Critically Assess the Importance of a Passing Off Action

Passing off is a common law tort that was established long before trade marks became registerable. It was originally intended to protect traders by allowing them to bring action against a trader attempting to ride off the back of their established reputation (goodwill) by using a similar mark or get-up as their own. However for an action of passing off to succeed three requirements must be established; goodwill, a misrepresentation and resulting damage. [1]

In 1875 a statutory system of registering trade marks was introduced [2] whereby registering a mark which acts as an indication as to the identity or origin of a product, protects that mark from being used by anyone other than the proprietor of the trade mark. This solved the earlier problems of having to show title to the mark by establishing goodwill as is necessary for a passing off action. The law has been subsequently amended by numerous statutes until the Trade Mark Directive was finally implemented into English law in the form of the Trade Mark Act 1994 (‘TMA’) which is where the law stands today. This states that:

‘The proprietor of a registered trade mark has exclusive rights which are infringed by the use of the trade mark in the United Kingdom without his consent’. [3]

The purpose of the TMA was to widen the scope of trade mark infringement by allowing for the registration of

‘[A]ny sign capable of being represented graphically which is capable of distinguishing goods of services of one undertaking from those of other undertakings’. [4]

It has been suggested that this broad definition of what constitutes a registerable mark will considerably limit the role of passing off in the future as its effect is to allow registration of ‘almost anything which is capable of being a distinguishing indicium for the purposes of a claim for passing off’. [5] However despite this extended definition, passing off actions will remain an essential feature in English law. This is because it remains the sole course of action for those who do not register a potentially registerable trade mark and for those marks, which remain non-registerable due to the limitations of the TMA. Furthermore, although the TMA does extend the scope of protection there remain gaps where a trader’s only redress will be the common law of passing off. The law has therefore developed into a dual system of protection.

Passing off: a fall back position due to the limitations of the TMA

Due to the recent extended scope of trade mark law by virtue of the TMA, which increased what is registerable as a trade mark, the importance of passing off has been diminished. However, there are still certain things, which are unregisterable as trade marks, and therefore the common law tort of passing off is by no means redundant.

One of the circumstances in which the law of passing off goes further in its protection than trade mark law it where descriptive words are concerned. The TMA prevents registration of descriptive words unless qualified by the proviso that they have acquired a ‘distinctive character’. [6] The law of passing off was similar in that originally it required a “secondary meaning” [7] which referred to the appellants business to allow descriptive words in a passing off action.

However the scope for passing off where descriptive words are in issue was extended in the case of Antec International v Southern Western Chicks [8] . Here the requirement of a secondary meaning was held only to be relevant in cases concerning a word or phrase describing the goods in question with ‘some precision’ [9] . This requirement was therefore not met in the case of Computervision v. Computer Vision in which it was held that:

‘[T]he words “computer” and “vision” in tandem was not descriptive of electronic equipment [10] ’.

A similar stance has been taken when dealing with descriptive words under trade mark law, although it does not go quite as far, in the case of Procter & Gamble v. OHIM [11] . Here the applicant wanted to register “Baby-Dry” as a trade mark for nappies. The mark was held not to contain descriptive words because:

‘ “Baby-Dry” is by any standard an invented term and does not as such form part of the English language, thus rendering its use as a descriptive term in trade considerably less likely’. [12]

Although this does provide a narrow interpretation of what constitutes descriptive words it is not as extreme as that in the common law of passing off because as noted by Shuilleabhian (2003):

‘[S]ome passing off cases suggest that mere designation of a characteristic is insufficient whereas such direct designation is clearly sufficient for the purposes of the statutory trade mark law’. [13]

It follows that some words which amount to being descriptive under trade mark law will not be descriptive under the law of passing off. This is therefore an area where the wider protection afforded by passing off means it will still play an important role despite the introduction of a system of registered trademarks.

