One of the ways in which a holder of an unregistered trademark right can be protected is under the law of passing off. There are three main criteria which needs to be established before one of the remedies available under passing off is given.
Shortcomings on registration of trademarks leaves businesses exposed, than what otherwise might be the case to protect brands from others taking advantage of the goodwill they have built up. This is not to say that businesses with unregistered trademarks do not have brand protection options. They do.
Trademark infringement is not the only option. A different form of action can be brought to protect unregistered trademarks of business brands. The tort of passing off is a centuries old cause of action which protects businesses’ goodwill and reputation. It has a far broader and flexible application than a claim for registered trademark infringement. As such, what might not constitute infringement of a registered trademark, may well amount to passing off, and give the business the brand protection it is looking for.
Passing off is exclusively a common law remedy in English law. Its modern incarnation is found in the judgment of Lord Oliver in Reckitt and Colman Products Limited v Borden Inc [1990]. In that case, Lord Oliver said, “no one may pass off his goods as those of another,” and went on to set out the three main criteria which a claimant must prove to secure a successful claim.
Firstly, the claimant must prove the trade mark contains goodwill. Goodwill can be difficult to define and judges have used different factors to determine goodwill over time. A famous example of a name being shown to contain goodwill occurred in relation to a band called Liberty X. Formed originally as the band Liberty, the band were forced to amend their name after a judge found that it was too similar to a funk group that had achieved a degree of success a decade before the formation of Liberty X. The original band was considered to have residual goodwill in its name.
The second element of passing off requires some form of misrepresentation which causes confusion in relevant buying public. Using the Liberty example, the fact that the new band were operating in the same industry as the former group allowed the judge to conclude that the band could be misrepresenting itself to the public that it was the old band. Once the final letter X was added however, although the name was similar, the band had its own unique identity so were no longer liable for passing off as Liberty.
The final element of passing off is damage. The misrepresentation of someone else’s goodwill is not sufficient to constitute passing off on its own. To satisfy the elements of the tort, the misrepresentation must cause damage to the other party or by likely to cause damage to the other party. In the case of Stringfellow v McCain Foods (GB) Ltd [1984], an action for passing off involving a nightclub and a food product called Stringfellow chips failed because the public were unlikely to confuse a brand of chips with nightclubs and secondly because no damage was caused by the confusion.
Businesses which believe its unregistered trademark rights are being taken advantage of unlawfully should act as soon as they have knowledge or suspicion of it. If there is a significant delay in bringing a claim against the party using the trademark, there is an increased risk that a Court will find that the business has acquiesced to the use, and undermine the claim for passing off. If the criteria are met and a claim for passing off is successful the following remedies may be sought:
The latter remedies, damages and accounting for profit, are alternative remedies. In most cases damages are more commonly awarded. This is because in the final analysis, the sum of damages which would be awarded outstrips the sum of money which would be awarded with an account of profits
The tort of passing off plays an important part of the arsenal of legal methods which may be used for protection of the reputation of businesses and brand protection. Although businesses are usually well-served by a registered trademark with a properly drafted specification of goods and services, passing off remains as a fall-back in situations where a business:
Our London based businesses intellectual property solicitors advise businesses which have been caught short on brand management and reputation protection. We advise on methods to enforce unregistered trademark rights and other methods which may be used to prevent unfair and unlawful competition.
