Trade Marks

Trade Mark, Trademark or Trade-Mark?

The spelling of trade mark is completely down to which
country you are from.
o Trade mark is typically the British spelling.
o Trademark is the spelling used in America and used by
the World Intellectual Property Organisation (WIPO)
o Trade-mark is the spelling used in Canada.

India?
 What's in a name?
“What's in a name? that which we call a rose
By any other name would smell as sweet.”
― William Shakespeare, Romeo and Juliet

o Earlier we gained some perspective on why

Trademarks are important.
o Let us look at some more aspects of the importance
of Trademarks
 What's in a name?

Source: Interbrand: available at

 What's in a name?

Source: Interbrand: available at

http://brandequity.economictimes.indiatimes.com/news/business-of-brands/interbrand-report-here-are-the-best-indian-brands-of-
2016/53929331
 What's in a name?

What does it mean for a brand to value at 178 million

dollars?
 What's in a name?
‘A brand’s value is merely the sum total of how much
extra people will pay, or how often they choose, the
expectations, memories, stories and relationships of
one brand over the alternatives.’

Another way of understanding brand value is to think of

the extra money a buyer of the company will need to
pay in addition to the value of that target company’s
tangible assets.
 What's in a name?
Groundbreaking research conducted by Brand Finance
demonstrated that 62% of the world's business is now
intangible. This represents $19.5 trillion of $31.6 trillion
global market value.
 Functions of Trade Marks
• Understanding the functions of a trade mark is
important because the essence of trade mark law is
ultimately to prevent harm to these functions.
• One of the earliest (perhaps the earliest) reported
trade mark case in Anglo American trade mark law is
the Sandforth’s case decided in England in 1584 is a
useful starting point for finding out what a trademark
is for.
 Sandforth’s case
• Plaintiff manufactured woolen cloths marked with letters J.G.
and a sign called a tucker’s handle
• Plaintiff’s customers had become accustomed to buy his cloths
in several locations without any further inspection
• Defendant made woolen cloths of poor quality, deceitfully
marked them with the letters J.G. and with the tucker’s handle,
and sold these cloths as the cloths of the plaintiff
• Customers bought defendant’s cloths without further
inspection believing that they were plaintiff’s, but found them
of bad quality and changed their good opinion of plaintiff
• Because of the deceit committed by defendant, plaintiff could
not sell his cloths because buyers refused to buy them
 Functions of Trademarks
• Decision
The majority of the court held that ‘an action on the case lies by
the custom of London for counterfeiting another’s mark’

• Thus, in this case, the marks used by the plaintiff – J.G. and the
sign of a tucker’s handle – were the symbols relied upon by the
public to help them identify the source of the goods in
question, without having to inspect the goods further.
• Trademarks serve, in this sense as ‘badges of origin’.
• This function of trademarks still forms the core of trademark
protection even today.
 Functions of Trademarks
• There is another aspect of the ‘origin’ function: think about
why were the public looking for the J.G. mark? Because they
were seeking a certain quality of goods which they believed
goods having this mark carried.
• Thus, underlying and intertwined with the ‘origin’ function of
trademarks is their other function of assuring the customer of
a certain quality in the goods and services.

• Thus, trademarks are badges of origin and of quality.

 Functions of Trademarks
• These functions of a trademark would be harmed when other
traders use the same or a similar mark on their goods and
services and cause confusion in the market about the origin
and quality of goods.
• Protecting these functions of a trademark means stopping such
confusion.
• Thus prevention of confusion forms the cornerstone of
traditional trademark law.
 Justifications for Trademark Protection
• Let us now look at some jurisprudential justifications for
protection of trademarks
• Economically, laws for trademark protection have a utilitarian
basis (What is this?)
• Trademarks serve as shortcuts to locate the goods and services
they want – thereby they save time and cost for such search
• They also ‘protect consumers’ – by preventing them from
buying goods and services of sub-optimum quality
 Justifications for Trademark Protection
• Another justification lies in the ‘just desserts’ theory (what is
this?)
• It means that the trader deserves protection for the time and
effort he spent in building up a particular sign as his trademark
and must be protected against unfair competition from traders
who are out to take a free ride on the goodwill and reputation
he has acquired for his goods and services.
• ‘Just desserts’ is an old English phrase which means ‘that which is deserved.
A reward for what has been done - good or bad.’
 Overlap
Remember that trademark may overlap with other Intellectual
Properties, especially copyright and sometimes, with designs as
well.
 Common Law v. Statutory protection
One must remember that trademark law comprises two main
branches:
a) the common law action for passing off, and
b) actions under the Trademarks Act

