What is passing off?
Passing off is an economic tort. The pristine rule of passing off is that nobody has the right to represent his goods as the goods of another.
Describe the test for passing off established in Reckitt and Colman Products v Borden [1990] PRC 341 (the Jif Lemon case).
- Goodwill – It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom.
- Misrepresentation – consumers have been (or are likely to be) deceived as to the commercial source of the goods or services being offered by the defendant.
- Damage – the defendant has caused damage to a business or goodwill of another trader
What requirements need to be met to show goodwill?
- Show that the goodwill attached to their goods or services has been communicated to the public (e.g. by using a particular brand name in the course of trade).
- Prove that such communication between their business and customers already exists in the marketplace
- Show that this communication mechanism of goodwill has been interfered with by a third party.
Name different types of misrepresentation (9 points)
- Misrepresentations as to the quality of the plaintiff’s goods
- Misrepresentation that the plaintiff has control or responsibility for the defendant’s goods or services
- Reverse passing-off
- Comparative advertising
- Look-alikes
- Cybersquatting
- Providing third parties with means of deceiving the ultimate purchaser
- Personality Merchandising
- Character Merchandising
What form can damages take wrt passing off?
- Loss of (potential) trade/profit
- Loss of licensing revenue
- Damage to reputation
- Dilution
- Extended passing off
- Unfair competition
Describe the test for passing off established in the Warnink v Townend [1979] A.c. 731, (the Advocaat decision)
- misrepresentation
- by a trader in the course of trade
- to prospective customers of his or ultimate consumers of goods or services supplied by him,
- which is calculated to injure the business or goodwill of another trader, and
- which causes actual damage to the business or goodwill of the trader by whom the action is brought or will probably do so.
To what extent does the U.K. law of passing off protect well-known personalities?
Explain briefly your answer, using case authority by way of illustration.
Personality merchandising
- The practice whereby celebrities use their names and images to endorse and associate themselves with products and services has become a common feature of modern marketing.
- There is no such thing as a free-standing general right by a famous person to control the reproduction of their image.
- The defendant must have made a misrepresentation that the claimant has some type of control or responsibility for their goods or services, or while the public does not need to believe that the personality made the goods or services, the public must have thought that the personality endorsed them.
Example: Rihanna v Arcadia
- The unauthorised sale of a t-shirt bearing a pop star’s image by a high street fashion retailer amounted to passing off.
- In circumstances where the retailer had, over time, emphasised its connection with that pop star, the sale of the t-shirt bearing that particular image amounted to a representation that the pop star had endorsed it, which was likely to lead people to buy it.
Can the UK law of passing off be used to protect fictitious characters from imitation?
Explain briefly your answer using case authority by way of illustration.
Character merchandising – the use of a character (such as a cartoon) in relation to various goods/services. This is done with a view to attract customers because of their affinity with the character.
For passing off in relation to character merchandising, it needs to be shown that:
- goodwill exists in the fictitious character, and
- a substantial part of the purchasing public would assume that this goodwill could not be exploited without the consent of the owner of any right in the fictitious character (e.g. through licensing agreements) and therefore buy from the defendant while believing that these are genuine goods;
- and damage would and has occurred as a result of exploitation of the character made without the owner’s consent, which is calculated to injure the business or goodwill of another trader, and which causes actual damage to the business or goodwill of the trader bringing the action.
Discuss Mirage v Counter-Feat (Teenage Mutant Ninja Turtle) wrt character merchandising
Mirage v Counter-Feat
Defendants applied to their items of apparel plaintiff’s fictitious humanoid cartoon characters known as the “Teenage Mutant Ninja Turtles.”
- The perception of the public was crucial
- To succeed in a passing-off action, the claimant must show that the public understood that the goods were licensed and that they bought the merchandise on that basis.
- The court held that such misrepresentation may lead to damage. For example, the owner of the copyright in the fictitious characters may experience a loss of licensing revenue
- It seems that the fact that the cartoon characters were copyrighted was crucial in the sense that it affected the perception of the public
Can goodwill exist in relation to a foreign trader, where the trading activity takes place outside the UK? Explain your answer.
- The passing off provides protection to goodwill within the UK (territoriality principle).
- A foreign trader has to show that he has established a communication mechanism of goodwill within the UK. Mere reputation is not enough.
Sheraton Corp of America v Sheraton Motels [1964] RPC 202
- A famous hotel chain sought to enjoin the defendant company from using the name “Sheraton Motels” in the UK.
- Although the plaintiff had not operated any hotels in the UK, the court affirmed the existence of goodwill on the grounds that bookings have been made through an office the plaintiff maintained in the UK.
Alain Bernardin v Pavilion Properties Limited [1967] FSR 341
- The owner of a restaurant in Paris named the “Crazy Horse Saloon” requested an interlocutory injunction against a third party who had been using the same name for its own restaurant in London.
- Apart from disseminating some advertising material, the plaintiff had not been engaging in any trading activity within the UK.
Explain briefly how the owner of a foreign mark which is well-known in the UK may protect his/her interests in the UK.
- The passing off provides protection to goodwill within the UK (territoriality principle). A foreign trader has to show that he has established a communication mechanism of goodwill within the UK. Mere reputation is not enough.
- It might be a bit sketchy to rely only on goodwill. Can apply for an EU or an international registration which would extend protection to include the UK so long as the country of the foreign application is a member state of Madrid Protocol.
Explain briefly whether reputation alone is sufficient in order to establish goodwill under the law of passing off in the UK.
- Generally, reputation alone is insufficient to establish goodwill in the UK.
- Traders must show that they have established a communication mechanism of goodwill within the UK.
- In order to establish goodwill, the claimant must have customers within the jurisdiction, as opposed to people in the jurisdiction who happen to be customers elsewhere.
However, there is some diverging case law on this point.
- In BBC v Talbot – the BBC’s CARFAX service was said to have built up goodwill as extensive advertising about it had caused a significant part of the public knew about the name CARFAX as distinctive of the BBC’s system.
Essay Q: The tort of passing-off is totally unfair to foreign traders who have a reputation but no business establishment in the UK.
(See other side for draft essay plan)
Plan
- What is passing off
- Origins: an offspring the common law tort of deceit
- What is the rationale behind passing off
- Protecting traders’ economic expectations
- Consumer protection:
- Prevent unfair competition
- What does it apply to
- Unregistered right
- However, certain criteria need to be met – what are they?
- Goodwill
- Misrepresentation
- Damages
- Explain why the goodwill requirement may limit foreign traders and the rationale behind it
- Pros of this
- Cons of this
- My view – I think it’s ok
