Passing OFF - Lecture notes 3-4 PDF

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Passing off intellectual property law
This document includes full detailed notes on the elements in filling a successful passing off claim....

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PASSING OFF -

ELEMENTS OF THE ACTION

What is P/O? - It is a common law right, based on case law. - it originates from the tort of conception, so it is an economic tort - Linked to unregistered trade mark law - P/O is a property right- business goodwill - P/O provides a protection for brands P/O or TM? - Legal disputes over registered TMs are cheaper and quicker - P/O is harder to prove as you need to prove 3 elements, and produce evidence - Registration of TM acts as a warning - Not always possible to register TM, but can be protected under passing of - P/O can give wider protection, as it protects the whole of the product - Can bring both claims simultaneously Extended Form of P/O - Lord Diplock- Erven Warnink v Townendo Warnink was one of the main producers of a certain alcoholic drink that required certain ingredients. Townend then produced a similar alcoholic drink but used diferent ingredients. o In a claim for passing of Lord Diplock established 5 criteria for extended form of P/Of, there had to be:  Misrepresentation  By a trade in course of trade  To prospective customers or ultimate consumers  Calculated to injure business or goodwill  Causes actual damage

CLASSIC FORM OF P/O -

Reckitt & Coleman v Bordeno Facts Reckitt & Coleman created high quality lemon juice in a lemon container with a yellow cap, called ‘Jit'  Borden started selling lemon juice but with a green cap. RC tried to sue for P/Of  Borden argued, the lemon shape of the product was too descriptive of the product, that selling lemon juice in a lemon plastic container was common place in the trade, and if RC were allowed to protect their lemon juice in P/O this would give them a monopoly in this trade. o Decision HL held, firstly the plastic lemon was not descriptive, as RC were not selling plastic lemons. Secondly, in the UK RC were the only company selling lemon juice in plastic lemon containers, so it was not common practice. Finally, the plastic lemon had come to be recognised by consumers as JIF lemon juice, so RC could

establish Goodwill, and anyone could sell a product as long as they could diferentiate it from RC lemon juice. o Lord Oliver outlined 3 elements, that must be establish:  1. Goodwill (in the eyes of the consumer)  C must establish that goodwill is attached to his product  2. Misrepresentation  Made by D to the public, leading to confusion  3. Damage (actual or likely)  C is likely to sufer or sufers damage as a result of confusion 1.GOODWILL - Definitiono IRC v Muller & Co’s Margerine  ‘The Attractive force which brings in custom’ o It is benefit or advantage of a good name. o Must attach to a business o Not Reputation  Harrods v Harrodian School- business can have reputation but no goodwill. The school was set up and was completely separate to Harrods. But Harrods argued, that naming the school ‘Harrodian’ would associate it with Harrods. Harrods has such a strong reputation but the court said, Harrods is not known by schools, therefore Harrods had no goodwill attached to schools, so it had no P/O claim. -

Must be in Trade- attach to business o Claimant must operate in trade  Business or Trade not defined, only has to be some sort of commercial activity. o Includes Charities:  British Diabetic Assciation v Diabetic Society- BDA was successful in its claim against DS, in claiming the DS as passing itself of as the BDA.  Burge v Haycock- about Countryside Alliance, set up about fox hunting, a lobbying group set up in response to the last Labour govs ban on fox hunting. They were upset as a member of the British national society claimed to be part of the Countryside Alliance, but they did not want to be associated with the far right. They were successful in P/O action. o But not Political Parties  Kean v McGivan- about a political party called, Social Democratic Party, who tried to bring a claim for passing of but were unsuccessful as it was held, political parties were not carrying out a trade.

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Establishing Goodwill o established by USE  Stannard v Rea- goodwill is established by use, but short-term use may be enough. In the case, a mad brought an ice cream van which was previously called Mr Whippy, and he decided to change the use and name it Mr Chippy. He was only trading for a few weeks, but someone else started using the same name, which afected the man’s tacking’s. The court said, even though there was shortterm use, this was enough for goodwill.

