Proving Goodwill and Reputation
Chapter One Hundred Twenty-One
Syllabus topic 3.5, "Passing off Action."
Pages 546 to 550 of 742
In one line
Goodwill is a question of fact and it must be proved by documents, not asserted in the plaint, and the surest proofs are length of use, sales figures and advertising expenditure.
Why this deserves its own chapter
A passing off suit is won or lost on the plaintiff's evidence of goodwill, and most Indian plaints are weak on it. The pleading says the plaintiff enjoys an enviable reputation and gives no year, no figure and no document.
Toyota v Prius is the warning. A company whose car is famous across the world lost because it could not prove goodwill among Indian consumers before the defendant's adoption.
The chapter therefore sets out what to prove, and with what.
What must be proved, and as of when
Three questions, and the third is the one most often missed.
What is the goodwill in? The mark, the name, the get up, the domain or the trading style. Identify it precisely, because the evidence must attach to that thing.
Where is the goodwill? In India, on Toyota v Prius, and in the market where the defendant operates. The territoriality doctrine holds the field.
As of when? Before the defendant's adoption. Evidence of the plaintiff's fame at the date of the suit proves nothing if the defendant began five years earlier. Every document should be dated, and the pleading should fix the defendant's date of adoption and prove goodwill as at that date.
The proofs, in order of weight
| Evidence | What it establishes | Practical notes |
|---|---|---|
| Length of continuous use | The oldest and strongest proof | Prove the first use with a dated document, not a bare assertion |
| Sales turnover, year by year | The size of the custom | Audited accounts, or a chartered accountant's certificate |
| Invoices, from the earliest onward | That the use was real and commercial | The first invoice is the single most valuable document in the file |
| Advertising expenditure, year by year | Effort spent building the association | Broken down by medium, with vouchers |
| Specimens of advertising | What the public actually saw | Dated cuttings, storyboards, screenshots |
| Publications circulating in India | Reputation reaching India without the goods | Whirlpool; prove the circulation, not merely the publication |
| Press coverage and third party references | Independent recognition | Weightier than the plaintiff's own material |
| Awards, rankings, listings | Recognition by the trade | Corroborative |
| Evidence of actual confusion | That the association is real | Misdirected letters, returned goods, customer complaints |
| Registrations elsewhere in the world | First in the world market | Relevant chiefly in pharmaceuticals, Milmet Oftho |
| A survey | Public recognition, measured | Rare in India; its methodology will be attacked |
| Mere presence on the internet | Very little by itself | Toyota v Prius |
The three cases that fix the standard
N.R. Dongre v Whirlpool Corporation, (1996) 5 SCC 714.
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