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The tort of passing off notes
Intellectual Property Law (6FFLK039)
King's College London
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The tort of passing off
According to Lord Oliver in the leading case on passing off, ‘Jif Lemon’: ‘The law of passing off can be summarised in one short general proposition— no man may pass off his goods as those of another.’
In ‘ Jif Lemon’ , Lord Oliver set out the three basic elements which are necessary to bring an action in passing off. These have come to be known as the ‘classic trinity’.
Lord Oliver, at p. 499:
First, [the claimant] 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 ‘get-up’ (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services as offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff’s goods or services. Secondly, 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 goods or services offered by him are the goods or services of the plaintiff. ... Thirdly, he must demonstrate that he suffers or, in a quia timet action that he is likely to suffer, damage by reason of the 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.
The ‘classic trinity’ identified in ‘Jif Lemon’ as necessary for a passing off action are: (1) goodwill; (2) a misrepresentation; (3) damage or in a quia timet action, the likelihood of damage.
The ‘Advocaat’ definition – both can be used
Earlier in the ‘Advocaat’ case Lord Diplock identified five elements which he held must be present in order to bring a passing off action:
Lord Diplock, at pp. 740–2:
The action for what has become known as ‘passing off’ arose in the nineteenth century out of the use in connection with his own goods by one trader of the trade name or trade mark of a rival trader so as to induce in potential purchasers the belief that his goods were those of the rival trader. Although the cases up to the end of the century had been confined to the deceptive use of trade names, marks, letters or other indicia, the principle had been stated by Lord Langdale MR as early as 1842 as being: ‘A man is not to sell his own goods under the pretence that they are the goods of another man’; Perry v Truefitt, 6 Beav 66.
Lord Parker in Spalding v Gamage (1915) 32 RPC 273. In a speech which received the approval of the other members of this House, he identified the right the invasion of which is the subject of passing off actions as being the ‘property in the business or goodwill likely to be injured by the misrepresentation’.
My Lords, Spalding v Gamage and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so.
Also in ‘Advocaat’, Lord Fraser identified five criteria which should be present for a successful passing off action. Lord Fraser’s criteria are generally complementary to those of Lord Diplock
Lord Fraser, at p. 755:
It is essential for the plaintiff in a passing off action to show at least the following facts: (1) that his business consists of, or includes, selling in England a class of goods to which the particular trade name applies; (2) that the class of goods is clearly defined, and that in the minds of the public, or a section of the public, in England, the trade name distinguishes that class from other similar goods; (3) that because of the reputation of the goods, there is goodwill attached to the name; (4) that he, the plaintiff, as a member of the class of those who sell the goods, is the owner of goodwill in England which is of substantial value; (5) that he has suffered, or is really likely to suffer, substantial damage to his property in the goodwill by reason of the defendants selling goods which are falsely described by the trade name to which the goodwill is attached.
The definitions set out by Lord Oliver in ‘Jif Lemon’ and Lord Diplock in ‘Advocaat’ are not incompatible.
Lord Diplock’s formulation (together with that of Lord Fraser) might be most usefully applied in cases of extended form of passing off.
The Relationship Between Passing off and Unfair Competition
In ‘Advocaat’, Lord Diplock expressed his anxiety that an action for passing off might, but should not, be used to hamper legitimate competition.
Lord Diplock, at p. 742:
.. does not follow that because all passing off actions can be shown to present these characteristics, all factual situations which present these characteristics give rise to a cause of action for passing off. True it is that their presence indicates what a moral code would censure as dishonest trading, based as it is upon deception of customers and consumers of a trader’s wares but in an economic system which has relied on competition to keep down prices and to improve products there may be practical reasons why it should have been the policy of the common law not to run the risk of hampering competition by providing civil remedies to every one competing in the market who has suffered damage to his business or
influence may be, goodwill is worth nothing unless it has the power of attraction sufficient to bring customers home to the source from which it emanates.
In a passing off action, the misrepresentation may result from the improper use of a trader’s trade name or other indicia which distinguishes this goodwill. But while passing off will protect a trader’s goodwill, it will not necessarily protect a trader’s reputation. The two are not synonymous.
Harrods Ltd v Harrodian School Ltd [1996] RPC 697
The claimant owned the Harrods department store. The defendants ran a preparatory school under the name ‘The Harrodian School’.