The limitations of trade mark law are also evident when dealing with place names. The TMA prevents the registration of marks that can be taken as an indication of geographic origin [14] . This is also subject to the qualifying proviso that before registration it has not already ‘acquired distinctive character as a result of the use made of it’ [15] . In the case of Windsurfing Chiemsee v. Huber [2000] it was held that a geographical name, can only acquire distinctive character if there has been:

‘[L]ong-standing and intensive use of the mark by the undertaking applying for registration’. [16]

This is a much stricter test than that under the law of passing off. This is demonstrated in the case of Chelsea Man Menswear v. Chelsea Girl [17] . Here an action for passing off was successful where the plaintiff, trading under the name “Chelsea Man” bought action against the defendant who also started marketing products under the name “Chelsea Man”. Despite the fact that Chelsea could easily be mistaken as the origin of the product, there was no need to show any “long-standing or intensive use”. This therefore means that an action for passing off may be successful in circumstances an action bought under trade mark law would not.

The protection afforded to personal names is also an area where intellectual property rights are at issue, and particularly where celebrity names are concerned. Under the law of passing off the traditional stance was:

‘[A] man must be allowed to trade in his own name and if some confusion results, that is a lesser evil than that a man should be deprived of what would appear to be a natural and inherent right’ . [18]

However in recent case law English courts have become more reluctant to allow the “own name defence”. This is specifically demonstrated in the case of Asprey and Garrard v. WRA Guns [19] . Here it was held that where a trader was trading under their personal name and in doing so it led to possible confusion with another trader who had registered a trade mark in that name ‘the defence, such as it is, about use of one’s own name is something borne out of necessity’ [20] . This therefore suggests that:

‘[T]he law of passing off is now capable of conferring a high level of exclusivity on a personal name even against a defendant with the same personal name’. [21]

The TMA has limited the need to rely on passing off as it clearly allows for registration of personal names by Section 1(1) where it defines a registerable trade mark as:

‘[A]ny sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking form those of another’. [22]

The requirements for distinctiveness in section 3 do not seem to apply to personal names. However there is concern over whether this will ‘confer an unfair advantage on the first applicant for such a name’ [23] . In the case of celebrities it is therefore crucial that they attempt to register their names prior to success in order to obtain the higher protection afforded by trade mark law than that of passing off.

In cases involving celebrities the intellectual property rights surrounding their names and image is of particular importance because of how financially lucrative a particular name or image can be. Even if they are allowed to register their names as trade marks as noted by Shuilleabhain (2004):

‘It is difficult to see how registered trade mark rights could adequately cater for image protection when the depiction of the celebrity can take an infinity of different forms’. [24]

This is to say that for cases involving false endorsement and things such as unauthorised images of a celebrity on merchandising, a trade mark may not be enforceable and the common law tort of passing off may be the only course of action. A passing off action in such circumstances lies in the fact that well-known celebrities will have accrued a certain amount of goodwill in their name, image or slogans. If these are then affiliated with another product because of unauthorised use by a trader it may cause the public to assume the celebrity has given his or her consent to such marketing and this may increase sales for the trader. The damage caused to the celebrity is financial loss of the fee they could have potentially earned through endorsing the said product. In today’s commercial market such endorsement deals can be particularly lucrative for celebrities and in some circumstances their main source of income. It is therefore vital that they are afforded some sort of protection. As noted by Farnsworth (2001):

‘The public would, as a whole, consider unauthorised use of sportspersons’ personalities for commercial gain as morally wrong’. [25]

Where merchandising is concerned the enforceability of a name as a trade mark was raised in the case of Re Elvis Presley Trade Marks [26] . Here it was held that the use of the name “Elvis” on products was not a trade mark infringement because ‘It is not an indication of trade origin at all’. [27] Lord Justice Laddie rejected the argument that merchandise which displayed a celebrity’s name was an indication to the public of a “genuine source”. [28] This was also the reasoning for the failure of a passing off action.

A different stance has however been taken where celebrity endorsements are concerned and it seems that the English courts have taken the view that the law of passing off should be extended to protect celebrities in such cases. This can be seen in the case of Irvine v. Talksport [29] . In this instance Lord Justice Laddie held that:

‘Manufacturers and retailers recognise the realities of the market place when they pay for well known personalities to endorse their goods. The law of passing off should do likewise. There appears to be no good reason why the law of passing off in its modern form and in modern trade circumstances should not apply to cases of false endorsement’. [30]

The reasoning behind the distinction between merchandise and endorsements seems to be that the courts believe that the public believe endorsements to be authorised by the relevant celebrity whereas no such assumption is present where a name is used on merchandise. However, as noted by Shuilleabhain (2003):

‘Surely the public’s assumptions as to authorisation depend primarily on whether the law allows a celebrity to insist on authorisation. It is a chicken and egg problem’. [31]

It is not clear how the courts will use this distinction, however due to the limitations of trade mark law where celebrity personalities are concerned it stands that the law of passing off will be the sole course of action in protecting a celebrity’s image.

