Laws of Passing Off - Lecture Notes

Facts: Reckitt & Colman (Jif Lemon) had been selling lemon juice in lemon-shaped plastic containers since the 1930s. Borden introduced a similar product.
Defendant's Argument: The tag and cap color are different, so consumers can distinguish the products.
Plaintiff's Argument: The target consumers (housewives) may not read the tag.
Court's Question: How should consumers be considered when assessing passing off?
Court's Answer: Consumers are taken as they are; consider their actual characteristics and traits.
Key Principle: "The essence of the action for passing off is a deceit practiced upon the public."
- The court noted that if the public is demonstrably deceived, it is not a valid defense to claim they would not have been deceived if they had been more careful, literate, or perspicacious.
Market Context: The court emphasized the importance of considering the type of market, sales manner, and purchaser habits.
- Consumer characteristics vary with the product (e.g., cracker biscuits vs. electronic devices).
- Passing off law protects even those "whom it is difficult to deceive."

Three Requirements for Passing Off:
- Established goodwill in the distinctive getup.
- Misrepresentation.
- Damage.
Application to the Case:
- The court determined there was established goodwill, consumers would be misled by the getup, and there would be a diversion of sales.
- Goodwill: Product popularity and long-standing presence in the UK market.
- Misrepresentation: Consumers associate the lemon shape with Jif Lemon.
- Damage: Diversion of sales due to consumer confusion.

Context: A New Zealand case applying the Jif Lemon principle.
Facts: Klisser's (predecessor to Vogel bread) sold bread with a gingham pattern and used a ponytail effect to tie the packaging of the bread. Harvest Bakeries began practicing a similar way of packaging their bread.
- Klisser's argued the getup was distinctive and they had goodwill attached to it, wanting Harvest Bakeries to stop using that packaging pattern.
The court looked into the three criteria: goodwill, misrepresentation, and damage.
The court analyzed whether there was goodwill attached to this distinctive getup.
- The court found that this way of packaging bread was a common practice in the breadmaking business, so there was no distinctiveness and no goodwill attached to such packaging.

Facts:
- Spalding experimented with footballs, patenting a design but finding the initial batch substandard (heavier with unsatisfactory materials).
- They created an improved version advertised as the "improved Sony o.r.b. football."
- The substandard batch was sold to a rubber merchant without any contract to destroy the batch.
- Gamage acquired the substandard footballs and began selling and advertising them.
- Gamage's advertisement used the same phrase as Spalding, but omitted "improved", leading consumers to believe they were Spalding's new product.
Issue: Can this be a case of reverse passing off, where someone else's product is passed off as one's own?
Court Ruling:
- Addressed the association with an inferior quality product.
- The court held that passing off laws were applicable, extending the principles to cover the situation.
- Damages included not just diversion of sale but also dilution of reputation and goodwill.

Facts:
- Champagne, recognized for its special characteristics due to grapes grown in the Champagne region of France, had established goodwill in the UK.
- A Spanish company, Costa Brava, began selling sparkling wine in the UK under the name "Spanish Champagne."
Issue: Can passing off apply to a group of winemakers from a specific region?
Court Ruling:
- The court determined that goodwill could be attached to a group of manufacturers from a particular region.
- Costa Brava was using the goodwill of champagne makers by misrepresenting their sparkling wine as champagne.
- Damages included diversion of sale and dilution of goodwill.

Facts:
- Advocaat, a Dutch alcohol, has specific qualities due to a sacred recipe. It had established goodwill since 1911.
- Townend & Sons started copying the Advocaat product using cheaper alternatives.
Issue: Can a group of Dutch manufacturers claim passing off?
Court Ruling:
- The court decided that there was goodwill attached to Advocaat made by Dutch manufacturers.
- The defendant was trying to capitalize on the goodwill established by the Advocaat manufacturers.
- The court noted that goodwill could be endangered when someone sells goods described as being made by the manufacturer but are of inferior quality.
- Damage was in the form of dilution of goodwill.

Facts:
- A local Popeyes takeaway, owned by Bill and Me, had been operating in Fielding since 2008.
- Popeyes Louisiana Chicken, a US-based company, planned to open outlets in New Zealand.
- Popeyes sent a notice to the local business, claiming they had a registered trademark and the local business needed to change its name.
- The local business changed its name due to a lack of resources to fight the international business.
Point of Discussion:
- Could passing off have helped them, arguing they had established goodwill in the community since 2008?
- Popeyes had a registered trademark since 1976 in New Zealand but was not operating any business under that name.
Discussion Points
- Common law protection is available despite legislation.
- It’s a clash between a registered mark and an unregistered mark.