Lord Justice Millett, at p. 702:
The plaintiffs have always been very proud of the name ‘Harrods’. They claim that it has come to represent an unsurpassed level of quality in the range of goods and services which they provide. But while their range is of astonishing breadth, it would be a mistake to be dazzled into thinking that the range of the plaintiffs’ commercial activities is virtually unlimited, or that they have acquired a reputation for excellence in every field of activity. They are retail suppliers of goods and services of every kind; but that is all.
[The question then arose whether, given the wide reputation which resided in the name ‘Harrods’, any use by the defendant of the ‘Harrods’ name would inevitably trespass on the claimant’s goodwill. Lord Justice Millett concluded it would not. He noted that it is goodwill, alone, that is protected by a passing off action:]
It is this fundamental principle of the law of passing off which leads me to reject the main way in which the plaintiffs have put their case before us. ‘Harrodian’, they submit, is synonymous with ‘Harrods’; the name ‘Harrods’ is universally recognised as denoting the plaintiffs’ business—it has, as counsel put it .. unlimited ‘field of recognition’; .. the huge number of persons who are customers or potential customers of the plaintiffs it is a simple matter to infer that an appreciable number of them will be deceived into thinking that ‘The Harrodian School’ is owned by or otherwise connected in some way with Harrods; and damage may likewise easily be inferred. The name ‘Harrods’ may be universally recognised, but the business with which it is associated in the minds of the public is not all embracing. To be known to everyone is not to be known for everything.
The location of goodwill
To bring a passing off action, goodwill must be situated in the UK. It is worth remembering that having a reputation in the UK is not the same as having goodwill.
The Budweiser case:
The American brewers of Budweiser beer brought a passing off action against the defendants who supplied beer under the name ‘Budweiser’ in the UK. Although it was accepted that the American ‘Budweiser’ beer was well known in the UK , the claimant supplied its beer only to US army bases. In the Court of Appeal, Oliver LJ held that the claimants did not have the goodwill necessary for a passing off action. He noted that it is not possible to assume ‘the existence of the goodwill apart from the market, and that, as it seems to me, is to confuse goodwill, which cannot exist in a vacuum, with mere reputation
which may, no doubt, and frequently does, exist without any supporting local business, but which does not by itself constitute a property which the law protects’.
In ‘Budweiser’, Oliver LJ held that the claimant must have a ‘market’ in the UK for its goods to have the requisite goodwill.
In the early case of Alain Bernardin et Cie v Pavilion Propertie the claimants, who carried on a restaurant business in Paris under the title ‘The Crazy Horse Saloon’, had for many years advertised their establishment by publicity material distributed to tourist organizations and hotels in the UK. They failed to restrain the defendants from carrying on a restaurant in London under the same name because the court held that a trader could not acquire goodwill without some sort of use in the UK. By merely advertising, a foreign trader might acquire a reputation in the UK but not the requisite domestic goodwill.
The ‘Crazy Horse’ decision suggested that for goodwill to subsist in services, the claimant must not only have customers in the UK but also a place of business.
Pete Waterman Ltd v CBS United Kingdom Ltd [1993] EMLR 27
The claimants (PWL) were a successful pop record-producing organization who were known to the public as ‘The Hit Factory’. The claimants did not trade under the name ‘Hit Factory’, but had released three compilation albums of their hits entitled ‘The Hit Factory’, ‘The Hit Factory 2’, and ‘The Hit Factory 3’. The defendant was a record company which owned a recording studio in London. The defendant had entered into a joint venture agreement with the owner of a studio in New York for the refurbishment and running of the London studio. The New York studio had traded since about 1970 as ‘The Hit Factory’. Under the agreement, the owner of the New York studio had granted the defendant a licence to use the name ‘The Hit Factory’. The defendant proposed to rename its studio in London ‘The Hit Factory’. The New York studio had an international reputation and clientele, including many from the UK. Bookings had been made direct from the UK. In addition, $3 million of business had been done by the New York studio with US record companies relating to English artists, including bookings placed at the behest of UK companies through their US affiliates. However, all services rendered by the New York studio had been rendered in New York. The New York studio had no agent or place of business in the UK.
Browne-Wilkinson V-C, at p. 50:
.. changes in the second half of the 20th century are far more fundamental than those in 19th century England. They have produced worldwide marks, worldwide goodwil l and brought separate markets into competition one with the other. Radio and television with their attendant advertising cross national frontiers. Electronic communication via satellite produces virtually instant communication between all markets. This has led to the development of the international reputation in certain names, particularly in the service fields, for example Sheraton Hotels, Budget Rent A Car. In my view, the law will fail if it does not try to meet the challenge thrown up by trading patterns which cross national and jurisdictional boundaries due to a change in technical achievement.
