Passing Off

Introduction Now more than ever it is important to protect the interests of your business and to make sure that these are not prejudiced by the acts of a competitor. What steps can you take if a competitor represents his goods or services as being those of your business? This is known as "passing off" and the law prevents one trader from passing off his good or services as those of another and benefiting from the reputation and goodwill built up by that business. Legal action can be taken to obtain an interdict (injunction) or compensation, or both, to protect your business against passing off.

Requirements for an action for passing off There are three things that a claimant has to establish in order to be successful in an action for passing off: -

That there is a reputation/goodwill attached to the goods or services he supplies. That there has been a misrepresentation by the other party (whether intentional or not) leading, or likely to lead, the public to believe that the goods or services offered are those of the claimant. It is irrelevant whether or not the misrepresentation was intended to mislead the public or even whether any members of the public have indeed been misled - the test is simply whether the misrepresentation is likely to mislead the public. That he has suffered, or is likely to suffer, damage because of the mistaken belief caused by the other party's misrepresentation. When looking at the likelihood of customers becoming confused, the geography of the market in which the parties operate will be an important factor. Two businesses may have similar names, but if they operate in entirely different areas of the country, it is less likely that confusion will arise.

The services provided by the respective businesses will also be an important consideration. Confusion is unlikely to result if the goods or services provided by the claimant are entirely different from those provided by the other party.

Cases involving for passing off The issues that the Court will consider when deciding whether there has been passing off can be seen in a couple of Scottish Court decisions. In each case, the claimant provided sufficient information to satisfy the Court that an interim interdict (injunction) should be granted to protect the claimant's position until a full hearing could take place.

In a case based on both trademark infringement and passing off, Gleneagles Hotels Ltd were able to prevent another business using the name of...