Passing off and trademark infringement arise when a rival adopts a distinctive trade name likely to mislead consumers and appropriate goodwill.

Use of a rival's distinctive trade name as the core of a trading style was held actionable where it was likely to mislead consumers as to source and divert trade; passing off succeeded because the parties competed directly and the plaintiffs' mark had acquired reputation. The same use of the word "Ellora" was treated as infringement of the registered mark because it appropriated an essential feature of the mark in relation to the goods and created confusion. An inquiry into and account of profits was refused, as that equitable relief is discretionary and was not warranted on the facts.

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Issues: (i) Whether the defendants' use of the trading style "Ellora Industries" amounted to passing off; (ii) whether the use of the word "Ellora" in the defendants' trading style infringed the plaintiffs' registered trade mark; (iii) whether the plaintiffs were entitled to an inquiry into and account of profits.

Issue (i): Whether the defendants' use of the trading style "Ellora Industries" amounted to passing off.

Analysis: Passing off protects business goodwill and is established where the defendant's conduct is likely to mislead ordinary purchasers as to source. The parties were direct competitors in an overlapping field of activity, the plaintiffs' mark had acquired reputation, and the use of "Ellora" in the defendants' business name created a real and tangible risk of confusion and diversion of trade. Actual fraud or proof of actual deception was unnecessary.

Conclusion: The issue was decided in favour of the plaintiffs and against the defendants.

Issue (ii): Whether the use of the word "Ellora" in the defendants' trading style infringed the plaintiffs' registered trade mark.

Analysis: A registered proprietor enjoys the exclusive right to use the mark in relation to the registered goods, and infringement occurs where another trader uses an essential feature of the mark in relation to goods so as to cause confusion. The defendants' use of "Ellora" as the core feature of "Ellora Industries" was held to be a misleading appropriation of the plaintiffs' registered mark and a use in relation to the goods within the meaning of the statute.

Conclusion: The issue was decided in favour of the plaintiffs and against the defendants.

Issue (iii): Whether the plaintiffs were entitled to an inquiry into and account of profits.

Analysis: An account of profits is an equitable relief granted in discretion and ordinarily proceeds on the footing of a quasi-fiduciary obligation or constructive agency. The plaintiffs had not themselves manufactured time-pieces, the defendants' goods bore a distinct mark, and the case did not warrant an order for profits on the facts found.

Conclusion: The issue was decided against the plaintiffs.

Final Conclusion: The decree of injunction was affirmed, the passing-off claim succeeded, and relief by way of account of profits was refused, so the defendants' challenge failed substantially while the plaintiffs obtained only partial additional relief.

Ratio Decidendi: Use of a rival's distinctive trade name or mark as the core of one's own trading style is actionable both as passing off and as infringement where it is likely to mislead consumers as to trade source and appropriate the goodwill attached to the registered mark; an account of profits remains a discretionary equitable remedy and is not granted as of course.

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