Overview of Passing Off

1. Introduction

1.1 History

The principle underlying the tort of passing off is that “A man is not to sell his own goods

under the pretence that they are the goods of another man”1. There is no statutory cause of

action for passing off. The tort has developed on an ad hoc basis, by way of decisions that

often seem motivated by a judicial desire not to let an unmeritorious wrongdoer escape

liability.

For a mark to be capable of being protected by an action in passing off the public must rely

on the mark, in the sense that they recognise it as denoting the quality or character of the

goods of one trader. The public do not need to be able to identify the trader by name, nor do

they need to know what role the trader plays in respect of the goods (whether designer,

manufacturer, distributor etc). It is irrelevant to the existence of a cause of action in passing

off whether the goods passed off are as good as or better than the Claimants2 or whether the

Defendant is selling his goods at a higher price3 (although these factors will be relevant in the

assessment of damages). Actions in passing off have traditionally concerned the use by the

Defendant of the name, mark or get-up used by the Claimant to denote a product or business.

Over time, however, the cause of action has been extended to include the use by a Defendant

of other branding or marketing techniques of the Claimant, such as slogans or visual images

from advertisements4.

The tort of passing off does not afford the owner of the goodwill a monopoly in the mark or

get-up; rather, it protects the trader’s business against what might in broad terms be called

‘unfair competition’.

1 Perry v Truefitt (1842) 6 Beav. 66, at page 73 2 Bowden Wire Ltd v Bowden Brake Ltd (1913) 30 RPC 609 3 Spicer Bros Ltd v Spalding & Hodge Ltd (1914) 32 RPC 52 4 e.g. Cadbury-Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1981] RPC 429 (PC)

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1.2 Elements of the tort

There are two forms of passing off, the “classic form” (involving a test sometimes referred to

as the “classical trinity”) and the “extended form”.

The “extended form” has developed in connection with actions in passing off brought by a

class of traders sharing the (collective) goodwill in a mark, (such as the French “champagne”

producers, for example), and was explained by Lord Diplock in the Avocaat case5 as

comprising five elements:

(1) a misrepresentation;

(2) made by a trader in the 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 (in the sense that this

is a reasonably foreseeable consequence); and

(5) which causes actual damage to a business or goodwill of a trader by whom the action

is brought or (in a quia timet action) will probably do so.

The “classic form” of passing off involves a three part test. This “classical trinity” was

described by Lord Oliver in the Jif Lemon case6 as comprising:

(1) a goodwill or reputation attached to the goods or services;

(2) a misrepresentation by the Defendant to the public (whether or not intentional)

leading or likely to lead the public to believe that the goods or services offered by

him are the goods or services of the Claimant; and

(3) damage to the Claimant, 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 Claimant.

5 Warnick (Erven) Besloten Veenootschap v J Townend & Sons (Hull) Ltd [1980] RPC 31

6 Reckitt & Coleman Products Ltd v Borden Inc [1990] RPC 341

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The two forms of passing off are not different torts; instead, the Courts refer to one form or

the other depending upon which is more appropriate to the facts of the case. In practice, the

“classical trinity” test is more often used, given its relative simplicity. Save where otherwise

stated, this note proceeds on the assumption that a successful action in passing off will

involve establishing the “classical trinity” of goodwill, misrepresentation and damage.

1.3 The wrongdoer’s state of mind

Although historically fraud was an essential element of an action for passing off, it is no

longer a pre-requisite. It is therefore irrelevant whether or not the wrongdoer intended to pass

his goods or services off as those of another, or whether he acted maliciously, negligently or

fraudulently.

1.4 Potential Claimants

Actions in passing off may be brought by anyone who can establish the existence of the three

elements of goodwill, misrepresentation and damage. It is important to note, however, that

passing off actions may only be brought by traders who have generated goodwill – if a

company or individual has not traded, the cause of action is unlikely to be open to them.

Actions in passing off are, however, open to all types of trader, including companies,

partnerships and sole traders.

1.5 Passing off and trade mark infringement

Actions for infringement of a registered mark are governed by the Trade Marks Act 1994.

Under the Trade Marks Act 1994, the proprietor of a registered trade mark has exclusive

rights in the mark which are infringed by its use in the UK without his consent7. Trade mark

infringement proceedings may only be brought in respect of marks which have been

registered. The cause of action in passing off is wider, as it protects all the ways in which a

Claimant’s product or business may be identified, and is not confined to marks which meet

the criteria for registrability under the Trade Marks Act 1994. On the other hand, the

benchmark for establishing a cause of action in passing off is normally higher from an

evidential point of view, since the Claimant must prove the “classical trinity” of goodwill,

misrepresentation and damage. In an action for trade mark infringement, if one of the

7 Trade Marks Act 1994 s.9(1)

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prohibited acts8 has been committed, the Defendant is likely to be liable unless one of the

statutory defences is successfully pleaded9.

It is no bar to an action in passing off that a mark might have been, but was not registered as a

trade mark. It is also no defence to an action in passing off that the mark complained of is

registered as a trade mark.

1.6 Passing off and “unfair competition”

The English tort of passing off is often compared to the more general law of “unfair

competition” which exists in most continental European countries, and in other jurisdictions

such as the United States. Although there are similarities between the two causes of action, a

claim for passing off is narrower in scope and is more difficult to prove, due to the need to

establish the existence of goodwill, a misrepresentation and damage. This has led to calls by

brand owners for the introduction of a law of unfair competition in the UK, which, to date,

have fallen on deaf ears. This issue is discussed in more detail in the final section.

2. Goodwill

2.1 The meaning of goodwill

Goodwill has been described as “the benefit and advantage of the good name, reputation, and

connection of a business. It is the attractive force which brings in custom.”10

Goodwill is personal property and it can pass by voluntary assignment, under a will or

intestacy or by operation of the law. Although passing off actions often concern misuse by

the Defendant of a name, mark, get-up or other indicia, it is not strictly correct to speak of

having goodwill “in a mark”. Although goodwill may be embodied in words, names, colours,

shapes or get-up, passing off protects the goodwill of the plaintiff’s business as a whole and

not individual marks.

The Courts have been unwilling to accept that a business with customers in this country may

exist without goodwill. They have therefore held than an individual working from home has

8Trade Marks Act 1994 s.10 9Trade Marks Act 1994 s.11 10 Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] AC 217 per Lord Macnaghten at pages 223-224

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goodwill in his business11, as does the owner of a mobile fish and chip shop in a holiday

resort, despite the transient nature of the customers12.

2.2 Goodwill and reputation

Goodwill and reputation are often connected, since a business with goodwill will invariably

have a reputation. It is possible, however, that a business may have a reputation but no

goodwill, for example, a well-known foreign company that does not supply products to

customers in this country. As reputation is a state of fact and not a form of legal property, it

cannot be assigned or dealt with in the same way as goodwill.

2.3 Location of goodwill

Where a business is carried on in more than one country, there is separate goodwill in each

country notwithstanding that the same legal entity is carrying on the business in each of the

countries.