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o Depends on evidence available: how widely the business is known, how much efort is put into marketing, how recognisable the business is etc. o Question of Fact Knight v Beyond Properties Pty Ltd- Mr Knight published children’s books under the name ‘myth busters’. In 2003 a TV programme was created under this name. Mr Knight brought an action claim in goodwill for P/O. But, as Mr Knight had not done nothing in the name for a few years, the goodwill had been lost.  Sutherland v V2 Music- about a pop group ‘libertyX’ who originally wanted to call themselves ’Liberty’, but there was a pre-existing punk band called ‘liberty’ who had won an award in 1993 for band of the year, and still had a loyal fan base so still had Goodwill. o Goodwill can be lost by Non-Use  whereas, TMs have 5 years to be used  Intention to re-use can help  Ad Lib Club v Granville- Ad Lib had an issue with noise so was forced to close by its neighbours, it closed for 4 years, during this period someone else tried to open a club with the same name. Ad Lib successfully sued for P/O and argued Goodwill was still attached to the club even though it was closed for 4 years, as there was an intention to re-use and people still remembered the old club and the owners had found a new property. Foreign Traders o Must have Goodwill in the Jurisdiction, must be trading in that jurisdiction to obtain Goodwill  Anheuser-Bush v Budejovicky Budvar- whether US company had goodwill in UK? At the time the US company was only selling their beer on US military bases in the UK, which was technically under US law. So could not establish Goodwill o Evidence of business activity in England  Hotel Cipriani SRL v Cipriani (Grosvenor Street) Ltd- The Hotel chain had hotels in Venice, Lisbon and Madera. The Grosvenor Streets, used the name for their restaurant in London. The Hotel chain was well known in the UK, so it was likely customers thought the restaurant and hotel were connected. Even though, the Hotel chain did not have a branch in the UK, they Could establish Goodwill based on hotel bookings by customers in the UK.  Plentyoffish Media Inc v Plenty More LLP- HC held, a US online dating service could not reply on its reputation in order to prove it had Goodwill in the UK. It had to have actual customers using the service.

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How is it Manifested? o By:  Trading names  Signs or Badges  Product ‘get up’  Shape of goods or packaging  advertising image  personality

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Descriptive Marks

o it is easier to establish Goodwill with a descriptive name, rather than establishing descriptive TM o Descriptive Names:  Mothercare v Penguin Books- Mothercare had acquired a secondary meaning, and the public had associated that name with the shop.  Cf Office Cleaning Services v Westminster Window & General Cleaning Cleaners Ltd- Office Cleaning Services was very descriptive, it does not relate to a particular source or supplier, so no goodwill. o Geographical Names:  Montgomery v Thompson- concerned a beer called stone ale, made in Stone. It was descriptive but the ale had been made for 100 years, so it had acquired a second name. When a second brewery set up in Stone, and started selling a beer called ‘stone ale’ was not allowed, as the original brewery had already established themselves with goodwill. -

Packaging, Get Up & Trade Dress o Get-up = “the dress in which products are offered to the public”- R&C v Borden  look and feel of the product o C must prove public recognises the get-up is distinctive of its goods/services  Coca Cola v Barr- about the shape of the Coca-Cola bottles  R&C v Borden- about the shape of the plastic lemons.  United Biscuits v Asda- UB produced a famous chocolate biscuit called Penguin, and Asda decided it was going to produce a own brand similar biscuit called puffin, which had similar packaging. As consumers normally seen own-branded products as lower quality, own-branders want to make their products as similar to other companies. UB successfully sued Asda for P/O, as there was evidence from Consumers that they could not tell the diference between the 2 chocolates, they thought the biscuits were made from the same manufacturer, so were confused by the origin. o Not Smells  L’Oreal v Bellure- Not smells.

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Advertising Themes o Cadbury Schweppes v Pub Squash- Cadbury tried to advertise a new soft drink for men called ’Solo’, they ran an advertising campaign, of men drinking the soft drink and doing rugged things. Pub Squash tried to do the same thing, by advertising their drink in that way. The advertising claim was very similar but the advertising theme was not distinctive so the claim failed.  The test is, whether the product has derived from the advertising a distinctive character which the market recognises. o Easyjet v Dainty- the court considered Easyjets advertising style. The Judge listed 4 elements: the word easy together with another word which alludes to the services being ofered so as to form a new word, secondly the word easy is in lowercase, thirdly the first letter of the second work is a capital letter, and lastly the colours white letters and orange background.

