Trademark Protection and Law of Torts

Introduction

• Kushbu will be teaching for the next two weeks, covering trademark protection and the law of torts.

• The focus will be on torts of passing off this week and trademarks/certification marks next week, including the Manuka Honey case.

About the Instructor

• Kushbu researches commercial law, particularly intellectual property rights and drug regulation.

• She completed her PhD in New Zealand and has been teaching commercial law for two and a half years.

• India shares a common law history with New Zealand due to British colonisation, influencing legal understanding.

Knockoffs and Passing Off

• Examples of knockoffs include:

  • "Prongles" imitating Pringles.

  • "Dave" imitating Dove.

  • "Legs" imitating Lays.

  • "Abibas" imitating Adidas.

• The discussion will focus on the tort of passing off, especially concerning unregistered trademarks.

Law of Torts: An Introduction

• Law is categorized for better understanding (e.g., criminal lawyer, intellectual property lawyer).

• The law of torts is largely developed by common law judges through interpretation and application over time.

• Judges incidentally develop the law while interpreting it; lawmaking power primarily resides with the parliament.

Donoghue v Stevenson: The Snail in the Ginger Beer

• Facts: Miss Donoghue found a decaying snail in a ginger beer bottle and claimed illness due to shock.

• Issue: What remedy does she have, especially since consumer protection laws were not yet established?

• Normally, substandard products could be addressed via contract law with the shopkeeper but Miss Donoghue didn't buy the drink herself.

Law of Contracts

• Law of contracts involves legally enforceable promises.

• Example: Rental agreements are contracts where both parties (landlord and tenant) have obligations.

• Breach of contract occurs when promises are not fulfilled, allowing legal action.

• In Donoghue's case, no contract existed between her and the shopkeeper, complicating her ability to seek remedy.

• The question was whether she had a legal remedy against the ginger beer bottler, Mr. Stevenson.

Duty of Care

• The court considered whether the bottler owed a duty of care to consumers.

• Before this case, there was no general principle of duty of care; remedies were decided on individual cases.

• Lord Atkin established a general principle of duty of care: $You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbor.$

• This principle was a major contribution to common law.

Defining "Neighbor"

• The court defined neighbor as "persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions that are called in question."

• The bottler owes a duty of care to consumers, even without a direct contractual relationship.

Law of Torts vs. Law of Contracts

• Law of Contracts: Covers legally enforceable promises, obligations assumed voluntarily.

• Law of Torts: Obligations imposed by law.

• Example: In rental agreements, parties voluntarily agree on terms, whereas tort obligations are determined by the court.

Law of Torts vs. Criminal Law

• Tort: A wrong committed by one person against another.

• Crime: An act committed against the whole society, prosecuted by the state.

• Remedies differ; torts seek compensation, while crimes involve state action and punishment.

Negligence

• The most common action in tort is negligence.

• Negligence arises from violation of legal rights in personal safety, property, or economic interest.

• In New Zealand, negligence actions for personal injury are largely replaced by the Accident Compensation Act 2001.

Accident Compensation Act 2001

• Abolishes the need to prove fault in accidents to gain compensation.

• Reduces litigation by providing immediate compensation without establishing negligence.

• Maggie's question: You can still sue the company if hurt at work due to negligence but the Act provides immediate compensation.

Understanding the Term "Tort"

• "Tort" is French for "wrong" and derived from Latin "tortum" meaning twisted or crooked.

• Law of torts addresses situations where one person's conduct harms or invades the interest of another.

• It determines whether compensation is owed to the injured party.

Trademarks: Identifying Marks

• Trademarks are marks associated with goods or services.

• Examples: Logos on laptops (Apple, HP), University logos.

Examples of Trademarks

• Domino's (Pizzas)

• McDonald's (Burgers)

• Audi (Premium luxury cars)

• X (Social media services)

• KFC (Fried chicken)

Functions of Trademarks

• Indicate the origin of product or services (the manufacturer).

• Reflect the quality of the product related to business goodwill.

• Serve as a valuable marketing tool with economic value.

Passing Off Examples

• "M Shampoo" imitating Head & Shoulders.

• "Sardar Baksh Coffee" imitating Starbucks Coffee.

• Knockoffs try to capitalize on established goodwill.

Goodwill and Getup

• Goodwill can be associated with product quality or presentation (getup).

• Passing off often relies on the getup of a product.

• "M Shampoo" copies the blue cap and white bottle of Head & Shoulders to exploit its goodwill.

More Examples of Imitation

• Pringles imitating Pringles, changing the logo slightly

• Two humps camel cigarettes imitating Camel cigarettes

• Pitchers and Pims copying the Head & Shoulders bottle design

• Glucose D and Glucon D competing in the Indian market – similar packaging but not considered passing off.

Bed Bath and Beyond vs. Bed Bath and Table

• Bed Bath and Beyond sued Bed Bath and Table for passing off, but the court ruled they were not similar enough to cause consumer confusion.

• Establishing passing off requires factual analysis and evidence of goodwill and consumer confusion.

Definition and Purpose of Passing Off

• Passing off is a common law tort (developed by courts, not legislation).

• It is an economic tort involving unlawful interference with economic rights.

• Purposes:

  • Prevent unfair competition.

  • Protect a trader’s goodwill and reputation built over years.

Remedies for Passing Off

• Injunctions: Court orders to do or refrain from doing something.

  • Interim/Interlocutory Injunctions: Temporary orders during litigation.

  • Permanent Injunctions: Issued after litigation if passing off is proven.

• Damages: Compensation for economic losses due to consumer confusion or brand value decrease.

• Fair Trading Act: A general principle against unfair practices that confuse consumers.

Summary of the Lecture

• Introduction to law of torts and economic tort, which includes passing off.

• Discussion of Donoghue versus Stevenson case.

• Definition and purpose of passing off: to prevent product imitation.

• Passing off is covered under the law of thoughts.