FREE CHAPTER from ‘Protecting Unregistered Brands: A Practical Guide to the Law of Passing Off’ by Lorna Brazell

CHAPTER TWO – ELEMENTS OF CLASSIC PASSING OFF

There is no statutory basis for the law of passing off. It has developed entirely through the common law over the last several centuries. As such, passing off suffers from the inevitable ambiguities resulting from different judges attempting to explain the analysis they have undertaken in their own words. The earlier cases are often reported very briefly, leaving multiple opportunities to infer differences in meaning where none may have been intended. But fortunately the senior courts have reviewed the issues thoroughly in relatively recent decisions, and earlier cases can now be treated as more or less authoritative according to how compatible they are with this recent analysis.

Goodwill, misrepresentation and damage

The current law derives from two House of Lords decisions: the Advocaat decision (Erwin Warnink v Townend [1979] All ER 927), and the Jif Lemon decision (Reckitt & Colman v Borden [1990] 1 All ER 873). Lord Diplock in Advocaat set out five characteristics which constitute the cause of action in passing off, which were subsequently condensed into three by Lord Oliver in Jif Lemon. These are:

  • a misrepresentation which

  • causes or is likely to cause damage to

  • goodwill.

Lord Diplock’s characterisation emphasised in addition that the misrepresentation must be

  • made in the course of trade, and

  • made to prospective or ultimate customers of the relevant goods or services.

These additional factors are indeed still required, but in the majority of cases have not caused any difficulty and so need little discussion – although in the emerging commercial world of social media, questions around the addressee of material may in due course need to be asked. Instead, the courts’ attention to date has been on issues raised in establishing the ‘classical trinity’ of misrepresentation, damage and goodwill. Each of these is the subject of a separate chapter, below.

Intention is irrelevant

It is important to stress that the misrepresentation need not have been made maliciously or fraudulently. One of the problems of dealing in intellectual property generally is that whereas the public at large well understands the principles of ownership when it comes to physical goods or land, relatively few people have the same sense of trespass when it comes to making use of someone else’s idea, image or design. As a result, businesses frequently copy from each other with no sense of wrongdoing, and may respond with genuine disbelief when told that they have infringed any rights. At the other end of the scale, in particular in the case of supermarket lookalike products, a trader does know perfectly well that it is hoping to profit from sowing confusion among consumers, but has selected which design elements to copy with extreme care hoping to stay just the right side of the line. In neither case does this affect the application of the law, which requires only that a misrepresentation has been made and that damage has been suffered or is likely to be.

It follows that sincere good faith on the part of the party making the misrepresentation, including an honest belief in the truth of the statement, are no defence to a claim in passing off if in fact the statement does mislead customers.

Who can bring a claim

Passing off protects interests in trade, and so the status of both parties as traders is relevant to the analysis. It is not, however, necessary that the parties be direct competitors nor that the brand being imitated be particularly distinctive or even generally known. Passing off can be brought on the basis of a purely local reputation and goodwill – a well-established corner shop catering to a small town is entitled to protect its investment in building a business, just as much as a national chain with a vast advertising budget. The principle that “what is worth copying is worth protecting”, though coined in relation to copyright, is just as applicable to passing off, with the caveat that unlike a claim for copyright infringement a claim in passing off may not protect a good brand on launch day: it has to have already attracted some goodwill.

These questions will also be reviewed in more detail in subsequent chapters.

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