CAN PASSING OFF ACTION BE INITIATED UNDER THE COPYRIGHT LAW?

The author of this blog is Deepika Dhankani, she is a second year law student at New Law College, BVP, Pune.

INTRODUCTION 

Intellectual Property law encompasses various measures to protect works of human creativity. Among these are passing off, a common law tort designed to safeguard the goodwill of businesses and their goods or services, and copyright law, which protects original works of authorship. Copyright law grants creators exclusive rights, giving them control over the reproduction, distribution, and modification of their works. Conversely, passing off aims to prevent unfair competition by prohibiting misleading information about the source or quality of products or services. Although passing off and copyright law operate within different legal frameworks, there are instances where they overlap, raising questions about whether passing off actions can be pursued under copyright law.

UNDERSTANDING PASSING OFF 

The act of misrepresenting one's goods or services as being affiliated with another brand in order to win over new clients is known as passing off. It involves utilising the goodwill of another company to commit acts of deceit and misrepresentation in order to obtain an unfair advantage.

This is typically done by using the distinct identity of the more reputable and well-established company, such as its name, brand, or logo. Passing off in India is applied by the courts based on the principles of English law. The goal of this tort law principle is to stop unfair competition and undue advantage.

It is recognised in India through the Trade Marks Act, 1999 and the Geographical Indications of Goods (Registration and Protection) Act, 1999. Passing off provides a claim for damages in the case of an unregistered trademark. It is a different form of remedy than infringement (actionable by a registered proprietor). 

Passing off action under the Trade Marks Act, 1999 

A registered trademark has the backing of infringement and passing off remedies under the Trade Marks Act. The act does not provide for infringement action with respect to unregistered trademarks. Only passing off remedy is available in case of unregistered trademarks. While passing off is commonly associated with trademarks, it can also apply to other forms of intellectual property, including copyright.  

Key elements of Passing off 

Elements that need to be proven by the claimant in order to win the case -  

• Goodwill of the brand – It is essential and crucial to the outcome of a passing off action. The company claiming passing off must prove that it is the owner of the goodwill and reputation associated with the mark, sign, or logo that is affixed to the goods or services in question that are being made available to the general public. The Goodwill of the brand can be created by various types of advertisements and social media marketing. 

• Misrepresentation - In order to prove the passing off, the company must also demonstrate that there has been deception or misrepresentation that has led to or could lead the public to assume that the products or services being offered are the claimants. For example, deceptively similar trademarks are made of famous brands such as Puma, Nike, Starbucks Coffee, etc. 

• Damage - The claimant has to establish that the passing off activity has caused it to suffer loss or damage, or that it is likely to cause it to suffer loss or harm. This harm can involve loss of revenue or harm to one's reputation.

Famous Passing off cases in India 

• Cadila HealthCare Ltd. v. Cadila Pharmaceuticals Ltd. (2001)

In this case, the plaintiff, Cadila HealthCare, alleged passing off against the defendant, Cadila Pharmaceuticals, over the use of the word "Cadila" in their respective company names. The court ruled in favour of Cadila HealthCare, stating that the defendant's use of the name was likely to deceive consumers and cause damage to the plaintiff's goodwill. 

• Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories (1965)

The plaintiff manufactured a medicinal product called "Navaratna Oil," and the defendant started manufacturing a similar product with the name "Navaratna Kalpamrit." The court held that the defendant's product was likely to deceive consumers into believing it was associated with the plaintiff's product, thereby causing damage to the plaintiff's goodwill.

COPYRIGHT LAW OVERVIEW 

Under the umbrella of Intellectual Property law, Copyright law gives creators exclusive rights over their original works. These works include literary, artistic, musical, and other creative expressions fixed in a tangible medium of expression.

Scope of copyright protection 

Copyright protection extends to original works of authorship that are fixed in a tangible form, including - literary works, artistic works, musical and dramatic works, audiovisual works and architectural works. Copyright protection generally does not extend to ideas, facts, procedures, methods of operation, or systems, but only to the particular expression of these concepts.

Rights of The Copyright Owner 

The copyright owner enjoys several exclusive rights, including: 

• Reproduction Right - The right to reproduce the work in copies or phonorecords.

