Taj Residency Inn” and using signage comparable to the luxurious Taj Hotels, could mislead travelers to believe it is affiliated with the Taj hotel chain. The Taj Hotels Group could initiate passing off litigation to protect its reputation and market.
• Product Packaging (Trade Dress): A beverage company can sell a cola in a red can with white, cursive lettering that is almost identical to the Coca-Cola packaging. Even if the Coca-Cola name is not used, similar looking packaging can be a cause for confusion. If the packaging has the potential to cause confusion by falsely implying association with Coca-Cola, this could be passing off.

DIFFERENCES BETWEEN TRADEMARK INFRINGEMENT AND PASSING OFF

• Source of Right: Trademark infringement is a statutory cause of action under the Trade Marks Act, 1999 (See Section 29). Passing off is a common law cause of action, although the Act preserves it in statute in section 27(2).
• Requirement of Registration: Action for infringement can only be launched for registered trademarks. Passing off actions can be brought for unregistered trademarks, although the plaintiff must demonstrate they have generated goodwill in the mark.
• Test Applied: Infringement is determined based on whether the defendant’s mark is identical or deceptively similar to a registered mark which causes a likelihood of confusion. Passing off is subject to the “Classical Trinity” test: goodwill, misrepresentation, and damage.
• Burden of Proof: In cases of infringement, the registration of the mark and unauthorized use create good presumptions, so the plaintiff does not have to prove actual confusion or bad faith. In passing off cases, the plaintiff must prove each element of the trinity: the existence of goodwill, a misrepresentation by the defendant, and harm as a result of it.
• Scope of Protection: Infringement provides broad exclusive rights to use the registered mark for specified products or services. Passing off has a narrower scope: it simply prohibits misrepresentation of goods as those of the original trader without providing an exclusive proprietary right in the mark itself.
• Nature of Right Protected: Infringement protects the trademark owner’s statutory exclusivity in the registered mark. Passing off protects the goodwill and reputation associated with an unregistered mark.

REMEDIES AVAILABLE FOR TRADEMARK INFRINGEMENT

Under Indian law, remedies against trademark infringement are available as both civil and criminal remedies, along with statutory options to enforce rights.

Civil Remedies (Sections 134–135 of the Act)

• Injunctions (Interim or Permanent): The Court can order the infringer to cease using the mark, temporarily while the case is proceeding or permanently when judgement is rendered.
• Damages or Account of Profits: The trademark owner can claim damages against the infringer for his losses, or it can require the infringer to compensate the trademark owner for the profits it made from using the mark.
• Delivery-up/destruction: The Court an order the infringing goods, labels, packages, or other materials to be delivered-up or destroyed to prevent further use of the mark.
• Litigation costs: The successful litigating party may generally be able to recover its costs of litigation from the losing party, which includes lawyers’ fees and other litigation costs.

Criminal Remedies (Sections 103–105 of the Act)

