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1928 Supreme(SC) 67
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT DUNEDIN, LORD SHAW, LORD BLANESBURGH, AND SIR JOHN WALLIS.
JUGGI LAL-KAMALAPAT - Appellant
Versus
SWADESHI MILLS COMPANY, LIMITED - Respondents
On Appeal from the High Court of Allahabad.
Decided On : Nov. 2. 1928.
Solicitors for appellants :Douglas Grant & Dold. Solicitors for respondents: Lattey & Dawe.
In passing-off actions, deception is judged by the perception of the average, potentially illiterate consumer. Damages should not be based on speculative percentages of the infringer's sales but on the actual loss of trade suffered by the plaintiff.
Headnote:(A) Passing-off - Trade Marks - Deception by sight and sound - Action for infringement of trade marks where the leading feature is a specific floral emblem - Deception may occur not only through critical observation but also through the perception of illiterate and unobservant purchasers - Where a trade mark becomes associated with a specific name, any similar device likely to lead to the goods being palmed off as those of another manufacturer constitutes actionable passing-off.
(B) Damages - Estimation - Calculation of damages based on a speculative percentage of the defendant's sales attributed to the misleading mark is unsustainable - A more reliable measure is the actual decline in the plaintiff's trade following the introduction of the infringing mark, combined with a reasonable allowance for potential growth in trade.
Facts of the case:
A milling company used trade marks featuring a specific floral emblem, and their cloth became known by a name associated with that emblem. The defendants used similar marks that, while distinguishable to a literate person, were likely to deceive illiterate buyers. The lower court granted an injunction and awarded damages based on a calculation that 60% of the defendants' sales were due to the misleading mark.
Findings of Court:
The court upheld the injunction, finding that the overall appearance and "get-up" of the defendants' marks were sufficiently similar to deceive the target consumer base. However, it found the lower court's method of calculating damages to be too speculative to justify the decree.
Issues: Whether the use of similar trade marks constituted passing-off and whether the method used by the lower court to assess damages was legally sound.
Ratio Decidendi: In passing-off actions, the standard of deception is based on the likely perception of the average purchaser, including those who are illiterate. Regarding damages, speculative assumptions about the proportion of the infringer's sales caused by the infringement are improper; damages should instead be based on the demonstrable loss of trade suffered by the plaintiff and a reasonable estimate of lost growth.
Result: Decree of the lower court varied by substituting Rs. 67,000 for the amount of the damages, and otherwise affirmed and appeal dismissed without costs.
Legal Category Hierarchy
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tort
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passing off
- trade marks
- damages
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passing off
Judgement
Appeal (No. 116 of 1927) from a judgment of the High Court (June 7, 1916) in a suit transferred to the extraordinary original jurisdiction of that Court from the Court of the Subordinate Judge of Cawnpore.
The respondents brought the present suit in the Court of the Subordinate Judge against the appellants alleging infringements of trade marks to which they had the exclusive right by user ; they claimed an injunction, an account of profits, and other relief. They subsequently gave up their claim to an account, and claimed damages.
The suit was transferred to the High Court and was heard by Mears C.J. and Mukerji J.
The facts appear from the judgment of the Judicial Committee, and more fully from a report of the proceedings in the High Court at I. L. R. 49 A. 92.
Upon the grounds appearing in that report, the High Court held that the appellants were liable in damages, which were assessed in the manner appearing also in the present judgment.
1928. Oct. 30;. Nov. 1, 2. Sir Duncan Kerly K.C., Sir George Lowndes K.C., Wallach and F. E. Bray for the appellants. The marks used by the appellants were not colourable imitations of the respondents mark, nor likely to deceive purchasers. An exaggerated view of the illiteracy of retail buyers was taken. In any case the decree for damages should be set aside. There was no relevant or convincing evidence of any substantial damages. It could not properly be assumed that cloth sold by the appellants bearing the offending mark would have been sold by the respondents but for the use of the mark Leather Cloth Co. v. Hirschfield (( 1865) L. R. 1 Eq. 299.) ; Kinnell & Co. v. Ballantine & Sons. (( 1910) 27 R. P. C. 185.)
W. A. Greene K.C., Archer K.C. and E. B. Raikes for the respondents. Applying the principles laid down in Seixo v. Provizende (( 1866) L. R. 1 Ch. 192.) and Johnston v. Orr-Ewing (( 1882) 7 App. Cas. 219.) the evidence fully established an actionable passing off. The High Court were entitled on the evidence to draw the inference upon which they based the damages. The acts of the defendants were fraudulent, and omnia praesumuntur contra spoliatorem. The Court in no way misdirected itself ; had the damages been awarded by a jury, the verdict would not have been assailable. The cases relied upon by the appellants are distinguishable upon their facts. [Reference was made also to Boord & Son v. Bagots, Hutton & Co. ([ 1916] 2 A. C. 382.)]
Sir Duncan Kerly K.C. replied.
The judgment of their Lordships was delivered by
VISCOUNT DUNEDIN. This is a case of the class which is generally known as a passing-off action.
The plaintiffs, who are the respondents before this Board, are a milling company who deal largely in Indian cloths, and who, in connection with the sale of that Indian cloth, use certain trade marks. In several of those trade marks, either in conjunction or alone, the lotus flower is the leading feature. Now their complaint is that the defendants, who are appellants before this Board, suddenly began to use trade marks which, though if critically looked at by a person of such literacy as to have critical powers of observation would not be confused, yet would be apt to be confused, by the illiterate and unobservant; and in particular did despite to them for this reason that their trade mark had really got to be associated with the name of " lotus," so that their cloth was known as " lotus cloth," and that a person coming and asking for " lotus cloth " might be satisfied by having cloth delivered with the trade mark of the defendants. That there may be deception, as one might phrase it, by sound as well as by sight was nowhere more forcibly insisted on than in the well known case of Johnston v. Orr-Ewing .
(( 1882) 7 App. Cas. 219.)
The plaintiffs also claimed for an account of profits, but at the trial they gave up their claim for an account of profits and said that they wished instead to claim for damages. The trial took place before the High Court at Allahabad in its ex