One of the most intractable issues in the law of passing off is whether foreign businesses may

generate goodwill in the UK by using a name, mark or “get up” in this jurisdiction. As noted

above, a foreign business may have a reputation in the UK – from travellers, periodicals with

an international circulation or the Internet, for example, – but fail in an action for passing off

as no business has been carried out in the UK and therefore no goodwill generated. The

differences in case law are often hard to reconcile. By way of illustration:

2.3.1 The Claimant owned a restaurant in Paris called ‘The Crazy Horse Saloon’, publicity

for which was distributed in the UK via tourist boards and hotels. The Defendant set up a

similar establishment in London, advertising it under the slogan “Crazy Horse Saloon comes

to London”. The judge ruled that although the restaurant might have acquired a reputation

through travellers returning from Paris and speaking highly of the restaurant, this was not

sufficient to amount to goodwill as there was no real connection with the UK13;

2.3.2 The Claimants, the American brewers of “Budweiser” beer, sued a Czech brewer for

passing off. The Court found that at the time the Czech brewery entered the UK market, the

11 Stacey v 2020 Communications Plc [1991] F.S.R 49 12 Stannard v Reay [1967] FSR 140 13 Bernadin (Alain) et Cie v Pavilion Properties Ltd [1967] F.S.R. 341

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Claimant’s beer was on sale only at bases belonging to the US armed forces, and that the

Claimant’s beer was not available to the UK public. The American brewer therefore had no

goodwill in the UK upon which to base a claim for passing off14;

2.3.3 The Claimants owned a hotel chain abroad. There was some evidence of advertising

in the UK and bookings were taken through a booking office in London. A cause of action in

passing off was established15;

2.3.4 The Claimants were French car manufacturers with no place of business in the UK,

although they sold cars to English people who returned with them to the UK. It was held that

they had a reputation and market in the UK which could be protected in passing off16;

2.3.5 The Defendant asserted the right to use “The Hit Factory” for a London recording

studio, based on its long running and bona fide use of the term in the United States as part of

its business operating recording studios17. The Court held that goodwill does not have to be

attached to a specific place of business in the UK. Instead, all that is necessary is to establish

a trade connection with the UK, such as the presence of customers, whether or not there is a

place of business in the UK and whether or not services are actually provided here.

2.4 Ownership of goodwill

Goodwill is legal property that the owner may deal with as he or she wishes. Sometimes,

however, it is unclear who owns the goodwill, as there may be more than one business

involved in the sequence of events which result in the goods or services being made available

to the public. Where possible, therefore, it is prudent to establish ownership of goodwill at

the outset of a relationship by, for example, including an express provision relating to this

issue in a distribution or agency agreement.

Where such steps have not been taken, however, the following checklist has been suggested

which may assist in establishing ownership of the goodwill18:

14 Anheuser-Busch Inc v Budejovicky Budvar Narodni Podnik [1984] F.S.R. 413 15 Sheraton Corp of America v Sheraton Motels Ltd [1964] R.P.C. 202 16 La SA des Anciens Etablissements Panhard et Levassor SA v Panhard Levassor Motor Co Ltd [1901] 2 Ch 513 17 Pete Waterman & Others v CBS United Kingdom Ltd [1993] EMLR 27 18 Wadlow - The Law of Passing-Off (1993 Second Edition) at page 103

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�� Are the goods bought on the strength of the reputation of an identifiable trader?

�� Who does the public perceive to be responsible for the character or quality of the

goods? Who would be blamed if they were bad?

�� Who is in fact most responsible for the character and quality of the goods?

�� What support is there for the claim of a particular trader to be the owner of the

goodwill?

2.4.1 Manufacturer and trader

Where goods are made to order, the goodwill prima facie belongs to the trader and not

the manufacturer, although this presumption may be displaced where the

manufacturer is held out as the sole source of the goods.

2.4.2 Foreign business and representative

Where a foreign business has customers in the UK by virtue of having representatives

in this jurisdiction, the foreign business will own the goodwill provided that they, and

not the representatives, are recognised by the public as the source of the goods. In

MedGen19, however, it was held that the goodwill in a name and packaging belonged

to the distributor in the United Kingdom, as the American manufacturer was not

referred to on the packaging or in connection with marketing or sales. The distributor

was therefore thought of by the public as the source of the product.

2.4.3 Employer and employee

As a general rule, goodwill accrues to the business as a whole and not to individual

employees.

2.4.4 Writers and publishers

The goodwill associated with the name under which a work is produced is likely to

belong to the creator, and not the publisher or employer.

19 MedGen Inc v Passion for Life Products Ltd [2001] F.S.R. 30

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2.5 Collective goodwill

The Avocaat20 case was founded on the same principle as the Bollinger case21, where it was

held that producers of Champagne were jointly and severally entitled to restrain sparkling

wine not produced in the Champagne region from being sold as “Spanish Champagne”.

Prior to this, it was understood that passing off was only available in respect of marks that

were distinctive of the Claimant alone. It is now recognised that “collective goodwill” exists

whereby a class of traders who all use a mark to denote their goods share the goodwill in the

mark. It is necessary, however, to be able to “identify with reasonable precision the

members of this class of traders”22.

The “extended form” of the tort of passing off advanced by Lord Diplock in Advocaat23 is

particularly relevant to cases concerning “collective goodwill”. In Advocaat, Lord Diplock

distinguished the “extended form” from the “classic form” in the following terms:

“The features that distinguish it from all previous cases were (a) that the element in

the goodwill of each of the individual plaintiffs that was represented by his ability to

use without deception (in addition to his individual house mark) the word

“Champagne” to distinguish his wines from sparkling wines not made by the

champenois process from grapes produced in the Champagne district of France, was

not exclusive to himself but was shared with every other shipper of sparkling wine to

England whose wines could satisfy the same condition and (b) that the class of traders

entitled to the proprietary right in “the attractive force that brings in custom”

represented by the ability without deception to call one’s wines “Champagne” was

capable of continuing expansion, since it might be joined by any future shipper of

wine who was able to satisfy that condition.”24

20 Warnick (Erven) Besloten Veenootschap v J Townend & Sons (Hull) Ltd [1980] R.P.C. 31 21 J Bollinger SA v Costa Brava Wine Co Ltd [1960] Ch. 262 22 Warnick (Erven) Besloten Veenootschap v J Townend & Sons (Hull) Ltd [1980] R.P.C. 31 at 98 23 Warnick (Erven) Besloten Veenootschap v J Townend & Sons (Hull) Ltd [1980] R.P.C. 31 24 Warnick (Erven) Besloten Veenootschap v J Townend & Sons (Hull) Ltd [1980] R.P.C. 31 at 94 - 95

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2.6 Future goodwill

As a general principle, actions in passing off are founded on businesses that are in existence

and generating goodwill at the time of the action. In Glaxowellcome,25 however, a

mandatory injunction was granted requiring the Defendant company to change its name, prior

to the Claimant commencing business. This case concerned the registration of a new

company (“Glaxowellcome Ltd”) following press releases stating that if a take-over bid were

successful, a company would be renamed “Glaxo Wellcome Plc”. The injunction was

granted despite the fact that the newly registered company had not traded.

2.7 Residual goodwill

The rebranding of companies and products is an increasingly common feature of commercial

life, and it raises the issue of what happens to marks that are no longer used, since goodwill in

the mark will not necessarily be extinguished the moment a business stops using a mark or

ceases to trade.