2.MISREPRESENTATION - Define: o There is no requirement for intention o It is an express statement or can be implied from use o It is an objective test: is the consumer deceived or confused? o Must be Material  Morning star v Express Newspapers- the Morning star sued the owners of the Daily Star and argued that the Daily Star was making misrepresentations that it was made by the Morning Star. The Court stated, ‘only a moron in a hurry would be confused’, so the argument was insufficient. o Common field of activity is not required (but may help)  Harrods v Harrodian School- reputation of harrods didn’t stretch to schools. They were not in a common field of activity.  Lego System AS v Lego Lemelstrich Ltd- Lego Systems was able to stop Lego Lemelstrich from selling irrigation equipment under the name lego, on the basis that there was possible customer confusion, as Lego was a household name and it was so well known. This case is seen to go too far, and the Harrods case is more relevant. -

Types of Misrepresentation o Source  False impression of association  Customer thinks a product comes from one source but it actually comes from another o Quality  Spalding v Gamage- the claimant manufactured and sold a special type of football called ‘improved zone orb’. The defendants was selling a supply of the claimants rejected footballs under the same name. the court held, this was P/O as it would afect the claimant, as customers may think the claimants products were of a lower quality like the defendants products.  Gillette Safety Razor v Franks- Frazor was selling old gillette razors which were repackaged as new ones. This was misrepresentation of the quality of the products. o Reverse Passing Of  The defendant wrongfully misrepresents someone else’s goods to be his.  so he takes credit for goods which originate with someone else  Bristol Conservatories v Conservatories Custom Built- D used photos of Cs conservatories and put the photos in his own broacher, pretending they were his conservatories. So D misled consumers in thinking his conservatories would be the same quality as Cs conservatories. C is also damaged, even if the customers do not know that C exists. o Extended Misrepresentation  This is where the claimant brings a claim that relates to the product itself, which might be shared with other claimants.  There may be Group Goodwill, so all the manufacturers can sue together.

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The requirement is to have a distinctive product which have recognisable qualities Taittinger v Allbev Ltd (1993)- the manufacturers of champagne in France took exception to elderflower champagne, and it was marketed and bottled to look like champagne. Champagne has to be made in the particular champagne region in France, so Taittinger sued in Passing Of, as there was goodwill in the word ‘Champagne’ which is shared by many traders. There was a misrepresentation through confusing the customers as to the origin of the product, as Elderflower champagne did not come from the champagne region. Misrepresentation expanded, to cover dilution of the name of Champagne.  Chocosuisse v Cadbury- Claimants were manufacturers of Swiss chocolate, and Cadbury manufactured a chocolate called ‘Swiss Chalet’ in the UK, and the packaging had little mountains on the side so it looked Swiss. The Claimant for successful in stopping Cadburys. The Court held that there was a misrepresentation because people think that the chocolate was Swiss, and that matters as Swiss chocolate is thought to be superior to normal chocolate. o Laddie stated, ‘it was not necessary for a term to denote the superior quality of goods, it was sufficient that the trade name distinguished that cast of goods from other goods.  Diageo v Intercontinental Brands- whether or not consumers brought VODKAT thinking it was Vodka? The CA upheld the HC decision, that Vodkat had been unlawfully Passed of as vodka, under Extended P/O

Evidence for Extended Misrepresentation o Need actual customer confusion  often evidenced through surveys, but survey evidence is frequently discredited  M&S v Interflora- the judge wouldn’t allow survey evidence unless the court were satisfied that it would be valuable, and that it was likely Utility would justify the costs in the survey. So there’s a test that must be pasted for survey evidence to be used. o Need Substantial Number of Consumers  Chocosuisse v Cadbury  must be the people who buy the goods in question o Unprovoked complaints are excellent  Neutrogena v Golden- Neutrolia, had an advert of a naked women in a shower, but there was loads of complaints which were sent to a diferent brand ‘neutrogena’. This is clear evidence of confusion o if no confusion, there’s no action  L’Oreal v Bellure

3.DAMAGE - Define: o C must prove damage or likely to sufer damage

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o Often inferred from proof of other 2 elements- if there is strong goodwill and misrepresentation, then courts are generally likely to infer that this will cause damage. Types of Damage: o Diversion of Sales  loss by C  Sales gained by D o Damage by Association  Annabels v Schock- clubs Annabels is a high-end club in the Westend, and Schock owned an escort agency with the same name. Court thought that this would damage the nightclub by association. o Damage by lack of distinctiveness  Concept of Dilution developing  Taittinger- argued that the distinctiveness of the champagne mark would be eroded if there was other products on the market which also called themselves champagne, this would cause the real champagne to no longer be seen as a premium product.  first time, dilution was seen as a type of damage.

