torts final

Torts and Its Effect on Reputation of Goods and Property

Submitted by

ANIMESH KUMAR

Division B ; Roll No 14010224071 ; Class BBA-LLB

Of Symbiosis Law School, NOIDA

Symbiosis International University, PUNE

In

March, 2015

Under the guidance of

Dr. C J Rawandale

Prof. In Charge

Prof. Nitya Thakur & Prof. Kiran Kale

(Associate Professors)

Symbiosis Law School, NOIDA

(Symbiosis International University, Pune)

[email protected]

C E R T I F IC AT E

The Project entitled “Torts and Its Effect on Reputation of Goods and Property”

submitted to the Symbiosis Law School, NOIDA for Managerial Economics as

part of Internal Assessment is based on my original work carried out under the

guidance of Prof. Nitya Thakur, Prof. Kiran Kale and Dr. C. J. Rawandle from

December to March. The research work has not been submitted elsewhere for

award of any degree.

The material borrowed from other sources and incorporated in the project has been

duly acknowledged. I understand that I myself could be held responsible and

accountable for plagiarism, if any, detected later on.

Signature of the candidate:

_______________________

Name of the Candidate: Animesh Kumar

Date: 13/03/2015

ACKNOWLEDGEMENT

I would like to offer Prof. Nitya Thakur, Prof. Kiran Kale and Dr. C. J.

Rawandle my heartfelt appreciation for providing me the opportunity to

undertake a research project on the topic, “Torts and Its Effect on Reputation of

Goods and Property”. I would like to thank her for all the necessary help and

guidance they offered in completing my project. Without her help, it would have

not have been possible to carry out this research project. I would like to thank my

college, Symbiosis Law School- Noida, for providing me with excellent

opportunities and facilities to help me complete my project.

I would also like to thank my parents and my classmates for helping me, in one

way or the other, who have been constant pillars of support for the successful

completion of the research project.

Contents

INTRODUCTION.............................................................................................1

Law of Torts:.................................................................................................1

TYPES OF LAW OF TORTS..............................................................................2

INTENTIONAL TORTS.....................................................................................2

DIGNITARY TORTS.........................................................................................2

REPUTATION OF GOODS AND TITLE:.............................................................3

SLANDER OR LIBEL OF GOODS.....................................................................3

SLANDER AND LIBEL OF TITLE:.....................................................................5

DIFFERENCE BETWEEN SLANDER OF TITLE AND DEFAMATION:....................7

PASSING OFF.................................................................................................7

EVOLUTION AND DEVELOPMENT OF THE CONCEPT:...................................10

REMEDIES OF PASSING OFF........................................................................12

Injunction:...................................................................................................12

Damages/Compensation.............................................................................13

Account of Profits:.......................................................................................13

PASSING OFF AND TRADEMARK INFRINGEMENT.........................................14

CONCLUSION...............................................................................................16


INTRODUCTION

Law of Torts: “Tortious Liability arises from breach of a duty primarily fixed by law; this duty is towards persons generally and its breach is redressable by an action for unliquidated damages.” – Winfield1

“a civil wrong for which the remedy is common law action for unliquidated damages and which is not exclusively the breach of contract or the breach of trust or other merely equitable obligation.” – Salmond2

"A body of rules fixed and enforced by a sovereign political authority." - John Austin3

This is the area of law that covers the majority of all civil lawsuits. Essentially, every claim that arises in civil court with the exception of contractual disputes falls under tort law.

Law in general is a system of rules which are enforced through social institutions to govern behavior, although the term "law" has no universally accepted definition. Law is any rule of human conduct accepted by the society and enforced by the state for the betterment of the human life. In a wider sense it includes any rule of human action for the example, religious, social, political and moral rules of conduct. Law systems are often based on ethical or religious principles. However only those rules of conduct of persons which are protected and enforced by the State do really constitute the law of

1 Introduction to Law of Torts, Winfied & Salmond on Torts Law. 2 The Law of Torts. A Treatise on the English Law of Liability for Civil Injuries, Salmond on Tort Law. 3 John Austin, Tort Law. 6 | P a g e

Compiled By Animesh Kumar

http://en.wikipedia.org/wiki/Law_enforcement

http://en.wikipedia.org/wiki/Law_enforcement

http://en.wikipedia.org/wiki/System


the land in its strict sense. According to Salmond the “law constitutes of rules recognized and acted on by courts of justice”4.

