Passing off and trade mark infringement can arise after business division when a party markets the other's allotted product under altered branding.

After dissolution of a business, sale of one party's allotted product under the other party's product identity can amount to passing off, including reverse passing off, where the seller appropriates the goodwill and commercial value attached to the other quality. Altering a registered label in a material way may also render the mark, as used, different from the registered form and support infringement analysis. A contractual negative covenant restricting use of the mark to allotted qualities is breached when a party introduces or markets goods outside that allotment. The discussion emphasises that trademark rights, goodwill, and post-dissolution covenants operate together to control use of the brand.

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Issues: (i) Whether the appellant's sale of a different product under the same brand name amounted to passing off, including reverse passing off; (ii) Whether the altered label used by the appellant constituted infringement of the respondent's registered trade mark; (iii) Whether the appellant breached the negative covenant contained in the deed of dissolution.

Issue (i): Whether the appellant's sale of a different product under the same brand name amounted to passing off, including reverse passing off.

Analysis: The parties had divided the business and the product qualities under the deed of dissolution, and the appellant was allotted one distinct quality while the respondent was allotted another. The appellant thereafter marketed a product under the allotted brand name but with ingredients matching the respondent's product, thereby appropriating the commercial value and reputation attached to the respondent's quality. The misrepresentation did not depend on proof that consumers associated the product with the respondent by name; it was enough that the appellant represented the respondent's product as his own. The principle of reverse passing off was treated as falling within the wider tort of passing off where the defendant wrongfully appropriates another's goods or reputation.

Conclusion: The appellant's conduct amounted to passing off, including reverse passing off, and the finding was in favour of the respondent.

Issue (ii): Whether the altered label used by the appellant constituted infringement of the respondent's registered trade mark.

Analysis: The registered label had been split into separate registrations after dissolution, and the appellant was bound to use the mark only in the manner permitted by the registration and the dissolution deed. The label actually used by the appellant differed materially from the registered form because the descriptive matter had been altered by substituting the ingredient description. Such material variation made the mark, as used, legally different from the registered mark. The appellate court found that the trial court's view on infringement was a reasonable exercise of discretion on the material before it and did not warrant interference.

Conclusion: The finding of infringement of the respondent's registered trade mark was upheld and was in favour of the respondent.

Issue (iii): Whether the appellant breached the negative covenant contained in the deed of dissolution.

Analysis: The deed restricted each party to the allotted qualities and prohibited introduction or use of any other quality or goods under the mark. By selling the respondent's allotted product under the appellant's allotted quality name, the appellant went beyond the contractual allotment and violated the restriction agreed between the parties. The respondent's alleged breach was not accepted, as the record showed that the objections raised against the respondent were either explained or unsupported.

Conclusion: The appellant breached the negative covenant, and the finding was in favour of the respondent.

Final Conclusion: The injunction was sustained because the appellant's conduct was found to constitute passing off, trade mark infringement, and breach of the contractual restrictions created on dissolution of the business.

Ratio Decidendi: A party who, after division of a business and its trade mark rights, markets the other party's allotted product under a different allotted name with material alterations, commits actionable misrepresentation, may infringe the registered mark as used, and breaches the contractual covenant restricting the use of the mark to the allotted qualities.

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