As a matter of legal principle, I can see no reason why the courts of this country should not protect the trading relationship between a foreign trader and his United Kingdom customers by restraining anyone in this country from passing himself off as the foreign trader. The essence of a claim in passing off is that the defendant is interfering with the goodwill of the plaintiff. The essence of the goodwill is the ability to attract customers and potential customers to do business with the owner of the goodwill. Therefore any interference with the trader’s customers is an interference with his goodwill.
with the mark Cipriani. That, therefore, could not justify a finding of goodwill in England in relation to the Cipriani mark.
As for the New York Cipriani restaurants, despite some slight reputation in England, they failed to prove any significant English custom at the relevant time.... That too, therefore, is inadequate to show that the name Cipriani brought in any worthwhile English custom to the Cipriani restaurants in New York.
It is fair to say that, especially in the circumstances of the present day, with many establishments worldwide featuring on their own or shared websites, through which their services and facilities can be booked directly (or their goods can be ordered directly) from anywhere in the world, the test of direct bookings may be increasingly outmoded. It would be salutary for the test to be reviewed in an appropriate case. However, it does not seem to me that this case offers a suitable opportunity.
.. the exact test may be, the defendants do not pass it.
The relationship between a reputation, goodwill, and location
There are three fundamental and related questions which may arise in an action for passing off:
How to differentiate between reputation and goodwill?
Whether it is necessary to have actual goodwill in the UK to bring an action for passing off?
How is one to assess the extent of that goodwill?
The Supreme Court recently addressed all three of these questions in
Starbucks (HK) Ltd v British Sky Broadcasting Group Plc [2015] UKSC 31
The claimants, PCCM, supply a closed circuit internet television (IPTV) subscription service in Hong Kong , which has operated under the name ‘NOW TV’ since 2006. It has approximately 1 million subscribers and provides 200 channels, many with names including the word ‘NOW’. The vast majority of its programmes are in Mandarin or Cantonese. The service cannot be received nor have any set top boxes been supplied in the UK. There are no subscribers to NOW TV with UK billing addresses. And PCCM has never held an OFCOM licence for UK broadcasting.
Nonetheless , many Chinese-speaking residents of the UK would be aware of NOW TV, either through its Hong Kong service or because, since 2007, NOW TV Chinese content has been available on PCCM’s website, its YouTube ‘channel’, and as video on demand on flights to the UK.
PCCM has also been considering expanding its service into the UK, launching a NOW TV app which by October 2012 had been downloaded by 2,200 people. In July 2012, the defendants, collectively known as Sky, launched an IPTV service named ‘NOW TV’ , available across all internet platforms. The claimants sued for passing off. PCCM argued that they had both a reputation in this country with those who might subscribe to its service in Hong Kong and it also had customers in this country because of the significant number of
people who were exposed to its programmes on its website and on some international flights. The lower courts disagreed and PCCM appealed.
On appeal, PCCM made the additional argument that even if it were held that they did not have customers in this country , the Supreme Court should acknowledge that in an age of e-commerce it was both impractical and unrealistic to treat goodwill as limited only to jurisdictions where a trader had customers and should instead allow a passing off action where the trader has a reputation but no goodwill.
Lord Neuberger:
47 ... I have reached the conclusion that this appeal should be dismissed on the same ground on which it was decided in the courts below. In other words, I consider that we should reaffirm that the law is that a claimant in a passing off claim must establish that it has actual goodwill in this jurisdiction, and that such goodwill involves the presence of clients or customers in the jurisdiction for the products or services in question. And, where the claimant’s business is abroad, people who are in the jurisdiction, but who are not customers of the claimant in the jurisdiction, will not do, even if they are customers of the claimant when they go abroad.
Lord Neuberger also declined to accept the claimant’s suggestion that the court jettison the idea that claimants, with an online presence, must necessarily establish goodwill as opposed to a mere reputation in the relevant jurisdictions.
He believed that two related aspects of the case required further elucidation. These were: what constitutes sufficient business to give rise to goodwill; and whether that goodwill has to be in England.
As to what amounts to a sufficient business to amount to goodwill, it seems clear that mere reputation is not enough ... The claimant must show that it has a significant goodwill, in the form of customers, in the jurisdiction, but it is not necessary that the claimant actually has an establishment or office in this country. In order to establish goodwill, the claimant must have customers within the jurisdiction, as opposed to people in the jurisdiction who happen to be customers elsewhere. However, it could be enough if the claimant could show that there were people in this jurisdiction who, by booking with, or purchasing from, an entity in this country, obtained the right to receive the claimant’s service abroad. And, in such a case, the entity need not be a part or branch of the claimant: it can be someone acting for or on behalf of the claimant.