• Distribution Right - The right to distribute copies of the work to the public by sale, rental, lease, or lending.

• Public Performance Right - The right to perform the work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, motion pictures and other audiovisual works.

• Public Display Right - The right to display the work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work.

• Derivative Work Right - The right to prepare derivative works based upon the original work. 

Copyright Infringement Provisions and Remedies 

Copyright infringement occurs when someone violates any of the exclusive rights granted to the copyright owner without permission. Infringement may occur through – reproduction, distribution, public performance or display or creation of derivative works. 

Remedies for copyright infringement may include injunctive relief, damages, or statutory damages as provided by law.

Copyright Infringement cases 

• Microsoft Corporation v. Yogesh Papat & Anr. (2005)  

Microsoft sued a computer dealer for copyright infringement and selling counterfeit software. The court ruled in favour of Microsoft and awarded damages for copyright infringement. This case highlighted the importance of protecting software copyrights in India's growing IT industry.

• The Gramophone Company of India Ltd. v. Super Cassette Industries Ltd. (T-Series case) 

This case involved copyright infringement in the music industry. The Gramophone Company of India (GCI) filed a lawsuit against Super Cassette Industries (SCI) for unauthorised duplication of audio cassettes containing copyrighted songs. The case established important precedents in Indian copyright law regarding the rights of music producers and the liability of infringers.

DIFFERENCE BETWEEN PASSING OFF AND COPYRIGHT INFRINGEMENT 

Although they both are essential for the protection of intellectual property rights, passing off and copyright infringement are two different legal concepts. The main differences between them are –  

• Subject Matter - Passing off protects the goodwill associated with a business or product, while copyright infringement protects the specific expression of ideas or creative works.

• Legal Basis - Passing off is based on common law principles, while copyright infringement is governed by statutory law. Passing off is not specifically mentioned in the Copyright Act. However, it provides a remedy and supplement to the copyright law when there is no direct infringement of rights. 

• Proof Requirements - Passing off requires evidence of misrepresentation and damage to goodwill, whereas copyright infringement requires evidence of unauthorised use of a copyrighted work.

• Scope of Passing off - Passing off has a wider scope beyond copyright infringement. It addresses situations where there is no direct copying of copyrighted material but still unfair competition exists. For example, if a business uses a similar logo or visual appearance that creates confusion with another business, it maybe considered passing off. 

• Remedies - Remedies for passing off may include damages, injunctions, or an account of profits. In copyright infringement cases, remedies may include injunctions, damages, or statutory damages.

POTENTIAL OVERLAPS BETWEEN PASSING OFF AND COPYRIGHT INFRINGEMENT 

Even though copyright infringement and passing off are two different legal concepts, there may be situations in which they overlap and the differences become blurred. Some situations in which overlap could happen are – 

• Unauthorized use of copyrighted material can sometimes be included in passing off cases where goods or services are misrepresented as their source. For example, adopting a logo or branding that is identical to another business's trademarked logo may be considered both copyright infringement (using the copyrighted logo without permission) and passing off (by misleading consumers about the source).

• In addition to copyright infringement claims, copyrighted material used in marketing or advertising campaigns that misleads consumers about the origin of goods or services may give rise to passing-off claims. For example, using a well-known figure or piece of art to advertise a product without permission may result in accusations of copyright infringement and passing off.

• In some situations, trademark law (in cases involving passing off) and copyright law may provide protection for components of a brand's identity, such as slogans, logos, and product packaging. In certain situations, using these components without permission may give rise to accusations of copyright infringement as well as passing off. 

• Passing off and copyright infringement are increasingly overlapping due to the growth of online content and digital media. Unauthorised use of copyrighted material, for example, in online advertisements or website design, may give rise to copyright infringement and passing off claims (if it causes doubt regarding the source of products or services).

• Passing off and copyright infringement issues may occasionally arise when goods are imported in parallel. For example, if illegal copies of content protected by copyright are imported and marketed under a different brand name, it may result in copyright infringement and passing off claims (if customers are misled about the source).