Another area in which the TMA’s limitations have meant the common law tort of passing off is still important in the arena of intellectual property law is where the general get-up of a product is concerned. Although the get-up of a product may be capable of graphic representation for the purposes of registering it as a trade mark in accordance with section1(1) of the TMA, the courts have taken a restrictive approach to the requirement of distinctiveness in section 3(2). The reason for this is the importance of keeping an open market and not restricting competition. This can be seen in the case of Libertel [32] in which the ECJ held that a colour lacked the distinctiveness required for registration. The reasoning for this was that:

‘[It must] be acknowledged that there is, in Community trade mark law, a public interest in not unduly restricting the availability of colours for the other operators who offer for sale goods or services of the same type as those in respect of which registration is sought’. [33]

When attempting to register the get-up of a product it will generally require registration of shape marks. These are particularly difficult to register because a shape is often part of the goods themselves therefore is lacks any distinctiveness. The courts have been reluctant to allow protection under trade mark law of shapes as it effectively paths the way for monopolisation and restricts the freedom of other traders. This reasoning was particularly prevalent in the Coca-Cola case [34] . In this case Coca-Cola attempted to register the shape of their bottle as a trade mark. This particular bottle has become one of the most recognisable and distinctive bottles in the world therefore it is difficult to see how it could be said to lack the qualities of a trade mark. It is clearly something which infers a specific origin of the product. However it was held that a ‘shape’ application did not constitute a registerable ‘mark’. Lord Templeman stated this was merely:

‘[A]nother attempt to expand the boundaries of intellectual property and to convert a protective law into a source of monopoly’. [35]

Shapes often form part of the goods themselves and this is why is it thought to be unfair to allow registration of them as trade marks as it would restrict any competition in that market. This reasoning can be seen in the case of Linde [36] where it was stated it was in the publics interest that:

‘[A]ny trade mark consisting exclusively of a sign or indication which might serve to designate the characteristics of goods or a service within the meaning of that provision had to be freely available to all and was not registrable’. [37]

In order to protect shapes or the get-up of a product from copying it is therefore necessary to rely on the more uncertain and inconvenient action of passing off. The common law therefore provides an essential protection for traders where another has copied the get-up of their product in an attempt to mislead the public into thinking there is a connection between the two products. This was the case in Reckitt & Colman v. Borden [38] in which a passing off action was successful, not because the shape of the bottle for lemon juice had been copied because as it was noted this was ‘a monopoly which the law does not permit’ [39] , but because the defendant had attempted to mislead the public and ride off of the back of the applicants goodwill. Goodwill can be extremely valuable to a trading company and therefore the protection afforded by the law of passing off remains of vital importance despite having a registered system of trade mark protection, as there are some things which is does not protect.

As seen above the TMA requires a ‘mark’ to be capable of graphic representation for it to be registerable. This in itself limits the nature of what can be registered as a trade mark and therefore another area in which the law of passing of is still important.

In particular smells are incapable of such representation and seem to have been rendered unregisterable by the ECJ. In the case of Sieckmann the ECJ rejected the graphic representation of the chemical formula of a smell because it ‘represents not the odour of a substance, but the substance itself’ [40] . It follows that smells must rely on the action of passing off if protection is required because as noted by Bainbridge (2004):

‘There is no conceivable way of describing a smell with precision such that it can stand on its own without reference to some other information, stimuli or material or without inviting an unacceptably wide range of subjective perceptions of what the mark really is’. [41]

Another area were the law of passing off will remain the only form of protection is for themes, for example in advertising, which are not capable of specific representation. This was the case in Cadbury Schweppes v. Pub Squash [42] in which a distinctive advertising concept to which goodwill had attached was copied by a competing trader. In this instance Lord Scarman held that passing off could be stretched to:

‘[S]logans or visual images, which radio, television or newspaper advertising campaigns can lead the market to associate with the plaintiff’s product, provided always that such descriptive material has become part of the goodwill of the product’. [43]

Passing off: a fall back for potentially registerable marks that were not registered or failed to renew a registration.