Although there are many common features between the two, they
are not the same thing

We will also see in due course that passing off is, in certain ways, a
broader cause of action than trademark infringement
 Common Law v. Statutory protection
Section 27 (The Trade Marks Act, 1999, “the Act”)
No action for infringement of unregistered trade mark
(1) No person shall be entitled to institute any proceeding to
prevent, or to recover damages for, the infringement of an
unregistered trade mark.
(2) 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.
 Common Law v. Statutory protection
Important differences between common law protection and
statutory protection:
Passing off Trademark infringement
Subject Protects the plaintiff’s business Protects the property in the
matter or goodwill (and not the mark, registered trademark itself
yet the mark may be the vehicle
of goodwill)
When Protection only upon goodwill May be protected without actual
protected acquired through actual use use merely through registration
Assignment Cannot be assigned except along Assignable on its own
with the business itself
Registration No registration required Registration a must
 Passing Off
We will first study Passing Off.
o Passing off is a common law tort. Remind yourself of law of torts
before proceeding further.

o The great majority of cases will involve a mark in the wide

sense, including containers and packaging, but business
goodwill can be achieved and maintained in other ways and it is
possible that business methods and get-up, marketing strategy
and advertising themes can be protected by this useful area of
law.
 Passing Off
• The main point about passing off is that goodwill has been
established by one trader and another trader tries to take
advantage of that goodwill, to cash in on it to the detriment of
the first trader
• Perry v Truefitt – ‘a man is not to sell his own goods under the
pretence that they are the goods of another trader.’
• The essence of passing off is misrepresentation which misleads
customers
 Passing Off
Erven Warnink Besloten Vennootschap v J Townend & Sons (Hull)
Ltd. (Advocaat case) earlier laid down 5 requirements for a case of
passing off namely :-
(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 or 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 trader by whom the action
is brought.
 Passing Off
Some Indian cases on Passing Off still refer to the less refined
version of Passing Off cited above (Lord Diplock in Advocate case)
having 5 ingredients.

One can refer to the Supreme Court case of Cadila Health Care
Limited v Cadila Pharmaceuticals Limited, AIR 2001 SC 1952 to see
the court relying on this definition of passing off.
 Passing Off
However, Lord Oliver reduced this list to three elements in Reckitt
& Colman Products Ltd v Borden Inc, which are now widely
accepted as the requirement for passing off:
1. Goodwill,
2. misrepresentation and
3. Damage (likelihood?)
 Passing Off
These ingredients have been accepted in Indian law in several
cases:
S. Syed Mohideen v P. Sulochana Bai, (2016) 2 SCC 683, Para 23, B.
“These ingredients are considered to be classical trinity under the law of passing
off as per the speech of Lord Oliver laid down in the case of Reckitt & Colman
Products Ltd. v Borden Inc (1990) 1 All E.R. 873… which is more popularly
known as "Jif Lemon" case wherein the Lord Oliver reduced the five guidelines
laid out by Lord Diplock in Erven Warnink v. Townend & Sons Ltd. [1979) AC 731,
… (the "Advocate Case") to three elements: (1) Goodwill owned by a trader, (2)
Misrepresentation and (3) Damage to goodwill. Thus, the passing off action is
essentially an action in deceit where the common law rule is that no person is
entitled to carry on his or her business on pretext that the said business is of
that of another.”
 Passing Off
Name exception
Wright, Layman & Umney Ltd v Wright
“A man may sell goods under his own name as his own goods. If he
does so, he is doing no more than telling the truth. If there
happens to be already on the market another trader of that name .
. . that is just his misfortune . . . provided that a man keeps within
the limit of using his own name and does so honestly and does not
go beyond that, nobody can stop him even if the result of him
doing so leads to confusion.”
 Goodwill
o Plaintiff must establish (what is establishing?) that he has
acquired goodwill as at the relevant date
o Relevant date is the date when the defendant’s conduct
complained of started.

