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What is passing off?

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Passing off is a tort which is an actionable civil wrong. It is committed when someone sells goods or services which mislead potential or actual customers into thinking that those goods or services are provided by another. Passing off is an attempt to capitalise on another person’s goodwill and reputation, as well as stealing trade away from that person. Ultimately, no-one should pass off their goods or services as those of another. A victim may have the right to sue for remedies which include damages, an account of profits and injunctive relief to prevent further passing off.

The case of Reckitt & Colman Products Ltd v Borden Inc (No.3) [1990] 1 W.L.R. 491 provided three elements that a claimant would need to prove to succeed. They are as follows:

  1. The claimant must show a goodwill or reputation attached to the goods or services that they provide in the mind of the purchasing public. This could be a brand name, trade description, or certain features of the packaging or labelling which are distinctly recognisable to the public.
  2. The claimant must show a misrepresentation by the defendant to the public, which has led the public or is likely to lead the public, into believing that the goods or services offered by the defendant are the goods or services of the claimant. The public do not need to know the actual identity of the claimant. For example, it could be the brand the public recognises which is owned by the claimant. The misrepresentation may or may not be intentional.
  3. The claimant must show that they have suffered or are likely to suffer damage caused by the misrepresentation.

A description of what goodwill is has been given by Lord MacNaghten in Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] A.C. 217. Lord MacNaghten said, ‘it is the attractive force which brings in custom. It is the one thing which distinguishes an old established business from a new business at its first start. The goodwill of a business must emanate from a particular centre or source. However widely extended or diffused its influence may be, goodwill is worth nothing unless it has the power of attraction sufficient to bring customers home to the source from which it emanates.’

As a business you should also consider what intellectual property you have and make sure you have the right protection for it. For example, a trademark protects your brand, such as a name of a product or service. A registered trademark offers protection as you can take legal action against anyone who may use your brand without your permission. Having your brand registered as a trademark will also assist you if another were to attempt to pass off your goods or service.

At Lawdit we can ensure you have the right protection for your intellectual property. Our Stay Legal packages at different price points offer something for every business. A Stay Legal package will keep your business compliant with the law. It will also put legal safeguards in place to protect and assist you and your business if a dispute were to arise. With a free initial consultation there is no need to delay, so book today!

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