4 Salmond on Law. 7 | P a g e



TYPES OF LAW OF TORTS

INTENTIONAL TORTS: An intentional tort is a category of torts that describes a civil wrong resulting from an intentional act on the part of the tortfeasor. The term negligence, on the other hand, pertains to a tort that simply results from the failure of the tortfeasor to take sufficient care in fulfilling a duty owed, while strict liability torts refers to situations where a party is liable for injuries no matter what precautions were taken. Common law intentional torts include Assault; Battery; Conversion; False imprisonment; Trespass to land; Trespass to chattels (Personal property); Intentional infliction of emotional distress; Fraud and Invasion of privacy.

INTENTIONAL TORTS include a few different types of torts. PROPERTY TORTS and DIGNITARY TORTS are included in intentional tort.

DIGNITARY TORTSDignitary torts are the class of intentional tort, including slander and libel, which arise when the right invaded involves the reputation or privacy of the individual claiming industry.

Although an individual has control over many of the statements, acts, and other biographical or social points that are used to construct one’s reputation, one does not ultimately have control over the result of that reputational assessment, the pronouncement of which is a task reserved to others. Reputation is fundamentally a social concept; it does not exist until a community collectively forms a judgment about an individual or firm that has the potential to guide the community’s future interactions with the individual. Despite reputation’s relational nature, discussions of the law’s interest in reputation tend to focus on one of two parties: the individual or firm holding the reputation and the defendant accused of having unlawfully harmed that reputation. But the community that constructs one’s reputation 8 | P a g e



also has an interest in the soundness of a reputation’s foundation so that future uses of others’ reputations will be effective. Dignitary Torts include defamation or injury to the reputation of Individual as well as the defamation or injury to the reputation of Title of any other as well as the goods of an individual.

9 | P a g eCompiled By Animesh Kumar


REPUTATION OF GOODS AND TITLE

Under the reputation of title and goods the ambit of Slander Or Libel of goods, Slander or Libel of Title which are included in Malicious Falsehood and Passing off are all recognized under the Common Law of Tort Action. Reputation of goods are also dealt explicatively by the Intellectual Property Laws where Trademarks violations and infringements are a general concept related to the reputation of goods. Even Passing Off has been recognized giving it the recognition of a Statute by the Trademarks Act, 19995.

SLANDER OR LIBEL OF GOODS

Slander of goods consist of a false statement, disparaging the goods of another, published maliciously and causing special damage to the individual suffering the tort. This is also known as ‘Trade Libel’.

To maintain an action for Slander of Goods it is necessary to prove the following essentials:

1) That the defendant disparaged the plaintiff’s goods;2) That such disparagement was false;3) That it was made maliciously.6

In the case of Imperial Tobacco Co. v. Bonnam7, it was held that “the precise words complained of must be set out in the statement of claim”.

5 Trade Marks Act, 1999.6 Western Counties Manure Co. v. Lawes Chemical Manure Co., (1874) LR 9 Ex. 218. See also White v. Mellin, (1895) AV 154: 72 LT 334: 43 WR 353.7 (1927) 46 CLJ 455.10 | P a g e



In India, the tort of disparagement has been embodied under Section 36 A (1)(x)8, Monopolies and Restrictive Trade Practices (MRTP) Act, 19699 which stated that ‘whoever gives false or misleading facts disparaging the goods, services or trade of another person would be engaging in an unfair trade practice.’

It is no longer a statute as the MRTP Act, 196910 is no longer a statute. The MRTP Act, 196911 was repealed after the advent of the Competition Act, 200012 which was enforced from 2009.

