How Registration of Your Brand’s Trademark Gives You an Edge Over Competition and Infringement

Introduction 

A Trademark, simply defined, according to the World Intellectual Property Organization (WIPO), and also reiterated by Section 2(zb) of the Trademark Act (1999), can be construed to mean a sign that can lay distinction between goods & services of one venture, from the other. Section 2(2)(a) of the Trademark Act (1999) defines trademark with regards to its inclusions, while Section 2(i) states that a registered trademark vests in its proprietor the right to use the mark. In contradistinction to the well-defined concept of trademark that has statutory backing, the concept of passing off has devolved from judicial pronouncements of note. 

The concept of passing-off was accorded foremost recognition in the jurisdiction of England, during the rule of Elizabeth-I, notably under the case of Southern v. How (1617). While primordially regarded as a delineation of the tort offence of deceit, it eventually came to be understood as the wrongful representation of a person’s goods as one’s own without any lawful basis to do so. Howsoever, the erstwhile legislation, Trademark Act (1999), does not lay down any explicit provision that defines the offence of ‘passing off’, in any manner whatsoever. 

Trademark Infringement

Section 134 of the Trademark Act, 1999 , states that a suit for trademark infringement can be filed before the concerned District Court, further elaborating under Sub-Clause (1) that such a suit, whether for infringement for registered trademark, rights related to registered trademark thereto, or for passing off by way of trademark use, shall be filed in a court inferior to the concerned District Court having competent jurisdiction in this regard. Thus, it can be seen that the Trademark Act (1999) provides legal basis and statutory backing for filing of suit with regards to both infringement of trademark vis-à-vis passing off.

Passing Off

Section 27 of the Trademark Act, 1999, states broadly that there shall be no right to institute action with regards to infringement of ‘unregistered trademark’, stating under Sub-Clause (1) that such a bar to action shall extend to filing of suit, institution of proceedings for prevention of infringement, as well as filing a suit for recovery of damages, all with regards to infringement of unregistered trademark. 

However, Sub-Clause (2) states, under an exemption clause, that notwithstanding other provisions of the Trademark Act (1999), nothing shall affect the right of a person to take action against another for passing off, with regards to goods and services of another. Regardless, analyzing the distinction between infringement of trademark and passing off from the lens of law, it can be discerned that the subject matter of suits for ‘passing off’ are often unregistered goods and services that do not hold a registered trademark which makes proving the right to remedy much harder. 

Key Differences- Passing Off vis-à-vis Infringement

The key distinction between passing off and infringement lies in the fact that while the former covers unregistered products as well as services under its ambit, the latter protects registered and documented products & services.  Passing off occurs when a person, not being the proprietor or holder of a trademark, uses the goods & services of another person, with an unregistered trademark over the goods and services. 

While a comprehensive statutory basis, elaborated by way of Section 29 of the Trademark Act, 1999, that elaborates on the prerequisites of infringement of registered trademark, read with Section 27 and Section 134 of the Trademark Act, 1999, provides credence to filing a suit for trademark infringement, the protection is also granted on the stipulation of it being a registered trademark, as explicitly stated as a prerequisite under Section 134(1)(a) & Section 134(1)(b) of the Trademark Act, 1999. Compared to that, an action for passing off does not enjoy comprehensive protection under the aegis of Trademark Act, 1999, but is mentioned under Section 134(1)(c) as a valid subject matter for infringement. 

Distinguishing an action of trademark infringement, and passing off based on the underlying principle, it can be stated that the underlying basis for according protection against trademark infringement is that the owner of trademark enjoys certain rights excluding those in rem with regards to the owned and registered trademark. However, the underlying principle behind passing off, as succinctly described in the case of Perry v. Truefitt (1842), stated that a man ought not to sell off his goods under the guise that they are the goods of another man. Thus, the legal principle governing an action for the two differs significantly. 

However, the distinctions between an action of passing off and trademark infringement were elaborated upon, based on several parameters in the case of Cadbury India Limited & Ors. v. Neeraj Food Products (2007), a judgment rendered by the Delhi High Court, which stated the differences as stated hereunder- 

1. An action for passing off is a common-law recourse, in contrast to an action for trademark infringement, which is a statutory remedy in nature.
2. In the case of a claim for trademark violation or infringement, the use of the plaintiff’s trademark by the respondent is also a requirement, but this is not so, in the case of a claim for passing off.
3. The fact that the outfit, outer wrapping, and other written marks on the products come from a different source than a registered proprietor’s trade mark is irrelevant in a lawsuit alleging trademark violation by the complainant. In such a situation, the offender may be completely liable. However, if the defendant can demonstrate that the material he added is adequate to differentiate his goods from those of the plaintiff’s goods, he may be able to avoid responsibility in a case of passing off of a trade mark.
4. Due to the disputed mark being a registered trademark, the plaintiff in a case for infringement asserts that they have the sole right to use the mark in connection with those products. However, passing off one’s own products as those of another is essentially a deceptive act.