As to Lord Diplock’s statement in Star Industrial that, for the purpose of determining whether a claimant in a passing off action can establish the first of Lord Oliver’s three elements, an English court has to consider whether the claimant can establish goodwill in England, I consider that it was correct.
[Lord Neuberger then listed the various authorities for this stance. He continued:]
- My view on the two issues discussed at [49]–[53] above is supported by a brief extract from Lord Fraser’s speech in Erven Warnink at p, where he said that ‘the meaning of the name in ... countries other than England is immaterial because what the court is concerned to do is to protect the plaintiffs’ property in the goodwill attaching to the name in England and it has nothing to do with the reputation or meaning of the name elsewhere’.
The definition of a trader
In order to bring a passing off action, the claimant must be a ‘trader’, for it is only a trader who will have ownership of the requisite goodwill.
‘Trader’ has been given a very wide definition by the courts. See the book for a list of examples.
The ownership of goodwill
Goodwill is property. As such it can be sold or assigned. It cannot, however, be separated from the business to which it attaches. This was made clear by Lord Diplock in Star Industrial Company Ltd v Yap Kwee Kor.
Lord Diplock, at p. 269:
Goodwill, as the subject of proprietary rights, is incapable of subsisting by itself. It has no independent existence apart from the business to which it is attached. It is local in character and divisible; if the business is carried on in several countries a separate goodwill attaches to it in each. So when the business is abandoned in one country in which it has acquired a goodwill, the goodwill in that country perishes with it although the business may continue to be carried on in other countries.
There may be more than one owner of goodwill. In a partnership or a joint venture, goodwill may be shared.
In Fine & Country Ltd v Okotoks Ltd , it was suggested the goodwill might also be shared between a licensor and licensee.
It might also be shared by the owners of a business which has been divided , for instance between the founder’s heirs ( Sir Robert McAlpine Ltd v Alfred McAlpine Plc )
Alternatively a number of traders may have goodwill in the same mark, such as the title ‘mail’ which is commonly attached to newspapers ( Associated Newspapers v Express Newspapers [2003] FSR 51).
Goodwill may also be shared between traders in goods which have distinctive characteristics in common.
In these circumstances, passing off may arise when the defendant misrepresents its own goods as sharing these characteristics. Such actions have come to be known as the extended form of passing off.
Shared goodwill/the extended form of passing off
The defendant does not misrepresent its goods as originating from a particular source, but rather it misrepresents the fact that its goods share the same characteristics as a certain category of goods.
Erven Warnink BV v J. Townend & Sons (Hull) Ltd [1979] AC 731 (Advocaat)
The first claimants and other Dutch traders had for many years manufactured in the Netherlands a liquor called ‘advocaat,’ which was exported to Britain and distributed by the second claimants. The essential ingredients were the spirit brandewijn, egg yolks, and sugar as required by statutory regulations in the Netherlands, though the British regulations were not so specific. The liquor acquired a substantial reputation in Britain as a distinct and recognizable beverage. From 1974, a drink described as ‘Keeling’s Old English Advocaat’ composed of dried egg powder mixed with Cyprus sherry was made and marketed in England by the defendants. Though it could not be shown that it was mistaken for Dutch advocaat, it captured a substantial part of the claimants’ English market. In the passing off action in the High Court, Goulding J gave judgment for the claimants. The Court of Appeal reversed his decision and the case reached the House of Lords.
In this case, Lord Diplock set out the circumstances in which a limited class of traders might share the goodwill in a particular product.
Lord Diplock, at p. 743:
The Champagne case came before Danckwerts J in two stages: the first (reported at [1960] RPC 16) on a preliminary point of law, the second (reported at [1961] RPC 116) on the trial of the action. The assumptions of fact on which the legal argument at the first stage was based were stated by the judge to be:
(1) The plaintiffs carry on business in a geographical area in France known as Champagne; (2) the plaintiffs’ wine is produced in Champagne and from grapes grown in Champagne; (3) the plaintiffs’ wine has been known in the trade for a long time as ‘Champagne’ with a high reputation; (4) members of the public or in the trade ordering or seeing wine advertised as ‘Champagne’ would expect to get wine produced in Champagne from grapes grown there; and (5) the defendants are producing a wine not produced in that geographical area and are selling it under the name of ‘Spanish Champagne’.