Though the principle of Unfair Trade Practices embodied in the MRTP Act, 196913 found a place in the Consumer Protection Act, 198614. In the Consumer Protection Act, 1986 in Section 2 (r) the term “Unfair Trade Practices” has been defined. Section 2 (r) states that:

"unfair trade practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely;—

(1) the practice of making any statement, whether orally or in writing or by visible representation which,—

(i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

(ii) falsely represents that the services are of a particular standard, quality or grade;

(iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;8 Section 36 of MRTP Act, 1969.9 MRTP Act, 1969.10 Ibid, pt. 9.11 Ibid, pt. 9.12 Competition Act, 2000.13 Ibid, pt. 9. 14 Consumer Protection Act, 1986.11 | P a g e



(iv) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;

(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

(vi) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof;

Provided that where a defense is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defense shall lie on the person raising such defense;

(viii) makes to the public a representation in a form that purports to be—

(i) a warranty or guarantee of a product or of any goods or services; or

(ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;

(ix) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;



(x) gives false or misleading facts disparaging the goods, services or trade of another person.

Explanation.—For the purposes of clause (1), a statement that is—

(a) expressed on an article offered or displayed for sale, or on its wrapper or container; or

(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or

(c) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public,

shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;

(2) permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.

Explanation.—For the purpose of clause (2), "bargaining price" means—

(a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or

(b) a price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;

(3) permits—



(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;

(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

(3A) withholding from the participants of any scheme offering gifts, prizes or other items free of charge, on its closure the information about final results of the scheme.

Explanation.—For the purposes of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time, published, prominently in the same newspapers in which the scheme was originally advertised;

(4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;

(5) permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.

(6) manufacture of spurious goods or offering such goods for sale or adopts deceptive practices in the provision of services.

(2) Any reference in this Act to any other Act or provision thereof which is not in force in any area to which this Act applies shall be construed to



have a reference to the corresponding Act or provision thereof in force in such area.15

As can be observed even here in Section 2 (r)(1)(x)16 the slander of goods have been recognized, though not explicatively but through the essentials.

In the landmark case of White v. Millin17, the defendant was charged with having made a statement that his food for infants was more nutritious than any preparation yet offered in the market. It was held that his statement would not support a cause of action, since it was merely a piece of puffery, intended more to promote the sale of defendant’s than to disparage the plaintiff’s food.

In the case of Director General (Investigation & Registration) v. Shakthi Publications18, the defendants published an advertisement claiming that their magazine would give better value for money for advertisers as against the plaintiff's magazine. They based their claim on the fact that though the two magazines had comparable circulation figures, their magazine had the advantage of cheaper advertising rates.

The plaintiffs were able to prove that they enjoyed a much wider readership than the magazine of the defendants and therefore the claim of the defendants was patently false. The Court held that the very fact that the defendants had claimed that advertising in their magazine gave better value for money implied that advertising in the plaintiff's magazine would be less beneficial. The Judge concluded that this was a clear case of disparagement and the defendants were guilty of indulging in unfair trade practices.

In the matter of Kinetic Honda Motors Ltd.19, an advertisement was released by Kinetic Honda setting out the requirements of registration under 15 Section 2 (r) of the Consumer Protection Act, 1986. 16 Section 2 (r)(1)(x) of the Consumer Protection Act, 1986.17 (1893) AC 154.18 (1999) CTJ 357.19 1994 (2) CTJ 157.15 | P a g e



the Motor Vehicles Act and it was claimed that only Kinetic Honda met these requirements. It was held that this claim was false and misleading since not all the features mentioned in the advertisement were requirements laid down under the Motor Vehicles Act. The Court held that the total effect of the advertisement was to convey the impression that scooters other than Kinetic Honda were bound to land up in limitless registration problems.

In the landmark case of Ratcliffe v. Evans20, the plaintiff had for many years carried on the business of an engineer and boiler maker under the name Ratcliffe and Sons. The defendant published in his newspaper falsely and maliciously that the plaintiff had ceased to carry on his business and that the firm Ratcliffe and Sons did not then exist. It was held that the defendant was liable and that evidence of general loss of business was sufficient to support the action.

In Lyne v. Nicholls21, the plaintiff and defendant were the owners of newspapers circulating in the same locality, and the defendant published a statement which was untrue, that “the circulation of” his newspaper “is 20 to 1 of any other weekly paper” in the district and “where others count by the dozen, we count by the hundred.” It was held that those statements were not a mere puff but amounted to an untrue disparagement of the plaintiff’s newspaper and were actionable on proof of actual damage.

