Notes on Passing Off and Trade Marks: History, Justifications, International Dimensions, and New Technologies

1 History

1.1 History of Marks

Historically, marks served dual purposes: indicating ownership and signaling quality. Early proprietorial marks identified livestock or goods to aid recovery after events like shipwrecks. With the rise of medieval guilds, marks functioned within craft communities to certify source and quality, compelling members to apply identifying signs to goods. After guilds declined in the 18th century, marks expanded with regional trade, factory production, and mass advertising, becoming cues that consumers relied on when purchasing. Over time, signs shifted from indicating origin to signaling quality, and then to becoming valuable branding assets in their own right. Some marks gained an advertising allure, functioning as symbols that attract customers not merely through origin or quality beliefs, but through the marketing presentation of the product. In contemporary insight, trade marks are described as evolving from signals to symbols, and at times to a “mythical” status that helps construct consumer identity through experiences associated with brands (e.g., Ferrari, Prius, Budweiser). This evolution raises questions about whether trade marks should be treated as language devices, symbols, or myths.

In marketing and legal discourse, brands can be seen as more than identifiers of origin; they embody personality, style, or aura surrounding a product. The discussion also notes a contrast between brands as empirical signifiers of origin and quality versus their broader cultural and emotional roles in consumer identity and experience.

1.2 History of the Legal Protection of Marks

The legal protection of marks began in the sixteenth century at common law, where misrepresentation that could deceive the public was prohibited. The tort of passing off developed from concerns about fraudulent representations, protecting goodwill and preventing deception about source. Though registration emerged later, it complemented common law protection. The registered system began in 1875, inspired by foreign demand for stronger protection and international recognition of industrial property rights. When registration started, it covered a limited range of marks subject to examination prior to entry. Registration offered benefits, notably reducing the burden of proving goodwill and allowing protection prior to use. The 1938 Trade Marks Act brought the ability to assign marks separately from the goodwill of a business, reinforcing the advantages of registration. Nevertheless, passing off retained relevance where registration was restrictive, the process onerous, or rights narrower. The debate on scope centered on origin-based protection versus broader protection as marks evolved into sources of advertising and brand value. Frank Schechter’s influential argument promoted stronger protection grounded in preserving the uniqueness of a mark, even across dissimilar goods, framing trade marks as a form of property rather than solely as indicators of confusion. Over time, many jurisdictions incorporated Schechter’s logic to extend rights, including preventing uses of marks on dissimilar goods and recognizing marks as assets beyond their source-indicating function. The discussion also covers the economic costs of protection, including the idea that trade marks are monopolies, though this framing is contested. Registration reduces some information asymmetries but creates costs, such as clutter on registers and the incentives to invest in mark design and branding.

The chapter also discusses tensions between the costs and benefits of protection, the role of consumer confusion in defining infringement, and the ongoing evolution of protection to reflect marks’ broader functions in branding and advertising. The “signals to symbols to myth” transformation underpins debates about whether the law should extend protection to cover brand-associated goodwill and non-source functions, and how to balance protection with free competition.

2 Costs of Trade Marks

A central critique is that trade marks function as monopolies, raising concerns about efficiency. However, the text argues that trade marks are not monopolies in the same way as patents or copyrights, because they generally control use of a sign in connection with goods or services rather than exclusive control over the sale of a product itself. True monopolistic risk arises when marks are treated as products in their own right or when the sign is inherently linked to the product in a broader market sense. Even if monopolistic concerns are overstated, trade marks impose social costs: the costs of developing and maintaining marks, conducting registers searches, and negotiating with related mark owners, especially for new entrants. As the pool of strong marks shrinks, firms may incur higher costs to create distinctive and high-quality associations. The text highlights APPLE as an illustrative example of investments in functional branding to signal quality, advertising, and related associations. The discussion also notes the costs of cluttered registers, including unused marks and registrations for broad classes of goods that are not actively used, which can hinder efficiency and clarity in the marketplace.

A major critique is that trade marks function as monopolies over signs, yet this framing can mislead, since protection is not over the underlying goods and does not invariably restrict all competition. The chapter argues that social costs arise from exclusive rights over words and symbols, including potential restrictions on free speech in some contexts. The broader point is that the legal framework shapes how language and discourse circulate in the public domain, influencing identity formation and public communication.

