Passing off law: a comprehensive guide

Last updated: 20 September 2018

Estimated reading time: 8 minutes

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Passing off is a ‘civil wrong’ or tort connected to intellectual property, which sometimes involves one trader misrepresenting the goods or services they’re selling as being those of another trader, or vice versa. Passing off can cost your business dearly and enforcing against an infringer can be difficult if you don’t have formal intellectual property protection. Find out the basics on passing off law below.

Jump to:

  1. What is passing off?
  2. Elements and characteristics of passing off
    1. 1. Goodwill
    2. 2. Misrepresentation
    3. 3. Damage
  3. Passing off and misrepresentation
  4. Passing off defences
  5. Passing off remedies
  6. Passing off cases
    1. Starbucks vs. Sky
    2. Rihanna vs Arcadia/Topshop
    3. Sofa Workshop vs Sofaworks

What is passing off?

Passing off is where a party deliberately or unintentionally offers goods or services as those of another business in a way that deceives the customer into believing that they are buying the goods or services of another party that they trust and are familiar with. This misrepresentation can damage the goodwill of a business or person and cause damage both financially (revenue is lost on unsold products and services as another business has instead benefited from such sales) and in terms of reputation (if the products or services actually sold were of inferior standard the reputation of the business whose goods or services are being passed off can be damaged).

Elements and characteristics of passing off

There is no specific legislation governing passing off, and as such the law of passing off has been established through case law. There are three key requirements that must be satisfied by a claimant to prove passing off and make a claim for compensation:

1. Goodwill

The claimant must first prove that it has established a reputation or goodwill in its goods, name, mark, or other identifying feature by using it in business so that the public associates this use with the claimant’s name personally or their specific products or services.

The claimant must also show that the mark distinguishes them and/or their goods and services from others. Marks can have many different forms, for example:

  • Style or shape of packaging (for example, the Toblerone triangular prism)
  • Colour (for example, the purple packaging of Cadbury chocolate)

The length of time required to establish goodwill varies depending on the circumstances of each case. However, to succeed the claimant must also prove that the infringing act has taken place within the geographical limits of their goodwill.

Whilst defining goodwill in a mark can be difficult, reputation and goodwill of a business is generally considered as something that provides an identity to a business and its goods or services and distinguishes them from those of their competitors. This can be a difficult characteristic to prove because it is a very subjective test as the goodwill associated with a particular company may have very different effects on different members of the general public. For consumers simply to know that a particular brand identifies certain goods or services as originating from a particular business is not sufficient unless there is evidence of sales figures, advertising spend, press coverage, awards, web pages or social media references.

2. Misrepresentation

The second element is for the claimant to show that there has been a misrepresentation by the defendant which has led or is likely to lead to the confusion, deceit and misleading of the public into believing that their goods and services actually belong to the claimant such that a distinction between the claimant and defendant could not be made.

Confusion alone will not be sufficient to prove misrepresentation – the consumers must be deceived and believe the goods to be those of the claimant or made by the claimant instead of merely wondering whether this is the case. Similarly, as for the number of people who need to be deceived to establish a claim, case law is clear that passing off can be established even though most people are not deceived. The courts will look at the evidence of deception considering the size and nature of the applicable market as well as sale streams, and then assess whether it is likely that enough individuals have made or will make the false assumption such as to cause material damage to the goodwill of the claimant. Deception also does not need to be intentional because passing off is a tort which attracts strict liability,meaning that intention is irrelevant in defining misrepresentation.

3. Damage

The final element which a claimant needs to establish to prove passing off is to show that the misrepresentation has caused damage or is likely to cause damage to the claimant’s reputation or goodwill or cause actual or foreseeable financial or reputational loss.

This damage must arise from the reliance of the defendant’s misrepresentation and can arise (i) where the claimant has lost sales as a result of the defendant’s misrepresentation and (ii) as a result of dilution to the claimant’s goodwill, such as, for example, due to the inferior nature of the defendant’s goods or their reputation.

Passing off and misrepresentation

For the purposes of passing off, there are different kinds of misrepresentation. However, provided that damage has been suffered as a result of the misrepresentation, it is likely to be possible to establish a passing off case.

