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IP Law - Passing off

Passing off is closely interlinked with trademarks The usual question in passing off is whether in marketing goods and services, one party has employed an identifying device or badge associated in the market with another party or parties.

The difference:  Passing off is a tort which means that it is a civil wrong, and therefore unlikely to be affected by the withdrawal of the UK from the EU.  A civil wrong arises when a defendant passes off itself, its name or product as another business or product. The key point is to start by understanding that one person is not allowed to represent their goods or business as someone else’s, to benefit from another’s reputation.  Passing off is the protection of goodwill against misrepresentation, an extension of the scope here is seen.  The typical injury in passing off is loss of custom to a competitor, while the wrong which leads to the injury is the false statement by the competitor. Three elements to the tort – a trinity 1. A goodwill – the defendant’s business and/or products must be similar to that of another’s. 2. Misrepresentation – a customer in the trade must be lead into believing the defendants business or product is the same as another’s 3. Damage – there must be damage created from misrepresentation to the claimant’s business or goodwill. 4. A business context - as long as you can prove it is a registered right, the proof of infringement will be easier for the claimant. Overview of passing off  Meikle v Williamson paragraph 172 = “the remedy which the law gives to a person who has used a particular name in trade is that he is entitled to prevent others from using the same name in such a way as is likely to mislead the public into thinking that the business or the goods so described is or are the business of goods of the claimant”  Perry v Truefitt at para 752 = “a man is not to sell his own goods under the pretence that they are the goods of another man” he cannot therefore be allowed to use names, marks, latters or other indicia by which he may induce purchasers to believe that the goods he is selling are the manufacture of another person.” International background  It has a long common law history and so is less affected than other areas of intellectual property by international conventions

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Paris convention article 10 acts on unfair competition cover this area. Questions have been raised as to whether passing off is moving towards an unfair competition action or whether it should be introduced by statute.

Definition of passing off “Jif” Lemon case, Reckitt and Coleman products v Borden incorporated  Case outlined what had to be shown for a party to succeed in a passing off action, concerned an injunction to prevent the sale of lemon juice in a lemon shaped container, as JIF had been selling it since 1956.  “First he must establish goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get up”  “Second, he must demonstrate a misrepresentation whether or not intentional, leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff.”  Third, he must demonstrate that he suffers, or in a quia timet action, that he is likely to suffer damage by reason of the erroneous believe engendered by the defendants’ misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff  This creates a trilogy of goodwill, misrepresentation and damage Modern passing off  It has expanded as time has moved - “he cannot be allowed to use names, marks, letters, or other indicia, by which he may induce purchasers to believe that the goods he is selling are the manufacture of another person.” (Lord Langdale in 1842)  In modern time this has been applied to a wide range of passing off, not only names, but also ways in which traders enable customers to identify their products and distinguish them from competitors. Expansion of the JIF Case:  Erven Warnink v Townend, “Advocaat” = creation of egg nog originating from the Netherlands. Townend is a British company that used similar ingredients and called their product English advocaat. Warnink believed this caused damage through misrepresentation in the market place. The court said = the use of certain ingredients has engaged passing off, and therefore held that misrepresentation was seen.  Lord Diplock said that “it is possible to identify five characteristics which must be present in order to create a valid cause of action for passing off – misrepresentation, made by a trader in the course of trade, to prospective customers of his or ultimate consumers of goods or services supplied by him, calculated to injure the business or goodwill of another and one that causes damage.  However, lord Frasers view was to confine passing off to the misuse of trade names in relation to goods

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GOODWILL Lord McNaughten in Irc v Margarine = goodwill is the benefit and advantage of the good name, reputation and connection of the business. It is the attractive force which brings in custom.

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Not as much focus on the reputation because reputation and brand would come under property rights, like trademark which must be registered. There are two dimensions to goodwill There must be an association between it and a particular trader or class of traders, this must be established by evidence. Knight v Beyond properties pty ltd = mythbusters was a title of primary skl book series. In 2003, it was used by others as the title for a dads and lads tv series. The author of the book sued the tv producers for passing off and the claim was dismissed. This was because the book series generated a reputation from 1993-96 but this diminished afterwards.

Foreign goodwill  If the business is in the UK, but the market elsewhere.  Hotel Cipriani SRL v Cipriani ltd – community trademark and used for hotels in different cities, like Venice, Lisbon and madeira. However, a business enterprise in the Uk used the name for a restaurant in London. The q is whether Cipriani has goodwill in the Uk. In this case, the claimant needs to have goodwill rather than reputation in the uk – you need to prove your services are booked by customers in the UK. So, the hotel chain had to prove they had a considerable amount of UK customers and can therefore have goodwill.  Starbucks HK v British Sky Broadcasting Group plc = Cl was operator of a tv service in Hong Kong which went for the name of now tv. Cl objected to the launch of a now tv in the UK. The cl’s action failed at first instance for want of protectable goodwill within the jurisdiction and then also failed at appeal. The supreme court reaffirmed that mere reputation within the Uk was not sufficient, what was required was actual customers within the jurisdiction. The claimant needed to show that customers were “people in this jurisdiction who, by booking with or purchasing from, an entity in this country, obtained the right to receive the claimants service abroad.” So, while clearly established that mere reputation in the UK is insufficient, the insistence on a direct bookings test is unfortunate given developments in cross boarder commerce. Regional or local goodwill  About the protection confined to a particular locality. E.g. a business that can only offer services at a fixed location, such as a hote,, club or restaurant can nonetheless develop widespread goodwill as the result of passing custom, although its existence might be difficult to prove or disprove .  Leading case = Chelsea Man Menswear Ltd v Chelsea Girl Ltd: the plaintiffs operations were local in character but they were nonetheless granted an injunction covering the whole country. Product goodwill  Also known as extended passing off  Protection here is granted by finding that certain products sold by reference to a particular name or identifier are associated with certain characteristics in the market place, which are the reason why they are purchased. This means that