In Kark26 the Court rejected the argument that goodwill survives in the absence of an

intention deliberately to abandon it. In Ad-Lib,27 however, the Court held that the Claimant

retained goodwill in a business that had been closed four years previously. According to

Pennycuick V.C:

“It must be a question of fact and degree at what point in time a trader who has either

temporarily or permanently closed down his business should be treated as no longer

having any goodwill in that business or in any name attached to it which he is entitled

to have protected by law”.28

In one of the most recent cases on residual goodwill29, it was held that if a party is shown to

have ‘abandoned’ a business and the goodwill associated with it, he cannot subsequently

25 Glaxo Plc v Glaxowellcome Ltd [1996] F.S.R. 388 26 Norman Kark Publications Ltd v Odhams Press Ltd [1962] R.P.C. 163 27 Ad-Lib Club Ltd v Granville [1971] FSR 1 28 Ad-Lib Club Ltd v Granville [1971] FSR 1 at page 5 29 Sutherland v V2 Music Ltd [2002] EMLR 28

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bring proceedings for passing off to protect that goodwill. The rationale for this approach is

that once an interest in goodwill has been relinquished, a Claimant will be unable to prove

damage or a likelihood of damage if, in fact, there is nothing left to damage. It is, however, a

question of fact in each case whether goodwill has been abandoned and can no longer be

protected, or whether it continues to possess “the attractive force which brings in custom”30,

in which case it may continue to form the basis of an action for passing off. On the facts of

Sutherland, the Claimants succeeded in their passing off claim based on residual goodwill in

‘Liberty’ as the name of a pop group.

3. Misrepresentation

3.1 What is misrepresentation?

The most common form of misrepresentation is where a Defendant falsely represents that his

goods are the goods of the Claimant. The misrepresentation may take the form of an express

statement by the Defendant to this effect, or may be implied from the use by the Defendant of

the same or similar distinguishing marks in respect of his goods or services as are used by the

Claimant. As Lord Jauncy stated in Jif Lemon31, however:

“It is not essential…that the Defendant should misrepresent his goods as those of the

plaintiff. It is sufficient that he misrepresent his goods in such a way that it is a

reasonably foreseeable consequence of the misrepresentation that the plaintiff’s

business or goodwill will be damaged”

3.2 Forms of misrepresentation

The misrepresentation must concern the origin (source) of the goods and not the quality of

the goods, unless the quality of the goods is such that it is attributable to a particular trader.

Forms of misrepresentation include:

�� An unexplained offer to supply the Defendant’s product to a customer who requested

the Claimant’s product;

30 Inland Revenue Commissioners v Muller & Co’s Margarine Limited [1901] A.C. 217 per Lord Macnaghten at page 223 31 Reckitt & Coleman Products Ltd v Borden Inc [1990] R.P.C. 341 at page 417

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�� Products correctly attributed to the Claimant but misrepresented as being of a superior

quality;

�� A misrepresentation that the Defendant’s product or business is connected with the

Claimant;

�� A misrepresentation that the Defendant’s product or business has been awarded

certain prizes or awards; and

�� A misrepresentation from an individual previously connected with the Claimant’s

business that the connection still exists.

3.3 Confusion

There must be a misrepresentation that confuses, deceives or is likely to confuse or deceive

the public. The onus of proving this is on the Claimant. The Claimant must therefore prove

on the balance of probabilities that a proportion of the public would be confused or deceived

as a result of the Defendant’s misrepresentation. This is a question of fact to be decided in all

the circumstances. Factors that are typically taken into consideration in assessing whether the

public are likely to be deceived include the phonetic and visual similarities between the

marks; the nature of the marketplace and circumstances in which the goods are sold or

services supplied; the habits of ordinary purchasers; and the nature of the goods themselves32.

Although it need not be all, or even the majority of customers or potential customers that are

confused, it must be more than a “moron in hurry”33.

Misrepresentation will only be actionable where the Claimant can show that he has generated

goodwill in his product or business, and that the misrepresentation creates a real and tangible

risk of damage to the Claimant’s identifiable goodwill. Where the most common form of

misrepresentation is established, i.e. where the Defendant falsely represents his goods as

those of the Claimant, the damage is usually in the form of a diversion of sales away from the

Claimant to the Defendant.

32 Morcom, Roughton and Graham – The Modern Law of Trade Marks (1999 – First Edition) at page 250 33 Morning Star Cooperative Society Ltd v Express Newspapers Ltd [1979] F.S.R. 113 at page 117

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There must be a misrepresentation at the point of sale; it is not enough that a similarity only

became apparent after a product was purchased, as this indicates that the misrepresentation

was not operative in the mind of the purchaser at the time of making the purchase34.

3.4 Innocent passing off

As with actions for infringement of registered trade marks under the Trade Marks Act 1994,

innocence is not a defence to an action for passing off. The Court held in Gillette35

“Coming now to passing off I can see no good reason why, if damages are

recoverable from the innocent infringer of a registered trademark, they should not

equally be recoverable for innocent passing off. Both wrongs are very closely related

and both may, as in the instant case, spring out of the same act.”

3.5 Common field of activity

The misrepresentation must be made by a trader in the course of trade. It is not necessary

that the Defendant operate in direct competition with the Claimant, although the further

removed the businesses are from one another, the less likely the public are to be confused

into thinking there is a connection. In Stringfellow36, the absence of a common field of

activity was taken into account in deciding whether the use of the word “Stringfellows” on

the packaging of frozen chips was likely to lead the public to believe that the product was in

some way associated with the Claimant or his club (Stringfellows).

If the Claimant’s mark has become a household name, the degree of overlap between the

fields of activity becomes less important, since the public are more likely to be confused as to

the origin of any goods bearing the mark in question which do not emanate from the

Claimant.

Although generally the Claimant and Defendant will share a common pool of customers and

potential customers, this may not be the case where the parties do not operate in a common

field of activity. Where the parties do not share a common pool of customers or potential

customers, it is unclear whether the misrepresentation must be made to the Claimant’s

34 Bostik Limited v Sellotape GB Limited [1994] R.P.C. 556 35 Gillette UK Limited and Anr v Edenwest Limited [1994] R.P.C. 279 per Blackburn J at page 291 36 Stringfellow v McCain Foods (GB) Ltd [1984] R.P.C. 501 CA

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customers and potential customers, or to the customers and potential customers of the

Defendant. Prior to Advocaat37, it was generally accepted that the misrepresentation must be

made to the Claimant’s customers. In Advocaat, however, Lord Diplock cast doubt on this

by making reference to the misrepresentation being made to customers or prospective

customers of the Defendant’s goods or services (not the Claimant’s).

Although the most common form of damage complained of by the Claimant is the loss of

sales where business is diverted to the Defendant, it is no defence to an action in passing off

that the misrepresentation was made to customers who do not pay for the goods or services.

3.6 True statements

In Reddaway38 the House of Lords established that a Defendant may not make a statement

that is literally true if, at the same time, it is calculated to deceive. In Reddaway, it was

revealed at trial that the mark accurately described both the Claimant and Defendant’s goods,

although the statement was intended to “convey a false impression” and therefore “has no

right to the genuine stamp and impress of truth”39. It is therefore not a defence that a

statement is literally true if, at the same time, it has the effect of confusing the public as to the

origin of the Defendant’s goods or services.

