Improper Use of a Trademark

Continuing with this month’s theory of improper use, under trademark law, one can improperly use a trademark or service mark under a legal theory referred to as passing off. In “passing off,” a seller associates another party’s mark with a good or service. The law of passing off concerns unfair competition more generally in situations where there does not need to be a registered trademark or any other intellectual property right. Where a second business does something so that the public is misled into thinking that the activity is associated with a first business and as a result the first business suffers some damage, then it may be possible for the first business to sue the second business for passing off. One area where passing off might apply is where a second person uses an unregistered trademark normally used by a first person and in so doing passes off, or represents, goods or services in such away that the public is deceived into thinking the goods or services are being offered by the first person.

Reverse Passing Off

In “reverse passing off,” a party misrepresents the source of its product by not informing the public who created it. The seller misrepresents the source by removing or obliterating the original trademark. The removal or obliteration of the original trademark is completed prior to sale of the associated goods or services. Reverse passing off falls into two categories, “express reverse passing off” and “implied reverse passing off.”

In express reverse passing off, the infringer replaces the original mark with his or her mark and sells the product. In implied reverse passing off, the infringer only removes the mark prior to selling the product, leaving the product unbranded. The infringed party suffers damages by implied and express reverse passing off. An infringer thwarts the purpose of a mark by its removal.

Damages Caused by Reverse Passing Off

A trademark serves three purposes: it designates origin, it develops goodwill by allowing customers to associate a level of quality with a product from a specific origin, and it serves as advertising. By removing the mark, the infringer prevents the ultimate customers from knowing the true source of the product, creating a means for deceiving the customer. The deception can occur if the infringer replaces the unbranded products with products of a lower quality. Additionally, the removal of the mark denies the infringed party the opportunity to further develop the advertising value of the mark. on.

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