Read the following case study carefully and answer the questions given at the end : Facts of the case : The plaintiff XYZ Ltd. is a Company publicly listed, organized and existing under the laws of USA, having its regist

CS Professional · Intellectual Property Rights - Laws and Practices · PYQS · June 2019
Read the following case study carefully and answer the questions given at the end : Facts of the case : The plaintiff XYZ Ltd. is a Company publicly listed, organized and existing under the laws of USA, having its registered office at New York. Mr. ABC is duly authorised to sign, verify and institute the present suit. The plaintiff's group of companies is one of the world's most famous and well-known hotel and resort chain group using the trademark 'sleepingcat' and its device. The plaintiff's flagship company 'sleepingcat Resort' was launched in 1994 in Laguna Phuket under the trademark 'sleepingcat' and its device. Hence, the mark is inherently distinctive of the business and products of the plaintiff and the continuous use of the trademark 'sleepingcat' by the plaintiff group since the year 1994 has created goodwill and reputation in the said mark that is associated with the plaintiff and the plaintiff alone. The plaintiff Group's services and products under the trademarks 'sleepingcat' and its device have been widely promoted inter alia through print and audio-visual media including television programmes, advertisements, articles and write-ups appearing in leading newspapers, magazines, journals, etc. all of which enjoy a wide viewership, circulation and readership all over the world. Many of these forms of media also have a substantial reach and circulation in India and are viewed by millions of Indians who travel abroad or who subscribe to the same in India every year. In addition, many people from all over the world including India access the plaintiff Group's websites : www.sleepingcat.com, www.sleepingcatspa.com, www.sleepingcatgallery.com, www.sleepingcatresorts.com that have been registered since as early as 1996 and become acquainted with the plaintiff Group's business, services and products which further contributed to the reputation and notoriety of the mark 'sleepingcat' and its device of the plaintiff. The plaintiff Group, being prior in the adoption and use of the mark 'sleepingcat' and its device, is its proprietor and thus, entitled to the use of these marks under common law rights, to the exclusion of all others. Apart from having common law rights in the mark 'sleepingcat' and its device, the plaintiff also has statutory right in the same. It is submitted that the plaintiff has registered or has sought to register the mark 'sleepingcat' and its device in more than 30 countries of the world. The plaintiff is, thus, the registered owner of the trademark 'sleepingcat' as well as the device in various countries. The defendant Mr. X is the Managing Director of defendant No. 2 which is 'sleepingcat Tours and Travels (Pvt.) Ltd.' having its office at Dadar, Mumbai and at Regal Building, Parliament Street, New Delhi. It is the case of the plaintiff against the defendant that sometime in 2004 it came to the knowledge of the plaintiff that the defendants had applied for registration of the mark 'sleepingcat' under the Trademarks Act, 1999. The plaintiff had filed opposition against the purported registration applications in 2004. The said application were thereafter abandoned in February 2005 since the defendants failed to file any counter statements to the oppositions filed by the plaintiffs predecessor in-title and thus, the cases were closed. In June, 2005 the defendants filed an application with trademark office seeking registration of the mark 'sleepingcat' with device, opposition to which was filed by the plaintiff in May 2006 and September 2006 respectively. While the said applications were under contest before the trademarks registry, the defendant used the trademark for advertising his services. It adopted the website www.sleepingcattours.com which was created on 16th August 2003. The plaintiff filed the suit against the defendant use of the trademark on 15 January 2019. It plead to the court that : (1) The adoption of the mark 'sleepingcat' and its device by the plaintiff is much prior to the filing of the application for registration of the mark 'sleepingcat' and its device by the defendants and also much prior to the alleged use of it by the defendants. (2) It is submitted that the defendants belong to the same trade/industry and therefore, there exists every reason for the defendants to have been aware of the plaintiffs marks and also the goodwill and reputation of the said marks worldwide. (3) The plaintiff submits that there is no way in which the defendants could have honestly or by sheer coincidence adopted such a well known mark for his goods, except for ulterior gains. The conduct of the defendants is totally dishonest and is solely motivated to create mass deception and confusion by running a trade/business under an identical trademark. The defendants' activities are clearly motivated to encash upon the hard earned reputation and goodwill of the plaintiff's well known and recognized trademark 'sleepingcat' and its device. The following defence were raised by the defendant : (1) The plaintiffs have no area of operation from India nor do they have any office in India, while the defendants are a company incorporated within India and have their area operations in India and have been actively conducting business since 1996 without any interruption. The plaintiffs are only trying to take advantage of the goodwill and reputation of the defendants and to encash on the presence of the defendants' business which the defendants have established for the last 12 years in India and abroad under the trademark of 'sleepingcat' and its device. (2) The defendant No. 2 is one of the leading tour and travel companies including camping and adventure sports and lay special emphasis on providing services to suit the clients and to provide such hospitality designed to fit into its natural surrounding, using indigenous resources as far as possible which may reflect the landscape and architecture of the area of travel and also catering to all such needs of clients visiting India and taking the advantage of the facilities and other opportunities available in India with regards to well known tourists spots in India. (3) The plaintiffs are conducting a business of hotels, resorts and spas while the defendants are primarily conducting services relating to travel and tourism in India through their company and the trademark 'sleepingcat' and its device. There is no trade connection between the business of the plaintiff and defendants. Questions : What are the essential ingredients of 'passing off' ?