3 Justifications for the Legal Protection of Trade Marks

The chapter surveys several rationales for protecting trade marks and evaluates their merits and limits. It notes that traditional justifications—indicators of origin and guarantees of quality—are comparatively straightforward, while broader brand protection raises more complex questions. Three main strands are discussed: creativity and innovation; information and search costs; and ethical considerations.

3.1 Creativity and Innovation

The copyright/patent regime centers on protecting labour and personality, but these notions do not map neatly onto trade marks, since novelty is not a prerequisite for protection of marks. Some scholars have insisted on treating marks as creations, arguing that goodwill can be created by branding in a similar way to authors creating works. Another prominent argument is that protection rewards producers for investment, ensuring that the producer reap financial and reputational rewards rather than an imitator. The European Commission has described marks as engines of innovation, linking brand protection to incentivizing investment in product quality and marketing. However, these claims rest on contested assumptions, including whether trademark protection indeed fosters quality or induces static or dynamic improvements in product offerings. The debate also notes concerns about the unpredictability of quality under mark protection and the potential for strategic degradation of quality if that benefits long-term profits.

3.2 Information and ‘Search Costs’

A central and widely cited justification is that marks reduce information costs for consumers. By preventing copying of source-identifying marks, trade mark law facilitates shopping by giving consumers confidence that items bearing the same mark come from the same producer and share consistent characteristics. This is especially valuable for experience goods, where quality or variety cannot be judged on inspection alone. Trade marks thus help maintain consistent standards and encourage firms to uphold quality across outputs. Critics, including Dogan and Lemley, argue that search-cost reductions should not be the sole justification for extending protection if competition would be hampered. Jonathan Aldred questions assumptions about information provision by marks and suggests that firms may adjust quality over time to maximize profits, potentially undermining the informational value of marks. The broader point is that trademarks also function as advertising devices; debates about the role of advertising revolve around informational versus persuasive uses of branding. Ralph Brown’s influential view linked advertising’s informational content with the legitimacy of mark protection, while highlighting concerns about persuasive advertising that can insulate firms from competitive forces. The chapter notes that some scholars argue for a narrow scope of protection based on search costs, while others advocate broader protection grounded in the uniqueness and identity of marks.

3.3 Ethical Justifications

Ethical arguments center on fairness and justice, particularly the notion that one should not reap the benefits of another’s goodwill through misrepresentation or misappropriation. The “reap–sow” metaphor is used to justify protection for marks whose associations have been nurtured by the original maker. Critics caution that it can be difficult to determine what the mark owner has sown, and whether consumer associations constitute valuable goodwill. Some ethical arguments also invoke speech rights, arguing that restricting misuse of marks protects expressive autonomy and prevents compelled speech where use of a mark communicates a message on behalf of the mark owner. However, it is unclear how far speech rights should reframe traditional property-based protections, and most commercial disputes remain anchored in likelihood of confusion and deception analysis rather than broad speech-based theories.

4 International and Regional Dimensions

Trade marks have always tied to geography, but globalization and international trade created pressure for harmonization and cross-border protection. The chapter outlines two main strands: establishing international registration systems and developing international minimum standards, and then regional harmonization, particularly in Europe.

4.1 International Registration

International protection mechanisms have evolved from the Paris Convention (1883), which promotes national treatment, to the Madrid System (Madrid Agreement, 1891; Madrid Protocol, 1989) that streamlines international registration via the World Intellectual Property Organization (WIPO). The UK historically resisted Madrid but ultimately joined the Protocol. International registration allows owners to file home registrations and extend protection to multiple jurisdictions with a single process, albeit each national office must still manage and enforce rights, creating a portfolio of national marks. The European Union regime later introduced unitary protection through the European Union Trade Mark (EUTM), administered by EUIPO, with the option to designate the EU via a single application. The Madrid System can be used in conjunction with EUTMs for international protection.

4.2 International Standards

Beyond registration mechanisms, Article 10bis of the Paris Convention obliges member states to provide protection against unfair competition. In the UK, protection for unregistered marks through passing off operates alongside registered marks. TRIPS provides a detailed framework: expansive subject matter (including service marks), non-discrimination in registrability, rights protection against use that causes confusion, and provisions on non-use revocation and licensing. The text highlights that TRIPS sets baseline protections and minimum standards that member states must meet, shaping national regimes.

