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Passing Off

As precious as the UI logo is to the University of Ibadan, if it’s not registered another school can use it. However, UI can still Sue and this time around not under trademark but ‘passing off’.

 

Due to the fact that a lot of people don’t engage in trademark registration, an action in passing off will succeed. Recently we had a case where someone image was used on Jiji website, his image was not registered but an action for passing off would be successful.

 

We would be talking about passing off today.

 

Passing Off applies to both tangible and intellectual property.

 

 

Introduction

Passing off basically involves a person portraying his trade or his products as that of another. Usually, the basis for this representation is the fact that the other’s trade has built up goodwill  and reputation over the years which is associated with either his trade name or trademark and the  defendant sees it as a basis to make profit for himself by misleading the public and causing confusion

It’s the most common situation with fake products. We’ve all seen fakes of popular brands and products. The likes of adadis,etc.

What the makers of the product do is imitate and try to pass off their own product as that of the popular company. Sometimes, they don’t make everything about their business identical with the business of the popular company, yes. But it is unhealthy competition to allow acts that mislead the public. Little differences that are not easily noticed would count as passing off.

One essential thing about passing off is that the defendant tries to benefit from the *goodwill* of the plaintiff. So where there’s no goodwill or known reputation associated with a company or person, he or she can’t sue for passing off.

These people try to benefit from the good names of popular companies and eventually, they affect these popular companies. Not just in the reduced sales, these companies have to spend more trying to make known the difference between original and fake. Thus, there’s damage to the original company.

What then is goodwill?

Goodwill is defined as the part of business value over and above the value of identifiable business assets. So basically it is an intangible asset. It’s closely associated with reputation and something that the business is known for.

We know Mary Kay products are good and don’t cause skin reactions. Nike shoes are durable. These are goodwill and reputation of the business

 

Now, when a person starts a trade, he has a trade name, signs, marks, slogans, etc which collectively form his Trademark. Trademark is a form of intellectual property right. The owner of the Trademark thus has exclusive rights over the Trademark and can exclude others from using his Trademark unless with a license.

 

So first and foremost, where a person has a Trademark, no other person is allowed to use any sign, slogan, name or mark that makes up his Trademark or that is similar or identical to it under the various Trademark laws.

 

However, apart from the protection granted by Trademark laws, the owner can also sue the infringer for the tort of passing off.

 

But there’s a thin line between passing off and trademark infringement.

In passing off, there’s an emphasis on the damage to the goodwill of a person or business.

And it is not necessary that the Trademark is registered. Under the Trademark laws, if the Trademark is not registered, a person can not bring an action. But a person with an unregistered Trademark has a remedy with passing off.

So it means that in trademark infringement, the defendant is not necessarily interested in benefitting from the goodwill of the plaintiff’s company or product.

 

The requirements

the requirements are Goodwill, misrepresentation and damage. In a more expanded form, there are certain requirements before one can bring an action for passing off. They include

 

1) That there was a misrepresentation

 

2) That the misrepresentation was made by a trader in the course of a trade, usually the same trade.

 

3)  That the misrepresentation was made to prospective customers or ultimate consumers of goods or services supplied by him

 

4) That it was calculated to injure the business or goodwill of another trader

 

5) Which causes damage to the business or goodwill of that other trader or is likely to do

 

 

Now, let’s consider a case.

 

Topshop is a well known fashion retailer. Rihanna is a famous pop star. In March 2012 Topshop started selling a t-shirt with an image of Rihanna on it. The image was a photograph taken by an independent photographer. Topshop had a licence from the photographer but no licence from Rihanna. Rihanna contends that the sale of this t-shirt without her permission infringes her rights. Topshop does not agree.

Basically, first thing is that you don’t have a right per se to your picture. The photographer does (he’s the creator of the valuable form of creative work)

So, running to the conclusion, Rihanna was only able to succeed in an action against the sellers of that cloth cos she established that “the use of that picture passes across an idea that she endorsed the cloth”

 

She did this by showing that

  1. She was as much a fashion icon as a music icon
  2. She represents a brand (with lots of goodwill) within the fashion industry
  3. Apparently, she’s done endorsements of clothing before.
  4. Thus, in the instant case, the use of her picture will definitely connote to the mind of members of the public that she’s endorsed this particular cloth.
  5. Damage to her (her goodwill), not cos the cloth is fake, but cos she’s gaining nothing from the sellers.

The damage will also include loss of control over her reputation in the fashion sphere.