• Section 103 – False Trademarks: Whoever, without authority, applies a false trademark, false trade description, or false country of origin to goods or services, or tampers with a genuine mark, is punishable. The penalty is imprisonment for 6 months to 3 years and a fine of ₹50,000 to ₹200,000.
• Section 104 – Selling Counterfeit Goods: Anyone who sells, offers for sale, or has for sale/distribution goods or services under a false trademark faces the same penalty (6 months–3 years imprisonment; ₹50,000–₹200,000 fine). A first-time accused can escape punishment by showing they took reasonable precautions, had no reason to suspect a fake mark, and provided the rightful owner’s details upon request.
• Section 105 – Repeat Offenders: For anyone convicted of trademark offences a second (or subsequent) time, the minimum sentence increases to 1 year (up to 3 years) imprisonment and ₹100,000 (up to ₹200,000) fine.
• Police Powers: Trademark infringement is a cognizable offence, meaning the police can arrest without a warrant. A police officer of DSP rank or above can conduct searches and seize suspected infringing goods without a warrant (subject to later court approval).
• Section 103: Misrepresentation of Trademarks: A person who, without authority, applies a misrepresentation of trademark, misrepresentation of trade description, or misrepresentation relating to the country of origin of goods, or alters the trademark of a genuine goods, is punishable therefore. The punishment is imprisonment for a term of 6 months to 3 years, and to a fine of ₹50,000. – ₹200,000.
• Section 104: Counterfeit Products: A person who sells, or offers for sale, and has for sale/distribution, goods or services under a misrepresentation of trademark is punishable therefore (6 months – 3 years, ₹50,000 – ₹200,000). For a first time accused of a counterfeit product, a person is not punishable if he, or she, can prove that (i) he, or she, took reasonable precautions, (ii) he, or she, had no reason to suspect a misrepresented mark, and (iii) upon request, provided to the right owner accurate contact information.
• Section 105: Repeat Offenders: For a person convicted of offences related to trademarks for a second time, or for more than two times, the minimum penalty is for an offence is 1 year (maximum 3 years). The minimum penalty is a fine of ₹100,000 (maximum ₹200,000).
• Police Powers: An infringement of a trademark is a cognizable offence, which means that police can arrest without a warrant. A police officer with the rank of DSP or above, can search for, or seize suspected infringing product, without a warrant (but conditional on receiving an ex post facto court order after the event).
• Rationale: These penalties to the law are meant to deter criminals from engaging in counterfeiting, protect consumers from fraud or harm (especially in pharmaceuticals, food, and cosmetics), and ensure confidence in the marketplace by punishing dishonest traders.

Administrative Remedies

• Opposition Proceedings: Any person can oppose the registration of a confusingly similar mark (Sections 21-23), before the trademark is registered.
• Rectification or Cancellation: A party that is aggrieved can apply to have a registered mark cancelled or rectified on the basis that it should not have been registered (e.g., if registration infringes another’s rights) (Section 57).
• Customs Enforcement: Trademark owners are able to record their marks with Indian Customs under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. This allows customs officials to detain or seize imported goods suspected of infringing the recorded mark.

LANDMARK CASES

Cadila Case on Trademark Infringement

In the case ofCadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. (2001), which involved both organizations being pharmaceutical companies. The plaintiff, Cadila Health Care marketed an anti-malarial drug under the trademark “Falcitab.” The defendant, Cadila Pharmaceuticals also marketed a competing product under the name “Falcigo.” The plaintiff argued that the defendant’s mark was deceptively similar and would be likely to lead to confusion in the marketplace and to the medical profession.

The Supreme Court of India said that, for medicinal products, even a small possibility of confusion would be serious or life-threatening for patients, thus requiring a stricter test for determining deceptively similarity.

The Court said this test must consider the average person as a consumer with an imperfect memory or an inattentive consumer, not an “exceedingly careful” buyer. The Court establish several factors by which to make this assessment such as: nature of the marks; degree of resemblance (visual, phonetic and structural)in marks; nature of goods; class of purchasers; and mode of sale.

Court ultimately held that public health and safety is of paramount concern, therefore “Falcigo” was deceptively similar to “Falcitab.”

This case is a leading authority on passing off in pharmaceutical trademarks, requiring a stricter standard to eliminate confusion between consumers of sensitive goods like medication.

Satyam Infoway Case on Passing Off                                                                           

In the case of Satyam Infoway Ltd. v. Sifynet Solutions (2004), The conflict occurred when Satyam Infoway Ltd. (SIFY), a popular Internet service provider, became aware that Sifynet Solutions was using the domain names “siffy.net” and “siffynet.net” to operate business websites. Satyam argued that “siffy” and “siffynet” were deceptively similar to its trademark and trade name “SIFY,” and that users may be confused when they viewed the webpages.

The main legal question was whether a domain name is entitled to trademark protection, and whether the defendant’s use of the domain names would constitute passing off.

The Supreme Court of India held that a domain name serves as an Internet address and also as a brand identifier, which carries excellent goodwill, thus they deserve the same protection as a trademark under the principles of trademark law. The Court concluded that the defendant’s domain names were confusingly similar and would mislead the users into thinking that they were somehow connected with the company Satyam.

The Court also accepted the passing off doctrine that goodwill, misrepresentation and likelihood of damage, were all present occurring in this case; therefore, the Court restrained Sifynet Solutions from using the disputed domain names.

