Damages: The damages have to be attributable to the passing off. If the plaintiff succeeds in getting an injunction he’s entitled to say damages suffered by cause of the infringement or revenue made by defendant by cause of his wrongful act.
There isn’t any minimize and dry rule which might be laid down by a court docket of regulation for the estimation of damages in a case of infringement of trademark. However as a substitute of creating a speculative assumption of gross sales by defendant by trusting to their very own items with out the deceptive trademark, the safer foundation could be to calculate on the falling off in plaintiff’s commerce which got here in after the pirated mark was launched out there. The place the plaintiff’s losses are claimed, damages would be the precise losses. The truth that the loss has been restricted by the plaintiff’s personal efforts to detect the fraud by means of his personal brokers and thereby put an finish to it as quickly as doable might be taken under consideration in ascertaining the precise loss. Exemplary or penal damages, nevertheless, should not normally granted. An injunction could also be granted and nominal damages awarded on proof of infringement, however substantial harm can solely be awarded on proof of precise harm. The criterion is whether or not there was any fall-off in plaintiff’s gross sales by causes of defendant’s piracy. It’s competent to the court docket to deduce substantial harm from the putting of misleading items into circulation, whether or not resold by the intermediary or not. The place the defendant submits to injunction and account, and delay by the plaintiff in bringing the motion is defined, it was held that the account shouldn’t be restricted, however ought to prolong to the entire of the defendant’s buying and selling below the false title. Measure of damages: In an motion for infringement damages would be the loss sustained by the plaintiff within the commerce and in respect of his fame. The earnings made by the defendant won’t be conclusive as to the damages awardable. The precept on which damages will likely be assessed has thus been acknowledged as: “The measure of damages which can be recovered in the case of a pirated trademark is not yet settled by authority. It is, however, clear that the plaintiff can recover for the loss of profit which he can prove to have arisen directly from the defendant’s wrongful conduct in pirating his trademark. It will not be assumed, in the absence of proof, that the plaintiff would have sold all the goods which the defendants have sold with the pirated trademark, but if the plaintiff could prove some distinct damage from the use of trademark, by showing loss of custom, or something of the kind, he can recover such damages from the defendants. In cases of unlawful use of a trademark, loss of profits forms the substantial ground of the claim for compensation. Loss of profits can be caused evidently in two ways: By diminishing the amount of the goods sold by the plaintiff by taking his customers or ousting him from his usual market or in some similar way; By causing the goods actually sold by the plaintiff to be sold at a diminished price. If loss of profits can be directly traced to the action of the defendant, I see no reason why he should not be liable for loss caused in the latter way as well as in the former. There would seem to be no difference in principle. In the latter case the reduction in the price in the goods sold would be the measure of the loss to the plaintiff. If the plaintiff were working at an extremely small profit, such reduction in price would cause him no loss of profit, but actual loss out of pocket. Here, again, there is no distinction, in principle, between the two classes of loss. For each, I consider the defendant would be liable if such loss were shown to be the reasonable and probable result of his action. Quantification for infringement of damages: Where the quantum of damages is left open for ascertainment by the commissioner and determination thereafter by the court, the plaintiff’s claim for damages cannot be said to be legitimately disposed of by awarding only nominal damages. Onus: Burden of proving substantial damage, lies on the plaintiff. The plaintiff claiming substantial damages is bound to show loss actually sustained by reason of the defendant’s conduct. In the absence of evidence it will not be presumed that the amount of goods sold by the defendant under the infringing trademark would, but for the defendant’s unlawful use of the plaintiff’s mark, have been sold by the plaintiff. The proper form of an order for an inquiry as to damages occasioned by the infringement of a trademark is, therefore, what damage has the plaintiff sustained by reason of the acts the repetition of which is restrained by the judgement. Injury to trade reputation: In addition to the loss of sales of plaintiff’s goods occasioned by the infringement by the defendant, there may also be an injury to the trade reputation of the plaintiff by reason of the goods passed off by the defendant being of an inferior quality. The plaintiff would be entitled to damages on this account also which will vary with the extent of the injury as assessed by the tribunal. It may also be that by reason of the competition occasioned by the passing off, the plaintiff will be forced to reduce his