3.7 Reverse passing off

Reverse passing off (also known as inverse passing off) describes the situation where a

Defendant wrongfully represents someone else’s goods or services as his, thereby taking the

credit for goods or services which originate with someone else. This may be contrasted with

the traditional action for passing off, where the Defendant falsely represents his own goods or

services as those of someone else. In Bristol Conservatories40 a Defendant used photographs

of conservatories designed and built by his previous employer as examples of work the

Defendants had carried out: Although the Court of Appeal declined to recognise a cause of

action known as “reverse passing off”, the Court did hold that:

37 Warnick (Erven) Besloten Veenootschap v J Townend & Sons (Hull) Ltd [1980] RPC 31 38 Reddaway v Banham [1896] A.C. 199 39 Reddaway v Banham [1896] A.C. 199 per Lord Macnaghten at page 219 40 Bristol Conservatories Ltd v Conservatories Custom Built Ltd [1989] R.P.C. 455

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“[T]he claim in passing-off is not…ruled out because it is not alleged that any

member of the public, looking at the photographs would associate any conservatory

with the plaintiffs…Nor would it matter if there was nothing in any photograph to link

the conservatory there depicted with the plaintiffs in any way. Next, it would not

matter that there was no allegation that there would be any confusion in the minds of

the public. The concept of confusion is irrelevant when the misrepresentation leaves

no room for confusion.”41

Other examples of reverse passing off include:

�� Retention by the Defendant of the lead comedian from a sketch, to write and perform

a film version. The author of the original sketch brought a successful action in

passing off, although the film version was different from the original sketch42; and

�� A Defendant represented that tests carried out on the Claimant’s product were in fact

tests carried out on their products. The Court held that “if this is not passing-off, I

really do not know what is.”43

3.8 Descriptive marks

If a Claimant has adopted an ordinary descriptive word in common usage as a mark to denote

his business, products or services, the Claimant must show that that the public have come to

associate that word with the Claimant and no-one else. The potential difficulties associated

with adopting a descriptive word as a trade mark were explained in Office Cleaning

Services44:

“Where a trader adopts words in common use for his trade name, some risk of

confusion is inevitable. But that risk must be run unless the first trader is to

monopolise the words. The Court will accept comparatively small differences as

sufficient to avert confusion. A greater degree of discrimination may fairly be

41 Bristol Conservatories Ltd v Conservatories Custom Built Ltd [1989] R.P.C. 455 at page 464 42 Samuelson v Producers Distributing Co Ltd (1931) 48 R.P.C. 580 CA 43 Plomien Fuel Economiser Ltd v National School of Salesmanship Ltd (1943) 60 R.P.C. 209 CA per Greene M.R 44 Office Cleaning Services Ltd v Westminster Office Cleaning Association [1946] 63 R.P.C. 39 per Lord Simmons at page 43

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expected from the public where a trade name consists wholly or in part of words

descriptive of the articles to be sold or the services rendered.”

It is therefore advisable when selecting trade names not to use ordinary words that are simply

descriptive of goods or services, since the protection afforded by an action for passing off

may be severely limited as a result. Where the Claimant has chosen an ordinary descriptive

word to denote his goods or services, however, to bring an action in passing off he must not

only show that the Defendant used that word, but also that the word has become so closely

associated with the Claimant’s goods or services through use that its adoption by the

Defendant amounts to a misrepresentation. Although it is not impossible for descriptive

marks to enjoy protection under the law of passing off, a substantial amount of use will

normally be required before the Court is likely to accept that the Defendant’s actions amount

to a misrepresentation.

3.9 Comparative advertising and disclaimers

There is no misrepresentation and therefore no cause of action in passing off where the

Defendant uses the Claimant’s mark in the context of comparative advertising, provided he

makes it clear that the goods or services he is offering are in no way connected to the

Claimant. An example might be an advertisement claiming that “Our product X is cheaper

than product Y”.

Companies sometimes use disclaimers in an attempt to avoid falling foul of the law of

passing off, for example by emblazoning the word “Unofficial” on magazines devoted to

particular sports teams, pop stars or computer games consoles. It should be borne in mind,

however, that a disclaimer will not necessarily save a Defendant from liability in a passing

off action; the Court must decide in each case whether, having taken all the facts and

surrounding circumstances into account, the Defendant’s use of the Claimant’s mark amounts

to a misrepresentation which is likely to confuse actual or potential customers, despite the

existence of the disclaimer.

4. Damage

4.1 Damage to the Claimant’s identifiable goodwill

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The tort of passing off protects the Claimant’s right to the goodwill he has generated in his

business. The Claimant may therefore bring an action in passing off to protect this goodwill

from damage. To bring a successful action for passing off, the Claimant must show that the

misrepresentation by the Defendant caused damage to his identifiable goodwill, or in a quia

timet action, that damage to the Claimant’s goodwill is reasonably foreseeable. As Millet

L.J. stated in Harrods45, “damage to reputation without damage to goodwill is not sufficient

to support an action for passing off”.

4.2 Main heads of damage

4.2.1 Diversion of sales

Where the Claimant and Defendant operate in a common field of activity and the Defendant

misrepresents that his goods are those of the Claimant, the damage most frequently alleged

by the Claimant is the diversion of sales to the Defendant. The public may be induced by the

Defendant’s misrepresentation to buy the Defendant’s products or use his services where they

would normally buy or use those of the Claimant.

4.2.2 Damage to reputation

Where the Defendant misrepresents his goods as those of the Claimant, in addition to the

diversion of sales to the Defendant, the Claimant may allege that his reputation will be

damaged. This was acknowledged in the Avocaat46 case:

“In this class of case there are two types of damage to be considered: direct loss of

sales through the Defendants’ illegitimate competition, and a more gradual damage to

the plaintiff’s business through depreciation of the reputation their goods enjoy”.

Also, if the Defendant sells goods correctly attributed to the Claimant but misrepresents them

as being of a superior quality, the Claimant may allege the Defendant is damaging his

reputation and therefore his goodwill as the public would expect to receive goods of a

superior quality.

45 Harrods Ltd v Harrodian School Ltd [1996] R.P.C 697 at 718 46 Warnick (Erven) Besloten Veenootschap v J Townend & Sons (Hull) Ltd [1980] RPC 31

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4.2.3 Injurious association

The term “injurious association”47 refers to the situation where the parties are not in actual

competition and the Defendant misrepresents himself as having an association with the

Claimant. In Ewing48, the judge held that damage may be caused in this instance, as:

“To induce the belief that my business is a branch of another man’s business may do

that other man damage in all kinds of ways. The quality of goods I sell; the kind of

business I do; the credit or otherwise which I enjoy – all those things may immensely

injure the other man who is assumed wrongly to be associated with me.”

It is not enough that the Defendant misrepresents that there is an association between the

Defendant and the Claimant. The Claimant must show that this misrepresentation has or

would reasonably forseeably damage the Claimant’s goodwill. This damage may, for

example, be caused by reason of the fact that the Defendant or his business has a bad

reputation, or that the Defendant supplies goods of an inferior quality, thereby exposing the

Claimant to new risks of litigation or liability in respect of the goods49.