4.3 Regional Harmonization

The EU’s Trade Marks Directive (1988, with updates in 2008 and recast in 2015) aimed to harmonize conditions for registration and rights to facilitate the internal market. The Community Trade Mark regime (CTM) evolved into the EU Trade Mark (EUTM) regime, with OHIM (now EUIPO) granting marks with EU-wide effect. Brexit has impacted the UK’s alignment with EU regimes, but the EU framework still influences UK law, especially in areas of harmonization and prior developments in the EU. Regional harmonization addressed disparities among member states’ laws that affected free movement of goods and services, promoting more uniform protection across borders. The chapter also notes the EU’s narrower harmonization in unfair competition directives and the protection of PDOs and PGIs for wines and foods.

5 New Technologies

The rise of electronic commerce and online domain-name presence introduced new questions about the interaction between trade marks and cyberspace. The UK responded by applying existing regimes (passing off and registered marks) to domain-name disputes rather than creating new statutes. Courts have often treated domain-name abuses as opportunities to enforce trade mark rights against cybersquatting and related misuses. Internationally, the Uniform Domain Name Dispute Resolution Policy (UDRP) established by ICANN provides a fast, arbitration-based mechanism to resolve abusive domain registrations. Multiple providers (including WIPO and the National Arbitration Forum) administer these disputes. The UDRP requires a domain name to be identical or confusingly similar to the complainant’s mark, a lack of rights or legitimate interests by the registrant, and registration and use in bad faith. A faster and cheaper variant, the Uniform Rapid Suspension System (URS), suspends abusive domains in clearly infringing cases, rather than transferring ownership.

As ex post remedies can be costly and slow, proactive solutions have emerged: the Trademark Clearinghouse (to verify rights holders for domain registrations during a pre-launch window) and the Domains Protected Marks List (DPML), which enables brand owners to block mark registrations for a designated period. AI technology has become prominent in registration processes, with first-to-file rules, and AI tools used to predict likelihood of confusion by assessing visual, phonetic, and semantic similarity. This raises questions about data compatibility across jurisdictions, the potential for unintended legal transplants, language biases in training data, and the implications for registries’ and private providers’ use of automated tools. AI is also used to detect infringing activity online, including monitoring social media and marketplaces. The chapter emphasizes the need to re-examine core trademark principles in light of algorithmic shoppers and automated decision-making, considering potential liabilities for those who design and deploy AI systems. It also highlights broader concerns about how these technologies influence the human standard consumer and the balance between algorithmic assistance and human judgment in registration and enforcement.

Practical and Ethical Implications

Domain-name disputes increasingly rely on established trade mark law rather than bespoke cyberspace statutes. This can create efficiencies but also raises jurisdictional and evidentiary questions.
UDRP and URS offer rapid relief, but they require careful balancing of brand protection with freedom of expression and fair use across borders.
AI in registration and enforcement promises improved conflict prediction and faster enforcement but introduces issues of data bias, cross-jurisdictional applicability, and accountability for AI-generated decisions.
The shift toward algorithmic decision-making challenges traditional tests for likelihood of confusion and may require rethinking consumer centrality in enforcement analyses.

International and Practical Implications

The evolution from local ownership to global branding requires balancing the protection of brand identity with competition and speech freedoms.
International and regional frameworks (Paris Convention, Madrid System, TRIPS, EU directives) create baseline protections while permitting national adaptations.
New technologies enable more efficient protection and enforcement but demand careful governance to avoid overreach and to protect free speech and legitimate use.

Key Concepts to Remember

Passing off remains a live tool for protecting goodwill when registration is unavailable or insufficient.
Registration consolidates rights and reduces proof burdens but introduces registration costs and potential clutter.
Schechter’s argument for preserving the uniqueness of a mark extends protection beyond identical/similar goods and supports broader rights.
The shift from origin-based to brand-based protection has shaped doctrinal expansions, including protection against use on dissimilar goods and the protection of well-known marks under TRIPS and international agreements.
International and regional harmonization have been significant in aligning standards, enabling cross-border protection, while preserving national variety.
New technologies reshape how marks are registered, protected, and enforced, necessitating ongoing evaluation of doctrinal tests (e.g., likelihood of confusion) in the age of AI and automated decision-making.

Note: The above notes synthesize the chapter’s discussion on the history, justification, and global framework of passing off and trade marks, including modern challenges posed by digital commerce and AI. Specific references, cases, and articles cited in the chapter provide deeper context for each point and can be consulted for detailed analysis.