India: The Law Of Passing Off Strengthened Further

Last Updated: 4 March 2008
Article by Manisha Singh

In an action for Passing Off under the law of trademarks, it is essential to prove that the consumer is misled into believing that the impugned goods are the goods of or are connected with the goods of a prior user of the trademark. When this is not proved, the prior user cannot enforce a passing off action against the new user, even if the goods in relation to which the trademark is used fall in the same class. This was the view taken by the Delhi High Court in the case of M/s Microlube India Ltd. v. Maggon Auto Centre and Another, decided on 7th February 2008.1

The plaintiffs were the registered users of the trademark MICO registered in relation to their petroleum products including oils, grease, lubricants and coolants. They filed a suit for Infringement and Passing Off against the defendants for using the same mark in relation to their lubricants and also got an ex parte order. When the defendants contented that they could not be restrained from the use of the trademark by the plaintiffs in view of Section 28(3) of the Trademarks Act, 1999 which relates to concurrent use of trademarks by two persons; the plaintiffs took help of Sections 27(2), 33 and 34 of the Trademarks Act 1999 as having an overriding effect on Section 28, and made their ground for the relief of passing off.

However, the defendants averred that the plaintiffs had suppressed material facts and did not inform the court about the fact of registration of the trademark MICO by the defendant in 2005, thereby misleading the court that the latter were an unregistered user. Also, there was lack of research and misidentification of the principal parties by the plaintiffs, which led to non-presence of the defendants at the time of first hearing and obtaining of ex parte order by the plaintiffs. The plaintiffs argued that no provision of the Act bars an action for passing off by an anterior user of a trademark against a registered user of the same. Under section 27(2) of the Act, a prior user of a trade mark can maintain an action for passing off against any subsequent user of an identical trade mark including a registered user thereof.

The defendants further questioned the validity of the passing off action of plaintiffs, contending that the requirements for the claim were not met. "The law of Passing Off as it has developed permits an action against a registered proprietor of a trade mark for its mendacious use for inducing and misleading the consumers into thinking that his goods are the goods of or are connected with the goods of a prior user of the trade mark."

The court had to decide two questions, which were:

  1. Whether there was any concealment/ suppression of any material facts by the plaintiffs and
  2. Whether the plaintiff was able to prima- facie establish the existence of ingredients of passing off.

The court held that by not mentioning the fact of defendant’s registration, the plaintiffs did suppress a material fact. It was duty bound to have known or otherwise conduct a search to ascertain the fact of registration before filing the plaint. Thus the plaint was not filed in the right manner was not entitled to any equitable relief.

As regards the ingredients of Passing Off, The court relied on the observations of Lord Diplock in Erven Warnink Besloten Vennootschap and Another versus. J. Townend and Sons (Hull) Ltd. and Another [1979] A.C. 731, at 742, reiterated by the Supreme Court in the case of Cadila Health Care Ltd v Cadila Pharmaceuticals Ltd (2001) 5 SCC 73 at page 80 where five characteristics of passing off were identified. These are:

  1. a misrepresentation
  2. made by a trader in the course of trade,
  3. to prospective customers of his or ultimate consumers of goods or services supplied by him,
  4. which is calculated to injure the business of goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and
  5. which causes actual damage to a business or goodwill of the trade by whom the action is brought or (in a quia timet action) will probably do so.

As to the question of defendant using the trademark in respect of other classes of goods except in the case of lubricants for which the plaintiff was the prior user, the defendants contended that the plaintiff had to establish a right under a passing off action to exclusive use of the mark MICO even in respect of the lubricants.

The defendants proved that the trademark MICO was the acronym of their company name and was already a well-known brand registered in their name in respect of different classes of goods since 1953. The company was a large concern in respect of automotive goods and that the mark MICO was identifiable and distinctive of its products. It had an overwhelming market share and hence had no reason to injure the business or goodwill of the plaintiff by misrepresentation to the prospective customers of the plaintiff. Since there was no evidence of an attempt by them to pass off their goods as those of plaintiff’s; no action of passing off could be made out.

The court held that "In the facts narrated above, it is apparent that there is no misrepresentation on behalf of the defendant to any prospective customers much less a misrepresentation calculated to injure the business or goodwill of the plaintiff."

The Court thus refused to provide any injunctive relief against the defendants. As the plaint was not drafted properly, and the correct relief was not prayed for, the plaintiffs could not succeed in their action against the defendants.

Footnote

1 IA.Nos. 11702/2007 and 12433/2007 in CS (OS) 2015/2007.

© Lex Orbis 2008

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