Answer & Explanation:

The three fundamental elements of passing off are Reputation, Misrepresentation and Damage to goodwill. These three elements are also known as the Classical Trinity, as restated by the House of Lords in the case of Reckitt & Colman Ltd vs. Borden Inc. It was stated in this case that in a suit for passing off the plaintiff must establish firstly, goodwill or reputation attached to his goods or services. Secondly he must prove a misrepresentation by the defendant to the public i.e. leading or likely to lead the public to believe that the goods and services offered by him are that of the plaintiff's. Lastly he must demonstrate that he has suffered a loss due to the belief that the defendant's goods and services are those of the plaintiff's. Among the three, one of the essential ingredients of 'passing off' is goodwill. The classic case of passing off as it existed since its genesis always insist the existence of goodwill of a merchant in order to give him a locally enforceable right to sue for passing off. This has been explained by Kerly's in his book called Law of Trade Marks and Trade Names, wherein the concept of goodwill has always been categorized as local in character and the learned author observed thus:- "Since an essential ingredient of passing off is damage (or prospective damage) to goodwill, he (the Plaintiff) must show that he had, at the date when the Defendants started up, in this country not merely a reputation but a goodwill capable of being damaged. Goodwill, however, is local; it is situated where the business is. Thus a foreign claimant may have a reputation in this country-from travellers or periodicals of international circulation or, increasingly, from exposure on the Internet-yet still fail in an action for passing off because he has here no business and so no goodwill. Such cases have been not uncommon in recent years, and have caused considerable difficulty. Where there is a substantial reputation here, our courts will often accept minimal evidence that a business exists here, but there has to be some". This concept of goodwill and the insistence of localized business has been traditional concept of passing off which sometimes is called as classic case of passing off. However, this concept of passing off has undergone changes due to advent of technology and modernization. For the said reason the tendency to insist localized goodwill has been transformed into proving reputation of a global character. All this would mean that courts entertaining the case of passing off can discount the localized existence of goodwill and the business in the territory specific if the substantial nature of reputation has been proved which has some kind of nexus in the territory where the protection is sought and the said concept in the modern language is called trans-border reputation whereas the goodwill is always local in character, the concept of reputation is dynamic and is all encompassing. The reputation of a person can transcend boundaries by virtue of its advertisement in the newspapers, media circulation, expatriate reputation due to cultural akinness and all other relevant factors which connect one country's business with that of another. This has been aptly explained by the Division Bench of this Court in the case of N. R. Dongre vs. Whirlpool Corporation, AIR 1995 Delhi 300 wherein the concept of trans-border reputation was approved in the following words:- "Thus a product and its trade name transcend the physical boundaries of a geographical region and acquire a trans-border or overseas or extraterritorial reputation not only though import of goods but also by its advertisement. The knowledge and the awareness of the goods of a foreign trade and its trade mark can be available at a place where goods are not being marketed and consequently not being used. The manner in which or the source from which the knowledge has been acquired is immaterial." To prove the passing off action under the Trade Marks Act, 1999, following points need to be proved: Owner has to prove that there is similarity in the trade names. Defendant is deceptively passing off his goods as those of the owners'. It is leading to confusion in the minds of the customers (whether a person of average intelligence and of imperfect recollection will be confused). Nature of the activity and the market consumption of the goods of the parties to the passing off action must be same. Use of the same trademark or trade mark by the defendant must be likely to injure the business reputation of the plaintiff. Misrepresentation and loss or damage of the goodwill are also essential elements for a successful passing off action. This needs to be proved by the plaintiff for an interlocutory injunction.

Topics: Trademark Law

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