Introduction
In the circumstances where the mark of the proprietor is not registered and has been used by any third party without authorization of the proprietor, the action of passing off arises. Passing off is an action for an unregistered mark similar to infringement of a trademark for the registered trademark. Passing off action is not defined in trademark law; it 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 into believing that person is buying under the pretense that those goods are of another person. Therefore, both registered and unregistered trademarks are protectable in India by way of an infringement and passing off action, respectively, in the court of law.
Passing off Action
Passing off action, although it has not been defined in the Act, however, can be comprehended as a legal claim that can be filed when one party passes off the goods or services being sold to the public as those belonging to, or identical with, another. Simply, it involves the creation of misrepresentation amongst the public to make them believe that the goods/services being sold belong to another party and often damages the goodwill and reputation of the business or person, causing financial loss. Three imperative essentials regarding the passing off action include the goodwill of the unregistered trademark, prior and continuous usage of their mark, and the occurrence of the actual damage of the goodwill causing financial and reputational loss.
Section 27 of the Trade Marks Act, 1999
Section 27 of the Act provides the reference to passing off action in case of unauthorized use of the unregistered trademark with bona fide usage of the mark. Sub section 2 of Section 27 of the Act states that "Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another person, or the remedies in respect thereof."
Additionally, Section 34 of the Act provides certain exclusive benefits to the proprietor of unregistered trademarks. This section restrains the proprietor of the registered trademark from interfering with or claiming any infringement against any similar or identical unregistered mark if the proprietor of the unregistered trademark is a continuous and prior user of the mark, i.e., using the mark from a date earlier than the registered mark.
Court's Stance
In the case of S. Syed Mohiden v. P. Sulochana Bai (2016) 2 SCC 683, the Hon'ble Madras High Court observed that the rights in a passing-off action emanate from common law and not from statutory provisions; nevertheless, the prior user's rights will override those of a subsequent user even though it had been accorded registration of its trademark.
The difference between passing off and trademark infringement with respect to the nature of remedies and essentials was stated by the Hon'ble Delhi High Court in the case of Rob Mathys India Pvt. Ltd. v. Synthes Ag Chur MANU/DE/0308/1997.
Conclusion
Passing off action provides the rights to the unregistered but bona fide user of the mark based on its reputation, goodwill, and prior usage. The idea of passing off acts as a remedy for the protection of unregistered trademarks, even though trademark registration is essential and helps safeguard business owners' interests.
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