These findings disclose a factual situation (assuming that damage was thereby caused to the plaintiffs’ business) which contains each of the five characteristics which I have suggested must be present in order to create a valid cause of action for passing off.
The features that distinguished it from all previous cases were (a) that the element in the goodwill of each of the individual plaintiffs that was represented by his ability to use without deception (in addition to his individual house mark) the word ‘Champagne’ to distinguish his wines from sparkling wines not made by the champenois process from grapes produced in the Champagne district of France, was not exclusive to himself but was shared with every other shipper of sparkling wine to England whose wines could satisfy the same condition and (b) that the class of traders entitled to a proprietary right in ‘the attractive force that brings in custom’ represented by the ability without deception to call one’s wines ‘Champagne’ was capable of continuing expansion, since it might be joined by any future shipper of wine who was able to satisfy that condition. My Lords, in the Champagne case the class of traders between whom the goodwill attaching to the ability to use the word ‘Champagne’ as descriptive of their wines was shared was a large one, 150 at least and probably considerably more , whereas in the previous English cases of shared goodwill the number of traders between whom the goodwill protected by a passing off action was shared had been two ...
It seems to me, however, as it seemed to Danckwerts J, that the principle must be the same whether the class of which each member is severally entitled to the goodwill which attaches to a particular term as descriptive of his goods, is large or small. The larger it is the broader
alcoholic beverage in the UK, while ‘Vodkat’ had been on the market for over four years and had sold at least 13 million bottles. Diageo claimed that by marketing its drink under the name ‘VODKAT’, the defendant was misrepresenting to the public that it was vodka. In its defence, ICB argued not only that the extended form of passing off was meant only to apply to products which had ‘cachet’ but also that the product ‘vodka’ did not denote a sufficiently precisely defined class of goods to be the subject of a passing off action.
In the Court of Appeal, Patten LJ considered whether vodka was sufficiently clearly defined to be the subject of a passing off action. He suggested that like whisky, vodka fell into the category, defined by Wadlow in The Law of Passing Off, as ‘generic terms with well-defined meanings, which may consequently be protected despite the fact that they are not distinctive in the traditional sense of denoting a specific producer’. Patten LJ continued:
- Vodka and whisky fall into this category. Although they do not denote and are not derived from any particular geographical location, they have, as a matter of language, come to be used to describe particular types of spirit distilled in a particular way. To that extent they are no different in descriptive terms from the other examples of well-known commodities relied on by Mr Wyand such as beer or butter.
Patten LJ went on to say that if products of this kind ‘are to qualify for protection under the extended form of passing-off it can only be because they have acquired a reputation and goodwill in their own name by dint of the qualities or characteristics which they possess’.
- The switch in focus from the name and reputation of the seller to that of the product ought not in principle to impose a less stringent test in terms of what is required to establish the necessary goodwill in the product and an actionable misrepresentation on the part of the defendant in relation to his own goods.
In ordinary cases of passing-off the claimant has to show that the use of a particular mark or get-up has become distinctive of his goods and will be treated in the public mind as an indication that when used in relation to goods of that kind, the goods in question will be seen to be his goods or goods connected with him. This requirement that the name or mark should be distinctive is critical to any finding of goodwill subsisting in the use of the mark. The mark has to distinguish the goods sold under it from those of other traders. It may also be determinative of the allegation of misrepresentation. A trader who uses a name which is primarily descriptive of the product is likely to have more difficulty in proving misrepresentation against a defendant who uses the same name to describe a similar product of his own.
29. But there is no legal requirement that the distinctiveness of the claimant’s mark should also be a badge of quality. Whether it generates goodwill in relation to the goods or services sold will inevitably be determined by the impact which they have on consumers. Doubtless the better the quality or the more fashionable they are, the more likely it is that the necessary reputation and goodwill will be acquired. But this factor is evidential in character and largely co-incidental. The law of passing-off is there to protect the unlawful appropriation of goodwill through misrepresentation. It is not there to guarantee to the general consumer the quality of what he buys. For that he must look elsewhere.
[After reviewing the authorities on the extended form of passing off, Patten LJ took up the defendant’s argument that for goods to have sufficient goodwill in the extended form of passing off they must have ‘cachet’.]
- It seems clear to me from this and the other statements of principle in ADVOCAAT that there is no support in the authorities for Mr Wyand’s submission that in cases of extended
passing-off some cachet must be found in the sense of the product being a superior or luxury brand.