This decision was groundbreaking decision for cyber and trademark law in the India, as the Court established that a domain name could have the same protections as an intellectual property, because it fell within the principles of passing off.

CONCLUSION

Protecting trademarks is significant in maintaining identity, distinctiveness, and goodwill of businesses. In a competitive market, a trademark is recognized as a symbol of trade origin, but also as a valuable asset representing trust by consumers. Protecting trademark rights allows businesses to enjoy the rewards for their innovation and the quality of their services, while protecting consumers from being misled.

At the same time, the law must ensure that patent intellectual property rights and protect fair competition. To this end, the Trade Marks Act 1999 provides statutory remedies for trademark infringement and actions under Plaintiff of Passing off to provide a safety net for unregistered mark and enhance the duality of protection.

The evolution of digital commerce, cross-border commerce and evolving behavioural patterns present continual tests of how Indian trademark law reacts to such situations, the substantive clarifications made by the courts in the case law of trademark infringement and passing off will still be applicable in the legal practice of protecting trademarks and the need for enforcement in the law and sensitivity in judicial practice.

As to gain a fuller appreciation of intellectual property rights and developing roles of IPR in the Indian landscape, read more about IPR laws in India here.

FAQs

1. Define Trademark under the Trademark Act, 1999.

A trademark under Section 2(1)(zb) of the Trade Marks Act, 1999 is a mark capable of graphical representation which distinguishes the goods or services of one person from those of others, and includes shape of goods, packaging, and combination of colours.

2. What is Trademark Infringement and which Section of the Act deals with it?

Section 29(1) of the Trade Marks Act, 1999, states that ‘A registered trade mark 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’.

3. What is Passing Off in Trademark Law?

Passing off is a customary remedy within common law trademark concepts that protects a business’s goodwill from misrepresentation. Passing off prevents one trader from misrepresenting to consumers that their goods or services are those of another trader. In straightforward terms, passing off prevents a trader from “passing off” their goods as someone else’s goods.

4. What is the Classical Trinity Test?

The Classical Trinity Test is the primary test established by courts to establish passing off in trademark law. The plaintiff has to establish three essential components:

• Goodwill: The plaintiff has built some kind of reputation and goodwill in a mark, trade name or get-up.
• Misrepresentation: The defendant has misrepresented their products or services as the plaintiff’s, then misrepresenting to the public, causing a misrepresentation in the marketplace.
• Damage: The plaintiff has suffered (and/or likely to suffer) damage to their goodwill, business, as a direct consequence of the defendant’s misrepresentation.

The test was laid out succinctly in the English case Reckitt & Colman Products Ltd v. Borden Inc. [1990] 1 All ER 873, also known as the “Jif Lemon case.”

5. What are the Main Differences between Trademark Infringement and Passing Off?

Passing off is a remedy in common law, while infringement is a statutory remedy provided under the Trade Marks Act, 1999.

Passing off is a common law remedy, while infringement is a statutory remedy created under the Trade Marks Act, 1999. Passing off addresses claims made by unregistered trademarks by preventing misrepresentations that would cause damage to the goodwill and reputation of a trader. Infringement is restricted to registered trademarks, and occurs where there has been use of an identical or deceptively similar mark, without consent.

In a passing off claim, the plaintiff must prove the “classical trinity” of goodwill, misrepresentation, and damage, which creates a heavier burden of proof. In an infringement case, it will be enough to show similarities of marks and likelihood of confusion, since registration itself is proof of ownership. Passing off is based on an element of public interest and preventing confusion among the public, while infringement is mostly about enforcing the statutory rights of the trademark proprietor.

ABOUT AUTHOR

Anushree Vijay Tawani is a law student at BMS College of Law, Bangalore, with a focused interest in Intellectual Property Rights and Corporate Law. She is committed to developing her expertise through rigorous research and writing, aiming to contribute to the evolving discourse in these fields.

REFERENCES

https://www.indialawoffices.com/knowledge-centre/infringement-and-passing-off

https://www.mondaq.com/india/trademark/1481544/concept-of-passing-off-action-for-protection-of-the-trademark