  • Conventional Misrepresentation – as seen in the Jif Lemon case which established the test to satisfy the common law action of passing offe. that the public are deceived into believing that the defendant’s goods or services are those of the claimant when they are not. In this infamous case it was held that the reproduction of a lemon shaped container for lemon flavouring amounted to passing off because of the reputation and goodwill that the shape of the Jif lemon container had established.
  • Reverse/Inverse Passing off – instead of the public believing that the defendant’s goods are those of the claimant, reverse passing off happens where the defendant makes the public believe that the claimant’s goods are actually its own. In Bristol Conservatories the salesman for the defendant showed prospective customers pictures of the claimant’s conservatories rather than those designed and made by the defendant. The defendant was therefore representing to customers that if they purchased from the salesman they would be getting the conservatory in the photographs designed and made by the claimant who had earned goodwill in those products.
  • Extended Passing Off – where there is goodwill in a general class of goods rather than in a specific brand and the defendant seeks to pass off their goods as belonging to that class. TheGreek yoghurt case is a good example of this kind of passing off. In this case the owner of the famous TOTAL Greek Yoghurt brand, FAGE, took American company Chobani to court for passing off by marketing and selling in the UK its yoghurt made in the United States as being “Greek yoghurt” claiming that it could only be labelled “Greek Yoghurt” if it came from Greece and was thickened by straining (as opposed to using thickening agents).  The Court concluded that Chobani was wrongfully passing off its product as ‘Greek yoghurt’, impinging on the goodwill held in this mark by a clearly identifiable class of traders in the UK which sold yoghurt made in Greece using the traditional Greek method and ruled in favour of FAGE.
  • False Endorsement – Although there is no image right in English law allowing one to control the use of his or her name or image, passing off can be used to prevent falsely using a person’s image or name to endorse a product so long as the person in question is able to establish significant reputation or goodwill in their name or image and that a misrepresentation that the goods are endorsed, recommended or approved of by that person. This right was established in theEddie Irvine v Talksport case where the defendants were successfully sued for using an image of the racing driver, Eddie Irvine, to promote their radio station.

Passing off defences

Defending a claim for passing off can be difficult as intention is irrelevant – it is strict liability. However, it is equally difficult to prove passing off.

The key defences are:

  • Use of defendant’s own name
  • Use other than in the course of trade
  • Claimant cannot show sufficient goodwill
  • Claimant’s mark is not distinctive
  • Claimant’s mark is generic
  • Claimant’s delay in taking action
  • No proof of misrepresentation
  • Misrepresentation has not caused damage to the claimant (usually difficult to show once a misrepresentation has been established)
  • Consent given
  • Use of mark encouraged

The law on passing off is complicated. If you have any issues in relation to a potential passing off claim, you should seek specialist advice from our intellectual property solicitors.

Passing off remedies

A claimant in a passing off action may claim any of the following remedies:

  • An inquiry to establish loss
  • Damages for loss of reputation and/or profit
  • Seek an account of the lost profit
  • An order for the delivery up or destruction of the infringing articles or products
  • Injunctive relief (either an interim injunction if you need to act quickly or an injunction to prevent further actions that amount to passing off)

Passing off cases

Starbucks vs. Sky

The Claimant, Starbucks (HK), was the operator of the largest subscription TV service in Hong Kong through its NOW TV channel. The Defendant, Sky, had launched an internet-based pay-per-view channel in the UK operating under the name NOW TV. The Claimant objected and brought an action for passing off against the Defendant. The UK Supreme Court upheld the longstanding principle that to bring an action in passing off the Claimant must have more than a reputation in the UK – it must have actual paying customers and the fact that the service is one known to individuals living in the UK does not affect this requirement.

Rihanna vs Arcadia/Topshop

Rihanna brought a claim against Topshop in 2013 for damages of £3.3million following the sale by Topshop of t-shirts featuring a photograph of her taken during a video shoot by an independent photographer who had licensed the use of the image to Topshop. As Rihanna had not given her consent, she argued that her image on the t-shirt amounted to a misrepresentation that she was associated with it, encouraged the public to buy it and this resulted in damage to her reputation and goodwill as a fashion icon. The High Court decided in favour of Rihanna and found that the sale of the t-shirt amounted to passing off as it was likely to lead people to buy it in the false belief that she had approved or authorised it. The High Court granted an injunction prohibiting Topshop from selling the garment without informing purchasers that it had not been approved or authorised.

Sofa Workshop vs Sofaworks

The Sofa Workshop had registered two Community Trade Marks for the word mark SOFAWORKS and brought a claim for trade mark infringement against Sofaworks on the basis of these Community Trade Marks as well as a claim for passing off.  Whilst the trade mark infringement claim failed, the passing off claim was successful. The Sofa Workshop had goodwill in the UK and Sofaworks’ use of the SOFAWORKS brand amounted to a misrepresentation leading or likely to lead a proportion of relevant actual consumers to believe that Sofaworks’ goods were the goods of The Sofa Workshop which had caused material damage to The Sofa Workshop’s goodwill.

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What next?

If you’re concerned about passing off, our intellectual property solicitors can help. Call us today on 0800 689 1700, email us at enquiries@hjsolicitors.co.uk, or fill out our form below and we’ll get back to you.

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