CASE LAWS INVOLVING BOTH PASSING OFF ACTIONS AND COPYRIGHT INFRINGEMENT

• Cadbury India Ltd. v. Neeraj Food Products

Cadbury India filed a lawsuit against Neeraj Food Products for producing chocolates wrapped in packaging similar to Cadbury's trademarked packaging. The court ruled in favour of Cadbury, recognising the likelihood of confusion among consumers and the infringement of Cadbury's trademark rights.

•  Dabur India Ltd. v. Emami Ltd.

Dabur India, a leading consumer goods company, filed a lawsuit against Emami Ltd. for using a packaging design and marketing strategy similar to Dabur's trademarked hair oil products. The court ruled in favour of Dabur India Ltd.  

• Titan Industries Ltd. v. Ramkumar Jewellers

Titan Industries, a prominent jewellery brand, filed a lawsuit against Ramkumar Jewellers for using a logo and brand name similar to Titan's trademarked logo and brand. The court ruled in favour of Titan Industries Ltd. 

ILLUSTRATION & SIMPLIFIED VERSION 

Mrs. A has a bakery called "Sweet Delights." It's known for its delicious pink cupcakes with a cute smiling cupcake logo. Now, Mrs. B decides to start her own bakery and opens "Sweet Treats Bakery" right next to “Sweet Delights”. Mrs. B’s bakery also sells pink cupcakes with a cute smiling cupcake logo that looks almost similar to the one made by "Sweet Delights."

Due to the similarity in both cupcakes, people start getting confused. They can't tell if they're buying cupcakes from “Sweet Delights” or “Sweet Treats Bakery”. 

In this situation, "Sweet Delights," can initiate a passing off action under the copyright act. Even though the issue seems to be about the bakery's name and branding, copyright law can still come into play because of the logo. The logo with the smiling cupcake is considered intellectual property, and "Sweet Delights" has the copyright for it.

So, Mrs. B (Sweet Treats Bakery), by using a similar logo to that of Mrs. A’s bakery, is misleading customers into thinking that they are buying cupcakes from “Sweet Delights” only. This could harm the reputation and business of "Sweet Delights," which has worked hard to establish its unique brand identity.

In conclusion, passing off under the copyright act can occur when someone uses copyrighted material, like a logo or artistic work, in a way that misleads consumers about the source of goods or services, causing harm to the original creator's reputation or business.

CONCLUSION

Passing off action and copyright infringement are two distinct legal concepts. Passing off is a common law tort that protects against unfair competition and misrepresentation in the market. It typically involves a situation where one party misrepresents their goods or services as those of another party. 

In India, passing off is governed by common law principles and not by any specific legislation. The jurisdiction for passing off actions lies with the civil courts. 

On the other hand, copyright infringement is a violation of the exclusive rights granted to the creator or owner of a copyrighted work under the Copyright Act, 1957. Copyright protection is available for original literary, dramatic, musical, and artistic works, as well as cinematographic films and sound recordings. 

While passing off and copyright infringement are distinct legal actions, there can be overlaps in certain situations. For instance, if someone uses a copyrighted work and misrepresents it as their own, it could potentially give rise to both a claim of copyright infringement under the Copyright Act and a passing off action under common law. 

Therefore, passing off action is not governed under the Copyright Act, but it can still be used as a common legal remedy to protect both creative expression and the goodwill of the business and also to prevent unfair trade practices.

Sources:-

1. The Trade Marks Act, 1999. 

2. The Geographical Indications of Goods (Registration and Protection) Act, 1999.

3. Cadila HealthCare Ltd. v. Cadila Pharmaceuticals Ltd., AIR 2001 SC 1952.

4. Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories, AIR 1962 KER 156.

5. Microsoft Corporation v. Yogesh Papat & Anr., 118 (2005) DLT 580.

6. The Gramophone Company of India Ltd. v. Super Cassette Industries Ltd., 1995 IIAD (DELHI) 905. 

7. Cadbury India Ltd. v. Neeraj Food Products, 142 (2007) DLT 724.  

8. Dabur India v. Emami Ltd., 112 (2004) DLT 73. 

9. Titan Industries Ltd. v. Ramkumar Jewellers, 2012 (50) PTC 486 (Del).

10. The Copyright Act, 1957.