Passing off
Case Note: Harrods Ltd. v
Harrods (Buenos Aires) Ltd. and Another
John Lambert
June 1997
This case note originally appeared on the Lancaster Buildings website
The liability a retailer trading abroad under the same name as a well known British retailer was considered by Neuberger J in Harrods Ltd. v Harrods (Buenos Aires) Ltd. and Another [1997] FSR 420.
The plaintiff operates a well-known department store in Knightsbridge and the defendants an emporium by the same name in Buenos Aires. The parties were once connected when there was a large British presence in Argentina but they separated many years ago. A visitor to the Buenos Aires store finds little to remind him of Knightsbridge except the name. The defendants once had a substantial business throughout South America but it has declined over the last 35 years. Recently they decided to expand again. The plaintiff objected to such expansion alleging that it would breach a contract between the parties and lead the South American public to believe that the defendants had a connection with the plaintiff's London store.
The first issue between the parties was whether the plaintiff had licensed the defendants to trade as "Harrods" before the First World War and, if so, on what terms. The second was what, if any, contractual or fiduciary duties were owed to the plaintiff. Neuberger J found on the 15 Jan 1997 that no licence had been granted to the defendants. Nor was one necessary for their business in South America. The defendants had breached no contract and owed no fiduciary duty to the plaintiff .
The action came back before His Lordship on a strike out application on the 20 February. The defendants argued that the plaintiff could not object to their trading activities as it had originally set up the defendants. They also argued that they had enjoyed goodwill throughout South America 35 years ago. Refusing the application, Neuberger J held that the previous connection between the parties did not preclude passing-off and the fact that the defendants enjoyed goodwill 35 years ago did not mean that they had any now. He also refused to discharge or vary interlocutory injunctions that had been granted by Arden J.
The plaintiffs appealed to the Court of Appeal from Neuberger J's decision on the contractual dispute. Dismissing the appeal, Nourse LJ observed that the legal and commercial relationship between the parties had been established by 1914 and none of the events that had occurred since had affected that relationship in any material way. In many respects they had tended to confirm it (see Harrods Ltd. v Harrods (Buenos Aires) Ltd. and Another [1998] EWCA Civ 874 (21 May 1998)).
