October 24, 2024

THE DIFFERENCE BETWEEN TRADEMARK INFRINGEMENT AND PASSING-OFF: OUTSTANDING THING TO KNOW

by Eko Solicitors

Understanding the difference between trademark infringement and passing-off is crucial for everyone, whether or not you are an entrepreneur. While both relate to the unlawful use of a mark, they involve different legal principles. Knowing these distinctions helps you recognise when your brand’s identity is being misused and what legal remedies may apply.

WHAT IS TRADEMARK INFRINGEMENT?

Trademark infringement occurs when a party uses a trademark that is identical or confusingly similar to a registered trademark without the permission of the trademark owner. The court with jurisdiction for trademark proceedings in Nigeria is the Federal High Court. The burden of proof lies on the Proprietor of the trademark to show that his right has been infringed upon.

Section 5 (2) Trademarks Act provides that:

“without prejudice to the generality of the right to the use of a trade mark given by such registration as aforesaid, that right shall be deemed to be infringed by any person who, not being the proprietor of the trade mark or a registered user thereof using it by way of the permitted use, uses a mark identical with it or so nearly resembling it as to be likely to deceive or cause confusion, in the course of trade, in relation to any goods in respect of which it is registered.”

This statutory definition lays the foundation for understanding the difference between trademark infringement and passing-off, especially in how the law protects registered marks.

THE BASIC CONCEPT OF THE TORT OF PASSING-OFF

Ordinarily, when a person or Organisation wishes to be known by a symbol, sign, logo or word, Such symbol, logo, sign or word becomes attributable to that person or business and a reputation has being built over the years by the use of such symbol or any other indicative device, it should be registered as a trademark under the law of the state (Nigeria) that the person or business operates in or wishes to operate in, e.g. when a person sees a bitten Apple logo on a product, there is presumption that the product is made by Apple. Inc.

The purpose of this is to statutorily prevent the unauthorised use of this trademark by a third party, ensure the use of this registered trademark by the proprietor and protect the branding and identity of the goods or products for which the trademark is registered, When a third party uses a registered trademark without permission, the owner of the trademark can take legal action for infringement.

This action can stop the unauthorised use and allow the owner to seek compensation for any previous unauthorised use. However, there are cases where a person or organisation has built a reputation using a specific sign, symbol, logo, word, or phrase but hasn’t registered it as a trademark.

These are known as unregistered trademarks. In such cases, understanding the difference between trademark infringement and passing-off could clarify why legal remedies still exist for unregistered marks. It is noteworthy that even without registering a trademark, the owner can still take legal action under the common law of tort of passing-off if someone else uses it without permission.

What is Passing Off?

Passing-off occurs when a person deliberately or unintentionally displays their goods or services as belonging to another party by the use of each other’s party identifiers, being either a logo, sign, symbol, word or such other identifier connected with the party’s business.

The tort of assing-off started developing under the common law of tort; at first, it was considered part of the tort of deceit or defamation. However, the tort was properly defined in the case of Perry V Truefitt. In this case, Perry had been selling a product called “Perry’s medicated Mexican balm” for years and had built a reputation for it. His competitor, Truefitt, began selling a similar product with a similar name, “Truefitt medicated Mexican balm”, using bottles and labels that looked like Perry’s. Perry sued, claiming that the name “Medicated Mexican Balm” was valuable to his business and that he should be the only one allowed to use it.

Although the court didn’t give Perry the exclusive right to the name, the judge ruled that “Aman cannot sell his goods by pretending they are the goods of someone else”. This decision established the basis of the tort of passing–off, which forms a key part of the difference between trademark infringement and passing-off.

DIFFERENCE BETWEEN TRADEMARK INFRINGEMENT AND PASSING-OFF: SOME CASE STUDIES

Understanding the difference between trademark infringement and passing-off becomes clearer through decided cases.

In Nigeria, one of the prominent cases of passing-off is the Niger Chemists LTD V Nigeria Chemists & ORS (1961). Here, the plaintiff ran a pharmacy business under the name “Niger Chemist” in Eastern Nigeria. Later, the defendant started a similar business using the name “Nigeria Chemist”. The plaintiff sued, asking for a court order to stop the defendant from using similar name, claiming it was misleading and amounted to passing-off.

The court, in giving an order to stop the defendants, said that the defendant’s use of the name was likely to confuse people who wanted to do business with the plaintiff.

