Passing off is a common law right which protects goodwill in the business against misrepresentation in the course of the trade. Goodwill is the benefit and advantage of name and reputation that goods or services of a business acquire over the years under a brand name or mark, such that the purchasers perceive the brand name or mark as being distinctive of the reputable goods or services. When another person sells his wares or provides services unauthorizedly under the brand name or mark to take advantage of the goodwill earned by the owner of the mark, his misrepresentation can deceive the purchasers to believe that his goods or services belong to the owner of the mark. Such an erroneous belief can damage or is likely to cause damage to the goodwill of the owner of the mark.

2020 APEX COURT [40 ]- Passing off is a common law right which protects goodwill in the business against misrepresentation in the course of the trade. Goodwill is the benefit and advantage of name and reputation that goods or services of a business acquire over the years under a brand name or mark, such that the purchasers perceive the brand name or mark as being distinctive of the reputable goods or services. When another person sells his wares or provides services unauthorizedly under the brand name or mark to take advantage of the goodwill earned by the owner of the mark, his misrepresentation can deceive the purchasers to believe that his goods or services belong to the owner of the mark. Such an erroneous belief can damage or is likely to cause damage to the goodwill of the owner of the mark. Suit for passing off and restraining the respondents from using the trademark “Santhigiri” filed by Santhigiri Ashram – Trial court decreed the suit where as High court reversed it holding that the Evidence only establish that first respondent is having an Ashram by name Santhigiri and is also running Vydhyasala and School all suffixing the name with Santhigiri before the name of the respective institution. But that will not give an exclusive right like a trademark or trade name to the first respondent. Therefore the decree granted by the learned District Judge is not sustainable. The high court failed to differentiate the word “ passing off” with that of “registration of trademarks”. Passing off is a common law right which protects goodwill in the business against misrepresentation in the course of the trade. Goodwill is the benefit and advantage of name and reputation that goods or services of a business acquire over the years under a brand name or mark, such that the purchasers perceive the brand name or mark as being distinctive of the reputable goods or services. When another person sells his wares or provides services unauthorizedly under the brand name or mark to take advantage of the goodwill earned by the owner of the mark, his misrepresentation can deceive the purchasers to believe that his goods or services belong to the owner of the mark. Such an erroneous belief can damage or is likely to cause damage to the goodwill of the owner of the mark. Accordingly, in order to bring a successful claim for passing off, these three elements must be established, that is, goodwill owned by a trader, misrepresentation and consequent damage to the goodwill.Apex court held that There is no gainsaying the fact that the High Court has not systematically applied the three-prong test to the circumstances of the present case and instead, has given abrupt conclusions. While deciding the appeal, the High Court should have first examined the question whether the appellant had earned goodwill under the trademark “Santhigiri”, the medical and ayurvedic services provided by the Vydhysala and its branches could be distinctively identifiable by the said mark and therefore, the appellant would be entitled to protection against any misrepresentation of the same and exploitation of the goodwill by a third person, namely the respondent. Thereafter, the High Court should have examined and decided the question of misrepresentation by the respondent and the consequent damage to the appellant’s goodwill. Accordingly, we partly allow the present appeal and set aside the impugned judgment of the High Court with an order of remand for fresh decision in accordance with law without being influenced by the observations made in the order under challenge. The High Court while deciding must bear in mind the principles applicable to suits for passing off.