Seema S Mansoor May 28 2018 Protecting unregistered trademark rights from passing off Vellani & Vellani | Intellectual Property - Pakistan Seema S Mansoor Intellectual Property FactsDecisionCommentIn a recent case of the Lahore High Court, the appellant (Hilal Confectionery) challenged the Additional District Court's decision to dismiss a permanent injunction issued against the respondent (Naveed Enterprises) for its adoption of a confusingly similar mark (NAVEED KHOPRA CANDY SWEETS) to that of the appellant (HILAL KHOPRA CANDY SWEETS).Facts The appellant claimed that it had been manufacturing and marketing sweets and candies using the HILAL KHOPRA CANDY SWEETS trademark and packaging, which featured a particular design and colour scheme, for many years. As a result, it had developed its reputation and goodwill due to the high-quality product bearing said trademark.The HILAL KHOPRA CANDY SWEETS trademark, along with its colour scheme and design, was pending registration in Class 30 under Application 147,128. As a result, the Hilal Khopra Candy Sweets packaging was duly protected under trademark and copyright laws.The respondent was accused of infringing the appellant's trademark rights and passing off its goods as those of the appellant. In its defence, the respondent argued that:the appellant's trademark application conferred no rights or cause of action in its favour; andthe case should have been filed before a court of competent jurisdiction, as the Additional District Court had no jurisdiction to decide the case.In addition, the respondent refuted that its product or packaging was similar to the appellant's and argued that each product used different colour schemes and designs.Notably, in the absence of exclusive rights, an appellant cannot seek to restrain a respondent.DecisionHaving considered the above issues, the learned judge set aside the trial court's impugned order based on the following observations.Upon analysing the evidence, it was proven that the appellant had been using its trademark and packaging (including the colour scheme, design and get-up) since 1993. Therefore, the appellant's prior user of its trademark and packaging was established.The judge also found that:the trial court had failed to consider the facts and proceeded using an incorrect premise;there was only a slight difference between the respective labels and trademarks;due to a disclaimer on the phrase 'khopra candy', the appellant could not claim passing off; andthe trial court had erred by confusing the disclaimer with the appellant's registered rights.Based on the following observations, the court found that the defendant's trademark and packaging (ie, colour scheme, design and get-up) were deceptively and confusingly similar to those of the appellant.The judge noted that passing off can be maintained without a trademark registration despite a disclaimer on a certain feature of a mark, provided that the claimant can prove that the feature has acquired distinctiveness on account of the mark's use.Section 2(xxiv) of the Trademarks Ordinance 2001 defines a 'mark' as constituting various features and any combination thereof. If one such feature is copied, this constitutes trademark infringement. The fact that other features are not copied is therefore not a valid defence. By referring to various judicial precedents concerning the rules of comparison, it was held that the marks in question were confusingly similar due to the similarities in colour scheme, design and get-up.The judge found that the appellant had no right to the expression 'Khopra Candy', as it was a generic expression used by a number of companies. However, the appellant could claim rights over the colour scheme, design and get-up of its packaging. In any case, the appellant had previously won a number of cases filed against infringers of its trademark which confirmed that its product was well known.The judge found that trial court's decision should not have depended on a meticulous or side-by-side comparison, but rather on whether the public would have been deceived by one trademark in the absence of another.In light of the above, it was held that the respondent's mark and packaging were deceptively or confusingly similar to the appellant's and were therefore likely to confuse and deceive unwary customers. Further, the court found that the appellant was the prior user of the HILAL KHOPRA CANDY SWEETS mark and packaging and that the respondent was likely to pass off its goods as those of the appellant, which was likely to suffer damage to its reputation and goodwill, as well as lost sales.The appeal was decided in the appellant's favour and the trial court's impugned order was set aside.CommentThe decision reflects that unregistered trademark rights can be protected through a passing-off claim where it can be established that the trademark has gained distinctiveness as a result of its continuous use over time. Further, each feature of a trademark is distinctive and if one such feature is misappropriated by an infringing party, it may violate such rights despite there being a disclaimer on certain generic features.For further information on this topic please contact Seema S Mansoor at Vellani & Vellani by telephone (+92 21 3580 1000) or email ([email protected]). The Vellani & Vellani website can be accessed at www.vellani.com.