4.2.4 Restriction of expansion

Where the Claimant and Defendant do not operate in a common field of activity, the

Claimant may allege that a misrepresentation by the Defendant has restricted his scope for

future expansion into other areas. Damage may be inferred where the Defendant’s field of

business is a natural extension of the Claimant’s.

It is unclear whether the Claimant could allege damage by reason of the loss of an

opportunity to expand into other unrelated fields or into a broader geographic field in the

future.

47 Wadlow – The Law of Passing-Off at page 163 48 Ewing v Buttercup Margarine Co. Limited [1917] 2 Ch. 1 per Warrington L.J at page 13 49 For example, under the Consumer Protection Act 1987

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4.2.5 Erosion of goodwill

Dilution or erosion of goodwill is often raised as a head of damage by a Claimant who would

have difficulty showing that his goodwill has been damaged in other ways. The value of a

mark derives from the fact that a proportion of the public associate the mark and products

bearing that mark with the one particular trader. If another trader starts using the same mark,

the earlier trader’s goodwill may be damaged as, even if the public do not consciously

associate the use of the mark by the Defendant with the Claimant50, the mark will no longer

be associated with one trader in particular. This head of damage does not therefore rely on

there being any confusion between the parties, their goods or services.

Cases where the erosion or dilution of goodwill is most relevant are those relating to

collective goodwill. For example in Bollinger51, the Court held that:

“[T]he exclusivity of the association of the name, mark or get-up with A’s business

might perhaps, be shown to be a valuable asset as a powerful means of bringing A’s

goods to the notice of the public, thus maintaining and promoting A’s competitive

position in the market.”

In the later case of Taittinger52, the Court stated that there was sufficient prospective damage

to the Claimant’s goodwill as a result of undiscerning purchasers confusing “Elderflower

Champagne” with the “real thing” and (as obiter) from the erosion of the distinctiveness of

the mark “Champagne”:

“Any product which is not Champagne but is allowed to describe itself as such must

inevitably, in my view, erode the singularity and exclusiveness of the description

Champagne and so cause the first plaintiffs damage of an insidious and serious

kind.”53

50 Wadlow – The Law of Passing–Off at page 174 51 HP Bulmer Ltd & Showerings Ltd v J Bollinger SA and Champagne Lanson Pere et Fils [1978] R.P.C. 79 at page 94 52Taittinger SA and others v Allbev Ltd and another [1993] F.S.R. 641 53Taittinger SA and others v Allbev Ltd and another [1993] F.S.R. 641 per Bingham M.R. at page 678

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5. Special situations

5.1 Imitation of get-up

Imitation of the “get-up” or “trade dress” of goods or the packaging in which they are sold

may include the imitation of features such as the shape, size and colour of the goods or their

packaging, and the font of wording used on the packaging. Although it is possible to bring an

action in passing off based on imitation of get up alone, this is relatively unusual, since most

traders also use brand names to distinguish their goods. Where a Claimant brings an action in

passing off based on imitation of the get-up alone, he will, therefore, normally have to show

that the public are likely to be deceived notwithstanding the fact that the Defendant’s brand

name, and not the Claimant’s, appears on the goods.

In recent years there have been a number of passing off cases involving supermarkets

bringing out own brand products in “get-up” very similar to that of well-known brands. In

the Puffin biscuits case54, for example, the Claimant brought a successful action in passing

off against the Defendant supermarket selling chocolate biscuits under the name “Puffin” and

in very similar packaging to that in which the Claimant sold its “Penguin” biscuits.

Passing off cases in respect of the shape of goods are often the most problematic, as there is

some authority for the proposition that the mere copying of the shape of goods is not enough

to bring a successful action in passing off. Features of the get-up of goods are protected only

by reason of the fact that these features are distinctive of goods originating from one trader.

Features that are not indicative of origin are therefore not protected. As Jacob J stated in the

Roho case55:

“Some think that copying is unethical; others do not. Often the copyist of today

becomes the innovator of tomorrow. Copying is said to be the lifeblood of

competition, the means of breaking de facto market monopolies and keeping down the

price of articles not protected by special monopolies such as patents or registered

designs. Others say that copyists are parasites on innovators. None of this matters.

Certainly it is not the law that copying as such is unlawful: the common law…leans

against monopolies”.

54 United Biscuits (UK) Ltd v Asda (Stores Ltd) [1997] R.P.C. 513 55 Hodgkinson & Corby Ltd v Wards Mobility Services Ltd (No.1) [1995] F.S.R. 169 at page 173

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In Jif56, however, the Claimant brought an action for passing off in respect of the proposed

introduction by the Defendant of a product in similar packaging to the Claimant’s product,

distinguishable by a label around the neck of the bottle. The Court held that although the

plastic lemon shaped container served a functional purpose in the sale of lemon juice (being a

container of a convenient size and of a shape which suggested the nature of its contents),

these purposes could also be served by a variety of other distinctive containers.

Although an action in passing off is more likely to succeed where there is a strong similarity

between the get-up or appearance of the products, it is always a question of fact and degree; if

a new product is merely “inspired” by the earlier product, there may well be no

misrepresentation, meaning that an action in passing off would probably fail.

It is not necessary that the Defendant copy the “get-up” in its entirety. The Claimant may

still bring a successful action in passing off if the Defendant copies part only of the get-up,

subject to him showing that it is this part of the get-up that denotes his goods and leads the

public to associate the goods with the Claimant. The imitation of a number of features of the

get-up, although not distinctive if considered in isolation, may have a cumulative effect.

5.2 Imitation of business names

Where the Claimant can show the Defendant has used the name of the Claimant’s business in

such a way that it was calculated to deceive and therefore cause confusion among the public

or divert business from the Claimant’s business, he may bring an action in passing off.

If the Claimant has chosen a descriptive word to denote his business, the mere fact that it has

been used by the Defendant is unlikely to be enough to ensure success in a passing off action.

Instead, the Claimant must show that he has generated goodwill in the name, and that a

substantial proportion of the public have come to associate this word with the Claimant’s

business, even though it is in some way descriptive.

In the case of McCain57, Templeman L.J. stated that:

“if the plaintiffs introduce a novel product with novel words, but they take the risk of

choosing descriptive words, then they run the risk that the defendants cannot be

56 Reckitt Products Ltd & Colman v Borden Inc [1990] 1 R.P.C. 341 57 McCain International v Country Fair Foods [1981] R.P.C 69 at page 81

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prevented from using those same descriptive words so long as they make it clear that

their brands of the product are not the same as the brand of the plaintiffs”.

Where the Defendant uses a name calculated to suggest to the public that the Defendant is a

branch of the Claimant company, passing off may succeed where people would think the

Defendant was “a branch of the plaintiff or a client in some way amalgamated with or under

the supervision of the plaintiff and for which the plaintiff had in some way made itself

responsible” (emphasis added by the judge)58.

5.3 Passing off and publishing

5.3.1 Authors and nom de plume

A nom de plume is likely to be regarded as belonging to the author, not his publisher, and it is

therefore the author who may bring a claim in passing off in respect of unauthorised use of

his name.

In Clark59, a well-known politician brought a successful action in passing off in respect of

parodies of his diaries published in the Defendant newspaper, as:

“…the dominant message in the Defendant’s presentation of the articles is of the

plaintiff’s authorship; and the counter-messages can be expected to be insufficient to

disabuse a substantial number of unsuspecting readers of the Evening Standard, who

tend to skim read; and accordingly a substantial number of readers would be left (as

were the plaintiff’s witnesses) with the impression that the plaintiff was the author.”

