Passing Off Action Not Barred For Unregistered Trademarks: Madhya Pradesh High Court Clarifies Section 27 Trade Marks Act

"Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof." Madhya Pradesh High Court, in a judgment dated 16 September 2026, has clarified that the statutory bar under Section 27(1) of the Trade Marks Act, 1999—which prohibits suits for the infringement of an unregistered trademark—does not preclude a plaintiff from initiating an action for "passing off" under Section 27(2) of the Act.

Justice Ashish Shroti, presiding over the First Appeal, affirmed that while a party cannot claim statutory protection for an unregistered mark, they retain the common law remedy to protect their business goodwill against deceptive misrepresentation.

The dispute arose between two firms manufacturing "Bidi" products. The plaintiff sought a permanent injunction against the defendants, alleging that the defendants’ product, marketed as "Special Super Fohara Chhap Bidi," used a design and name deceptively similar to the plaintiff’s "Special Fohara Chhap Bidi," thereby misleading customers and eroding the plaintiff's established goodwill. The trial court decreed the suit in favor of the plaintiff, prompting the defendants to file the present appeal.

The court was primarily tasked with determining whether a suit seeking to restrain the use of a deceptively similar trade name and design is maintainable when the underlying trademark is not registered. Specifically, the court examined whether the bar under Section 27 of the Trade Marks Act precludes such litigation, or whether the suit falls under the protection of the common law remedy for passing off.

Distinction Between Infringement and Passing Off

The court underscored a fundamental distinction between the statutory remedy for infringement and the common law remedy for passing off. While Section 27(1) explicitly bars a person from instituting proceedings to prevent the infringement of an unregistered trademark, Section 27(2) provides a vital safeguard. The court noted that this subsection preserves the right of action against any person for passing off goods as the goods of another, ensuring that commercial reputation remains protected even without formal registration.

Defining the Essence of Passing Off

The court observed that although the term "passing off" is not expressly defined in the 1999 Act, it is grounded in the principle that no person is entitled to sell their goods under the pretense that they are the goods of another. This misrepresentation, which confuses the public, is the gravamen of the action. The court stated, "Passing off in the Indian Trademarks Act, 1999 seeks to safeguard the goodwill associated with unregistered trademarks."

Determining Maintainability of the Suit

Upon examining the pleadings, the court found that the plaintiff’s grievance was not premised on a claim of statutory infringement, but rather on the defendants’ attempt to capitalize on the plaintiff’s reputation through deceptive similarity. The bench clarified that since the plaintiff’s case was essentially about preventing the defendants from passing off their goods as those of the plaintiff, the suit fell squarely within the scope of Section 27(2). Therefore, the appellant’s reliance on the bar against unregistered trademark infringement was misplaced.

Affirming the Trial Court’s Decree

Finding the trial court's judgment to be legally sound and based on the correct interpretation of the distinction between infringement and passing off, the High Court dismissed the appeal. The court held that the absence of a registered trademark does not leave a businessman remediless against the predatory tactics of a competitor who mimics trade names or designs to deceive the public. The trial court's decree for permanent injunction and damages was subsequently upheld.

Date of Decision: 16 September 2026