#16782 - Passing Off - Intellectual Property Law

• These things have goodwill as seen by customers as an indication of trade origin

• E.g. Exxon (invented name)

• Only can acquire goodwill in these things if they have acquired a secondary meaning (Reddaway)

• Factors which you can point to to show that it has acquired a secondary meaning

  • C’s business is well-known.

  • C has used the e.g. descriptive word for a long time.

  • C has spent a lot of money/done extensive advertising using the descriptive word

• Can only acquire goodwill if either

  • (i) distinctive of C’s goods, or

  • (ii) if it is ‘get-up common in trade’ it can only have goodwill if has acquired a secondary meaning (Jif Lemon)

• More likely that a packaging will have goodwill in:

  • Goods sold in a foreign language market (e.g. Chinese instant noodles) - UK consumers much more likely to rely on the packaging as indication of trade origin than the foreign names.

  • Goods sold to people who are illiterate - consumers will rely more on packaging as indication of trade origin.

  • If the goods are common household goods (e.g. pasta, toilet roll), then consumers will rely on packaging much more (Jif Lemons)

• Can acquire good will if sufficiently distinctive of C’s good such that are seen as an indication of trade origin).

• Compare to facts of Cadbury Schewppes:

  • Advert featured masculine, adventurous men drinking the lemon drink - was distinctive enough.

Situation: C hasn’t opened up business yet. Can they still have goodwill?

• Starbucks v BSB: only if either:

1. Has a customer base in the UK ; or

2. C has advertised/promoted business to a future targeted customer base.

Situation: C business has finished. Can they still have goodwill?

• Factors to consider to determine whether goodwill continues to exist (Knight v Beyond Properties):

  • Strength of the original goodwill

  • Business continuing to promote the product even though they have stopped manufacturing/selling them

  • The product remains in the public eye:

    • E.g. TV show re-runs

    • E.g. vintage cars

• Also if C hasn’t abandoned the goodwill/intends to resume business:

  • See World Cup Willie facts:

    • They just shelved mascot until the next time the World Cup was hosted in the UK.

• The fact that the foreign trader has a mere reputation in the UK is not enough to establish goodwill in the UK (Starbucks v BSB)

Notes

(i)

• UK nationals who happen to be customers of C when they go abroad doesn’t count.

(ii)

• The ‘entity in the UK’ doesn’t have to e.g. be a branch/office of C that they keep in the UK - could be through a third party e.g. a travel agent that exists in the UK.

• Websites:

  • Lord Neuberger says ‘an entity which exists in the UK’

  • Therefore:

    • Bookings through a UK-based website would suffice.

    • But bookings through a foreign-based website would not suffice as this is not a booking through an ‘entity which exists in the UK’.

1. C’s mark is so well-known

• If C’s mark in question is really well-known, then it is more likely that the public is deceived (Lego)

2. Similarity of D’s mark to C’s

• The more similar D’s mark is to C’s, the more likely that consumers will be deceived.

(Wagamama ; Penguin)

3. Type of good in question

• If the goods are everyday household items that e.g. you can get at a supermarket, then consumers wouldn’t pay much attention to D’s packaging, etc. and so are more likely to be deceived (Jif Lemon)

4. D’s use of a disclaimer is not given much weight

• Disclaimers are not given much weight unless meet the strict test of being ‘bold, precise and compelling’ so that they are actually taken seriously by consumers (Norman v Bennett)

Is ‘reverse passing off’ actionable?

E.g. D buys C’s goods and then pretends that C’s goods are his.

• Reverse passing off probably is not actionable in English law. The case often cited in favour of reverse passing off being recognised is the Conservatories case,

When do consumers have to be deceived: post-sale confusion and initial interest confusion

Normally, the consumers must be deceived at the point of sale.

Post-sale confusion

• Possibly is actionable (Clark v Associated Newspapers)

Initial interest confusion

• High Court authority differs on whether initial interest confusion is actionable:

  • Arnold J in Och-Zif says that initial interest confusion is actionable misrepresentation

  • Hacon J in Moroccanoil doubts this.

C can claim

• Loss of existing trade and profits (since D will be diverting sales away from C) (e.g. Jif Lemon)

C can claim (if relevant on facts)

• Loss of future/potential trade and profits (since C loses the opportunity to expand into an area because of D) (e.g. Lego)

• Damages for loss of reputation because the misrepresentation leads to consumers to think that C and D’s goods are related (e.g. Football Orb case)

• ‘Champagne’: (sparkling wine produced through the process of double fermentation from grapes grown in a particular region of France) - distinctive of particular class of goods

• ‘Advocaat’: (liquor made from egg yolks and a spirit called brandewijn) - distinctive of...