Other similar cases include a successful action brought by a cartoonist in respect of the use by

a rival cartoonist of a confusingly similar signature and an action brought by an actor to

protect his stage name.

The right to bring an action in passing off is different from the moral right of an author not to

have a literary, dramatic, musical or artistic work falsely attributed to him as author, under

section 84 of the Copyright, Designs and Patents Act 1988.

58 Harrods v Harrodian School [1996] R.P.C. 697 at page 712 quoting from British Legion v British Legion Club (Street) Ltd (1931) 48 R.P.C. 555 59 Clark v Associated Newspapers Ltd [1998] R.P.C. 261 at page 280

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5.3.2 Titles of publications

The title of publications such as books and magazine can be protected by an action in passing

off where it is clear that the Defendant’s title is likely to confuse the public as to its origin.

Often the title is descriptive of the content, subject matter or frequency of the publication. In

such cases, the Claimant will have to establish that the title has acquired a secondary meaning

as the public have come to associate the title with the Claimant.

In the recent case of Associated Newspapers60, the Claimant (proprietor of the Daily Mail and

The Mail on Sunday) brought a successful action in passing off in respect of the titles

“Evening Mail” and “The London Evening Mail”. The Court held that the threatened use of

these titles by the Defendant would amount to passing off, given the risk of public confusion

with the Claimant’s “Mail” titles and consequential damage to the Claimant’s goodwill.

5.4 Merchandising and entertainment

5.4.1 Merchandising

“Character merchandising” describes the practice of licensing the use of the name or likeness

of a character (often fictitious) in relation to the marketing of goods or services.

Merchandising programmes are also conducted on behalf of successful sportsmen and

women, sports teams and pop stars etc.

Whether or not the name or image of the subject of a merchandising programme has been

registered as a trade mark, the Claimant may be able to bring a claim in passing off to protect

goodwill associated with the name or image in question.

In the Teenage Mutant Ninja Turtles case61, the Claimants brought a successful action in

passing off in respect of the reproduction of images of cartoon characters on clothing. The

Court held that:

“To put on the market goods which the public mistake for the genuine article

necessarily involves a misrepresentation to the public that they are genuine. On the

60 Associated Newspapers Ltd v Express Newspapers [2003] EWHC 1322 61 Mirage Studios v Counter-Feat Clothing Co Ltd [1991] F.S.R. 145 at page 155

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evidence in this case, the belief that the goods are genuine involves a further

misrepresentation, namely that they are licensed”.

In the Elvis Presley case62, the Court of Appeal approved the judgment in Ninja Turtles but

warned that:

“It does not give a green light to extravagant claims based on any unauthorised use of

a celebrity’s name”.

Merchandising was an issue in the recent Arsenal63 case. The passing off claim brought by

Arsenal FC failed at first instance. Laddie J held there was no evidence of confusion by the

public between the unlicensed goods and official merchandise over the past 31 years, and he

concluded that use per se of Arsenal’s trade mark on unofficial merchandise did not falsely

represent that the products originated from or were authorised by Arsenal. In the Court of

Appeal64, however, Aldous L J stated:

“I realise that there was no appeal on the conclusion reached by the Judge on the

cause of action traditionally called passing off, perhaps best referred to as unfair

competition. However I am not convinced that his reasoning was correct. The

traditional form of passing off as enunciated in such cases as Reddaway v Banham

[1896] A.C 199 is no longer definitive of the ambit of the cause of action.”

Aldous L J cited with approval a quote from the Vine Products case65 where Cross J

commented on the Spanish Champagne cases66:

“If I may say so without impertinence I agree with the decision in the Spanish

Champagne case - - but as I see it uncovered a piece of common law or equity which

had till then escaped notice - - for in such a case there is not, in any ordinary sense,

any representation that the goods of the defendant are the goods of the plaintiffs, and

evidence that no-one has been confused or deceived in that way is quite beside the

62 Elvis Presley Enterprises Inc v Sid Shaw Elvisly Yours [1999] R.P.C. 567 at page 582 63 Arsenal FC v Matthew Reed [2003] 1 All E.R. 137 64 Arsenal Football Club PLC v Reed [2003] R.P.C 39 at page 70 65 Vine Products Ltd v Mackenzie & Co Ltd [1967] F.S.R 402 at page 427 66 J Bollinger SA v Costa Brava Wine Co Ltd [1960] R.P.C 16 and [1961] R.P.C 116

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mark. In truth the decision went beyond well-trodden paths of passing-off into the

unmapped area of ‘unfair trading’ or ‘unlawful competition’.”

5.4.2 False endorsement

A cause of action in passing off may be available if the Defendant falsely represents that the

Claimant has endorsed a particular business or product, and the Claimant suffers or is likely

to suffer damage as a result. In the case of Talksport67, the Court of Appeal found that the

Defendant had falsely represented that it had been endorsed by Formula 1 racing driver,

Eddie Irvine, by ‘doctoring’ a photograph to show Irvine listening to a radio emblazoned with

the ‘Talksport’ logo, and distributing the photograph as part of a ‘press pack’. The Court of

Appeal further held that damages in false endorsement cases should be assessed on the basis

of the licence fee which would have been agreed by a notional willing endorser and endorsee.

5.5 The internet

5.5.1 Metatags

‘Metatags’ are used by companies to ensure their website is listed at the top or near to the top

of “hit lists” generated by search engines, such as Google and Yahoo! Metatags are hidden

code readable by the search engine but not normally visible to visitors to a website. If a

Defendant uses the name of a competitor in a metatag, or brand names associated with his

rivals’ goods or services, an action may be brought in passing off. In the recent case of

Reed68 the Claimant had registered the mark “Reed” in respect of employment agency

services and operated a website at “reed.co.uk”. The Claimant successfully brought

proceedings against the Defendant which operated a recruitment website where the words

“Reed Business Information” and “Reed” were employed as metatags, and the Court held that

for the purposes of passing off, the question in relation to the invisible use of a mark was

whether the Defendants could be said to be responsible in any way for the appearance of their

site in response to a search against REED, and if so, what the nature of that responsibility

was.

67 Irvine v Talksport Ltd [2003] EWCA Civ 423 68 Reed Executive Plc v Reed Business Information Limited [2003] R.P.C. 12

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5.5.2 Domain Names

A Claimant may bring proceedings for passing off (and/or infringement of a registered trade

mark) in respect of the registration of a domain name by a third party which obviously refers

to and identifies a particular business or entity, and which therefore amounts to the

illegitimate “hijacking” of the name. In the One in a Million case69 the Defendant dealt in

domain names and had registered a number of names incorporating the names of well-known

English companies. The Judge at first instance did not accept that the mere registration of

domain names constituted passing off. On appeal, Aldous L. J held that the registration of

domain names could give rise to an action in passing off on two grounds. First, if the placing

of domain names on a register would “make a representation to persons who consult the

register that the registrant is connected or associated with the name registered and thus the

owner of the goodwill in the name”. Secondly, if the domain name would constitute an

“instrument of fraud” in the hands of anyone other than the “true” owner:

“It follows that a Court will intervene by way of injunction in passing of cases in three

types of case. First, where there is passing off established or it is threatened. Second,

where the Defendant is a joint tortfeasor with another in passing off, actual or

threatened. Third, where the Defendant has equipped himself with or intends to equip

with an instrument of fraud. This third type of case is probably a mere quia timet

action”70.

