12. Passing off

The Nature of Passing Off

Core purpose: The economic tort of passing off occurs when a defendant markets goods or conducts business in a manner that misleads the public into believing their products or business are those of the plaintiff. The law protects traders against unfair competition, preventing a rival from using deceptive practices to profit from another person's commercial reputation.

Protected interest: In Leather Cloth Co v American Leather Cloth Co, Lord Kingsdown laid down the fundamental rule that no person has the right to sell their goods as those of a rival trader. In A G Spalding & Bros v A W Gamage Ltd, Lord Parker clarified that the right protected is the trader's proprietary interest in the goodwill of the business, which is vulnerable to injury by misrepresentation.

The Modern Test: The Five Ingredients

The Advocaat case: In Erven Warnink BV v J Townend & Sons (Hull) Ltd, the House of Lords expanded the scope of passing off beyond simple claims that one's goods were made by the plaintiff. The court held that where a name like 'Advocaat' denotes a distinct class of beverage with established goodwill, a rival who misleads the public into buying a different product under that name commits actionable passing off.

Lord Diplock's formulation: In Erven Warnink BV v J Townend & Sons (Hull) Ltd, Lord Diplock identified five essential elements required to establish liability: a misrepresentation; made by a trader in the course of trade; to prospective or ultimate customers; calculated to injure the business or goodwill of another trader as a reasonably foreseeable consequence; and causing actual damage, or the probable likelihood of damage, to that trader.

Forms of Misrepresentation

Directly marketing goods as the plaintiff's: A defendant commits passing off by falsely and directly stating that their merchandise was produced by the plaintiff. For instance, in Lord Byron v Johnston, the court held the defendants liable for advertising and selling verses under the plaintiff's name that he had not authored.

Using the plaintiff's business name: Adopting a business name confusingly similar to a competitor's in the same trade constitutes passing off. In Hendriks v Montagu, James LJ observed that ordinary customers do not memorise every single letter of a name and are very likely to be confused when two competing businesses trade under strikingly similar titles.

Local commercial confusion: In the Nigerian decision in Niger Chemists Ltd v Nigeria Chemists, Palmer J granted an injunction where a new firm opened a chemist in the same town and street as the plaintiff using a nearly identical name, ruling that there was a grave risk of deception. Similarly, in Madame Tussaud & Sons Ltd v Louis Tussaud Ltd, an injunction restrained the registration of a new company formed by the defendant because its name would deceive the public into associating it with the plaintiff's famous exhibition.

Using the plaintiff's trade name: A trade name is a name under which goods are sold that, through long use, identifies those goods as originating from a specific trader; see Powell v Birmingham Vinegar Brewery Co. Purely descriptive names that merely state the type of product are not protected. Examples of unprotected descriptive terms include 'stout' in Raggett v Findlater, 'vacuum cleaner' in British Vacuum Cleaner Co Ltd v New Vacuum Cleaner Co Ltd, and 'gripe water' in Re Woodward's Trade Mark.

Acquired secondary meaning: A trader who claims that a descriptive phrase has acquired a technical 'secondary meaning' pointing exclusively to their brand bears a heavy burden of proof. In Reddaway v Banham, the plaintiff successfully discharged this burden, obtaining an injunction restraining the defendant from using the descriptive words 'camel hair' for belting without clearly distinguishing their products.

Using the plaintiff's trade mark: A trade mark is a distinctive design, label, mark, or name affixed to goods to identify their commercial origin. In Sierra Leone, Section 3 of the Trade Marks Act (Cap 244 of the Laws of Sierra Leone 1960) requires a formal register of all trade marks and their proprietors to be maintained at the office of the Registrar General.

Imitating get-up and appearance: Where the distinctive packaging, colour scheme, or overall physical get-up of goods identifies them to the public as the plaintiff's product, copying that appearance creates actionable passing off. This principle was applied in United Kingdom Tobacco Co Ltd v Carreras Ltd.

Other Required Elements

In the course of trade: The misrepresentation must be made in the course of trade. The concept of 'trade' is interpreted broadly to include standard commercial activities, as well as a creator's interest in their literary and performance rights.

Directed to customers: The deceptive representation must be directed to prospective customers or ultimate consumers of the goods or services; see Harrods Ltd v R Harrod Ltd. However, where businesses operate in completely unrelated sectors with no common ground, confusion is unlikely to arise. Thus, in Granada Group Ltd v Ford Motor Co Ltd, a television broadcaster failed to stop a car manufacturer from naming a vehicle model 'Granada'.

Strict liability and calculated to deceive: Passing off is a strict liability tort, meaning a defendant can be liable even if they acted honestly and without intent to deceive. The test is objective: the plaintiff only needs to prove that the defendant's conduct was calculated—meaning reasonably foreseeable and likely—to deceive the buying public.

Customer perception and literacy: When evaluating whether confusion is likely, the court considers the perception, experience, and literacy level of the ordinary prospective buyer; see Johnston v Orr-Ewing.

Damage and quia timet relief: A plaintiff does not need to show that actual deception or financial loss has already taken place. Demonstrating a clear probability of future harm is sufficient, and the court may grant a quia timet injunction (a preventive court order granted 'because he fears' future injury) to restrain the defendant's conduct before actual damage occurs.