SLANDER AND LIBEL OF TITLE

Slander of title is intentionally casting aspersion on someone’s property including real property or a business. Slander of title involves slanderous remarks cast upon a person’s property. It is akin to the tort of defamation in that it involves a false statement about the plaintiff; however, it differs from defamation in that the false words do not reflect upon the character of the plaintiff, but on the plaintiff’s property.20 (1892) 2 QB 524.21 (1906) 23 TLR 86.16 | P a g e



Legally the law of Slander or Libel of title can be analyzed from the case of Old Plantation Corp. v. Maule Industries, Inc.22, defining it as “a false and malicious statement, oral or written, made in disparagement of a person's title to real or personal property, or of some right of his, causing him special damage."

The Court in the same matter of Old Plantation Corp. v. Maule Industries, Inc.23 held that the term slander of title is somewhat of a misnomer because slander refers to that which is spoken. The tort slander of title requires publication. “Although the term "slander" is more appropriate to the defamation of the character of an individual, yet the term "slander of title" has by use become a recognized phrase of the law.” A slander of title suit can be made in a variety of circumstances including but not limited to" the filing of an invalid lien against real property or virtually any type of recordable instrument recorded against a property by one without privilege which is untrue.

Slander of Title consist of a false, malicious statement in writing, printing, or by word of mouth, injurious to any person‘s title to property, whether movable or immovable, and causing special damage to such person.

Through the matter of Pater v. Baker24, one can understand the concept of Slander of Title very easily. Suppose one having an infirm title to property which he is going to sell, or to make the subject of a settlement, and another, moved by spite and malice, discloses what he believes to be untrue, and injury results to the former, an action would lie, the statement being false and malicious, and injurious to the plaintiff.

If lands or chattels are about to be sold by auction and a man declares in the auction room, or elsewhere that the vendor’s title is defective, that the lands are mortgaged, or that the chattels are stolen property, and so deters people 22 68 So. 2d 180, 181 (Fla. 1953).23 Ibid, 1.24 (1847) 3 CB 831, 868.17 | P a g e



from buying, or causes the property to be sold for a far less price that it otherwise have realized, this is a slander upon the title of the owner, and gives him a prima facie claim for compensation in damages.25

A person who goes to intending tenants and dissuades them from taking a building on rent by making false statements as to its habitability and safety is liable in tort if he is actuated by malice, the tort being analogous to slander of title falling within the broad description of injurious falsehood.26

As laid down in the Nemi Chand v. Wallace27 the plaintiff in order to sustain the action must essentially prove:

1) That the statement is false.28

If the statement be true, if there really be the infirmity in the title that is suggested, no action lies. In the matter of Burnett v. Tak29 it was held that it is for the plaintiff to prove that the statement is false, not the defendant to prove the statement to be true.

2) That the statement was made mala fide and is malicious, that is, with intent to injure the plaintiff30 or with some dishonest motive.31 If the statement is made in the bona fide assertion of the defendant’s own right to the property, no action lies, e.g. a bona fide notice by a person to prevent a sale on ground that he has a claim on the estate to be sold.32

3) That the words go to defeat or injure his title to property. The property may be either real or personal and the plaintiff’s interest therein may be either in possession or reversion.

25 Garrard v. Dickenson, (1590) 1 Cro. Eliz. 19626 Hargovind v. Kikabhai, ILR 1938 Nag. 34827 (1907) ILR 34 Cal 495.28 Brook v. Rawl29 (1882) 45 LT 743.30 Ibid, 17; Halsey v. Brotherhood, (1881)19 Ch D 386.31 Geers, Limited v. Pearman & Corder Limited, (1922) 39 RPC 406, 417.32 Hargrave v. Le Breton, (1769) 4 Bur 242.18 | P a g e



The legendary case of Barret v. Associated Newspapers33, provides the entire concept of Slander of Title in a concise and clear perspective. The simple facts of the case were that, A makes a false statement that B’s house which he is proposing to sell, was haunted. It amounts to slander of Title.

DIFFERENCE BETWEEN SLANDER OF TITLE AND DEFAMATION: Very frequently people get confused in between the concepts of Defamation and Slander of Title. In clear concise manner the difference in between the two can be explained via the following points:

1) The words are not defamatory, they do not disparage the plaintiff’s moral character, or his solvency, skill, business capacity. They are merely an attack on something, or on his title to something.

