LAW OF PASSING OFF UNDER TRADE MARKS ACT, 1999 NEEDS MORE STRINGENT PUNISHMENT – A CRITICAL STUDY

Trademark Stringent

By Souvik Dhar (Assistant Professor in Law, IILS, Siliguri)

Passing off is governed by the law of tort. This action is limited to a dispute between two individuals or parties. Here the action is not brought by the state against any particular person. It has to be remembered that the passing off arises specifically when one party passing off or misrepresenting the other party’s products or services as those of their own. That means the wrongdoer will try to sell his products as products of some reputed trader or business entity.

In fact, passing off is a very grave issue in the corporate world. More importantly it is limited to commercial transaction or business entities only. It primarily concerns with the misrepresentation made by one party (wrongdoer) which damages the reputation or goodwill of another party (aggrieved party).

Reputation and goodwill of a company is a very important aspect of a company. This reputation and goodwill of a business is that aspect of a company which give an identity to a business and its goods/services that distinguishes them from those of their competitors.

If any other trader or businessman tries to use this very aspect of reputation and goodwill of another trader or business, then that original owner of the business can put an end to such use by taking the course of law against passing off.

In order to succeed in a passing off action the claimant has to prove that:

  • The claimant possess a reputation or goodwill in their name, mark, products etc
  • There has been misrepresentation from defendant’s side
  • The confusion arises because of such misrepresentation by the defendant
  •  And for such misrepresentation, the damage has been occurred to the claimant’s reputation or goodwill in the claimant’s name, mark, products etc

Goodwill is given the vital importance as it is the goodwill of the trader or businessman which taken into account for passing off action. Since the goodwill has given importance, the law of equity has been well established here.

It is to be keeping in mind that if the concept of passing off compare with domain name and technological changes then the concept of passing off is in different dimension.

One of the important factors for passing off is that there is no such thing as a monopoly or a property in the nature of copyright or in the nature of patent in the use of any name. Whatever name is used to designate goods, anybody may use that name to designate goods always subject to this, that he must not make, directly or through the medium of another person, a false representation that his goods are good of another person.

Though passing off is a very well established law, a law based on equity and common law tort, there are some scopes for improvement. The development is required more in punishing the offender. The requirements need to stringent the laws are as follows –

  1. a) Passing off needs stronger statutory frameworks in India. It is based on law of equity. Statutes have not disclosed in detail the remedies available for passing off actions.
  2. b) Passing off is though a common law concept, but the penalties available is limited to civil remedies. But the intention of the offender is more criminal intention in nature. There is essence of fraud. Criminal remedies need to strengthen so those offenders beware before playing with the goodwill of another person. For that monetary penalties and prison need to be inducted as remedies so that the offender could be aware of the punishment he could face if he made any offence.
  3. c) Since passing off is for unregistered goods and services, the reputation and goodwill are to be decided by the Judiciary. There is no scope for partiality. The Judiciary shall continue this process.

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