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Passing Off Notes...

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B Lauriat

PASSING OFF NOTES Passing Off – ‘Protean’ Tort Unfair competition? Personality Rights? Supplement to copyright? Relationship between Registered Trade Marks and Passing Off TM: Registration; Consumer protection, protecting Mark PO: Use; Protecting Goodwill Christopher Wadlow, The Law of Passing Off “the law of passing-off emerged into the last quarter of the nineteenth century with its scope unaffected but one possible theoretical basis destroyed. It could not be said that passing-off protected a right of property in a TM because if it did so it would have been no more than the abolished common law infringement [that is, TM infringement] under another name” Fundamentals of Passing Off Ervin Warnink v Townend (Advocaat Case) 1979 Lord Diplock It is possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) misrepresentation (2) made by a trader in course of trade (3) to prospective customers of his or ultimate consumers of goods or services supplied by him (4) which is calculated to injure the business or goodwill of another trader (reasonably foreseeable consequence) (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or will probably do so. Reckitt v Coleman and Borden (Jif Lemon Case) [1990] RPC 341 Lord Oliver “First, he must establish a 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’, such that the get-up is recognized by the public as distinctive specifically of the plaintiff’s goods or services. 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. Whether the public is aware of the plaintiff’s identity as the manufacturer or supplier of the goods and services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. 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 belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff.” Goodwill Lord Macnaghten in Inland Revenue [1901]: ‘attractive force which brings custom’. Timing of goodwill—before business has started? After business has ended? 1

B Lauriat Location of goodwill—in the UK Anheuser Busch v BB [1984] (Budweiser Beer)

Misrepresentation Mere confusion? Hodkingson v Wards Mobility [1995] (Wheelchair cushions) ‘There is no tort of copying. There is no tort of taking a man’s market or customers. Neither the market nor the customers are the plaintiff’s to own. There is no tort of making use of another’s goodwill as such. There is no tort of competition. I say this because at times the plaintiffs seemed close to relying on such torts….Never has the tort [of passing off] shown even the slight tendency to stray beyond cases of deception. Were it to do so it would enter the field of honest competition. Why there should be any reason I cannot imagine. It would serve only to stifle competition.’ Hodgkinson—High water mark for confusion Mirage Studios/Arsenal dicta—Low Evidence produced Jif Lemon; Cadbury Schweppes v Pub Squash [1981] Damage Loss of sales; harm to reputation; dilution; loss of licensing opportunity Common Field of Activity Harrods v Harrodian School [1996] Lego System A/S v Lego M Lemelstrich Ltd [1983] FSR 155 Stringfellow v McCain Foods (GB) Ltd [1984] RPC 501 Hodgkinson & Corby Ltd v Ward’s Mobility [1995] FSR 169 ‘Dilution’ in Passing Off? Taittinger v Albev Ltd [1993] (Elderflower champagne); ‘blurring or erosion of the uniqueness that now attaches to the word “champagne”’ Mirage Studios v Counter Feat Clothing [1991] (Teenage Mutant Ninja Turtles) Extended Passing Off Shared reputation of a class Bollinger v Costa Brava Wine Company Ltd [1961] RPC 116, [1960] Ch 262 (Spanish Champagne) Ervin Warnink (Advocaat ): ‘drink of recognisable kind with specific qualities’ Taittinger v Albev Ltd [1993] (Elderflower champagne) Chocosuisse v Cadbury [1998] RPC 117, [1999] RPC 826 (CA) (Swiss chocolate) Diageo Inc v Intercontinental Brands (ICB) Limited, [2010] EWCA Civ 920 (VODKAT) Patten, LJ: ‘if one can define with reasonable precision the type of product that has acquired a reputation, one can identify the members of the class entitled to share in the goodwill as being those traders who have supplied and still supply to the English market a product which possesses those recognisable and distinctive qualities.’ Reverse/Inverse Passing Off Passing off someone else’s goods/services as your own International News Service v Associated Press (1918)(US) Bristol Conservatories v Conservatories Custom Built [1989] RPC 455 (CA)

