Infringement & Passing Off in Indian Trademarks Act

The legal framework about Trademarks in India is regulated by the Indian Trademarks Act, 1999 and the Trademarks Rules, 2002 formed thereunder. Trademark generally refers to a "sign", “brand”, “logo” or "symbol" that distinguish goods or services of one person or enterprise from those of another.

Even though the registration of a trademark is not compulsory in India, it has significant advantages like:

• Registration notifies the public at large that the person/enterprise is claiming exclusive ownership/right to the use of the trademark in relation to the goods or services in respect of which the trademark is registered.
• The right to obtain relief in respect of infringement of the trademark.
• Protects goodwill in the market and advertises goods & services.

In case of unauthorized use of the trademark by a third party, the owner of a trademark has two remedies available:

• An action for passing off in the case of an unregistered trademark.
• An action for infringement in case of a registered trademark.

An infringement action is a statutory remedy and an action for passing off is a common law remedy.

Do You Need Permission to Use Someone Else's Trademark? CLICK HERE for answer.

Infringement of Trademarks:

Section 29 of the Trademarks Act, 1999, deals with infringement. Trademark infringement is a violation of the exclusive rights attached to a registered trademark without the permission of the trademark owner or licensee. 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 similar to the registered trademark.
• Is used in relation to goods or services which are not similar to those for which the trademark is registered
• The registered trademark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trademark.

Passing Off Trademarks:

“Passing-off” has not been defined in the Trademarks Act, 1999. The Trademarks Act, 1999 under section 27 recognizes the common law rights of the trademark owner to take action against any person for passing off his goods as the goods of another person or as services provided by another person or the remedies thereof.

The Supreme Court of India defined passing-off in Cadila Healthcare Ltd v. Cadila Pharmaceuticals Ltd. as:

“The species of unfair trade competition or of actionable unfair trading by which one person, through deception, attempts to obtain an economic benefit of the reputation, which the other has established for himself in a particular trade or business”.

For passing off action, few essential characteristics need to be established, as held by Courts in a catena of judgments, which are mentioned as below:

• Misrepresentation
• The act must be made by the defendant in course of trade
• The prospective or ultimate customers of the plaintiff’s goods and services have been misrepresented.
• Such an act of misrepresentation is calculated to injure the business or goodwill of the plaintiff
• Such an act causes actual damage to the business or goodwill of the plaintiff.

In an action for passing off, the motive of the defendant is not important. Once the plaintiff establishes reputation, no further proof of fraudulent intent on the part of the defendant is required to be proved or established.

For Indian Legal Perspective on Trademark Transborder Reputation CLICK HERE.

Difference between Trademark Infringement and Passing Off:

S.no.	Particulars	Trademark Infringement	Passing off
1	Legal Basis	Statutory remedy under section 29 (1) of the Trademarks Act, 1999	Common Law Remedy
2	Trademark Registration	Requires a registered trademark	Can be brought for both registered and unregistered trademarks
3	Burden of Proof	Lower Burden of Proof	Higher Burden of Proof
4	Focus	Exclusive right to use the registered trademark	Protection of goodwill from misrepresentation
5	Relief Available	Injunction, damages, account of profits, seizure of infringing goods	Injunction, damages, account of profits

Jurisdiction of Courts in Case of Infringement:

As per Section 134 of the Trademarks Act, 1999, a suit for infringement can be instituted before a District Court/High Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons – any of them actually and voluntarily resides or carries on business or personally works for gain.

As per the Act, ‘person’ includes the registered proprietor and the registered user.

A suit for passing off is governed by Section 20 of the Code of Civil Procedure, 1908. Section 20 of the Code confers jurisdiction on those courts within whose territorial limits the defendant resides or carries on business or personally works for gain or where the cause of action has wholly or partly arisen.

Reliefs/Remedies:

As per Section 135(1), reliefs that a court may usually grant in a suit for infringement or passing off are:

• Permanent and interim injunction, restraining further use of trademark.
• Damages or account of profits.
• Order to deliver the infringing labels and the marks for destruction or erasure.
• The interim reliefs in the suit may also include an order for:
• Appointment of a local commissioner for search, seizure and preservation of infringing goods, account books and preparation of inventory, etc.
• Restraining the infringer from disposing of or dealing with the assets in a manner that may adversely affect the plaintiff's ability to recover damages, costs or other pecuniary remedies which may be finally awarded to the plaintiff.

Note: In case of infringement / passing off a trademark, a criminal complaint can also be filed.