Whether a domain name constitutes an “instrument of fraud” in the hands of the Defendant

depends on the circumstances of the case, and in particular, whether the name is so distinctive

that it could denote only one trader.

In Radio Taxicabs71 the Claimant sought an injunction restraining the Defendant from

passing off its business as being that of the Claimant or as being connected to that of the

Claimant, following registration by the Defendant of the domain name www.radiotaxis.com.

The Defendant arranged a direct link from www.radiotaxis.com to its own website

(www.dialacab.co.uk). The Court held that the Defendant’s intention in registering the

domain name was of crucial importance. They held that the Defendant had not sought to

69 British Telecommunications Plc & Others v One in a Million Limited & Others [1999] 1 ETMR 61 70 British Telecommunications Plc & Others v One in a Million Limited and Others [1999] 1 ETMR 61 at page 85 71 Radio Taxicabs (London) Ltd (t/a Radio Taxis) v Owner Drivers Radio Taxi Services Ltd (t/a Dial-a-cab) 2001 WL 1135216

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divert business from the Claimant but rather had been engaged in a legitimate attempt to raise

the company profile. The Court also held that the Claimant had not established a sufficient

reputation with the general public in relation to the phrase “Radio Taxis” to justify protection

of this generic descriptive term.

6. Evidence

To bring a successful action in passing off, the Claimant must show that the Defendant has

behaved in a way calculated to deceive a proportion of the public. According to Lord Parker

in Spalding72:

“…there can be no doubt that in a passing-off action the question whether the matter

complained of is calculated to deceive, in other words, whether it amounts to a

misrepresentation, is a matter for the judge, who, looking at the documents and

evidence before him, comes to his own conclusion, and to use the words of Lord

Macnaghten in Payton v Snelling Lampard “must not surrender his own independent

judgment to any witness whatever”

6.1 Evidence of actual deception

Although evidence of actual deception is helpful, it is not conclusive. The issue of whether

evidence from the trade that the matter complained of is calculated to deceive was considered

in Dalgety Spillers73. In that case, Blackburn J set out 4 guidelines:

�� There is no absolute bar on admitting such evidence;

�� Evidence of the likelihood of deception is admissible from those accustomed to

dealing in the market where the goods are of a kind sold in a specialist market and not

to the general public for consumption or domestic use;

�� Where the goods are of a kind sold to the general public for consumption or domestic

use, evidence of the likelihood of deception from those accustomed to deal in that

market may be admissible unless the “experience which a judge must be taken to

72 Spalding (A.G.) & Bros v A.W. Gamage Ltd (1915) 32 R.P.C. 273 (H.L.) 73 Dalgety Spillers Foods v Food Brokers Ltd [1994] F.S.R. 504 at page 506

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posses as an ordinary shopper or consumer will enable him, just as well as any other,

to assess the likelihood of confusion”; and

�� Evidence is always admissible to prove the circumstances and places the goods are

sold in, the kind of people who buy them and “the manner in which the public are

accustomed to ask for those goods”.

Evidence that consumers have actually been deceived is admissible. Conversely, the absence

of evidence of actual deception of consumers may lend strength to the argument that no

deception has occurred and that an action in passing off should fail.

6.2 Survey evidence

Survey evidence is often adduced in passing off cases. Such evidence is frequently

discredited, however, on the grounds that, for example, the cross-section of the public

surveyed was not representative of the likely consumers of the product or service, or that the

survey asked leading questions.

In the Raffles74 case, Whitford J set out the following guidelines for conducting surveys in

passing off cases:

(a). The interviewees must be selected to represent a relevant cross-section of the

public;

(b) The size of the sample must be statistically significant;

(c) The survey must be conducted fairly;

(d) All the surveys carried out must be disclosed including the number carried out,

how they were conducted, and the totality of the persons involved;

(e) The totality of the answers given (and the other requisite details) must be

made disclosed and made available to the defendant;

(f) The question must not be leading nor should they lead the person answering

into a field of speculation he would never have embarked upon had the

question not been put;

(g) The exact answers and not some abbreviated form must be recorded;

74 Imperial Group Plc v Philip Morris Ltd [1984] R.P.C 293

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(h) The instructions to the interviewers as to how to carry out the survey must be

disclosed; and

(i) Where the answers are coded for computer input, the coding instructions must

be disclosed.

In the recent case of Associated Newspapers75 however, Laddie J stated that:

“Notwithstanding the Defendant’s criticisms, the survey does give a feel for the

reaction of members of the public to the Defendant’s proposed newspaper…The

outcome of the survey accords with one's expectations.”

7. Remedies

7.1 Interim remedies

The availability of interim relief is crucial to a passing off action, since a Claimant who acts

quickly may obtain an interim injunction to restrain further dealings by the Defendant

pending a full trial, thereby preventing further damage to his goodwill during the intervening

period. In practice, the outcome of the interim injunction application is often decisive of the

entire action.

7.1.1 Interim injunctions

In the American Cyanamid case76, the House of Lords set out the principles which govern

whether an interim injunction should be granted. The three key American Cyanamid

questions are as follows:

�� Is there a serious issue to be tried?

�� If the Claimant is ultimately successful at trial, would damages be an adequate

remedy for any loss suffered by the Claimant in the intervening period until trial if no

interim injunction is granted?

�� If the Claimant is ultimately unsuccessful at trial, would damages be an adequate

remedy for any loss suffered by the Defendant in the intervening period until trial if

an interim injunction is granted?

75 Associated Newspapers Ltd v Express Newspapers [2003] EWHC 1322 76 American Cyanamid v Ethicon Ltd [1975] A.C. 396

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The “serious issue to be tried” hurdle is not a high one, and most interim injunction

applications turn on the issue of whether damages would be an adequate remedy for either or

both parties.

If the Claimant is to obtain an interim injunction it is essential that it makes its application as

soon as possible after becoming aware of the Defendant’s activities, since any unexplained or

unreasonable delay may well be fatal to its prospects of obtaining interim relief.

Whether or not an interim injunction is granted, the Court may upon the hearing of the

application order a ‘speedy trial’, meaning that the action will be ‘fast-tracked’ towards a full

trial inside a few weeks or months, rather than the more typical twelve month timeframe.

7.1.2 Search and Seizure orders

A search and seizure order (formerly known as an ‘Anton Pillar’ Order) compels the

Defendant to allow the Claimant’s representatives to take possession of infringing articles

which the Defendant is expected to have concealed, or to obtain evidence and documents

which the Defendant is expected to suppress. Typically, the Defendant is ordered to allow

the Claimant to enter his premises and take away evidence. Such orders are granted without

notice to the Defendant, and the jurisdiction is used sparingly. According to Wadlow77, the

Claimant must satisfy four criteria in order to obtain such relief:

�� There is a strong prima facie case of passing off;

�� The danger sought to be avoided by the Claimant in obtaining the order must be

serious. The order must go no further than necessary;

�� There must be real and tangible proof that the Defendant would remove or destroy

evidence if the order were not granted; and

�� The principle of proportionality should be applied to balance the harm to the

Defendant if the order is granted and the harm to the Claimant if it is not.