Whether or not any particular product has acquired the kind of public reputation described by Lord Diplock is a question of fact for the trial judge. One of the dangers about highlighting the references in cases on champagne, sherry and advocaat to the product having superior or special qualities is that it risks elevating the facts of those cases into a principle. The criteria to be satisfied are those set out by Lord Diplock and Lord Fraser in ADVOCAAT and the judge in this case directed himself in accordance with them.
The judge in this case has found that the conditions described in Lord Fraser’s speech in ADVOCAAT have all been satisfied and there is no challenge to any of those findings; in particular that relating to distinctiveness. Its qualities as a clear, tasteless, distilled, high strength spirit have given vodka a following which has created significant goodwill in the name. That is sufficient in my view to entitle Diageo to protection for their product against VODKAT which, on the judge’s findings, passes itself off as the same product.
It has been argued that the extended form of passing off, which protects designations which are not only distinctive but also descriptive, might be anti-competitive. This point was considered by Kitchin LJ in the ‘Greek yoghurt’ case, where a maker of yoghurt manufactured in Greece alleged passing off against a manufacturer selling as Greek, a yoghurt made in the US. Kitchin LJ noted:
148. Whether the current state of the law has drawn the line between what is capable of protection and what is not in the correct place may well be the subject of debate. I share some of the concerns expressed by Rix L. in the Diageo case that this form of passing off risks stifling healthy competition in relatively low cost generic goods. But in my judgment the location of the line has been drawn by Chocosuisse, by which we are bound; and for as long as that remains the law, it means that the judge was entitled to reach the conclusions that he did.
In NOCN v Open College Network the court held that despite a number of years of use exclusively by members of one organization, the term ‘Open College Network’, to describe services rendered to adult education colleges, lacked the distinctiveness necessary for an action in the extended form of passing off.
The limits to distinctiveness (1): descriptive insignia and get-up common to the trade
If any insignia, be it a word, a colour, or even a shape, is in practice descriptive of the goods or services to which it applies then it would appear to be a hard thing to prevent any other supplier from using such insignia to accurately describe its own goods and services.
Nonetheless, it also possible that, because of the way in which a claimant uses such insignia on the market, the insignia may come to be associated exclusively with its goods or services in the mind of the public. If it does, it will have acquired a ‘secondary meaning’. In other words, it will be not just descriptive of the claimant’s goods or services, but also distinctive of its goodwill.
descriptive term, embodied in a plastic lemon instead of expressed verbally, which is common to the trade’.
Every case depends upon its own peculiar facts. For instance, even a purely descriptive term consisting of perfectly ordinary English words may, by a course of dealing over many years, become so associated with a particular trader that it acquires a secondary meaning such that it may properly be said to be descriptive of that trader’s goods and of his goods alone, as in Reddaway v Banham [1896] AC 199. In the instant case, what is said is that there was nothing particularly original in marketing lemon juice in plastic containers made to resemble lemons. The respondents were not the first to think of it even though they have managed over the past 30 years to establish a virtual monopoly in the United Kingdom.... If and so far as this particular selling device has become associated in the mind of the purchasing public with the respondents’ Jif lemon juice, that is simply because the respondents have been the only people in the market selling lemon juice in this particular format. Because there has been in fact a monopoly of this sale of this particular article, the public is led to make an erroneous assumption that a similar article brought to the market for the first time must emanate from the same source. The likelihood of confusion was admitted by the appellants themselves in the course of their evidence, but it is argued that the erroneous public belief which causes the product to be confused arises simply from the existing monopoly and not from any deception by the appellants in making use of what they claim to be a normal, ordinary and generally available selling technique.
But the so called ‘monopoly assumption’ demonstrates nothing in itself. As a defence to a passing off claim it can succeed only if that which is claimed by the plaintiff as distinctive of his goods and his goods alone consists of something either so ordinary or in such common use that it would be unreasonable that he should claim it as applicable solely to his goods, as for instance where it consists simply of a description of the goods sold. Here the mere fact that he has previously been the only trader dealing in goods of that type and so described may lead members of the public to believe that all such goods must emanate from him simply because they know of no other.
To succeed in such a case he must demonstrate more than simply the sole use of the descriptive term. He must demonstrate that it has become so closely associated with his goods as to acquire the secondary meaning not simply of goods of that description but specifically of goods of which and he alone is the source.
