X is trading readymade garments under the trademark 'Villan'. The mark has caught the market reputation. This is noticed by Y and started his business in same goods as that of X, but used the trademark 'Villa'. X filed a suit against Y for infringement of his trademark. Decide if 'X's trademark is not registered.

Issue:

1. Whether the registration of trademark is mandatory? NO

2. Whether the action of Y is valid? NO

3. Can proprietor of unregistered TM sue infringement? NO

4. Whether an action for passing off will lie? YES

Rule:

Section 27 of the Trademarks Act, 1999: No person is entitled to maintain any proceedings to prevent, or to recover any damages for, the infringement of an unregistered trademark.

Application:

This problem is related to the Action for passing off on the basis of unregistered trademark.

Paragon steels pvt Ltd. Vs. Paragon Rubber Industries, ILR 2009 KAR 3446, on the date of the suit the plaintiff had no valid registration certificate of his trademark. The Court observed that the Trial Court committed error in holding that the plaintiff had made out a prima facie case. The grant of an injunction would have put the Defendant to a great hardship and loss.

S.M. Dyechem Ltd Vs. Cadhury (India) Ltd., AIR 2000 SC 2114, it has been held that there was no infringement of an unregistered trademark and  in view of the same no strict view could at all be taken by the Court if the Appellant-Defendant had been using some portion of plaintiff's unregistered trademark.

Thus as per Section 27 (1) of the Act, the proprietor of an unregistered trademark cannot use for its infringement or recover damages for infringement of his mark. The only way open to the latter to protect his trademark against infringement is by means of an action for passing off or by way of criminal proceedings for offence under Section 78 of the Act.

Conclusion:

In the instant problem, the registration of trademark is not mandatory. The action of Y is not valid and it amounts to crime. The trademark of X has not been infringed because it is unregistered. The proprietor of unregistered trademark cannot sue for infringement of trademark. Hence an action for passing off will lie against Y.

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