Inter Lotto (UK) Ltd v Camelot Group plc.

Whether the date at which the claimant’s goodwill should be
assessed was the date of filing the application by the defendant or
the date the defendant actually started using the trade mark?
 Goodwill
A widely accepted meaning of Goodwill is one laid down by Lord
Macnaghten in IRC v Miller & Co’s Magarine Ltd. [1901} AC 217:
“It is the benefit and advantage of the good name, reputation, and
connection of a business. It is the attractive force which brings in
customer. It is the one thing which distinguishes an old-
established business from a new business at its first start. The
goodwill of a business must emanate from a particular centre or
source. However widely extended or diffused its influence may be,
goodwill is worth nothing unless it has power of attraction
sufficient to bring customers home to the source from which it
emanates.”
 Goodwill
• Goodwill can come about through consistent use, even if the
name etc used by the plaintiff is descriptive.

• If a trader has only just started in business or has only recently

started using an unregistered mark or ‘get-up’ he may be unable
to succeed in a passing off action. Passing off does not protect
goodwill of a trivial extent. (Hart v Relentless Records Ltd)

• If there is a great deal of commercial activity and advertising,

goodwill could be acquired in a relatively short period of time.
 Goodwill
• Goodwill is not restricted to traders which are large companies
with high turnovers, and a small trader may establish goodwill
in a particular locality or because he is well known in a specialist
field.

• It is important to consider how the goodwill is associated with

the product or service concerned. This may, of course, be
influenced by the form of an advertising campaign.
 Goodwill
• The scope of passing off is quite wide and it can protect
unregistrable business names, unregistered trade marks,
advertising and general ‘get-up’; in fact, anything that is
distinctive of the claimant’s goods, services or business.
• For example, in Copydex Ltd v Noso Products Ltd. (1952), the
claimant had given a demonstration of its glue on television
although the name of the product was not mentioned (this was
before the days of commercial television)
• The defendant company also made glue and one of its salesmen
gave a demonstration of its glue in a large retail store.
 Goodwill
• During the demonstration a large card was displayed which bore
the words: ‘“NOSO” here again! As shown on television
“Women’s Hour” ’.
• When the claimant complained, the defendant gave the court
an undertaking not to do it again; otherwise an injunction
would have been granted in favour of the claimant.
 Goodwill
o The test to determine whether the plaintiff’s business has goodwill is this
o has the mark or any other indicia adopted by the plaintiff become
distinctive of his goods or services, in the sense that it is associated or
identified exclusively with his goods or services – White Hudson & Co v
Asian Organization Ltd [1985] MLJ 186 (Privy Council)
o Since this test is in fact focusing on the level of the public’s awareness of the
plaintiff’s mark and association of the mark with plaintiff’s goods or
services, the way goodwill has to be proven in a court of law is by adducing
evidence in the form of:
o Sales volume
o Extent and amount of advertisement and media coverage of business
conducted under the mark
o Market surveys
 Goodwill
White Hudson & Co v Asian Organisation Ltd (1965)
o The plaintiff was the manufacturer of ‘Hacks’ cough sweet (left picture). The
defendant’s cought sweets, sold under the ‘Pecto’, were similar in size and
shape and wrapper (right picture)
 Goodwill
o Since this dispute arose in Singapore in 1950s, most of the population did
not speak English, thereby causing the difference between their names, viz.,
‘Hacks’ and ‘Pecto’ much irrelevant.
o The evidence suggested, according to the Privy Council deciding the case,
that customers were in the habit of asking for ‘red paper cough sweet’ in
whichever language they spoke, which in turn suggested that these
customers associated the general packaging used by the plaintiff (which
was the relevant ‘mark’ or indicia in this case) with the plaintiff’s goods.
o Thus, the Privy Council held that the plaintiff had established its goodwill in
relation to the particular packaging.
 Goodwill
o Extent of protection of marks and ‘get-up’
o Reckitt & Colman Products Ltd v Borden Inc – the Jif Lemon case
 Goodwill
o Not only the packaging, but in certain cases, the appearance of
the good itself can be protected - Hodgkinson and Corby Ltd v
Wards Mobility Services Ltd, the claimant made a cushion for
use by permanently immobile persons to prevent pressure sores

