The importance of goodwill

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A passing off dispute in India has clarified the main points that rights owners should follow when seeking to defend a trademark, as Geetanjali Visvanathan explains.

Trademark attorneys anywhere in the world would agree that to succeed in a case of passing off, the plaintiff must establish the classic trinity as laid down by the UK House of Lords in the case of Reckitt & Colman v Borden,ie, (i) goodwill or reputation; (ii) misrepresentation; and (iii) damage or its likelihood.

So, to cross the first hurdle in a case of passing off, the questions that arise are (i) what is goodwill?; (ii) what is the difference between goodwill and reputation?; and (iii) how does one prove goodwill?

The answer to the first two questions can be found in any book on trademark law. As succinctly stated in Kerly’s Law of Trade Marks and Trade Names, Fourteenth Edition: “Goodwill is the attractive force which brings in custom and is a form of legal property representing the connection between the business and customer. Reputation is a matter of fact and its existence does not require that there should be a business in the said jurisdiction.”

This article was published in World Intellectual Property Review.