“In the early 19th century trade was still largely local; marks which were identical or which closely resembled one another might have been innocently adopted by traders in different localities. In these their respective products were not sold in competition with one another and accordingly no question of deception of the public could then arise. With the rapid improvement of communications, however, in the first half of the 19th century markets expanded; products of two traders who used similar marks upon their goods could thus come to be on sale to the same potential purchasers with the consequent risk of their being misled as to the origin of the goods . . . To meet this kind of situation the doctrine of honest concurrent user was evolved.” - LORD DIPLOCK
In India, the principle can be traced to the Indian Merchandise Marks Act, of 1889 which contained a pertinent provision, though with a different name “Unintentional Contravention of the Law relating to Marks and Descriptions.” Then, Trademark Act 1940 was enacted which contained a provision with the wording “honest and concurrent use” in Section 10(2); then came the Trade and Merchandise Marks Act 1958 which contained Section 12(3) with HCU wording. Thereafter, Trademark Act 1999 came with Section 12 with HCU wording. While the wording of honest concurrent use has only existed in one provision since 1940, the underlying principle has existed in other provisions focusing on the good faith or intention behind adopting a mark.
Dishonesty should be given an interim injunction?
In A.D. Padmasingh Isaac v. Sudali Aachi Provisions, 2022 SCC OnLine Mad 343 , the plaintiffs, who had conceived, adopted, and registered the trademark ‘Aachi’ for marketing a range of spices, sought injunctive relief against the defendant’s use of the term ‘Aachi’ in the name ‘Sudali Aachi Provisions’ for a grocery store. The defendant argued that ‘Aachi’, meaning grandmother in Tamil, was a generic term and thus incapable of exclusive ownership. The Court agreed with the defendant, holding that while ‘Aachi’ was a registered mark, its descriptive nature did not grant the plaintiffs the right to prevent others from using it per se or in combination, especially if used with bona fide intent. The judgment clarified that although descriptive trademarks may gain goodwill and reputation, infringement claims cannot rest solely on the descriptive nature of the mark. Instead, in such cases particularly at the interim stage plaintiffs must also establish that the defendant adopted the mark dishonestly or in bad faith. Conversely, a defendant cannot merely rely on descriptiveness as a defense but must demonstrate genuine, good faith use to describe their goods or services.
In Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceuticals Laboratories, 1964 SCC OnLine SC 14 the Supreme Court held that if the essential features of a plaintiff’s trademark are adopted by the defendant, no further evidence is needed to establish passing off. Relying on this principle, the Delhi High Court observed that there was clear visual and phonetic similarity between the marks in question, and that the defendant had adopted the essential features of the plaintiff’s trademark. This adoption was considered prima facie dishonest, aimed at taking undue advantage of the plaintiff’s global reputation and goodwill. The court also noted that the plaintiff’s mark was a well-known trademark, and the defendant’s use of it constituted infringement under Section 29(4) of the Trade Marks Act, 1999.
Recently, while deciding an application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908 in the case of Moonshine Technology (P) Ltd. v. Tictok Skill Games (P) Ltd., 2022 SCC OnLine Del 296 , a Single Judge of the Delhi High Court vide an interim order reiterated that in a case for infringement, grant of injunction is necessary if it prima facie appears that the Defendants’ adoption of the mark was itself dishonest. The Court held that once the Plaintiff has shown that the use by the Defendants is of the exact word i.e., the registered trademark of the plaintiff and that the goods or services are identical, the Court will necessarily presume that confusion would arise in the minds of the public or consumers as to the origin of the goods or services and accordingly, an interim injunction would have to be issued.
In the case of Bayerische Motoren Werke Ag v. Om Balajee Automobile (India) (P) Ltd., (2020) 1 HCC (Del) 46 , the Delhi High Court granted an ad-interim injunction in favor of BMW, restraining the defendant, Om Balajee Automobile, from manufacturing, exporting, importing, offering for sale, or advertising any goods, including e-rickshaws, bearing the mark “DMW” or any other mark deceptively similar to BMW’s trademark. The dispute arose from an interim application filed by BMW seeking a permanent injunction against the defendant for trademark infringement. BMW argued that the defendant’s use of the mark “DMW” infringed upon its globally recognized and well-known trademark, “BMW”.
While the court noted that the goods in question luxury cars and e-rickshaws were dissimilar and might not cause direct consumer confusion, it emphasized that the defendant had adopted the mark “DMW” dishonestly, with the intention to benefit from the reputation and goodwill associated with BMW. The court held that such use was likely to mislead an average consumer of ordinary intelligence. Relying on Section 29(4) of the Trade Marks Act, 1999, the court concluded that even in the absence of similarity in goods, the unauthorized use of a deceptively similar mark that takes unfair advantage of or is detrimental to the distinctive character or repute of a well-known trademark amounts to infringement.Consequently, the court ruled in favor of BMW and restrained the defendant from using the mark “DMW” in any manner, holding that it infringed upon the “BMW” trademark under the provisions of the Trade Marks Act.
In Suzuki Motor v. Suzuki (India) Ltd., 2019 SCC OnLine Del 9241, decided by the Delhi High Court on July 17, 2019, the court addressed a trademark infringement dispute concerning the use of the mark “Suzuki.” The plaintiff, Suzuki Motor Corporation, a globally recognized automobile manufacturer established in 1909 and registered in India since 1972, sought a permanent injunction against Suzuki (India) Ltd., alleging dishonest adoption of its well-known trademark. The defendant, engaged in investment and finance, claimed to have been using the name “Suzuki” since 1982, asserting honest, concurrent, and uninterrupted use, and further argued that Suzuki Motor had delayed the suit by over two decades.
