Passing off
Last Updated 5 March 2004
Taking business by presenting goods or services as someone else's is actionable at common law. The tort is known as "passing off" in the British Isles and most of the Commonwealth, "palming off" in the USA and unfair competition elsewhere. The usual remedies are injunctions, delivery up of offending items and inquiries as to damages or accounts of profits. There is an international obligation to assure effective protection against unfair competition under art 10bis of the Paris Convention
Classic Trinity
Passing off is judge made law. The modern law is to be found in a handful of cases of which the most recent are the decisions of the House of Lords in Reckitt & Colman Products Ltd. v Borden Inc [1990] RPC 341 and Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731. In the first of those cases, Lord Oliver said, at page 406, that a claim may be brought where:
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the claimant’s goods or services have acquired a goodwill or reputation in the market and are known by some distinguishing feature; |
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there is a misrepresentation by the defendant (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by the defendant are goods or services of the claimant; and |
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the claimant has suffered, or is likely to suffer, damage as a result of the erroneous belief engendered by the defendant’s misrepresentation. |
This restatement of the elements of passing off is often referred to as the "classic trinity".
Extended Forms of Passing off
These basic principles have been refined over the years to protect appellations of origin, such as Swiss chocolate in Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd. {1999] EWCA Civ 856 [1999] EWCA Civ 856, or champagne as in J Bollinger v Costa Brava Wine Co. Ltd. [1960] Ch 262. They have also been extended to what is sometimes called "reverse passing off", that is to say where the defendant claims the claimant's work as his own (Bristol Conservatories Ltd. v Conservatories Custom Built [1989] RPC 455).
Related Causes of Action
The action of passing off is closely allied to the law of trade marks, the Trade Descriptions Act 1968 and Community legislation on the protection of geographical designations of origin. Claims for passing off are usually brought at the same time as actions for infringement of a registered trade mark.
Enforcement
Claims for passing off are brought in the Chancery Division of the High Court of Justice. The vast majority of such claims are disposed of upon an application for interim injunction. The reason for that is that the losing party either has to change its packaging or quit the market. Either way, it has much less interest in the brand by the time the action comes on for trial.
An actionable misrepresentation may also be an offence under the Trade Descriptions Act 1968. Prosecutions are brought by local authority trading standards officers.
Risk Factors
Brands are among the most valuable assets of a business and the action of passing off is indispensable for their protection for two reasons. First, not every type of branding qualifies for registration as a trade mark. Secondly, no action may be brought on a mark until after registration. If goodwill, misrepresentation and damage can be proved an action will lie regardless of whether the wrongdoing was intended and there is no threats action to protect those accused of passing off from intimidation of their customers.□