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B Lauriat ‘Me-Too’ Marketing, Get-up Jif Lemon; United Biscuits v Asda [1997] (Penguin biscuits); Diageo [2010] (VODKAT) Geographical Considerations Anheuser-Busch Inc v Budejovichy Budvar [1984] FSR 413 Hotel Cipriani SRL and others v Cipriani (Grosvenor Street) Ltd and others, [2008] EWHC 3032 (Ch), [2010] EWCA Civ 110 S. 56 TMA 1994

CHARACTER MERCHANDISING AND CELEBRITY ENDORSEMENT Should there be legal protection for character and celebrity merchandising and/or character and celebrity endorsement? Should the UK Law include publicity rights? Protection of Copyright Law Trade Marks and Passing Off; The Early Approach Trade Mark Licensing--‘Trafficking’ in a Mark American Greeting Corp’s Application [1984] 1 All ER 426 (HL) (Holly Hobbie) Trade mark licensing as means of merchandising popular characters fell afoul of provisions against trafficking in marks in the 1938 Act, but may be allowable under the TMA 1994, provided the mark functions as a trade mark. In Scandecor v Development AB v Scandecor Marketing AB [2001] UKHL 21, the House of Lords rejected that the control of the licensor is legally required for a valid TM licence under the 1994 Act. Passing Off--No Common Field of Activity McCulloch v Lewis A. May [1947] (‘Uncle Mac’ cereal) Tavener Rutledge Ltd v Trexapalm Ltd [1975] FSR 479 (‘Kojak Lollies’) ‘...there may come a time when the system of character merchandising will have become so well known to the man in the street that...he will say to himself: “They musts have a licence from the person who owns the rights”...What he would have to go on to show is that it had also become so well known that people in the situation of licensors of these names exercised quality control over any product bearing their name’. Walton, J. Wombles Ltd v Wombles Skips Ltd [1975] RPC 99 Also, no misrepresentation. No Misrepresentation/Confusion Lyngstrad v Anabas Products [1977] FSR 62 (Abba) No Damage Stringfellow v McCain Foods Ltd [1984] RPC 501 The Australian Approach Henderson v Radio Corporation Pty Ltd [1969] RPC 218 (Ballroom dancers) Childrens Television Workshop v Woolworths [1981] RPC 187 (NSW) (Muppets) Hogan v Koala Dundee (1988) 83 ALR 187 (FCA) (Crocodile Dundee) Pacific Dunlop v Hogan (1989) 87 ALR 14 (FCA) Adopted by UK? 3

B Lauriat Mirage Studios v Counter-Feat Clothing Company Ltd [1991] FSR 145 (Ninja Turtles) ‘Character merchandising is an industry which has grown in sophistication over the comparatively recent past. The owners of the copyright in such cartoon characters as the Mutant Turtles licence their use and the use of the name of these fictitious characters and the reproductions of them on merchandise and goods. The return to the owner of the copyright, the creator of the character, is normally in the form of royalty payments. Those rights are extremely valuable…as it is has been in the present case; the royalties run into hundreds of millions of dollars.’ Sir Nicolas Browne-Wilkinson Misrepresentation: 1) that they are genuine; 2) that they are licensed Celebrity Merchandising and Endorsement Halliwell and Panini SpA [1997] EMLR 94 (Spice Girls) Irvine v Talksport Ltd [2002] EWHC 367; [2003] FSR 35 (CA) (Race car driver) Robyn Rihanna Fenty v Arcadia [2013] EWHC 2310 (Ch) Her past connection with Topshop was important, as was their habit of collaborating with celebrities. Trade Marks Elvis Presley Trade Marks [1997] RPC 543 (Ch D); [1999] RPC 567 (CA) ‘The more a proposed mark alludes to the character, quality, or non-origin attributes of the goods on which it is used or proposed to be used, the lower its inherent distinctiveness.’ Laddie, J. ‘On analysis, as it seems to me, all the English cases upon which Enterprises seeks to rely (Mirage Studios not least) can be seen to have turned essentially upon the need to protect copyright or to prevent passing off (or libel). None creates the broad right for which in effect Mr Prescott contends here, a free standing general right to character exploitation enjoyable exclusively by the celebrity…In addressing the critical issue of distinctiveness there should be no a priori assumption that only a celebrity or his successors may ever market (or licence the marketing) of his own character. Monopolies should not be so reality created.’ Brown, LJ Diana, Princess of Wales Trade Mark [2001] ETMR 25 Linkin Park LLC’s Application [2006] ETMR 1017 (Linkin Park posters) Personality Protection Property right in economic value of one’s image? Douglas v Hello! [2007] UKHL 21. ‘The point of which one should never lose sight is that OK! had paid 1 million for the benefit of the obligation of confidence imposed upon all those present at the wedding in respect of any photographs of the wedding. That was quite clear. Unless there is some conceptual or policy reason why they should not have the benefit of that obligation, I cannot see why they were not entitled to enforce it. And in my opinion there are no such reasons. Provided that one keeps one’s eye firmly on the money and why it was paid, the case is...quite straightforward.’ Lord Hoffmann Freedom of Expression? Mattel v MCA Records 296 F.3rd 894 (2002) (US Ct of Appeals, 9th Circuit) ‘Trademarks often fill in gaps in our vocabulary and add a contemporary flavour to our expressions. Once imbued with such expressive value, the trademark becomes a word in our language and assumes a role outside the bounds of trademark law.’ ‘The trademark owner does not have the right to control public discourse whenever the public imbues his mark with a meaning beyond its source-identifying function.’ Kozinski, J.