In the instant case the submission that the device of selling lemon juice in a natural size lemon-shaped squeeze pack is something that is ‘common to the trade’ and therefore incapable of protection at the suit of a particular trader begs the essential question. If ‘common to the trade’ means ‘in general use in the trade’ then, so far as at least as the United Kingdom is concerned, the evidence at the trial clearly established that the lemon- sized squeeze pack was not in general use. If, on the other hand, it means, as the appellants submit, ‘available for use by the trade’ then it is so available only if it has not become so closely associated with the respondents’ goods as to render its use by the appellants deceptive; and that is the very question in issue. The trial judge here has found as a fact that the natural size squeeze pack in the form of a lemon has become so associated with Jif lemon juice that the introduction of the appellants’ juice in any of the proposed get-ups will be bound to result in many housewives purchasing that juice in the belief that they are obtaining Jif juice. I cannot interpret that as anything other than a finding that the plastic lemon-shaped container has acquired, as it were, a secondary significance. It indicates not merely lemon juice but specifically Jif lemon juice.
In his speech, Lord Jauncey looked at earlier cases regarding goodwill in the shapes of products. He continued:
Lord Jauncey, at p. 519:
In my view these two cases are merely examples of the general principle that no man may sell his goods under the pretence that they are the goods of another. This principle applies as well to the goods themselves as to their get-up. A markets a ratchet screwdriver with a distinctively shaped handle. The screwdriver has acquired a reputation for reliability and utility and is generally recognised by the public as being the product of A because of its handle. A would be entitled to protection against B if the latter sought to market a ratchet screwdriver with a similarly shaped handle without taking sufficient steps to see that the public were not misled into thinking that his product was that of A. It is important to remember that such protection does not confer on A a monopoly in the sale of ratchet screwdrivers not even in the sale of such screwdrivers with similarly distinctive handles if other appropriate means can be found of distinguishing the two products. Once again it will be a question of fact whether the distinguishing features are sufficient to avoid deception.
For the foregoing reasons and for the reasons given by my noble and learned friend, Lord Oliver of Aylmerton, I would dismiss the appeal.
In ‘Jif Lemon’, both Lord Oliver and Lord Jauncey raised the question of whether the claimants’ victory would endow them with a monopoly of selling lemon juice in plastic lemons. They both took the view it would not. Anyone could sell their products in the same way, if they sufficiently differentiated their own product from that of the claimants.
Both Lords Oliver and Jauncey concluded that i t is in principle possible for a trader to have an effective monopoly on certain descriptive insignia or the shape of goods, in this case the shape of a plastic lemon, if it can be shown that they have acquired a secondary meaning.
The outcome troubled Lord Bridge who saw it as anti-competitive.
The limits to distinctiveness (2): generic marks
McCain International v Country Fair Foods [1981] RPC 69 (CA)
In 1979, the claimants introduced a new product into the UK market: chips which could be cooked in the oven. They sold the product under the name ‘McCain Oven Chips’. A year later, the defendants introduced their own version of the product which they sold under the names, ‘Country Fair Oven Chips’ and ‘Birds Eye Oven Chips’. The claimants obtained an injunction in the High Court to restrain the defendants from marketing their product under the name ‘oven chips’ with or without their own brand names. The defendants appealed. The defendants argued that the name ‘Oven Chip’ was descriptive of the product, that it had not subsequently acquired distinctiveness, and that where a descriptive name had been applied to a product by the sole supplier of that product that name could not easily acquire distinctiveness. The claimants argued that ‘oven chips’ was not descriptive but was a fancy name because it was an ungrammatical combination of two words which had not previously been associated together and, further, that by virtue of the claimants’ extensive sales and advertising it had acquired a secondary meaning.
Templeman LJ, at p. 73:
In the ‘Elderflower champagne’ case, the defendant described its cheap, non-alcoholic drink as ‘champagne’. The Court of Appeal accepted that not only would some consumers buy the defendant’s product instead of champagne, but that by using the word champagne to describe its inferior product, the defendant was also ‘diluting’ the value of the word more generally.
Misrepresentation
An actionable misrepresentation will be one which deceives the consumer and, as a result, the claimant suffers or is likely to suffer damage.
To be an actionable misrepresentation, a substantial number of customers must be confused. Lord Jauncey considered the nature of a misrepresentation in the ‘Jif Lemon’ case.
‘A man is not to sell his own goods under the pretence that they are the goods of another man ...’ Accordingly, a misrepresentation achieving such a result is actionable because it constitutes an invasion of proprietary rights vested in the plaintiff. However, it is a prerequisite of any successful passing off action that the plaintiff’s goods have acquired a reputation in the market and are known by some distinguishing feature. It is also a prerequisite that the misrepresentation has deceived or is likely to deceive and that the plaintiff is likely to suffer damage by such deception. Mere confusion which does not lead to a sale is not sufficient. Thus, if a customer asks for a tin of black shoe polish without specifying any brand and is offered the product of A which he mistakenly believes to be that of B, he may be confused as to what he has got but he has not been deceived into getting it. Misrepresentation has played no part in his purchase.