Lastly, lifting directly – the judge noted that :

 

“_a substantial portion of those considering the product will be induced to think it is a garment authorised by the artist. The persons who do this will be the Rihanna fans. They will recognise or think they recognise the particular image of Rihanna, not simply as a picture of the artist, but as a particular picture of her associated with a particular context, the recent Talk That Talk album. For those persons the idea that it is authorised will be part of what motivates them to buy the product. I am quite satisfied that many fans of Rihanna regard her endorsement as important. She is their style icon. Many will buy a product because they think she has approved of it. Others will wish to buy it because of the value of the perceived authorisation itself. In both cases they will have been deceived .”

 

Forms of Passing off

There are basically three forms of passing off

  1. The classical passing off (already discussed earlier)
  2. Extended Passing-off
  3. Reverse / Inverse Passing-off

 

In relation to this, can A who produces Zobo sue B for passing off if B is producing Kunu but labels it as Zobo?

 

Extended passing-off is that unique form of passing-off that protects the property right of a trader in his goodwill and it would appear that each of the plaintiffs’ is entitled to bring an action to protect such property right, so far as thereby affected.” It usually involves more than one plaintiff. Here, the defendant’s misrepresentation is as to the particular quality of a product or services and usually causes harm to the plaintiff’s goodwill.

The material element is the representation.

 

There’s the popular case of Avocaat. Etc..

But, let’s take the Champagne case, this is a type of wine that has some peculiar characteristics in terms of taste, fruit used and sparkling look. Now, there are a thousand and one manufacturers of Champagne..

Where someone produces a different kind of wine, different fruits, different taste, different look,  and then labels it Champagne, the manufacturers of Champagne, can sue him, because people will get to buy it and taste it and its presence in the market will reduce the “value of the word Champagne”.

 

You may ask… What’s special about this passing off? Is it just that it involves more than one plaintiff?

 

We all agree that passing-off involves B passing off his goods as that of A.

This extended passing-off only widens the Umbrella of protection for business owners.

 

It connotes that even where B does not actually make the public believe that his goods are that of A but does something which involves the use of A’s get-up or name or something and which will invariably cause damage to A,  B will be liable to A.

 

In the Zobo-Kunu controversy.

 

The person labelling Kunu as Zobo will prolly put on the label the active ingredients of Kunu as the ingredients of the content of the bottle he is selling,  Buh because the name “Zobo” which he labels on his product has acquired a secondary meaning in the minds of people, and is no longer Just any other name in the dictionary,  he will be causing damage to the real producers of the real Zobo

 

 

 

Reverse passing-off, like the name suggests is where the B is not trying to pass off his goods as A’s but is trying to pass off A’s goods as his. Basically, this can be seen as taking credit for A’s hard work. Same requirements of goodwill, misrepresentation and damage. Just that the table is turned.

 

In the John Roberts Powers School Inc Case, it was held that in reverse passing off, the defendant markets the plaintiffs goods as being the defendant’s goods. In this case the defendant had misrepresented to her students and customers that the study notes for self-improvement and social development of the plaintiff were the product of her own efforts. Injunction was granted by the Courts

In the Samuelson Case, the plaintiff was the author under the stage name Lawrie Wyle of a humorous sketch titled “The New Car” which had been performed successfully before the King and Queen at a Royal Command performance and had attracted favourable reviews. The defendants retained the principle comedian from the sketch to write and perform a film version which emerged as totally different from the original. The defendants used misleading quotations from newspaper reviews of the command performance to advertise their film as if it was the sketch which had pleased the King and Queen.

The Judge holding that it was passing-off remarked of their action thus:

 

“That seems to me to amount to a notice or invitation; come and see our film and when you have seen our film you will have seen the sketch which has been spoken of in the manner which is stated in the passages which appear in the advertisement”

Whenever B sells A’s goods as his, then we have reverse passing-off.

The remedies of passing-off

 

  1. Damages
  2. An account for profit.
  3. An order for Delivery – up of the goods
  4. An injunction to prevent further acts
  5. An enquiry to establish the plaintiff’s loss which I presume will lead back to the damages

 

 

Defences include

 

Use of a registered trademark

Use of individual’s own name

Plaintiff’s own goods – the goods belong to the plaintiff and the name is also that of the plaintiff. In other words, there’s no imitation or difference.

Absence of goodwill – where there’s no goodwill to be damaged, it could be a defence

 

Where a photographer gets paid for his pictures he transfers the ownership of the copyright to the person he sells it to or the person who pays for his service except there’s an agreement whose terns does not include ownership of the Intellectual property right.

 

 

 

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