Are you a business owner who uses a trading name and/ or a brand name, but has not registered the name as a trade mark? If so, you may in certain circumstances, still be able to protect your mark and prevent its exploitation by a competitor. In order to do so you will need to be able to establish rights in the tort of passing off.
In very brief terms passing off involves a three-part test:
1. A goodwill or reputation attached to the goods or services.
2. A misrepresentation by the defendant to the public leading or likely to lead the public to believe that the goods or services offered by him are the goods or services of the claimant.
3. Damage to the claimant, by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the claimant.
Goodwill has been described as "the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom". Although goodwill may be embodied in words, names or get-up, passing off protects the goodwill of the claimant's business as a whole and not individual marks.
The most common form of misrepresentation is where a defendant falsely represents that his goods are the goods of the claimant. The misrepresentation can either be: (i) an express statement by the defendant to this effect; or alternatively; (ii) implied from the use by the defendant of the same or similar marks in respect of his goods or services as are used by the claimant. The misrepresentation must concern the source of the goods or services and not their quality, unless the quality is such that it is attributable to a particular trader.
The claimant must prove on the balance of probabilities that a proportion of the public would be confused or deceived as a result of the defendant's misrepresentation. This is a question of fact to be decided in all the circumstances. Factors that are typically taken into consideration in assessing whether the public are likely to be deceived include:
1. The phonetic and visual similarities between the marks.
2. The nature of the marketplace and circumstances in which the goods are sold or services supplied.
3. The nature of the goods themselves.
In certain cases, the courts may find that there has been a misrepresentation even where there is no evidence of confusion. However, where possible a claimant should provide evidence of, and establish, confusion between the goods and services since this will clearly assist any claim in passing off.
The tort of passing off protects the claimant's right to the goodwill in his business and the claimant may therefore bring an action in passing off to protect this goodwill from damage. To bring a successful action for passing off, the claimant must show that the misrepresentation by the defendant caused damage to his goodwill.
Where the claimant and defendant operate in a common field of activity and the defendant misrepresents that his goods are those of the claimant, the damage most frequently alleged by the claimant is the diversion of sales to the defendant. The public may be induced by the defendant's misrepresentation to buy the defendant's products or use his services and not the claimant's.
