Passing off

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Passing off is a common law tort which can be used to enforce unregistered trade mark rights. The tort of passing off protects the goodwill of a trader from misrepresentation.

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The law of passing off prevents one trader from misrepresenting goods or services as being the goods and services of another, and also prevents a trader from holding out his or her goods or services as having some association or connection with another when this is not true.

Passing off and trade mark law

A cause of action for passing off is a form of intellectual property enforcement against the unauthorised use of the trade dress (the whole external appearance or look-and-feel of a product, including any marks or other indicia used) which is considered to be similar to that of another party's product, including any registered or unregistered trademarks. Passing off is of particular significance where an action for trade mark infringement based on a registered trade mark is unlikely to be successful (due to the differences between the registered trade mark and the unregistered mark). Passing off is a common law cause of action, whereas statutory law such as the United Kingdom Trade Marks Act 1994 provides for enforcement of registered trademarks through infringement proceedings.

Passing off and the law of registered trade marks deal with overlapping factual situations, but deal with them in different ways. Passing off does not confer monopoly rights to any names, marks, get-up or other indicia. It does not recognize them as property in its own right.

Instead, the law of passing off is designed to prevent misrepresentation in the course of trade to the public, for example, that there is some sort of association between the businesses of two traders.

One recent example of its application by the United Kingdom Intellectual Property Office can be found in a Trade Mark Opposition Decision in 2001. [1] It was held that two brands of confectionery both named "Refreshers", one made by Swizzels Matlow and one by Trebor Bassett, which had coexisted since the 1930s, would deceive a consumer as to their source for some items but not for others. Both coexist in the marketplace.

Required elements

When coming to court, there are three elements in the tort which must be fulfilled. In Reckitt & Colman Products Ltd v Borden Inc, [2] [3] Lord Oliver reduced the five guidelines laid out by Lord Diplock in Erven Warnink v. Townend & Sons Ltd. [4] (the "Advocaat Case") to three elements:

  1. Goodwill owned by a trader
  2. Misrepresentation
  3. Damage to goodwill

The plaintiff has the burden of proving goodwill in its goods or services, get-up of goods, brand, mark or the thing standing for itself. Goodwill normally develops alongside a brand name or brand association. It has been described as "the attractive force by that brings in custom" by Lord Macnaghten in the UK case IRC v Muller & Co.'s Margarine [1901] AC 217. [5]

The plaintiff also has the burden of proof to show false representation (intentional or otherwise) to the public to have them believe that goods/services of the defendant are that of the Plaintiff. There must be some connection between the plaintiff's and defendant's goods, services or trade. They must show likely or actual deception or confusion by the public.

It is the court's duty to decide similarity or identity of the marks, goods or services. The criteria are often: aural, visual and conceptual similarity (often applied in trademark infringement cases).

For the element of damage to goodwill, there may be a loss or diversion of trade or dilution of goodwill. The plaintiff need not prove actual or special damage; real and tangible probability of damage is sufficient. This damage should however be reasonably foreseeable. It is not enough just to show likelihood or actual deception or confusion.

Ultimately, the court must use common sense in determining the case, based on evidence and judicial discretion, and not witnesses.

Disclaimers may not be enough to avoid passing off or cause of action. [6]

Extended passing off

One of the instances where passing off is actionable is the extended form of passing off, where a misrepresentation as to the particular quality of a product or service causes harm to another's goodwill. An example of this is Erven Warnink v. Townend & Sons Ltd. , in which the makers of advocaat sued a manufacturer of a drink similar but not identical to advocaat, but which was successfully marketed as advocaat.

The extended form of passing off is used by celebrities as a means of enforcing their personality rights in common law jurisdictions. Common law jurisdictions (with the exception of Jamaica) do not recognise personality rights as rights of property. Accordingly, celebrities whose images or names have been used can successfully sue if there is a representation that a product or service is being endorsed or sponsored by them or that the use of their likenesses was authorised when this is not true. [7]

Reverse passing off

Another variety, somewhat rarer is so-called 'reverse passing off'. This occurs where a trader markets another's product or service as being his own (see John Roberts Powers School v Tessensohn [1995] FSR 947). It is usually covered by the same court rulings as straight passing off. [8] In the UK, reverse passing off exists where trader A claims that trader B's goods are actually trader A's. Although not expressly endorsed by the courts, reverse passing off was successfully argued by the plaintiff in Bristol Conservatories Ltd v Conservative Custom Built Ltd [1989]. [9]

Defences

There are many defences that can be used by a Defendant to dismiss a claim in passing off. The most common are:

  1. Delay or acquiescence
  2. Bona fide use of the defendants name
  3. Concurrent use

Delay in the claimants claim for passing off can be used by a defendant as a defence. Mostly, the claimants delay will be fatal to the grant of interim relief by a court. Essential for a Acquiescence defence is that failure of the claimant to act should have induced the defendant to believe that the wrong was being assented too. [10]

The second most common defence is invoked where the defendant is trading under their own name. This permits the trader to trade under his name as long as he had not been causing significant deception. [11]