77 Wadlow - The Law of Passing-Off at page 528

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7.2 Damages or an account of profits

7.2.1 Damages

Although an injunction is normally the most valuable remedy for a Claimant in a passing off

action, if he pursues the matter to trial and is successful he will normally be entitled to an

award of damages or, at his option, an account of profits. Although the measure of damages

is often difficult to quantify, the general rule is that the Claimant is entitled to:

“[S]uch damages as naturally flow from [the Defendants’] unlawful act”78

Claimants typically allege damage under two heads: (i) loss of sales; and (ii) damage to

goodwill and reputation. As regards loss of sales, the issue is what proportion of sales made

by the Defendant would otherwise have been made by the Claimant but for the Defendant’s

acts of passing off. Damage to goodwill and/or reputation is normally more difficult to

quantify, and the Courts tend to take a fairly ‘broad-brush’ approach.

In the recent Talksport case79, Eddie Irvine was awarded £25,000 by the Court of Appeal in

respect of the misrepresentation by Talksport that he had endorsed their radio station. The

Court assessed the damages on the basis of the sum that would have been agreed by a

notional willing endorsee and endorser, taking evidence of other endorsement deals as a

comparable.

7.2.2 Account of profits

A successful Claimant will normally have the option of seeking an account of the

Defendant’s profits, rather than an award of damages (although the Court does have a

discretion to refuse to order an account of profits, since it is an equitable remedy). Orders for

an account of profits are commonly limited to dealings from the date of the letter before

action or commencement of proceedings, on the grounds that an account of profits is not

available in respect of innocent passing off. In practice, it is rare for an account of profits to

be pursued, due to the difficulty of proving what proportion of the Defendant’s profits were

78 Spalding (A.G.) & Bros v A.W. Gamage Ltd (1915) 32 R.P.C. 273 (H.L.) 79 Irvine v Talksport Ltd [2003] EWCA Civ 423

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attributable to the passing off, and because of the scope for Defendants to argue that they in

fact made little or no profit at all from their unlawful activities.

7.3 Delivery up or destruction

If an injunction is granted, or if the Defendant voluntarily undertakes to cease dealing in the

infringing goods, it is common to order or (in the case of undertakings) to require that the

infringing goods be delivered up to the Claimants or their solicitors, or that they be destroyed

by the Defendant with the destruction being verified upon oath. This ensures that the

Defendant is no longer in possession of items, dealings in which would breach the injunction

or undertakings.

8. Passing off and unfair competition

The terms “unfair competition” and “unfair trading” are often used interchangeably as a

collective name for torts designed to protect traders in their dealings with one another.

According to the Paris Convention80:

“The countries of the union are bound to assure to nationals of such countries

effective protection against unfair competition.”

Any act of competition contrary to honest practices in industrial or commercial matters

constitutes an act of unfair competition under the Paris Convention. Whereas English law

purports to comply with this requirement through a combination of passing off, malicious

falsehood and various criminal provisions such as the Trade Descriptions Act 1968, most

continental European countries provide a general cause of action in “unfair competition”.

The principle of a general common law tort of “unfair competition” has been considered most

extensively in Australian case law.

In Victoria Park81, the Defendants allowed a third party to erect a tower on their land to

overlook a racecourse owned by the Claimant. Commentary was broadcast by the

80 Article 10 BIS

81 Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1938) 58 C.L.R. 479

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Defendants and the plaintiff claimed that attendance at races dropped. The case was

dismissed by a majority of 3 to 2. Even the dissenting minority were not inclined to

recognise a general law of unfair competition.

In Hexagon82, following a breakdown in negotiations the Defendant used a film character

created by the Claimant. Needham J commented (obiter) that he thought there was room in

the jurisprudence for the concept of “unfair competition”.

This approach was, however, curtailed in Moorgate83 where the Australian High Court

refused to recognise a general tort of unfair competition because:

“The rejection of a general action for “unfair competition” involves no more than a

recognition of the fact that the existence of such an action is inconsistent with the

established limits of the traditional and statutory causes of action which are available

to a trader in respect of damage caused or threatened by a competitor”.

In England, calls for a general tort of unfair competition have been resisted by both the

legislature and the Courts. As Fry L.J. stated in Mogul84:

“[T]o draw a line between fair and unfair competition, between what is reasonable

and unreasonable, passes the power of the Courts.”

It was suggested at one stage that the cases concerning “collective goodwill” (and in

particular the Spanish Champagne cases85) not only marked an expansion of the law of

passing off, but also went “beyond the well trodden paths of passing off into the unmapped

area of "unfair trading" or "unlawful competition"”.86

The extent to which the “collective goodwill” cases marked an expansion of the law of

passing off rather than a departure from the law of passing off, however, was questioned in

the Avocaat case87 by Lord Fraser of Tullybelton:

82 Hexagon v Australian Broadcasting Commission [1976] R.P.C. 628 (NSW) 83 Moorgate Tobacco Ltd v Philip Morris Ltd (1984) 156 C.L.R 414 84 Mogul Steamship Co. v McGregor Gow & Co (1889) 23 Q.B.D 598 85 J Bollinger SA v Costa Brava Wine Co Ltd [1960] R.P.C 16 and [1961] R.P.C 116 86 Vine Products v Mackenzie [1969] R.P.C 1 per Cross J 87 Warnick (Erven) Besloten Veenootschap v J Townend & Sons (Hull) Ltd [1980] RPC 31

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“…where the falsehood is a misrepresentation that the competitor's goods are goods

of definite class with a valuable reputation, and where the misrepresentation is likely

to cause damage to established traders who own goodwill in relation to that class of

goods, business morality seems to require that they should be entitled to protect their

goodwill. The name of the tort committed by the party making the misrepresentation

is not important, but in my opinion the tort is the same in kind as that which has

hitherto been known as passing off.”88

In Hodgkinson89, Jacob J added to this stating that:

“At the heart of passing off lies deception or its likelihood, deception of the ultimate

consumer in particular. Over the years passing off has developed from the classic

case of the defendant selling his goods as and for those of the plaintiff to cover other

kinds of deception e.g. that the defendants goods are the same as those of the plaintiff

when they are not…or that the defendant’s goods are the same as goods sold by a

class of persons of which the defendant is a member when they are not…Never has

the tort shown even a slight tendency to stray beyond cases of deception. Were it to

do so it would enter the field of honest competition, declared unlawful for some

reason other than deceptiveness.”90

The above cases illustrate that the English Courts have to date resisted calls to institute or

‘discover’ a common law tort of unfair competition. Instead, the law of passing off has

developed to encompass many cases that would typically be dealt with in continental

jurisdictions under a law unfair competition, subject always to the proviso that for a passing

off claim to succeed the “classical trinity” of goodwill, misrepresentation and damage must

still be established.

David Wilkinson and Kate Wibberley Bristows

88 Warnick (Erven) Besloten Veenootschap v J Townend & Sons (Hull) Ltd [1980] RPC 31 at page 106 89 Hodgkinson & Corby v Wards [1995] F.S.R 169 90 Hodgkinson & Corby v Wards [1995] F.S.R 169 at page 175

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