Passing off

The key difference between trade mark infringement and passing off is that the former deals with registered rights, the latter with unregistered rights.

An introduction to the law of passing off

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.  Relying on the law of passing off to protect your brand name and business ideas may leave you unprotected against copycats and counterfeiters.

The law of passing off is a tort that seeks to protects traders’ and/ or manufacturers’ goodwill in relation to their goods and services.  It protects 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 customer 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 sell such figures and states that the figures for sale are ‘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 the website seller is misrepresenting, to the consumer, that the goods (i.e. the Star Wars figures) are something that they are not.

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

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

It makes no difference if the trader in the “misrepresented” goods was ignorant, and therefore negligent, or acted with the intention of being malicious or fraudulent. 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 usually require a wealth of evidence to be available. As a consequence, legal action and the remedies sought can be very expensive and time consuming.

What evidence do you need to prosecute for passing off?

In order to successfully prosecute a “cowboy” (as in the scenario above) in a UK court, you have to persuade the court that the “cowboy” has passed off his/ her goods or services as yours. To do this, you – as the claimant – will have to provide evidence that demonstrates that:

• The claimant must show their goodwill exists.
• The defendant made a misrepresentation likely to deceive the public, and
• This misrepresentation damages the goodwill of the claimant

In order to succeed in a case of passing off, the claimant is required to prove all of these points. Naturally, this needs 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 the goodwill concept, however it has been described as the consumer’s attraction to a particular brand. Such an attraction will aid a consumer in distinguishing 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 often used definition would seem to be, that goodwill is ‘an attractive force that brings in custom’. You have to have created goodwill before being able to bring an action for 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 on 01869 692888 and we can help to make the complicated understandable.