Concurrent use requires the defendant to show that he and another trader have acquired the right to use the same name. It has been used successfully whereby both the claimant and defendant trade different goods, as this would not cause confusion within the public. [12]

Remedies

There are several remedies available to a claimant. [13] They include:

  1. Injunction
  2. Damages
  3. Account for profits
  4. Destruction
  5. Declaration that the Defendant was passing off goods as the claimants

See also

Related Research Articles

A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable by the state. While criminal law aims to punish individuals who commit crimes, tort law aims to compensate individuals who suffer harm as a result of the actions of others. Some wrongful acts, such as assault and battery, can result in both a civil lawsuit and a criminal prosecution in countries where the civil and criminal legal systems are separate. Tort law may also be contrasted with contract law, which provides civil remedies after breach of a duty that arises from a contract. Obligations in both tort and criminal law are more fundamental and are imposed regardless of whether the parties have a contract.

<span class="mw-page-title-main">Trade dress</span> Characteristics of visual appearance of a product

Trade dress is the characteristics of the visual appearance of a product or its packaging that signify the source of the product to consumers. Trade dress is an aspect of trademark law, which is a form of intellectual property protection law.

<span class="mw-page-title-main">English tort law</span> Branch of English law concerning civil wrongs

English tort law concerns the compensation for harm to people's rights to health and safety, a clean environment, property, their economic interests, or their reputations. A "tort" is a wrong in civil law, rather than criminal law, that usually requires a payment of money to make up for damage that is caused. Alongside contracts and unjust enrichment, tort law is usually seen as forming one of the three main pillars of the law of obligations.

<i>Rylands v Fletcher</i> Landmark House of Lords decision on tort law

Rylands v Fletcher (1868) LR 3 HL 330 is a leading decision by the House of Lords which established a new area of English tort law. It established the rule that one's non-natural use of their land, which leads to another's land being damaged as a result of dangerous things emanating from the land, is strictly liable.

<span class="mw-page-title-main">Misrepresentation</span> Untrue statement in contract negotiations

In common law jurisdictions, a misrepresentation is a false or misleading statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The misled party may normally rescind the contract, and sometimes may be awarded damages as well.

Economic torts, which are also called business torts, are torts that provide the common law rules on liability which arise out of business transactions such as interference with economic or business relationships and are likely to involve pure economic loss.

Tortious interference, also known as intentional interference with contractual relations, in the common law of torts, occurs when one person intentionally damages someone else's contractual or business relationships with a third party, causing economic harm. As an example, someone could use blackmail to induce a contractor into breaking a contract; they could threaten a supplier to prevent them from supplying goods or services to another party; or they could obstruct someone's ability to honor a contract with a client by deliberately refusing to deliver necessary goods.

Imperial Group plc v Philip Morris Ltd, 1982 FSR 72, was a case of the Court of Appeal of England and Wales. The plaintiff endeavoured to register the trade mark "MERIT" for cigarette products, but was unable to do so on the grounds that the trade mark was too descriptive. Instead, it registered the mark "NERIT", without any intention of using the mark, but in order to prevent other traders from using the mark "MERIT" because it would be considered too similar to the registered mark "NERIT". The intention was to obtain a de facto monopoly over the unregisterable mark "MERIT".

<span class="mw-page-title-main">Canadian trademark law</span>

Canadian trademark law provides protection to marks by statute under the Trademarks Act and also at common law. Trademark law provides protection for distinctive marks, certification marks, distinguishing guises, and proposed marks against those who appropriate the goodwill of the mark or create confusion between different vendors' goods or services. A mark can be protected either as a registered trademark under the Act or can alternately be protected by a common law action in passing off.

Erven Warnink B.V. v. J. Townend & Sons (Hull) Ltd., [1979] AC 731, [1980] R.P.C. 31, – also known as the Advocaat case – is a leading decision of the House of Lords that further developed the common law tort of extended passing off for the Commonwealth as originally established in Bollinger v. Costa Brava. Prior to this case "collective goodwill", as required for an action in passing off, only applied to names indicating geographic origin. The Court held that wares whose name falsely suggests its character or quality can be prevented from selling the product under that name.

Reckitt & Colman Ltd v Borden Inc [1990] 1 All E.R. 873, – also known as the Jif Lemon case – is a leading decision of the House of Lords on the tort of passing off. The Court reaffirmed the three part test in order to establish a claim of passing off.

<i>Kirkbi AG v Ritvik Holdings Inc</i> Supreme Court of Canada case

Kirkbi AG v. Ritvik Holdings Inc., popularly known as the Lego Case, is a decision of the Supreme Court of Canada. The Court upheld the constitutionality of section 7(b) of the Trade-marks Act which prohibits the use of confusing marks, as well, on a second issue it was held that the doctrine of functionality applied to unregistered trade-marks.