2) The words are equal actionable whether written or spoken.3) There is no presumption that the words are untrue, the onus lies on the

plaintiff to prove them untrue.4) Malice is not presumed, the plaintiff must give some prima facie

evidence that the defendant acted maliciously, or, at all events, without lawful occasion or reasonable cause.

5) A right of action for defamatory words dies with the person defamed, but this action survives to an executor to the extent that any damage can be shown to the estate of the deceased34.

33 (1907) 23 T & R 666.34 Hatchard v. Mege, (1887) 18 QBD 771.19 | P a g e



PASSING OFF

Explaining Passing off and its difference from Malicious Falsehood, Professor Fleming gave an excellent definition:

“While it is Injurious Falsehood (Malicious Falsehood) for a defendant to claim that your goods are his, it is Passing Off to claim

that his goods are yours.”

The court has on numerous occasions explained passing of the term of “Riding on the Court tails of the Plaintiff”.

It means a false representation tending to deceive purchasers into a belief that the goods which defendant is selling, are really the plaintiffs. As held in the famous case of N. R. Dongre Vs. Whirlpool Corporation35 “A man may not sell his own goods under the pretense that they are the goods of another man.”

Passing off is a wrong, a common law tort which protects the goodwill of a trader from misrepresentation. Misleading the public into believing falsely, that the brand being projected was the same as a well-known brand is a wrong and is known as the tort of “passing off”.36

In the case of Wander Ltd. v. Antox India (P) Ltd.37 the Supreme Court stated that passing off was a species of unfair trade competition or of actionable unfair trading by which one person, through deception, attempted to obtain an economic benefit of the reputation, which another had established, for himself in a particular trade or business. The action was regarded as an action for deceit.

35 (1996) 5 SCC 714.36 R.F.V. HEUSTON AND R.A. BUCKLEY, SALMOND & HEUSTON ON THE LAW OF TORTS, 395-399 (20th Ed. 2004).37 (1990) Supp. SCC 727.20 | P a g e



In the matter of Ayushakti Ayurved (P) Ltd. v. Hindustan Lever Ltd.38 the court held that, Claims in passing off action are not for an infringement of property rights but for misrepresentation by the defendant. Therefore, if the alleged confusion is the result of the exercise by the defendant of his legitimate rights to use certain common words in order to compete with the plaintiff it must be sufficient for the court to form a broad impression that there is no confusingly by and large and not to decide merely on the basis of an affidavit of a person who claims that he got confused.

The essentials of Passing off Tort can be summed up in the following points:

1) That his goods were known to the public by some distinctive name, mark, get up, appearance, or badge.

2) That the defendant made representation, spoken or written, by word of mouth or by conduct of others.

3) That the defendant’s use or initiation of the name, mark was likely to mislead the public into believing that the defendant’s goods were the plaintiffs.

4) That defendant’s conduct complained of was calculated, or is likely in ordinary course of business, to deceive or mislead the public, at least unwary or incautious, if not the intelligent or careful purchaser.

38 (2003) 4 Mah LJ 915.21 | P a g e



EVOLUTION AND DEVELOPMENT OF THE CONCEPT:The story of Passing off started in the 17th century, in the cases of Southern v. How 39 and Dean v. Steel40.

The earliest documented case where there was an indication of passing off, this one dates back to 1618. In this case mark of an eminent clothing brand was used to dupe a customer, who bought the defendant’s low grade clothing thinking it was the plaintiff’s brand. The defendant was held liable. This though was more a case of deceit, but the principle of passing off clearly started its journey from this case. 41

Later, in the nineteenth century, in the case Millington v. Fox42, it was decided that proof of fraud was not necessary in such a wrong and it was from here that the actual tort of passing off began building its own definition. The concept of equity was largely used to realize the scope of passing off. The predominant view was that equity intervened to restrain what would be a fraud if allowed to go ahead and that it protected proprietary rights. This particular viewpoint led to the equity courts to awarding compensations instead of injunctions. This idea was based on the theory that, in such a tort, constructively, the defendant was an agent of the plaintiff.