Furthermore, in a recent judgment of S. Syed Mohideen v. P. Sulochana Bai (2015), it was stated that a more comprehensive recourse than a trademark violation or infringement under the law, is the right of passing off. This is so because the passing off theory is based on the fundamental idea that no one has the right to pass off, their enterprise as the enterprise of another.

Other areas of distinction between the action of passing off and trademark infringement are myriad, such as the level of proof required to be adduced, which is lesser in case of trademark infringement, due to the fact that the trademark is registered, compared to an action of passing off, wherein not only deceptive similarity needs to be proved but also the fact that there was likelihood of confusion, in the general public between the goods, as well as likelihood of monetary loss or damages due to the passing off. The jurisdiction for trademark infringement has been stated under the Trademark Act, 1999 while that of passing off under Section 20 of Code of Criminal Procedure Act, 1908. 

Advantages in Litigation

Trademark infringement and passing off are two common legal actions that can be taken by business owners to protect their intellectual property rights. However, there are certain advantages that a business owner can get in litigation if they have a registered trademark and file an infringement suit, as compared to a passing off suit. 

A registered trademark provides a business owner with a statutory right to prevent others from using an identical or similar mark for goods or services that are identical or similar to those covered by the registration. This means that if someone else is using a mark that is identical or similar to the registered mark, the owner of the registered mark can take legal action against them for trademark infringement. 

• One of the key advantages of filing an infringement suit as opposed to a passing off suit is that the burden of proof is much lower in an infringement suit. In an infringement suit, the owner of the registered trademark only needs to prove that the defendant is using a mark that is identical or similar to their registered mark, and that the defendant’s goods or services are identical or similar to those covered by the registration. The owner of the registered mark does not need to prove that the defendant is passing off their goods or services as those of the registered mark owner. 
• On the other hand, in a passing off suit, the burden of proof is much higher. The owner of the unregistered mark must prove that they have a reputation or goodwill in the mark, that the defendant has made a misrepresentation that has led to confusion in the minds of the public, and that the owner of the unregistered mark has suffered damage as a result of the defendant’s actions. 
• Another advantage of filing an infringement suit is that it provides the owner of the registered trademark with greater remedies. In an infringement suit, the owner of the registered mark can seek an injunction to prevent the defendant from using the infringing mark, damages for any loss suffered as a result of the infringement, and an account of profits made by the defendant as a result of the infringement. 
• In a passing off suit, the owner of the unregistered mark can only seek an injunction to prevent the defendant from continuing to use the mark, and damages for any loss suffered as a result of the passing off. They cannot claim an account of profits made by the defendant, which can often be a significant amount. 
• Furthermore, if the owner of the registered trademark can establish that the defendant’s use of the infringing mark was deliberate or intentional, they may be entitled to additional damages or even criminal sanctions. In addition, a registered trademark provides the owner with a wider scope of protection. A passing off action only protects the owner of an unregistered mark against the specific acts of passing off that have been committed. However, a registered trademark provides the owner with a broader scope of protection, which extends to acts that are likely to cause confusion or deception in the minds of the public, even if there has been no actual passing off. 

In conclusion, while both infringement and passing off suits can be used to protect a business owner’s intellectual property rights, there are clear advantages to filing an infringement suit if the owner has a registered trademark. The lower burden of proof, greater remedies, and wider scope of protection provided by a registered trademark make it a more effective tool for protecting a business owner’s brand and reputation.

Conclusion

Thus, from the elaboration of the distinguishing features of action of passing off vis-a-vis trademark infringement, it can be understood that having a registered trademark puts the owner or the person, who holds rights over the goods or services in a better position as compared to a person seeking to institute action based on an unregistered trademark, for passing off. Not only is the burden of proof higher in passing off, it is not accorded the same level of protection against infringement in the Trademark Act, 1999. 

It is rightly stated that the best right over an item lies with an owner and therefore, the person holding a registered trademark stands to gain compared to any other person in an infringement suit, regardless of the veracity and genuineness of the claims made therein. Therefore, any potential trademark owner should take proactive steps to concretize their ownership over their goods and services by way of registration of trademark under Trademark Act, 1999.