Development of P/O - Character Merchandising o Character merchandising describes the practice of licensing the use or name or likeness of the character in relation to goods/services o TRADITIONALLY Courts have rejected P/O claims in relation to unauthorised use of names or images of celebrities. o Lyngstad v Anabas- about the use of the pop group ‘ABBA’s name on badges and t-shirts. The court held this was not passing of. o Mirage Studios v Counter-Feat Clothing Co Ltd- the defendants had a licence for making merchandise, which produces clothing that featured the ’ninja turtles’. They lost their licence, so they got designs to create new turtles. The passing of claim succeeded here, in relation to character merchandising, as the cartoons were copyright works, so substantial amount of the public knew that where you have a famous cartoon on goods, that reproduction would be from copyright licence. o Elvis Presley Enterprises v Sid Shaw Elvisly Yours (1999)- CA warned that it does not give a green light to extravagant claims based on an unauthorised used of a celebrities name. they were only concerned with Passing Of based on licencing rights, in drawings protected by copyright. -

Celebrity Endorsements o P/O may be available if it can be shown that the celebrity endorsed a certain product And the claimant likely to sufer as a result. o Irvine v Talksport- the claimant was a well known formula 1 racing driver, and Talksport gain the rights to formula 1 on the radio. The defendants decided they were going to advertise their programme by doctoring a photo of the claimant listening to the radio with the Talksport logo. The claimant brought a claim for P/O. The claimant argued, goodwill for his name and image, and that

there had been Misrep as people seeing the advert would think he was endorsing talksport but he wasn’t, and the damage he lost was the licensing fee, which he never received. -

The Internet o Cyber-Squatting  Cyber Squatting is a practice which developed in 90s when domain names first came onto the market. Domain names are registered on a first come basis, and there is no requirement to prove any right in a domain name.  BT v One in a Million Ltd- the defendant registered a bunch of domain names, and they incorporated the names of well-known English companies. So when the companies came round to registering their domain names, they found out that they could not as they had already been taken by the defendants. The Defendants were only willing to sell the domain names at a higher price. So the group of companies sued for P/O. The Claimants were successful, and BT were granted an injunction on the basis that the defendants could use the domain names in a way that could cause Misrep, and that the registrant of the domain name is connected to with the owner of the goodwill in the name, and this would cause damage. no evidence that the defendants were going to do it, but there was a possibility they would.  Phones 4u v phone4u.co.uk internet ltd- C operated nationwide chain of shops, and they registered the domain name phones4u.co.uk in 1997. D then registered the domain name phone4u.co.uk without the ‘s’. But as a brand you want to try and get all the domain names very similar to your name, if someone misspells it etc. Therefore, C brought a claim for P/O. The court said, that knowledge of the registrant should be taken into account, when deciding if the domain registration is an instrument of fraud. The court found, that the defendant did not start to use the domain name, until he knew of the claimants shop. o Metatags  Metatags- are words or strings of characters used to link webpages.  Reed Exec v Reed Business Information- customers got diverted to the wrong company, as they had the metatag for the name Reed. The Court held, that invisible use cannot be passing of, as customers do not see the metatag there cannot be misrep.

Defences- Deficiency in the cause of action- find that one of the key elements of P/O has not been made. - Honest Concurrent useo need to show that 2 people may have goodwill in the same name, and the goodwill had been made up separately and honestly. o Anheuser Busch- concerned Budweiser beer.

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o Habib Bank v Habib Bank AG Zurich- used to be part of the same bank but then they separated. They had been operating separately for a number of years, and both had an entitlement to the name in the action Delay or Acquiescenceo if the claimant knows what the defendant is doing, and then decides to let them do it. If the claimant then decides to take an action, a few years later, it would be too late. As the defendant would have been spending money in developing their own business. Bono Fide use of your own name is a defence, but it has ne...