Similarly, in Trebor Nigeria Limited V Associated industries Limited, Trebor Nigeria Limited, the maker of Trebor peppermint, sued Associated Industries Limited, the maker of Minta super mint. Trebor claimed that the packaging used by the associated industries was too similar to theirs, making it seem like Minta super mint was actually Trebor Peppermint. Associated Industries argued that the two products were different, but the court still found them liable for passing-off their product as Trebor’s.

In Nigeria, the informal protection of rights through the tort of passing-off closely resembles the formal rights created by trademark law. The main purpose of the tort of passing-off is to protect both consumers and the business of the person making the claim from the actions of a dishonest trader.

These actions create confusion about the business’s reputation or “goodwill” in the market. The confusion happens when a trader makes their goods or services, or their appearance, look like those of the person making the claim. The law protects the person whose business and reputation are harmed by giving them the right to take legal action.

ELEMENTS OF PASSING-OFF

To prove legal rights under the tort of passing-off, the owner of an unregistered trademark must show three things in court. According to the dictum of the Supreme Court in The Boots company Limited V United Niger Imports Limited,

“the plaintiff must prove:

1: The name, mark or sign they claim ownership of is known by many people or businesses in the relevant market as connected to their products

2: The defendant, who works in the same field, has used a similar name, mark or sign that is likely to confuse or mislead customers into thinking it is the plaintiff’s product.

3: The defendant’s use of the name, mark or sign is likely to harm or has already harmed the goodwill and reputation of the plaintiff’s business.’’

To establish the claim of passing-off, you must meet three requirements

Goodwill: You must prove that you own a ‘reputation’ in the mark, and the public connects it with your specific product or service.
Misrepresentation: You must prove that the other trader has caused confusion, leading others to believe that their product or services are yours.
Damages: You need to show that this misrepresentation is harmful or is likely to cause harm to your reputation or cause financial or reputational loss.

If these elements are proven, the court can:

Order an injunction to stop the defendant from continuing their actions,
Require payment of damages to the plaintiff,
Demand that the infringing goods be destroyed or
Issue an Anton pillar order to make the defendant account for the profits made on the infringing goods.

THE DIFFERENCE BETWEEN TRADEMARK INFRINGEMENT AND PASSING-OFF

A trademark lawsuit can be filed for trademarks that are duly registered under the Trademarks Act. It is easier to prove ownership of a registered trademark. However, for unregistered trademarks, a lawsuit for passing-off can be filed if someone is infringing on the trademark. The person filing the case must prove that they have a significant interest in the trademark and that it is widely known and associated with their product, business or profession. In such cases, the plaintiff must specifically prove the tort of passing-off.
Trademark infringement is governed by law, but passing-off is not always strictly regulated by statute, although some places have included it in their laws. Passing-off happens when someone unlawfully interferes with the business of another. It is an economic tort, meaning it deals with economic harm.

WHICH COURT HANDLES TRADEMARK INFRINGEMENT AND PASSING-OFF IN NIGERIA

The Federal High Court handles cases involving the Trademark Act. Although there are different views on whether it should handle passing-off cases, the Federal High Court has jurisdiction to hear passing-off actions. In Patkun industries Ltd V Niger shoes Ltd case from 1988, the Supreme Court ruled that the Federal High Court has the authority has the authority to handle both trademark infringement and passing-off cases, whether the trademark is registered or not. This reinforces that there is a difference between trademark infringement and passing-off.

However, in the case of Ayman Enterprises Limited, some justices argued that passing-off cases for unregistered trademarks should not be filed in the State High Court, because these cases do not arise from a federal law. They believed that passing-off for unregistered trademarks is more of a common law issue, and that the Federal High Court should only handle passing-off cases if the trademark is registered.

In the case of Omnia (Nig) V Dyktrade Ltd, the court decided that the Federal High Court has exclusive authority to hear passing-off cases, whether the trademark is registered or not. These different opinions have created confusion about which court should handle passing-off cases. However, the Nigerian constitution provides a clear answer, which is that the Federal High Court has the authority to handle all passing-off cases, whether they involve registered or unregistered trademarks, as well as cases related to copyright, patents, business names, and other trade matters.

Although there is a difference between trademark infringement and passing-off, the law provides protection under both to prevent unfair competition and consumer deception.

CONCLUDING THOUGHTS

Once a symbol, name, logo, or sign becomes associated with a person or business and gains a reputation over time, the absence of formal registration does not leave the person defenseless in cases of infringement. The common law principle of passing-off, recognised by the Trademarks Act, provides protection for people or businesses that are widely recognised for their unregistered trademark. Now you know about the difference between trademark infringement and passing-off.

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