The branding for your business is a form of intellectual property. If someone is using your branding (or other aspects of your business model) then you may have a claim against them to stop them from using it and to pay you compensation for any financial losses you have suffered as a result of their unlawful use.
This kind of unlawful use is known as “passing off”. In this article, we explore the basic elements of a passing off claim.
What is passing off?
In very simple terms, passing off is the unauthorised use of another party’s name, mark or get-up (meaning the appearance or “look and feel” of a product) for commercial gain. Get-up can include a distinctive container, colours of the packaging or marketing materials.
How do you prove passing off?
The test for whether unlawful passing off has occurred is sometimes known as the “classic trinity” and has the following three elements, each of which are explored in further detail below:
- Goodwill or reputation owned by a trader (“A”);
- Misrepresentation by another trader (“B”);
- Damage to A.
A claimant would have to establish all three of these elements to be successful in a claim for passing off.
Goodwill owned by a trader
Goodwill is the good name and reputation of a business, built up over time, which increases the likelihood of customers using or continuing to use that business’s products or services. The law of passing off seeks to protect a party’s goodwill and reputation from unauthorised exploitation by third parties.
The existence of goodwill in a particular product or service is an enquiry of fact. A court will consider factors such as the aural, visual and conceptual characteristics of the product to make this determination. If goodwill is found to exist, then a court will move onto the next limb of the test.
Misrepresentation by another trader
The court will then consider whether the defendant has made a misrepresentation (usually concerning use of a brand or get-up that is sufficiently similar to the claimant’s brand or get-up) that causes or is likely to cause a consumer to believe that the goods or services of the defendant are the good or services of the claimant. This is again a factual enquiry. The claimant must show that there is a strong likelihood of or actual deception or confusion in the mind of a consumer. The classic example is the “Jif lemon” case. Reckit & Colman had a long standing lemon juice product which was sold in a container shaped like lemon. Borden, a competitor, entered the market and began marketing its own lemon juice product in a container also shaped like lemon. The Borden container was slightly larger and had a flattened side. Notwithstanding these differences the court found that Borden was liable for unlawful passing off.
Damage to goodwill
Finally, for a passing off claim to succeed, the misrepresentation meeting the criteria set out above must cause “damage” to the claimant. The primary damage is typically loss of revenue as customers buy the defendant’s product in the mistaken belief it is the claimant’s product. If the defendant was also providing an inferior product (in addition to appropriating the brand) then that could have dramatic consequences for a business further damaging its goodwill. This point is illustrated in the “Bristol Conservatories” case. A manufacturer of conservatories discovered that a competitor was using photographs of their conservatories in its brochures. Though the brochure did not mention the claimant, the court found that the use of the photographs constituted a damage to the goodwill built up by the plaintiff in its business.
What can I claim from a defendant?
There are two major remedies which can be claimed in the same action:
- An injunction to prevent the passing off from continuing; and
- A claim for damages (financial compensation)
As in all litigation, the success or failure of a claim will depend very much on the specific facts and requires professional advice. Whilst the “classic trinity” tests are clear and have been an established part of UK law for decades, much depends on how the case is presented in order to satisfy a court that goodwill exists in the claimant’s products or services and that a misrepresentation has occurred that causes or is likely to cause confusion in the eyes of the public.
This article is provided by Burlingtons for general information only. It is not intended to be and cannot be relied upon as legal advice or otherwise. If you would like to discuss any of the matters covered in this article, please contact Paramjit Sehmi or write to us using the contact form below.