Lawyer or cowboy?

Both win out if you rely on the law of passing off to protect your brand name. Lawyers and cowboys came to prominence in the 19th century – as did the tort of passing off.

The law of passing off is a tort that seeks to protect victims where an individual or company claims to produce goods or offer services as somebody else or with the express permission of somebody else in such a manner that deceives the consumer into believing that they are purchasing the goods or services of that individual or company that they trust and recognise.

This is more easily explained by way of example:

A consumer is searching the internet for original Star Wars figures produced in the early 1970’s to purchase. The consumer does not know who the licensed company was that produced these figures, but nonetheless searches for those figures lawfully endorsed by George Lucas.

The consumer discovers a website that claims to be the seller of such figures stating that the figures for sale are in fact ‘Palitoy’ Star Wars figures. In actual fact these figures are not ‘Palitoy’ and are imitations of the officially licensed producer of such goods and therefore is misrepresenting to the consumer that the goods are something that they are not (i.e. genuine).

The motive of the company to misrepresent in this way is to take advantage of the official company’s reputation (‘Palitoy’) and sell their goods in place of the authentic merchandise that the consumer wishes and expects.

This has the following effect:

  1. The consumer is deceived into purchasing goods that they do not want;
  2. The officially licensed company is deprived of revenue which they may have reasonably expected to secure;
  3. The officially licensed company’s reputation may be damaged where the bootlegged version is defective or of poor quality;
  4. The ‘pirate company’ has unlawfully received payment for their goods which otherwise would not have been purchased but for their misrepresentation.

There are many variations on this theme of passing off and the above is only a simple example of such acts. This area of law is highly complex and may be associated with a variety of difficult concepts and themes. You should also note that cases of passing off are often complicated and involve a wealth of evidence. The consequence of this is that legal action and the remedies sought are very expensive and time consuming.

An Overview

UK Law:

In order to succeed in persuading a court that the “cowboy” has passed off his goods or services as yours, you have to prove (and pay for) evidence that shows:

  1. The claimant must show their goodwill exists
  2. The defendant made a misrepresentation likely to deceive the public
  3. That misrepresentation damages the goodwill of the claimant

It can be seen that these tests require the claimant to prove all of these points necessary to succeed in a case of passing off. In order to do so will require time and expense on the part of the claimant.

Unfortunately the tests themselves do not easily convey the difficulty of proving the existence of the required concepts; the most difficult of which is that of ‘goodwill’.

There is no absolute legal definition of this concept but it has been described as the consumer attraction to a particular brand. Such an attraction will assist a consumer to distinguish between one particular business and another. Goodwill may change from one company to another and have different effects on different consumers. More elements may be present in one company’s goodwill than another. However, one overriding prerequisite would seem to be ‘an attractive force that brings in custom’ (Lord Macnaghten 1901)

Scope of Passing Off:

Passing off is typically a law practiced in the UK and other common law jurisdictions including the US. The European equivalent is that of unfair competition. Therefore any perceived passing off by companies in other jurisdictions outside of the UK will need to be dealt with by that jurisdiction and those laws therein.

CALL BRAND PROTECT and we can help to make the complicated understandable.