Company Law Essay Help : Passing Off

Law Cases referred to in this section:Reckitt & Colman Products Ltd v Borden Inc [1990] 1 All ER 873 at 880, [1990] 1 WLR 491 at 499, [1990] RPC 341 at 406, HL
Ewing v Buttercup Margarine Co Ltd [1917] 2 Ch 1
Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731, [1979] 2 All ER 927, [1980] RPC 31, HL
Dunlop Pneumatic Tyre Co Ltd v Dunlop Motor Co Ltd 1907 SC (HL) 15
Exxon Corporation v Exxon Insurance Consultants International Ltd [1982] Ch 199

The necessary elements of the action for passing off have been restated by the House of Lords as being three in number:

The claimant's goods or services have acquired a goodwill or reputation in the market and are known by some distinguishing feature;
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
The claimant has suffered or is likely to suffer damage as a result of the erroneous belief engendered by the defendant's misrepresentation (Reckitt & Colman Products Ltd v Borden Inc [1990] 1 All ER 873 at 880, [1990] 1 WLR 491 at 499, [1990] RPC 341 at 406, HL, per Lord Oliver of Aylmerton, and at 889, 510, 417 per Lord Jauncey of Tullichettle ('Jif Lemon')).

The restatement of the elements of passing off in the form of this classical definition has been preferred as providing greater assistance in analysis and decision than the formulation of the elements of the action previously expressed by the House. In Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731, [1979] 2 All ER 927, [1980] RPC 31, HL ('Advocaat'), Lord Diplock at 742, 932–933 and 93, and Lord Fraser of Tullybelton at 755–756, 943–944 and 105, 106 each formulated the elements of the action in markedly differing terms, with the remaining three members of the House agreeing with both Lord Diplock and Lord Fraser of Tullybelton.

This latest statement, like the House's previous statement, should not, however, be treated as akin to a statutory definition or as if the words used by the House constitute an exhaustive, literal definition of 'passing off', and in particular should not be used to exclude from the ambit of the tort recognised forms of the action for passing off which were not under consideration on the facts before the House.

The existence of a misrepresentation is an essential element of the action for passing off, so that activities which in some sense can be regarded as taking advantage of the claimant's trading reputation and goodwill, such as copying the claimant's goods of a novel character or copying his novel system of advertising, or selling goods or services by reference to him or his goods or services by saying that they are similar or a substitute for them, or an accessory to be used in conjunction with them, are not actionable in English law in the absence of a misrepresentation, even if such conduct might in other jurisdictions be actionable as unfair competition.

Representations to the effect that the defendant's goods or services are equivalent to or a substitute for the claimant's are often made, not expressly, but by the adoption of a similar get-up or similar advertising methods or slogans, and this is not actionable so long as the goods are sufficiently distinguished by other means.

The use of a similar name or get-up in order to satirise or disparage the claimant or his goods or business is not actionable as passing off in the absence of a misrepresentation that the defendant's goods or business are those of the claimant even if such conduct is likely to be damaging or hurtful to the claimant.

In Ewing v Buttercup Margarine Co Ltd [1917] 2 Ch 1, Ewing ran a dairy products business called the Buttercup Dairy Company, which sold margarine in 150 shops. The shops were only in Scotland and the North of England, but Ewing had plans to expand his business to the South of England. The defendant company was registered in 1916 to carry on the business of supplying margarine wholesale. Ewing brought an action for an injunction to prevent the company trading under its registered name. The defendants suggested that, as Ewing was a retailer and they were wholesalers, there would be no confusion. In addition, as the company would only operate around London, there would be no confusion between it and a trader who only operated in the North. It was held that the injunction would be granted - although the defendants were wholesalers, the objects clause of the memorandum did give power to retail which the company might exercise in future. In addition, the plaintiff intended to expand his business into the South of England and confusion was a real possibility.

Conversely, in Dunlop Pneumatic Tyre Co Ltd v Dunlop Motor Co Ltd 1907 SC (HL) 15 the pursuers were in the business of manufacturing tyres, whereas the defenders carried on business as a retail motor trader and car repairer. There was no evidence of any fraudulent intention on the part of the defenders. Interdict was refused, on the basis that confusion was unlikely to result. This can be contrasted to the case of Exxon Corporation v Exxon Insurance Consultants International Ltd [1982] Ch 199 in which the plaintiffs were internationally known producers of petroleum products. The defendants were motor insurance brokers. The plaintiffs successfully sought an injunction to restrain the defendants fom their use of the word "Exxon" even though the two businesses were unrelated to each other. The plaintiffs had an international reputation and "Exxon" was a distinctive invented word - there was a possibility of confusion.

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