Exhaustion of trademark rights: lawful acquisition and resale escape infringement unless refurbishing materially impairs quality or goodwill.

Interpretation of trademark rights emphasises that infringement requires use in the course of trade of the proprietor's registered mark or a deceptively similar mark; removal of marks and resale under different markings does not prima facie constitute infringement. The doctrines of passing off require goodwill, misrepresentation and likely damage at initial interest, and no prima facie misrepresentation or initial interest confusion was shown. The principle of exhaustion limits proprietor's control where goods bearing the mark were lawfully put on the market, while the ''change or impaired'' exception permits opposition only where refurbishing materially diminishes quality, value or goodwill; on the present record neither exception defeats exhaustion.

---

---

Issues: (i) Whether the respondents' importation, refurbishment, debranding and resale of end-of-life HDDs infringed the appellants' registered trade marks or amounted to passing off or reverse passing off; (ii) Whether Sections 30(3) and 30(4) of the Trade Marks Act, 1999 (including the doctrine of international exhaustion and the ''change or impaired'' exception) apply to permit or deny protection to subsequent dealers of lawfully acquired trade marked goods.

Issue (i): Whether the respondents' acts constituted infringement under Section 29 or the torts of passing off or reverse passing off.

Analysis: Section 29 defines infringement by requiring use in the course of trade of the registered mark or a deceptively similar mark. The respondents removed the appellants' marks prior to sale and used their own marks; no use of identical or deceptively similar marks in trade is prima facie shown. The ingredients of passing off require goodwill, misrepresentation and damage or likelihood of damage at the point of initial interest; no prima facie misappropriation of appellants' goodwill or evidence of initial-interest confusion at the point of sale was established. The concept of ''reverse passing off''-a defendant representing another's goods as its own-is not recognised as an actionable tort within the saved passing off rights under Section 27(2) read with Sections 134 and 135; alternatively, even assuming arguendo its availability, the necessary elements (initial-interest identification of the original manufacturer and misappropriation/damage) are absent on the record.

Conclusion: On the issues of infringement, passing off and reverse passing off, the appellants have not made out a prima facie case in their favour; the respondents' acts do not, at this interlocutory stage, amount to infringement or to passing off, and reverse passing off is not actionable under the Trade Marks Act in the circumstances.

Issue (ii): Whether Sections 30(3) and 30(4) operate to protect the respondents' dealings in lawfully acquired goods or to deny protection where the condition of goods is changed or impaired.

Analysis: Section 30(3) operates as a limit on the proprietor's rights where goods bearing a registered mark are lawfully acquired and have been put on the market by the proprietor or with his consent; it does not create a new specie of infringement but provides an escape where Section 29 otherwise applies. Section 30(4) carves out exceptions where legitimate reasons exist to oppose further dealings, in particular where the condition of the goods has been changed or impaired; the term "changed" must be read noscitur a sociis with "impaired" and thus implies a negative alteration diminishing quality, value or goodwill. On the facts at the interlocutory stage: (a) acquisition and import of end-of-life HDDs were not shown to be unlawful; (b) no material establishes that the respondents' refurbishing materially impaired the goods in a manner legitimately prejudicial to the proprietors; and (c) even if Section 30(4) were invoked, Section 29's requirements must still be satisfied for infringement to follow.

Conclusion: Sections 30(3) and 30(4), properly interpreted, do not afford the appellants a prima facie basis to restrain the respondents; Section 30(3) protections apply on the present record and Section 30(4) is not attracted.

Final Conclusion: The appellants have failed to establish a prima facie case of trademark infringement, passing off or actionable reverse passing off, and Sections 30(3) and 30(4) do not yield a contrary result; the interlocutory appeals are dismissed and the operative directions of the learned Single Judge are maintained so that the appellants are not placed in a worse position for having appealed.

Ratio Decidendi: For purposes of infringement under the Trade Marks Act, 1999, use in the course of trade of the proprietor's registered mark or a deceptively similar mark is indispensable; Section 30(3) limits the proprietor's rights by applying the principle of international exhaustion where goods bearing a mark are lawfully acquired and put on the market by the proprietor or with his consent, while Section 30(4) excepts cases where legitimate reasons (in particular material change or impairment that prejudices quality, value or goodwill) justify opposition to further dealings.

---