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B Lauriat Own Name TMA 1994 s11(2) A registered trade mark is not infringed by—(a) the use by a person of his own name or address...provided the use is in accordance with honest practices in industrial or commercial matters. Not a defense to passing off. Asprey & Garrard v WRA [2002] FSR 487 (CA). Reed Executive & Another v Reed Business Information Ltd [2004] EWCA Civ 159 Elizabeth Florence Emanuel v Continental Shelf 128 Ltd, Case C-259/04 (2006) Mark of fashion designer not liable for revocation on the grounds of being misleading following assignment. Edwin Co. Ltd., Case C-263/09 P (Fiorucci) Hotel Cipriani SRL and others v Cipriani (Grosvenor Street) Ltd and others, [2008] EWHC 3032 (Ch), [2010] EWCA Civ 110

UNFAIR COMPETITION AND UK LAW Article 10bis of the Paris Convention provides: (1) The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition. (2) Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition. (3) The following in particular shall be prohibited: (i) all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor; (ii) false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor; (iii) indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods.

TRIPS, Art 2 1. In respect of Parts II, III and IV of this Agreement, Members shall comply with Articles 1 through 12, and Article 19, of the Paris Convention (1967). TRIPS, Art 39 deals specifically with unfair competition vis a vis the protection of trade secrets Directive 2005/29/EC on unfair commercial practices Article 1 The purpose of this Directive is to contribute to the proper functioning of the internal market and achieve a high level of consumer protection by approximating the laws, regulations and administrative provisions of the Member States on unfair commercial practices harming consumers' economic interests. Chapter 2, Article 5, Prohibition of unfair commercial practices 1. Unfair commercial practices shall be prohibited. 2. A commercial practice shall be unfair if: (a) it is contrary to the requirements of professional diligence, and