The Delhi High Court held that the defendant had dishonestly adopted the mark “Suzuki” to benefit from the global reputation of Suzuki Motor. The court emphasized that mere concurrent use is insufficient—it must also be honest. Given the dishonest adoption, the court ruled that the delay in filing the suit did not bar the grant of an injunction, especially since “Suzuki” was a well-known mark deserving enhanced protection under trademark law.
Misrepresentation
Indian Courts have predominantly applied the test, termed as the ‘Classical Trinity factors’ as set out in the landmark House of Lords decision in Reckitt & Colman Products Ltd v Borden Inc. [1990] 1 All ER 873, to determine whether a defendant was passing off his goods as that of the plaintiff’s. The test requires the assessment of the following factors namely, (i) goodwill owned by a claimant (plaintiff); (ii) misrepresentation by the defendant; and (iii) likelihood of damage to that goodwill
Misrepresentation occurs when a defendant creates a false impression about the origin of goods or services, leading consumers to believe there is an association with the plaintiff’s brand. This can be done through various subtle or overt means that suggest a connection, even if the parties are not direct competitors. Such misrepresentation can cause reputational harm to the plaintiff, especially where the public is misled into attributing the defendant’s products to the plaintiff. In cases of reverse passing off, it is crucial for the plaintiff to establish that the defendant has falsely represented the origin of the goods as their own, thereby concealing the true source and misleading consumers.
At the core of a passing off claim lies the crucial element of misrepresentation. This involves the unauthorized use of a mark or trade identity by the defendant in a manner that misleads or confuses the public about the origin of goods or services. The essence of the claim is to protect the goodwill associated with the claimant’s trademark. To succeed, the claimant must demonstrate that the defendant’s actions have caused, or are likely to cause, the public to mistakenly associate the defendant’s products or services with those of the claimant, thereby leading to reputational or commercial harm.
In Hodge Clemco Ltd v Airblast Ltd[1995] F.S.R. 806, where a case of misrepresentation was alleged, the Chancery Division concluded that on balance it would be a greater injustice if an injunction was granted. Where there are precious issues to be tried, the balance of convenience may lay in preserving the status quo through an appropriate order.
In Sen v Oakes (1919) 24 Cal WN 155,the plaintiff’s prayer for relief refused on the ground that he was guilty of misrepresentation as to the place of manufacture of his cycles. Plaintiff guilty of making false declarations are not entitled to interim injunction.
Sanderson CJ, observed “A party seeking the protection of the Court in such a case as this must come to the Court, as it has been said ‘with clean hands’ and even if the plaintiff had established his case to the effect that the stamping of the bicycles with the Warrior indicated to dealers and purchasers that bicycles so stamped were imported and sold by him only or that the word “Warrior” had become associated in the market with the plaintiff so that it indicated to dealers generally that bicycles bearing the word “Warrior” were imported by the plaintiff only, …in my judgment it would not be right for the Court to grant him injunction or other relief claimed for the purpose of protecting his alleged right by reason of the misrepresentation of which in my judgment he was guilty.”
In Torrent Pharmaceuticals Ltd. v. Wockhardt Ltd., 2017 SCC OnLine Bom 318 the Bombay High Court addressed a suit concerning trademark infringement and passing off. Since both parties held registered trademarks, the Single Judge confined the adjudication to passing off alone. The central issue was whether, in the absence of disputed similarity between the marks, the likelihood of misrepresentation could be presumed to justify a restraining order.
Emphasizing that passing off is an action in deceit, the Court held that to grant an interim injunction, the plaintiff must show prima facie evidence of misrepresentation, particularly relating to the source, origin, or provenance of the goods. Importantly, the Court distinguished between likelihood of misrepresentation, likelihood of confusion, and likelihood of damage, stating that while confusion is not always deception, deception inherently seeks to confuse. Applying these principles, the Court found that the plaintiff failed to establish the Classical Trinity factors—particularly the element of actionable misrepresentation—and therefore declined to issue an interim injunction.
Several Indian cases illustrate the importance of misrepresentation in passing off:
Sheila Mahendra Thakkar v. Mahesh Naranji Thakkar, 2003 SCC OnLine Bom 441 ): In this case, the appellant began selling a product called "Vandevi Superfine Powder," which closely mirrored the respondent's product, "Vandevi Powder (Yellow)." The court held this to be reverse passing off, confirming that misrepresentation, goodwill, and potential damage were present.
Bajaj Auto Ltd. v. TVS Motor Co. Ltd., (2009) 9 SCC 797 : Here, Bajaj Auto accused TVS of marketing products originally manufactured by Bajaj. The court found that such actions constituted reverse passing off, as consumers were misled about the product's source.
Sunny Sales v. Binod Khanna, 2014 SCC OnLine Cal 18505 : The court refused to grant an injunction against the defendant using the "LIPU" mark, as both parties were found to be misrepresenting the origin of the goods, indicating issues with trademark ownership and use.
“In those circumstances I do not think that there is any justification for passing any interim order restraining the defendant from using the said mark. The prayer for an injunction is refused. However the defendant is directed to maintain accounts of the sale of the above machines from the date of filing of this application till the suit is decreed. The accounts are to be authenticated by a practising Chartered Accountant. The defendant is to supply copies of the current accounts to the Advocate on Record for the plaintiffs on a half yearly basis.”