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the goodwill can be damaged if goods without these characteristics are marketed under the same name or identifier. Also for a collection of certified businesses who fight for collected rights and goodwill of their products. Bollinger v Costa Brava Wine = Champagne was naturally sparkling wine made from grapes produced in the champagne district by a process of double fermentation. Therefore, in this case, no wine made outside of this district is allowed to be named Champagne. John Walker and Sons v Douglas Mcgibbon = scotch whiskey as a description has obtained a particular standard… it may only be applied to a spirit distilled in Scotland from a mash of cereal grin saccharified by the diastase of malt. As a result, all producers satisfying the conditions applicable are entitled to describe their product as scotch whiskey and to take action to protect the advantages conferred by such a right from improper use of that trade description – Lord avonside at para 128 Advocaat case = regulated by dutch law as the wine contains eggs, sugar flavouring and spirit. The spirit is brandewijn which is a dutch alcohol from grains. As a result, the british brandy was deemed separate. Swiss Chocolate = the term Swiss chocolate is the designation which has been used, save for very minor exceptions, only on chocolate made in Switzerland in accordance with swiss food regulations. E.g. Chocosuisse union v Cadbury Ltd. In this case, Laddie J pointed out that the protection of product goodwill was not available only to superior products. What matters is the public’s perception of a distinctive characteristic. Diageo North America INC v Intercontinental brands = vodka has in this case become known and recognised for distinctive qualities as a particular kind of alcoholic drink. Fage v Chobani = Fage claimed all greek yoghurt has to be made in Greece and created through a greek process of straining cows milk. They claimed that this made it distinctive and that it had been defined with reasonable precision.

ADDITIONAL GOODWILL – protectable devices: Words  Invented or fancy words  Descriptive words with secondary meaning  Personal and geographical names  Titles  Business names  Abbreviations and combinations of letters and numbers Invented or fancy words  Words that were not originally a part of the English language  E.g. Kodak, FiloFax, Adidas they also register their names as trademarks and can enjoy both sides of protections Descriptive words  Reddaway = Business used camel hair for their belts for industrial use in factories.  “Mothercare” in Mothercare v Penguin Books  Mccain’s “oven chips” to be cooked and not fried  Special Brew for beer in Carlsberg v Tennant Caledonian Breweries

Personal and geographical names  Scotch whiskey can already acquire secondary meaning, so the industry may claim they have collective goodwill  Swiss chocolate industry – could also claim that they have acquired specific goodwill  Greek – same with yogurt Titles  Books, TV, Radio Programmes, Newspaper, Magazines and Websites  Walter v Ashton = the times newspaper corporation started sales of times bicycle onto the market. They are different trades but they were upset about the use of the name and possible confusion.  BBC V Celebrity Centre = there was an injunction granted to the BBC to stop a book enlisted A-Z of Eastenders Business words & names  Personal names, descriptive words or invented words or some combination  If distinctiveness in th market is achieved, then the name may be protected by PO. Abbreviations and combinations of letters and numbers  Acronyms and short eye catching abbreviations or combination of letters and numbers  E.g. CA = corporation of accountants, they successfully defended their “CA” name  BMA = successfully defended bma as their brand goodwill in British Medical Association v Marsh  However, in FCUK = they normally use fcuk on their label. The court suggested that it doesn’t necessarily mean they have acquired a distinctiveness – they do not successively prove that their acronym has acquired significant goodwill in the market. What is most important is the creation or acquisition of distinctiveness in the marketplace of a word or combination of words. But the distinctiveness thus created or acquired can also be lost. Goodwill: Get-up  Get up is the packaging, the dress in which the goods are offered to the public as per the John Haig case. If distinctive of the goods, a feature by which customers distinguish the product from those of competitors, it may be protected by an action of passing off. It can be whole or party of the packaging.  Coco-cola v Barr demonstrated the whole bottle “get up” case  The Haig dimple bottles in John Haig v Forth Blending Co  The JIF lemon shape container  Passing off protects a distinctive aspect of the packaging of goods and is growing initially, before it was just business names but now covers the prevention of using similar packaging’s as different products. Goodwill: Advertising  Cadbury Schweppes Pty Ltd v Pub Squash Co Pty ltd = Cadbury marketed a non-alcoholic soft drink known as solo in Australia, showing young men quenching their thirst by drinking it. Pub squash marketed a rival seink with a

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similar campaign. Cadbury claimed that they were passing off, but the privy council rejected this because the original campaign had not achieved exclusive goodwill for them. Lord Scarman stated an effect of the advocaat case = the tort is no longer anchored to the name or trademark of a product or business. It is wide enough to encompass other descriptive material, like slogans or visual images as long as it has become part of the goodwill of the product.