Later, in the case Cartier v. Carlile43 it was decided that a “man must be taken to intend” the natural consequences of his act and mere proof of likelihood of deception was sufficient to prove the wrong.

Reckitt & Colman Products Ltd. v. Borden Inc.44 is popularly known as the Jif Lemon case. The judgment in this case finally formulated three basic principles of the tort of passing off. The facts of this case go as such:

39 (1618) Cro. Jac. 468, Poph. 14.3, 2 Roll. Rep. 26.40 (1626) Latch 188.41 Ibid,32. 42 (1838) 3 My. & Cr. 33843 (1862) 31 Beav. 292.44 [1990] 1 All E.R. 87.22 | P a g e



The plaintiff was a manufacturer of lemon juice and, since 1956, had been selling such juice under the name “Jif” in plastic containers resembling real lemons. The defendant’s product, manufactured in 1985-86 marketed three different kinds of lemon juice in containers precariously similar to those of the plaintiffs’, the only difference being a differently colored cover and a different brand name, “ReaLemon”. The plaintiffs’ brought an action for passing off and were successful, with both the Court of Appeal and the House of Lords upholding the decision.

The Court observed that a careful shopper might be able to distinguish between the different brands, the court held that, “the slightest peradventure that the effect of the introduction of any of the defendant’s lemons on to the market would be bound to result in many housewives purchasing them in the belief that they were purchasing the well-known and liked Jif brand.” The fact that the brand “Jif” was identified by the shape of its container and not by its label provided the ultimate evidence.

In the case of Calvin Klein Inc. USA v. International Apparel Syndicate45 the plaintiff, an internationally reputed US company with a tremendous goodwill for designer clothing brought an action for passing off and trademark infringement against International Apparel Syndicate, an Indian company to stop them from using the trade name Calvin Klein and the mark CK.

Calvin Klein did not have a market in India, but their goodwill was based on their reputation earned through advertisements. They also had worldwide trademark registrations in 136 countries including India. In India, their registration covered only textile goods, while their application for trademark registration for clothing, footwear and headgear was still pending. False representation by the Indian company that they were official CK licensees

45 MANU/WB/0083/1994.23 | P a g e



and marketing their products under the trade name of Calvin Klein led to the Calcutta High Court passing an interim order for injunction, stopping International Apparel Syndicate from using the name Calvin Klein and the mark CK, which subsequently became permanent. The defendants’ contention that the plaintiffs could not bring an action because they did not sell their goods in India was disallowed.

The court held that the marks were used with an intention to deceive the customers and to trade riding on the international reputation of Calvin Klein.

In the matter of Honda Motors Co. Ltd. v. Mr. Charanjit Singh and Ors46, the defendants manufactured pressure cookers under the name “Honda”, in India. Their application for registration had already been rejected once before and they had applied for registration again, while continuing to sell their products. The plaintiffs, popular all over the world for their motor goods and electrical appliances brought an action against the defendants. In India, they ran a joint venture with the Siddharth Shriram Group.

In the judgment, it was held that with an established business and sale of quality products, the name “Honda” had become associated with the plaintiffs’ reputation and its goods. It was said that it is very easy for the public to associate the plaintiffs with any product that carries the name of “Honda”. Further, the could also held that by using the name “Honda” the defendants were creating confusion in the consumers’ minds, which was indirectly affecting the business of the plaintiffs in an adverse way. An injunction was ordered to stop the defendants from using the name “Honda”.

46 101 (2002) DLT 359. 24 | P a g e



REMEDIES OF PASSING OFFInjunction: Injunction can be understood with the help of the landmark case of B K Engineering Co. v. Ubhi Enterprises (Regd.)47. In the case, appellants are manufacturing bicycle bells from 1971 and using their house mark ʻB.K.ʼ and their name is also stamped on the product as “B K Engineering Co.” Their products are manufactured under the trademarks ʻCrownʼ and ʼVenusʼ. The respondents started manufacturing bicycle bells in 1981 and their product is marked ʻB.K.-81ʼ and their name is also stamped on the product ʻU.B.H.I. Enterprises Regd’. The appellants also made an application

for interim injunction seeking to restrain the respondents from marketing their products

under the said trade mark pending the decision of the suit. A single judge declined the

interim relief.