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B Lauriat (b) it materially distorts or is likely to materially distort the economic behaviour with regard to the product of the average consumer whom it reaches or to whom it is addressed, or of the average member of the group when a commercial practice is directed to a particular group of consumers. .... Article 6 2. A commercial practice shall also be regarded as misleading if, in its factual context, taking account of all its features and circumstances, it causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise, and it involves: (a) any marketing of a product, including comparative advertising, which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor; [An Annex lists practices in all circumstances considered to be unfair including: ‘2. Displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation’; ‘13. Promoting a product similar to a product made by a particular manufacturer in such a manner as deliberately to mislead the consumer into believing that the product is made by that same manufacturer when it is not.’] Guidance is also provided by Directive 2006/114/EC on misleading and comparative advertising Will escape liability for TM infringement if meeting requirements of Art.3a(1) ...(g) it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor or of the designation of origin of competing products; (h) It does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name. WIPO Model Law on Unfair Competition all acts of such a nature as to create confusion with the establishment, the goods or the industrial or commercial activities of a competitor; false allegations in the course of trade of such a nature as to discredit the establishment, the goods or the industrial or commercial activities of a competitor; and indications or allegations the use of which in the course of trade is liable to mislead the public as to the characteristics of goods. That which is worth copying is prima facie worth protecting? “But, in a court of equity, where the question is one of unfair competition, if that which complainant has acquired fairly at substantial cost may be sold fairly at substantial profit, a competitor who is misappropriating it for the purpose of disposing of it to his own profit and to the disadvantage of complainant cannot be heard to say that it is too fugitive or evanescent to be regarded as property. It has all the attributes of property necessary for determining that a misappropriation of it by a competitor is unfair competition because contrary to good conscience.” INS v Associated Press, 248 US 215 (1918) UK Law No general tort against unfair competition. Unfair competition prevented primarily through statutory intellectual property laws, and torts of malicious falsehood, breach of confidence, and passing off. Malicious Falsehood false statement, made maliciously, causing damage to the claimant

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B Lauriat Breach of Confidence Coco v Clark [1969] FSR 415 ‘Springboard’ doctrine Trade Marks – Protection for marks with a reputation, Grey market goods and repackaging Frank Schecter, ‘The Rational Basis of for Trademark Protection’ (1927) recognized ‘a consciousness of the need for breadth and liberality in coping with the progressive ingenuity of commercial depravity’. CJEU in L’Oreal v Bellure (Case C-487/07) 'The advantage arising from the use by a third party of a sign similar to a mark with a reputation is an advantage taken unfairly by that third party of the distinctive character or the repute of the mark where that party seeks by that use to ride on the coat-tails of the mark with a reputation in order to benefit from the power of attraction, the reputation and the prestige of that mark and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark’s image.' Jacob in L’Oreal v Bellure [2010] EWCA Civ 535 “I regret that the ECJ in this case has not addressed the competition aspects of what it calls "riding on the coattails". The trouble with deprecatory metaphorical expressions such as this ("free-riding" is another), containing as they do clear disapproval of the defendants' trade as such, is that they do not provide clear rules by which a trader can know clearly what he can and cannot do. ... If a man trades in lawful replicas or in lawful copies, why should he not be able to inform the public what they are? And why should the truth be kept from the public? If, as I think there should be, there is to be reform of the law, this aspect of the CAD should be reconsidered. And in my view it should be made explicit that telling the truth about a lawful product does not involve any "unfair advantage" (the phrase used in Art. 3a(1)(g)) ... So far as I can see this is saying if there is "clear exploitation on the coat-tails" that is ipso facto not only an advantage but an unfair one at that. In short, the provision should be read as though the word "unfair" was simply not there. No line between "permissible free riding" and "impermissible free riding" is to be drawn. All free-riding is "unfair." It is a conclusion high in moral content (the thought is clearly that copyists, even of lawful products should be condemned) rather than on economic content.”

Passing Off Christopher Wadlow says extension of passing off: ‘Largely developed through ad hoc decisions which were often motivated primarily by a desire not to let an unmeritorious defendant escape liability.’ Cross, J in Vine Products Ltd v Mackenzie & Co Ltd [1969] RPC 1 (at 23) discussing Bollinger v Costa Brava: “A man who does not know where Champagne comes from can have not the slightest reason for thinking that a bottle labelled "Spanish Champagne" contains a wine produced in France. But what he may very well think is that he is buying the genuine article – real Champagneand that, I have no doubt, was the sort of deception which the judge had in mind. He thought, as I read his judgment, that if people were allowed to call sparkling wine not produced in Champagne "Champagne," even though preceded by an adjective denoting the country of 7

B Lauriat origin, the distinction between genuine Champagne and "champagne type" wines produced elsewhere would become blurred; that the word "Champagne" would come gradually to mean no more than "sparkling wine;" and that the part of the plaintiff’s goodwill which consisted in the name would be diluted and gradually destroyed. If I may say so without impertinence I agree entirely with the decision in the Spanish Champagne case – but as I see i...