Goodwill: must be trading goodwill  Burge v Haycock = Trading goodwill is defined broadly. Country alliance were a campaigning organisation. Here it was said that passing off action can be brought because of the goodwill that they have established in the public eye for their activities which is a valuable property.

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MISREPRESENTATION A misrepresentation is a false statement of fact In passing off, the false representation is that the goods or services in which the defendant trades are those of the claimant or in some way have a business connection with the claimant, or the particular qualities of the claimant’s goods or services Has the defendants action deceived members of the public to cause damage to the claimant’s goodwill? Here, the defendants state of mind is NOT relevant

Mother care UK Ltd v Penguin Books  The claimant was a well-known retailer of goods for expectant mothers, babies and young children.  They failed to establish that the use of the phrase mother care in the title of a controversial book would lead the public to take the book as a publication of the retailer.  Even when the defendant has copied the claimants badge of identity, passing off will not provide a remedy unless the latter’s goodwill has been damaged. United biscuits v Asda Stores  Asda created a biscuit known as the puffin biscuit that competed with Penguin biscuits.  Asda were careful to design packaging to avoid deception for customers but wanted to challenge or parody the traditional penguin style.  It was held that there was passing off because customers might still see the similarities that this could lead them to suppose that the two biscuits came from the same manufacturing source. Morroccan oil Israel Ltd v Aldi  Claimant created a hair care product called morroccanoil which contained argan oil, sold in a brown bottle with a turquoise label.  Aldi then launched their own hair care product known as miracle oil which also contained argan oil. It was sold in similar packaging  The court rejected the argument that the name and get up of the product constituted passing off.

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Although aldis product did bring to mind the claimants product, it was not sufficient “I do not think that there was anything unlawful in aldi creating a product with get up which brought the get up of Moroccan oil to mind. I think aldi intended to do so and that …. Some of the public might think that the similarities were cheeky and might infringe design rights. That is not passing off.” The second issue here was about descriptive words or geographical/personal names, it is no longer law that there is a right to one’s name which can be used to fend off a claim of passing off. “As long as he does not do anything more than that to cause confusion with the business of another” the use of name is allowed.

Misrepresentation: use of geographical and personal names 1. Dunlop Pneumatic Tyre CO v Dunlop Motor Co = car dealers were entitled to use their surname as a business name eventhough it was already the name of a tyre company. As long as it’s a genuine use of your own name its fine 2. Parker Knoll v Knoll international – distinguished british furniture on the market. Knoll international was stopped from being est in the uk because parker Knoll had goodwill 3. Biba group v biba boutique = biba is a fashion shop. In this case, the court ruled that an individual may not be able to use their name freely if it exists to an existing trader already 4. John Haig V John dd haig = a man not be able to use his own name for his company because its already associated with another trader, whos goodwill needs to be protected. Key points  misrepresentation is a statement in which goods and services in which the defendant trades are those of or have a business connection with the claimant or have the particular quality of that of the claimants.  It must damage the claimant’s goodwill by compromising their position in the market place.  The misrepresentation need not to be fraudulent.  Traders might not be entitled to use descriptive names or terms if the word has become established goodwill associated with another undertaking. Misrepresentation: confusion  You must prove there is likely to be confusion about the existence of the trading between the two entities.  The confusion must be more than mere confusion, a significant part of the market must be confused.  Fage v Chobani  Haig v Forth Blending = use of a particular shape bottle for whiskey. The court ruled the bottle would be confusing to bartenders  Recitt and coleman v borden = elderflower champagne case which was of a lower price than original champagne. French individuals state it ruined the

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brand name. It was held there was passing off because the average person would not be deceived, but some customers must be considered. Tattinger sa v allbev Chocosuisse v Cadbury = Cadbury launched a new product and the court suggested there was sufficient confusion to amount to passing off.

The most important thing is misrepresentation Misrepresentation: source  Reckitt v Colman = it has to be borne in mind that th eprimary retail outlets for these products are supermarkets…. The purchasing member of the public is reliant upon his own perception or recollection, unassisted by the opportunity of side-by-side comparison as per Lord Oliver.  The court look for the impression imprinted in the mind of a consumer Misrepresentation: quality  Spalding v Gamage = the claimant rejected a line of production that they believed was defective. The defendant got a supply of them, sold them and advertised them as an improved version. It was held to be passing off in this case. Product misrepresentation  Geographical cases  Bollinger v costa brava – the terminology champagne can only be used in the district in france, and you cannot pick it up as a descriptive word in a product  Erven Warnink v Townend, Advocaat = originated from the Netherlands industries which was a blended alcoholic drink that included egg yolk with spirits. An English firm sold this product and was regarded as extended passing off which meant geographical products are protected. Here, the name and geographical location was i...