Allowing the appeal against refusal of injunction the Court held that: “…ʻB.K.ʼ is the house name of the plaintiffs, the products of articles, Crown Bell, that own popular favor. The defendants have attached this name to the article they produce, ʻB.K.-81ʼ bell. The probability of deception and confusion is certainly there. ʻB.K.-81ʼ conveys a false impression, has something of a faulty ring about it; it is not sterling coin; it has no right to the genuine stamp and impress of truth.”

It was further held that “…the adoption of ʻB.K.-81ʼ by the defendants would lead person to think that ʻB.K.-81ʼ is the product of a business associate or an affiliate of B.K. Engineering Co. There is real risk that a substantial number of members among the public would in fact believe that there is a business connection between the plaintiffs and the defendants. The defendants cannot be allowed to cash in on the popularity of the plaintiff’s product in which they have built a goodwill. If not prevented they will harm the plaintiff’s

47 ILR (1985) 1 Del 525.25 | P a g e



business. There is sufficient ground for the grant of temporary injunction at this stage.”

Damages/Compensation: The concept of damages can be better understood using the case law: Bengal Waterproof Ltd. v. Bombay Waterproof Mfg. co.48 The court held that, An action for passing off is a common law remedy being an action in substance of deceit under the Law of Torts. Wherever and whenever fresh deceitful act is committed the person deceived would naturally have a fresh cause of action in his favor. Thus every time when a person passes off his goods as those of another he commits the act of such deceit.

Account of Profits: The purpose of account of profits is not to punish the defendant but to prevent unjust enrichment. An account is limited to the profits actually made and attributable to the infringement and the claimant must take the defendants business as it is.

48 (1997) 1 SCC 99: AIR 1997 SC 1398.26 | P a g e



PASSING OFF AND TRADEMARK INFRINGEMENTThe difference between Trademark Infringement and Passing off can be understood by the analysis of the scope of trademark infringement and the Trademarks Act, 199949. Trademark is a company’s identity enabling a customer to distinguish products under that trademark according to the goodwill of the company and quality of the products. Trademarks help the owners to avoid their competitors from using the trademark to their own benefit. The most important and significant point is that the name and reputation of a company is deeply rooted within the trademark. A company cannot afford to let any other person misuse its trademark and in the process harm the reputation, goodwill, and not to forget the business, which must have taken years to become solid.

Section 29(1) of the Trademarks Act, 1999 helps define infringement;

“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.”

Passing off is not defined in the Trademarks Act, 1999. But various courts have tried to follow the common law in helping build an idea of passing off. Passing off is said to take place when a trademark, registered or unregistered is infringed in a manner where not only is the mark dangerously similar to that of the plaintiffs’, but also it rides on the plaintiffs’ goodwill to

49 Trademarks Act, 1999. 27 | P a g e



help establish a market and thus ruin the plaintiffs’ market. “Goodwill” plays a big part in instituting an action against the tort of passing off.

This can be understood with the help of Section 27(2) of the Trademarks Act, 1999; by whose virtue a company with an unregistered trade mark can sue under Common Law on Passing off Tort.

Section 134 (1) (c) and Section 135, of the Trademarks Act, 1999 again mentions Passing off. In Section 134(1) (c) Passing off is recognized while in Section 135 the reliefs for Passing off are mentioned.



CONCLUSION

In a country where a considerable percentage of the population lives in rural areas, it is very easy to pass off goods. Thousands of instances of passing off can be found out throughout India. Right from garments to tobacco to toothpaste to pencils to pens, you name it, you find it. Unfortunately, a legal solution has evaded most of these. But with the Trademarks Act, 1999 providing protection against passing off, situation has improved, as can be observed from a huge splurge in the number of Indian cases concerning passing off in the recent past. Passing off has come a long way through the common law system and now has some well-defined principles and ambit. Perhaps the time is ripe to bring in legislation and enact a statute concerning passing off. With the remedy of passing off and the common law tort of Slander of Title, Slander of Goods and Other forms of Malicious Falsehood.

Legal Paradigm has grown so much that today it encompasses a relief for every possible unjust action.


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