What is passing off?
Passing off takes place when someone, such as a business, passes off another party’s goods or services as if they are their own, by misrepresentation. The law of passing off protects the goodwill of a business of person from other traders.
Passing off is governed by the civil law, and usually takes place in the business world where a misrepresentation is made by one party which damages the goodwill of another party, sometimes causing financial and or reputational damage.
Businesses have common law rights protecting them from passing off by others in relation to their slogans, names, packaging and other advertising elements where the company will have accrued some form of goodwill.
What are the elements to passing off?
No specific legislation governs the civil wrong of passing off. The law has been developed by the courts through case law. As the law currently stands, there are three essential elements that must be satisfied to prove passing off. The person or business making the claim (the claimant) must show:
- They possess a reputation or goodwill in their goods, name, mark, or other identifying feature that associates the public with those particular goods, and distinguishes them from others;
- There must be misrepresentation by the other party which has led others to believe the goods are actually those of the claimant. Confusion will not be sufficient to prove misrepresentation, and;
- This misrepresentation has caused damage to the claimant’s reputation or goodwill.
There is no definitive legal definition for these three elements. In practice, the most difficult element to prove is that of showing there is goodwill in a product or service – ie. a feature, name, or similar that attracts the consumer to a particular brand. This is what enables consumers to distinguish between the different brands on the market. The problem is, it is a very subjective test as the goodwill associated with a particular company may have very different effects on different members of the general public.
What is the link between passing off and trade marks?
Passing off is often relied upon when a product is unregistered as a trade mark. For example, a slogan or a name may not be registered as a trade mark, but it has sufficient goodwill attached to it to be protected by passing off laws.
Unfortunately, passing off claims can be much more time consuming and less straightforward than claims for trade mark infringement. If your name, slogan or similar feature is capable of being registered as a trade mark, then it strongly recommended you take legal advice in relation to registering it as a trade mark rather than risk having to rely on the common law of passing off in future.
If I have already registered my trade mark, can I also rely on passing off?
Yes, you can make a passing off claim as well as bring a case for trade mark infringement. A claim for trade mark infringement could fail but a passing off claim succeed. So if there is doubt as to whether a claim for trade mark infringement would succeed, making a passing off claim could prove highly beneficial. In practice, both claims would be made.
Does passing off simply apply to businesses to business?
No, it is possible for an individual to succeed in a passing off claim. However, it will have to be shown that an individual’s name or image have been used in the context of trade and to have goodwill attached to it. Examples include sponsorship and celebrity endorsements.
It has been held that false endorsements amount to passing off under UK law. In circumstances where an image is used without the person’s permission in order to endorse a product, the individual can make a successful passing off claim if he or she can prove that:
- At the time of the acts complained of they had a significant reputation or goodwill;
- The actions of the defendant gave rise to a false message which would be understood by a not insignificant section of the general public that their goods have been endorsed, recommended or approved by the claimant (ie. the celebrity).
However, there are no clear rules as to what will amount to misrepresentation in this context. Cases such as these will be highly subjective and depend on the facts of each case.
What remedies are available for passing off?
In successful passing off claims, the following remedies are available:
- Damages or an account of the defendant’s profits;
- An order for the delivery up or the destruction of the infringing articles or products;
- An injunction to prevent further actions that amount to passing off;
- Interim injunction if you need to act quickly;
- An enquiry to establish loss.
What defences are available?
The following are available as a defence to a passing off claim:
- The claimant’s mark, slogan, etc is not distinctive;
- The mark, slogan, etc has become generic;
- The defendant may be innocently using his or her own name;
- The claimant has given consent.
If you have any issues in relation to a potential passing off claim, you should seek specialist advice from intellectual property solicitors as to what action you can take to protect your rights.