A misrepresentation and mere confusion
Phones 4u Ltd v Phone4u.co Internet Ltd [2007] RPC 5
The claimants had, since 1995, owned and operated a nationwide chain of shops under the name, ‘Phones 4u’, which sold mobile phones and arranged customer contracts. It also had a domain name, ‘phones4u.co’. In 1999, the defendant registered the domain name ‘phone4u.co’. It sold mobile phones from this site, although, in 2000, it offered to sell its domain name to the claimant for a considerable sum. The claimant sued for passing off. The Court of Appeal found that, by the time the defendant commenced trading, the claimant had substantial goodwill in the name ‘Phones 4u’. A considerable number of people sought to contact the claimant via the defendant’s website. Once on the site, the defendant offered to sell them phones, but also stated it was unconnected with the claimant’s business. Among the questions for the Court of Appeal was whether the defendant’s actions amounted to an actionable misrepresentation or ‘mere confusion’. In his judgment, Jacob LJ examined the difference between the two.
.. a distinction is drawn between ‘mere confusion’ which is not enough, and ‘deception’, which is. I described the difference as ‘elusive’ in Reed Executive v Reed Business Information [2004] RPC 767 at 797. I said this, [111]:
Once the position strays into misleading a substantial number of people (going from ‘I wonder if there is a connection’ to ‘I assume there is a connection’) there will be passing off, whether the use is as a business name or a trade mark on goods.
- This of course is a question of degree—there will be some mere wonderers and some assumers— there will normally be passing off if there is a substantial number of the latter even if there is also a substantial number of the former.
...
Although correct as far as it goes, I do not endorse that as a complete statement of the position. Clearly if the public are induced to buy by mistaking the insignia of B for that which they know to be that of A, there is deception. But there are other cases too.. more complete test would be whether what is said to be deception rather than mere confusion is really likely to be damaging to the claimant’s goodwill or divert trade from him. I emphasise the word ‘really’.
HFC Bank v Midland Bank [2000] FSR 176, relied upon by Miss Lane, is a case about ‘mere confusion’. The claimant Bank was known, but not very well known, as HFC. It sought to restrain the Midland with its very many branches from changing its name to HSBC. That was said to be passing off. It relied upon some 1,200 instances of alleged deception. Lloyd J analysed the ten best (pp. 189–104). None really amounted to deception. And in any event, given the scale of the parties’ respective operations, the totality of what was relied upon was trivial. The case was one on its facts. It decided no question of principle.
In this discussion of ‘deception/confusion’ it should be remembered that there are cases where what at first sight may look like deception and indeed will involve deception, is nonetheless justified in law. I have in mind cases of honest concurrent use and very descriptive marks. Sometimes such cases are described as ‘mere confusion’ but they are not really—they are cases of tolerated deception or a tolerated level of deception.
An example of the former is the old case of Dent v Turpin (1861) 2 J&H 139. Father Dent had two clock shops, one in the City, the other in the West End. He bequeathed one to each son—which resulted in two clock businesses each called Dent. Neither could stop the other; each could stop a third party (a villain rather appropriately named Turpin) from using ‘Dent’ for such a business.
A member of the public who only knew of one of the two businesses would assume that the other was part of it—he would be deceived. Yet passing off would not lie for one son against the other because of the positive right of the other business. However it would lie against the third-party usurper.
- An example of the latter is Office Cleaning Services v Westminster Window and General Cleaners (1946) 63 RPC 39. The differences between ‘Office Cleaning Services Ltd’ and ‘Office Cleaning Association’, even though the former was well-known, were held to be enough to avoid passing off. Lord Simmonds said: Where a trader adopts words in common use for his trade name, some risk of confusion is inevitable. But that risk must be run unless the first user is allowed unfairly to monopolise the words. The Court will accept comparatively small differences as sufficient to avert confusion. A greater degree of discrimination may fairly be expected from the public where a trade name consists wholly or in part of words descriptive of the articles to be sold or the services to be rendered (p. 43). In short, therefore, where the ‘badge’ of the plaintiff is descriptive, cases of ‘mere confusion’ caused by the use of a very similar description will not count. A certain amount of deception is to be tolerated for policy reasons—one calls it ‘mere confusion’.
The tort of passing off notes
Module: Intellectual Property Law (6FFLK039)
University: King's College London
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