Where a trader has built up goodwill but failed to register a potentially registerable mark for whatever reason it is still necessary to offer some sort of protection to prevent other trader’s form benefitting from that goodwill. As is the case where a someone has failed to renew an already registered trade mark. By virtue of the TMA trade mark registration lasts for a period of 10 years, after which registration must be renewed [44] . Although a trader should always endeavor to register a registerable mark as the outcome of a passing off action carries much more uncertainty than when there is a clear trade mark infringement.

Passing off; filling the gap in Section 10 of the Trade Marks Act 1994

The TMA was introduced in order to incorporate the Trade Marks Directive into English law using the wording of the Directive. This has meant an illogical gap where the non-confusing use of a similar sign or goods is concerned. It is here where the common law of passing off has been of continued importance. Article 5 of the Directive is contained in Section 10 of the TMA and this concerns the test for infringement of a registered trade mark. Section 10 clearly provides for the automatic infringement where a sign is used:

‘[I]n the course of trade a sign which is identical with the registered trade mark in relation to goods or services which are identical to those for which it is registered’. [45]

Where a defendant uses an identical sign on similar goods or services or a similar sign on identical good or services however, there must exist a ‘likelihood of confusion’ [46] before an infringement can occur. Without a likelihood of confusion the law will therefore not protect against any possible damage to the goodwill of a trade mark which may have been caused. This is opposed to where a defendant uses a similar or identical sign on dissimilar goods. In such circumstances the goodwill of a trade mark is protected from dilution and tarnishment without the need to show any likelihood of confusion as long as the mark has:

‘[A] reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark’. [47]

The problem lies in that the former position, which is likely to cause more damage to the proprietor of the trade mark than the latter, is afforded less protection. In such circumstances the common law of passing off plays an important role in protecting goodwill.

The position of the law in this area was addressed in the case of Davidoff v Gofkid [48] by the European Court of Justice (‘ECJ’). Here it was being questioned whether the protection afforded by the Directive to circumstances where the goods or services are dissimilar could be extended to circumstances where they are similar. The Court, accepting the illogical result of the Directive permitted Member States to extend protection in such circumstances by holding that Article 5(2) must be interpreted as:

‘[E]ntitling the Member State to provide specific protection for registered trade marks with a reputation in cases where the later mark or sign which is identical with or similar to the registered mark, is intended to be used or is used for goods or services identical with or similar to those covered by the registered mark’ [49]

This does not call for extended interpretation of domestic provisions which incorporate Article 5 but states that it is at Member State’s discretion to provide protection in such circumstances. As noted by Shuilleabhain (2003):

‘Presumably such provision can only be achieved by an amendment of trade mark legislation or else by the use of unfair competition or passing off rules’. [50]

It is therefore clear that until the TMA is reformed to include such extension, which may or may not happen, applicants are left with having to rely on claiming a successful action of passing off to protect against damaging but non-confusing uses on similar goods or services. An example of where this was the case is in Taittinger v Allbev [51] . This involved a non-alcoholic drink being sold as “Elderflower Champagne” but it did not come from the Champagne region. The claim of passing off was allowed here because the court found that although there was no likelihood of confusion there was damage to the goodwill associated with “Champagne” because it led to:

‘[A] blurring or erosion of the uniqueness that now attends the word champagne, so that the exclusive reputation of the champagne houses would be debased’. [52]

In cases such as this where there is a risk of tarnishment to the goodwill of a business it is essential to be able to rely on passing off for protection because as per Lord Macnaghten in IRC V Muller [1901] goodwill is the ‘attractive force which brings in custom”. [53] Passing off therefore retains its importance in the protection of goodwill in such circumstances.

In conclusion the common law tort of passing off remains a vital form of protection of intellectual property despite the introduction of a registered system of trade mark protection. Although the scope of protection under trade mark law has been extended by the 1994 TMA certain limitations remain which leave an action of passing off as the only form of protection in such instances. The gap in Section 10 of the TMA also calls for reliance on the common law and this will be the case until statutory amendments are made.

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