<span class="mw-page-title-main">Canadian tort law</span> Aspect of Canadian law

Canadian tort law is composed of two parallel systems: a common law framework outside Québec and a civil law framework within Québec. Outside Québec, Canadian tort law originally derives from that of England and Wales but has developed distinctly since Canadian Confederation in 1867 and has been influenced by jurisprudence in other common law jurisdictions. Meanwhile, while private law as a whole in Québec was originally derived from that which existed in France at the time of Québec's annexation into the British Empire, it was overhauled and codified first in the Civil Code of Lower Canada and later in the current Civil Code of Quebec, which codifies most elements of tort law as part of its provisions on the broader law of obligations. As most aspects of tort law in Canada are the subject of provincial jurisdiction under the Canadian Constitution, tort law varies even between the country's common law provinces and territories.

AG Spalding and Bros v AW Gamage Ltd, (1915) 84 LJ Ch 449, (1915) 113 LT 198, (1915) 31 TLR 328, [1914-15] All ER Rep 147, (1915) 32 RPC 273, is a leading decision of the House of Lords on the tort of passing off. The Court established a three-part test for a successful claim of passing off. First, the claimant's product must have goodwill. Second, there must be a misrepresentation by the defendant's product, and third, there must be damages inflicted upon the claimant.

Krouse v. Chrysler Canada Ltd. is generally thought to be the first case to clearly acknowledge the existence in Canada of a tort of appropriation of personality.

The following outline is provided as an overview of and introduction to tort law in common law jurisdictions:

<span class="mw-page-title-main">Trademark</span> Trade identifier of products or services

A trademark is a type of intellectual property consisting of a recognizable sign, design, or expression that identifies a product or service from a particular source and distinguishes it from others. A trademark owner can be an individual, business organization, or any legal entity. A trademark may be located on a package, a label, a voucher, or on the product itself. Trademarks used to identify services are sometimes called service marks.

<span class="mw-page-title-main">Trademark infringement</span> Violation of trademark rights

Trademark infringement is a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees. Infringement may occur when one party, the "infringer", uses a trademark which is identical or confusingly similar to a trademark owned by another party, especially in relation to products or services which are identical or similar to the products or services which the registration covers. An owner of a trademark may commence civil legal proceedings against a party which infringes its registered trademark. In the United States, the Trademark Counterfeiting Act of 1984 criminalized the intentional trade in counterfeit goods and services.

In Canada, passing off is both a common law tort and a statutory cause of action under the Canadian Trade-marks Act referring to the deceptive representation or marketing of goods or services by competitors in a manner that confuses consumers. The law of passing off protects the goodwill of businesses by preventing competitors from passing off their goods as those of another.

<i>Ciba-Geigy Canada Ltd v Apotex Inc</i> Supreme Court of Canada case

Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 SCR 120, is a Supreme Court of Canada judgment on trademark law and more specifically the issue of passing off. Ciba-Geigy brought an action against Apotex and Novopharm, alleging that their versions of the prescription drug metoprolol were causing confusion to the public due to their similar appearance to Ciba-Geigy's version of the drug Lopresor. On appeal to the SCC, the issue was whether a plaintiff is required to establish that the public affected by the risk of confusion includes not only health care professionals but also the patients who consume the drugs in a passing off action involving prescription drugs of a similar appearance. The Supreme Court held affirmatively on this question.

References

  1. Jones, R. A. (on behalf of the Registrar and Comptroller-General) (21 February 2001). "IN THE MATTER OF APPLICATION NO. 2161647 IN THE NAME OF TREBOR BASSETT LIMITED AND IN THE MATTER OF OPPOSITION NO. 49406 THERETO BY SWIZZELS MATLOW LIMITED" (PDF). ipo.gov.uk. United Kingdom Intellectual Property Office. p. 9. Retrieved 25 February 2014.
  2. [1990] 1 All ER 873
  3. Mosawi, Anthony (24 March 1995). "The fire line between trade marks". New Law Journal. 145 (6688): 410 via Lexis.
  4. [1979] AC 731, 742 (HL)
  5. "Inland Revenue Commissioners v Muller & Co's Margarine Ltd. [1901] SVC 25 | Croner-i Tax and Accounting". library.croneri.co.uk. Retrieved 29 March 2021.
  6. Asprey and Garrard v. WRA (Guns) Ltd [2002] FSR 30. However, this was expressed in the dicta of the decision in that case.
  7. Irvine v Talksport Ltd [2003] FSR 35, ChD)
  8. Dastar Corp. v. Twentieth Century Fox Film Corp.
  9. Hood, Christopher (1996). Hood, Christopher. "Regulation: Legal Form and Economic Theory." (1996): 161-164. p. 2.
  10. Blinkx UK Ltd v Blinkbox Entertainment Ltd [2010] EWHC 1624
  11. Reed Executive Plc v Reed Business Information Ltd [2004] RPC 40
  12. Woolley v Ultimate Products [2012] EWCA Civ 1038
  13. Charleton, Peter, and Sinead Reilly. "Passing off: An Uncertain Remedy." Annual Conference. 2015.

Further reading