o Geographical extent – Goodwill v Reputation

 Misrepresentation
o Misrepresentation is an essential element in the tort of passing
off
o Misrepresentation is a question of whether the defendant’s use
of the name in connection with his goods or business could be
taken to be a representation that those goods were, or his
business was, those of the claimant or had some connection
with the claimant so giving rise to or a risk of harm to the
claimant’s goodwill which the claimant was entitled to protect
 Misrepresentation
In deciding whether the buying public (or the ultimate
consumer) is likely to be misled or confused, it is not
necessary to consider whether members of the public
who are knowledgeable about the particular product or
service are deceived and it may be sufficient if members
of the public who have relatively little knowledge of the
product or service are deceived or are likely to be
deceived.
 Misrepresentation
NAD Electronics Inc v NAD Computer Systems Ltd
Important factors in finding passing off were the facts
that
• the goodwill subsisted in ‘NAD’, a fancy name,
• that the goods were advertised in similar ways (the
claimant sold hi-fi systems of high quality and the
defendant sold computers) and
• both traders’ goods were sold alongside each other in
retail outlets.
 Misrepresentation
The public is not expected to be particularly
knowledgeable about the product concerned.
The reasonable man is no connoisseur of fine wines and
exotic foods.
J Bollinger v Costa Bravo Wine Co Ltd (No 2)
The claimant made the famous sparkling wine known as
‘champagne’ in the Champagne region of France. This
drink is often bought for special occasions by people who
do not purchase it regularly.
 Misrepresentation
The defendant imported into the UK a sparkling wine
called ‘Spanish Champagne’ which was supposed to be
like the claimant’s product but made in Spain.
The defendant claimed that, by adding the word
‘Spanish’, this clearly indicated that the wine was not
made in France and, because champagne was such a
well-known product, only a tiny portion of ignorant, ill-
educated persons would be misled.
The defendant further claimed that the word
‘champagne’ had become a generic description.
 Misrepresentation
An injunction was granted preventing the use of the word
‘champagne’ by the defendant.
It was held in the High Court that a substantial number of
persons, whose life and education had not taught them
much about the nature and production of wine, might
want to buy champagne from time to time and these
people might be misled by the description of the
defendant’s sparkling wine as ‘Spanish Champagne’.
 Misrepresentation
The description ‘Spanish Champagne’ was intended to
attract to the defendant’s product the goodwill
connected with the reputation of champagne and
amounted to dishonest trading.
Danckwerts J said, ‘it seems to me that close
resemblance makes the counterfeit not less but more
calculated to deceive . . .’
‘Champagne’ had not become a generic name because
corresponding wines made elsewhere were not
described using that word.
 Misrepresentation
A number of factors will affect whether the
misrepresentation is likely to confuse, such as
• whether the traders operate in the same field of
activity,
• the distinctiveness of the claimant’s get-up,
• how well-known and familiar the get-up is and
• the sales outlets for the traders’ goods.
 Misrepresentation
Irvine v Talksport Ltd
The defendant ran the radio station ‘Talk Radio’.
It mounted a promotional campaign which included
photographs of Eddie Irvine, the Formula One Grand Prix
racing driver.
The photograph had been manipulated.
It originally showed Mr Irvine speaking on a mobile
phone but was changed so he held a portable radio on
which the words ‘Talk Radio’ were clearly visible.
 Misrepresentation
It was held that this gave the impression that he
endorsed the radio station and this false representation
was passing off.
Product endorsement is very common and celebrities
expect to be paid large sums of money for such activities.
Thus, giving a false impression that a celebrity is