Criminal remedies for Trademark Infringement

• Unauthorized usage of a trademark, particularly if it resembles another trademark deceptively, constitutes falsification under section 102 of the Trademarks Act, 1999. The penalties are outlined in Section 103 of the same.
• Penalty under section 103 of the Trademarks Act, 1999 states that individuals found guilty of falsifying a trademark or falsely applying a trademark to goods or services face imprisonment ranging from 6 months to 3 years and a fine ranging from INR 50,000 to INR 2,00,000.

Supporting Offences:

According to section 104, individuals aiding the accused by selling, providing, hiring services related to such goods or possessing such goods for sale, are also liable. The punishment includes imprisonment for a term of 6 months to 6 years and a fine ranging from INR 50,000 to INR 2,00,000.

Limitation:

The period of limitation for filing a suit for infringement of a trademark/passing off is three years from the date of infringement/passing off. Where the infringement/passing is a continuing one, a new course of action arises every time an infringement occurs.

COPYRIGHT

The legal framework pertaining to Copyright in India is regulated by the Indian Copyright Act, 1957.

• Copyright is a right given by the law to creators of literary, dramatic, musical, and artistic works and producers of cinematograph films and sound recordings.
• It is a bundle of rights including, inter alia, rights of reproduction, communication to the public, adaptation, and translation of the work.
• Copyright comes into existence as soon as a work is created and does not require any formality for acquiring copyright protection.
• However, registered copyright prima facie serves as evidence in a court of law in case of any dispute relating to ownership of copyright.

Who is the Owner of Copyright – Employer or Employee? CLICK HERE for answer.

Infringement:

Chapter XI of the Indian Copyright Act, 1957 deals with Infringement of Copyright.

When a person intentionally or unintentionally copies or uses the work of another creator, without his prior consent or permission, or any contract or license or assignment with the author as covered by the copyright law, it amounts to infringement.

Jurisdiction of Courts in Case of Infringement:

As per Section 62 of the Act, every suit or other civil proceeding in respect of the infringement of copyright shall be instituted in the district court within the local limits of whose jurisdiction, at the time of the institution of the suit, the person instituting the suit or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain.

Reliefs/Remedies:

A copyright owner is entitled to certain remedies under the Copyright Act, 1957.

• As a civil remedy, the copyright owner is entitled to remedies by way of injunctions, damages-actual and conversion, and rendition of accounts of profit and delivery up.
• Criminal remedies for copyright violation include imprisonment of the infringer and seizure of the infringing copies and delivery of them to the copyright owner. The infringer is liable for imprisonment for a minimum of 6 months which may extend to three years and/or with a fine which shall not be less than fifty thousand rupees, but may extend to two lakhs.
• As an administrative remedy, the copyright owner can make an application to the Registrar of Copyrights to ban the import of infringing copies into India and the delivery of infringing copies of the copyrighted article which were earlier confiscated from the infringer to the owner of the copyright.

Limitation:

The period of limitation for filing the suit of copyright is three years from the date of infringement.

PATENT

• The grant of patent in India is governed by the Patents Act, 1970 & the Patents Rules 1972.
• A patent is an exclusive statutory right granted by the government to the inventor to manufacture, sell or use an invention.
• The term of every patent in India is twenty years from the date of filing the patent application.

Infringement:

Patent infringement is the commission of a prohibited act concerning a patented invention without permission from the patent holder.

Jurisdiction of Courts in Case of Infringement:

A Patent holder can file a suit for infringement in a district court/ high court. The patentee can bring a suit for infringement in the court that has jurisdiction in the area where he/she resides or carries on a business or personally works for the gain. The Patentee can also bring the suit for infringement in a court which has jurisdiction in the area where the infringing activity took place.

Reliefs/Remedies:

Section 108 of the Patents Act, 1970 provides for reliefs in a suit for infringement. The reliefs that are available to a patentee in a suit for patent infringement against an infringer are:

• Permanent injunction.
• Temporary / Interlocutory injunction.
• Ex-parte injunction.
• Damages or an account of profits.
• Seizure, forfeiture, or destruction of infringing products/goods and/or materials and implements predominantly used in the creation of the infringing products/goods.

Limitation:

The period of limitation for bringing a suit for infringement of a patent is 3 years from the date of infringement.

If the patent has ceased to have an effect due to non-payment of the renewal fee, the patentee will not be entitled to institute the proceedings for infringement committed between the date on which the patent ceased to have an effect and date of publication of the application for restoration of patent.

CONCLUSION:

Navigating the legal protections and remedies for infringement and passing off is crucial for safeguarding the intellectual property rights in India. Be it trademarks, copyrights, or patents, the importance of timely action, appropriate jurisdiction, and awareness of limitations is necessary to ensure effective enforcement of these rights.

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