Passing Off Notes
Revision: Law of Thoughts
Three elements:
Duty of care.
Breach of duty of care.
Damage due to breach.
Question Scenario: Sarah and John
Sarah: Professional baker, uses peanut oil, doesn't disclose.
John: Customer, allergic to peanuts, suffers reaction.
Questions:
Who is the claimant?
John.
Who is the defendant?
Sarah.
Elements of negligence:
Duty of care.
Yes, Sarah owes a duty of care to John.
Contractual obligation (seller-buyer).
Law of torts: Duty to neighbor (Donoghue v Stevenson principle).
Breach of duty of care.
Yes, Sarah omitted peanut oil from ingredients.
Damage.
Yes, John suffered an allergic reaction.
All three elements satisfied, potential tort of negligence.
Passing Off
Agenda:
Details of passing off.
Classical passing off.
Three ingredients: goodwill, misrepresentation, damages.
Case: Reckitt and Coleman v Borden (UK).
New Zealand case application.
History
Hard to pinpoint a single case.
Underlying principle traced to Perry v Truefitt (1842).
Lord Langdale: "A man is not to sell his own goods under the pretense that they are the goods of another man."
What is Protected?
Goodwill attached to getup, not just the getup itself.
Common law tort, developed through court cases.
Protects business goodwill.
Originally required intentional misrepresentation, now more flexible.
Initially intention was required to misrepresent.
Now the requirement has been relaxed, even accidental matching getup can lead to passing off.
Protects intangible property (goodwill).
Balances free competition with protection from unfair competition.
One of the purposes to prevent unfair competition.
No registration required (unlike trademarks).
Under passing off you don't need to register your trademark for it to be protected.
Under trademark, registration is compulsory.
Protects unregistered marks, signs, and getup.
Marks, signs (color, shape), getup (trade dress).
Called common law trademark protection.
Damage or likely damage is necessary.
In passing off, there has to be damage or likelihood of damage.
Situations of Passing Off
Copying names.
Example: Pringles copycat.
Imitating a distinctive trademark or trade name causing market confusion.
Protecting unregistered marks because it's protected common law.
Copying getup.
Example: Butter container copies.
Copying the product itself.
Public believes defendant's product has qualities of plaintiff's.
Example: Champagne.
Champagne: Sparkling wine from a specific region in France.
Australian sparkling wine makers case: Agreement to not use "champagne" label.
They can only say sparking wine.
Extended Concepts of Passing Off
False association.
Representing a business is associated with, approved by, or sponsored by another.
Unauthorized use of image or characters.
Example: Claiming certification or endorsement without approval.
Enabling passing off.
Intermediaries in complex product creation can be liable.
Reverse passing off.
Passing off someone else's product as your own.
Example: Removing tag and replacing it with your own brand.
Taking someone else's product and you're trying to sell it as yours.
Discussion on Reverse Passing Off
Scholarly debate if it's distinct or just regular passing off.
Pass the difference between passing off and reverse passing off, that is in dispute.
Scholars have argued whether reverse passing off is actually based on the principle of passing off.
Sometimes cases looking like reverse passing off are actually cases of passing off.
Requirements of Passing Off
Three requirements:
Distinctive getup with goodwill.
Misrepresentation causing deception to consumers.
Damage caused or likely to be caused.
1. Goodwill
Attractive force drawing customers.
Arises from business, professionals, artists, charities, political parties.
Must be commercial goodwill.
When we talk about goodwill, there has to be commercial goodwill.
Plaintiff must show a distinctive feature linked to their goods/services.
Protectable elements:
Distinctive names (e.g., Khushbu for hotels).
Descriptive names acquiring secondary meaning (e.g., Holiday Inn).
Distinctive getup or product itself (e.g., Champagne).
Getup: Badge of plaintiff's goodwill, associates good with plaintiff in public mind.
Features must be distinctive and capricious, not purely functional or common.
The logo or the trade name that you are trying to protect has to be distinctive.
It shouldn't be something that is commonly used in the trade.
The logo or the trade name that you are trying to protect has to be distinctive.
It shouldn't be something that is commonly used in the trade.
Any monopoly which a plaintiff may enjoy in getup will only extend to those parts which are capricious.
2. Misrepresentation
Must deceive or likely to deceive consumers.
Causes confusion about:
Source.
Characteristics.
Association.
Likelihood of confusion: question of fact through evidence (e.g., surveys).
Factors considered:
Nature of name, mark, trade dress.
Circumstances and peculiarities of the trade.
Defendant's motives (relaxed requirement).
Product type and cost.
Packaging/labeling.
Type of buyer (discerning or not).
Retailer representation.
3. Damage
To plaintiff's business or goodwill (essential).
Present or future possible damage.
Causation needed between misrepresentation and damage.
There has to be a causation between misrepresentation and damage.
Types of damages:
Loss of customers.
Dilution of goodwill.
Loss of potential licensing revenue.
Other economic losses that can be proved.
Case: Reckitt and Coleman v Borden (1990) - Jif Lemon Case
Significance: Laid out three requirements for passing off.
Facts:
Rickett and Coleman (Jif Lemon): Lemon juice in lemon-shaped plastic container since 1936.
Borden (US company): Selling lemon juice, entering UK market with similar containers.
Mark one was slightly bigger than the normal lemon size, so mark one lemon was not in dispute.
Dispute over Borden's lemon shaped containers (mark two and mark three).
Mark two and mark three were in dispute.
Rickett and Coleman claimed misrepresentation causing confusion.
Defendants selling small portions of lemon in these lemon shaped poly plastic containers.
Tag differences: Jif Lemon vs. Real Lemon.
Legal History
Trial court: Rickett and Coleman won.
Court of Appeal: Rickett and Coleman won.
House of Lords: Decision discussed here.
House of Lords - Judgement Paragraph
Laid out the three requirements for tort of passing off action:
First, he must establish a goodwill or reputation attached to the goods or services, which he supplies in the mind of the purchasing public by association with the identifying getup.
Whether it consists simply of a brand name or a trade description or the individual features of labeling or packaging, under which his particular goods or services are offered to the public such that the getup is recognized by the public as distinctive specifically of the plaintiff's goods or services.
Second requirement, he must demonstrate a misrepresentation by the defendant to the public whether or not intentional.
Leading or likely to lead the public to believe that the goods or services offered by him are the goods or services of the plaintiffs, the requirement of misrepresentation.
Third, he must demonstrate that he suffers or, is likely to suffer damage by reason of erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.
Questions Before the Court:
Whether Rickett and Coleman acquired distinctiveness and can complain against Borden's similar getup.
Whether what the appellants are doing constitutes a misrepresentation.
What their juice is jif juice and whether that results from similarity of their getup to the whole of the respondent's getup or to only the most striking part of it is wholly material.
Defendant's argument: Tag is different (Real Lemon), so no confusion.
Argument was not accepted.
Consumer group considered: Housewives.
Plaintiff's claim: Consumer who are housewives, they don't read the tag.
Question: Does the nature of the consumer matter in analyzing misrepresentation?