endorsing a product is likely to amount to passing off.
 Misrepresentation
Inverse passing off
It has been said that passing off can be one of two types:
1 classical passing off, where B represents his goods as
being those of A; or
2 extended passing off, where A uses a false description
for his goods to impute some quality to his goods – for
example, as in the Spanish Champagne case.
However, passing off is not necessarily limited to these
two forms and the common law.
 Misrepresentation
Inverse passing off occurs where the defendant falsely
claims that the claimant’s goods or services are actually
made by, or provided by, the defendant.
Bristol Conservatories Ltd v Conservatories Custom Built
Ltd – the defendant’s sales representatives showed
potential customers photographs of conservatories as a
sample of the defendant’s workmanship.
The photographs were, in fact, of the claimant’s
conservatories. The Court of Appeal had no doubt that
this constituted passing off.
 Misrepresentation
Intention
The great majority of passing off cases involve a
deliberate and calculated attempt to take advantage of
the goodwill owned by another trader and associated
with goods manufactured or sold by him or services
supplied by him.
However, a fraudulent motive is not necessary to a
passing off action and, indeed, innocence is no defence,
the main thrust of the law of passing off being the
protection of goodwill.
 Misrepresentation
Common fields of activity
In most cases, the rights associated with registered trade
marks are restricted in terms of the classes of goods and
services against which the marks are registered.
Therefore, trade mark law, by reference to identical or
similar goods or services, requires a ‘common field of
activity’ between the claimant and defendant.
Passing off is limited in a similar way in that there must
be a common field of activity between the claimant and
the defendant.
 Misrepresentation
There must be some common ground; otherwise there
can be no trespass to this form of intellectual property.
The justification for this is that, if there is no common
field of activity, there can be no damage to the claimant’s
goodwill because the public will not make a connection
between the traders and their different fields of activity.
 Misrepresentation
For example, if Trader A uses an unregistered trade
name, ‘Spright’, for its margarine and, later, Trader B uses
the same name for its bicycles, there will be little danger
of damage to Trader A’s goodwill (irrespective of the
quality of the bicycles) because the public are not likely
to think that the bicycles are made by or with the licence
of Trader A.
 Misrepresentation
Granada Group Ltd v Ford Motor Company Ltd
The Granada television group, famous for making the
television serial Coronation Street, could not prevent the
Ford Motor Company naming one of its cars the ‘Ford
Granada’.
There was no danger of confusion because of the
different fields of activity (television and motor cars) and,
consequently, there was little possibility of the claimant’s
goodwill being harmed.
 Misrepresentation
However, given the breathtaking diversification of many
large corporations, some relaxation of the rule is
appropriate.
Lego Systems A/S v Lego M Lemelstrich Ltd
The very well-known Lego company, that makes coloured
plastic construction bricks for children, was granted an
injunction preventing the use of the name Lego by the
defendant, which was planning to use it for its plastic
irrigation and garden equipment.
 Misrepresentation
The defendant had used the name Lego for its equipment
in various other countries such as Israel, but the
claimant’s children’s bricks had become so well known,
as had the name Lego in association with these bricks,
that the House of Lords was of the opinion that
confusion was extremely likely.
In this case, the common field of activity was, effectively,
coloured plastic.
 Misrepresentation
If the claimant’s business had not been so successful
and on such a grand scale in the UK, the claimant’s field
of activity might have been restricted to coloured
children’s plastic construction bricks, a much narrower
field.