prices, thereby suffering loss. The cost of advertisements to counteract the effect of the defendant’s conduct may also be taken into account. The acts of the defendants had delayed the plaintiff’s resumption of trade in the country by many years; That damages were recoverable for this although the plaintiffs might have disregarded the defendants claim and resumed trade at an earlier date; Judgement for infringement of trademark and passing off had not restored the plaintiff’s goodwill in its entirety; and That the profits made by the defendants were not the measure of the damage suffered by the plaintiffs. Nominal damages: Where the plaintiff proves infringement, he would be entitled to nominal damages. No allegation of special damage is necessary. The natural consequence of an infringement, even though it be made in complete ignorance of the plaintiff’s rights is that the infringer must pay at least nominal damages, and the costs of action, so that, if he acted under the direction of the third person, he may reasonably compound with the proprietor of the trademark on these terms, and claim an indemnity from his employer. The court may award nominal damages of fix a sum without ordering an account or an inquiry as to damages if the evidence of damage is not sufficient to justify the cost of an inquiry. Account of profit: The principle upon which the court grants an account of profits is that where one party owes a duty to another, the person to whom the duty is owed is entitled to recover from the other party every benefit which that other party has received by virtue of his fiduciary position if in fact he has obtained it without the knowledge or consent of the party to whom he owed the duty. An account is generally refused if the defendant had no knowledge of the plaintiff’s mark and when ordered, is limited to the period during which such knowledge had existed, the view being expressed that continuation of a deception course after knowledge of the plaintiff’s mark amounted to fraud. Where, therefor, such knowledge exists the plaintiff may in general, make his choice of either an account or payment to him of the profits which the defendant has gained by his wrongful conduct, or an inquiry as to, and payment of, the damages occasioned by reason of it. The plaintiff must establish that his business or goods have acquired the reputation he alleges; that, for example, a particular name has become distinctive of his goods and that a reputation has attached to them under the name in question, and this can be done by showing that a substantial proportion of people who are likely to become purchasers of the goods of the kind in question associate the name with them. The weight of this burden must vary according to the facts. Take the present case. The words “Ellora industries” which is the trading name of the defendants is likely to mislead the public as to the source of manufacture and to create a likelihood that customers of the plaintiffs would be diverted to the defendants. In a passing off action all that need be proved is that the defendant goods are so marked, made up or described by them as to be calculated to mislead ordinary purchasers and to lead them to mistake the defendants’ goods for those of the plaintiffs. It is the tendency to mislead or confuse that thus forms the gist of action and the plaintiff need not establish fraud nor that any one was actually deceived, or that he actually suffered damage. The tort is thus actionable per se, indeed the forms of passing off, like the forms of nuisances, are infinite. “Income” means “internet earnings”: The earnings recoverable will, after all, be internet earnings. How that is arrived at is pretty well-known. All reliable bills and losses incurred by the defendant will likely be deducted. Value of manufacture, defendant’s promoting and promoting bills, worth of depreciation, curiosity on capital invested for the aim, workplace fees and fee -all these have to be deducted. Income to be immediately attributable within the use – rule as to a part of earnings alone so attributable: The rules concerning this are thus acknowledged:
“Plaintiff will not be entitled to earnings demonstrably not attributable to the illegal use of his mark or title, however, the place the burden is on defendant to show such reality, if he fails to maintain the burden resting on him, he should account for all earnings made on all items bought below the infringing mark or title, and never merely for these proven to be as a result of infringement. This rule has been utilized to circumstances of unfair competitors. Whereas it has been acknowledged that this rule might end in a windfall to plaintiff the place it’s unimaginable to isolate the earnings as a consequence of defendant’s improper, the rule is justified on the bottom that to carry in any other case would give the windfall to the wrongdoer. The place it’s proven that part of the earnings made by defendant had been attributable to gross sales made on the deserves of the articles bought and on the established fame of defendant, it has been held that to award the earnings so made with out proof of precise fraud on the a part of defendant could be inequitable, and the accounting must be restricted to sale the place it’s proven by direct or presumptive proof that plaintiff would have bought the articles however for the sale by defendant.