The boundaries of the claimant’s field of activity appear

to be directly proportional to the magnitude of his
goodwill: the greater the goodwill, the greater the net of
passing off will be cast and the more likely it is that the
defendant will be found to have committed passing off.
 Misrepresentation
Character Merchandising
A fictitious or fantastic character might be devised for a
television series, a book, a film or a computer game: for
example, Harry Potter, the Teletubbies, the Simpsons,
Teenage Mutant Hero Ninja Turtles, etc.
 Misrepresentation
The person who devised the character or the person
commissioning the design will want to maximise the
financial return on the investment involved.
One way of doing this is to licence others to sell articles
to which a representation of, or the name of, the
character is applied.
It is big business.
The normal way it is done is for the merchandising
organisation to obtain a licence from the creator of the
character permitting the application of a representation
of the character to the articles.
 Misrepresentation
How to protect against unauthorized use of such names?

Passing off may not be very effective in the context of

character merchandising because of the requirement of a
common field of activity and without this there can be no
harm to the owner of the name of the character.
For example, if someone buys a ‘Garfield’ telephone, that
person would not be likely to complain to the makers of
the Garfield cartoons and comic strips if the telephone
turns out to be faulty.
 Misrepresentation
A common field of activity is the key to an action in
passing off and no more so than where character
merchandising is involved.
It is important for the parties to a licence agreement to
construct a connection in the course of trade between
the owner of the name, the licensor, and the goods or
services to which the name is to be applied.
 Misrepresentation
One way to do this is to establish a system of quality
control so that the owner of the name has a part to play
in the practical aspects of the marketing exercise.
In this way, the reputation of the name’s owner will be
extended into the other fields of activity defined by the
merchandising project.
However, the exercise of quality control must be known
about by the public and that appropriate advertising,
marketing and labelling of the goods can do much to
spread the word, thus extending the fields of activity.
 Misrepresentation
Even if the field of activity can be widened by careful
licensing and advertising, there will still be cases where
this will not be sufficient to provide a remedy, bearing in
mind that the prospect of harm to goodwill is a
fundamental requirement.
If there is no obvious link, regardless of any character
licences, then there is no remedy under the law of
passing off although there may be copyright issues,
particularly if a drawing of the character is used.
 Misrepresentation
BBC Worldwide Ltd v Pally Screen Printing Ltd
Court dismissed an application by the owners of the
rights in the famous fictional television characters the
Teletubbies (rotund furry creatures with television
screens set into their abdomens) for passing off (and
copyright infringement).
 Misrepresentation
He considered that the defendants, who made and sold
T-shirts showing representations of the Teletubbies, had
an arguable defence that they were not guilty of passing
off because it was possible that members of the public,
seeing the T-shirts bearing representations of the
characters, would see them for no more than that.
They would not necessarily consider that the T-shirts
were sold by or with the consent of the claimant.
 Damage
Damage to goodwill, or at least a probability that damage will
ensue, is one of the essential requirements for a passing off
action.
Damage is not limited to the direct diversion of sales and may
result in a number of ways. The diminution in the claimant’s
goodwill may be caused by:
• Lost sales because buyers confuse the defendant’s
products (or services) with those of the claimant;
• The fact that the defendant’s product is inferior to the
claimant’s product and buyers think the defendant’s
product is the claimant’s;
 Damage
Erosion, blurring or debasement of a name that is exclusive
and unique and which is used by the claimant;
indirect though invidious damage which prevents the
claimant controlling and developing his goodwill in the future
as he wished even though none would be deceived into
thinking the defendant’s product was from the claimant
 Sandforth’s case
• If you think about it, the Sandforth’s case embodies all the
elements of a passing off action long before these three were
separately recognized.
• Plaintiff had an established goodwill
• Defendant misrepresented his goods
• Plaintiff suffered loss of customers, i.e. damage
o This case had all the features of a modern day passing off
action.
o Yet the term ‘passing off’ was not used here and in fact did not
become an independent tort until the year 1865.