Passing Off y Passing-off is essentially a tort that protects commercial interests.

More precisely it protects the goodwill and reputation of [the claimant s] business which is likely to be harmed by the defendant s misrepresentation . y Definitions of Passing Off: o Clerk & Lindsell, Torts: It is an actionable wrong for a trader so to conduct his business as to lead to the belief that his goods, services or business are the goods, services or business of another  Specifically about commercial life/trade o Gatley, Libel and Slander: The tort of passing off is based upon the principle that a person may not, by deceiving the public as to the origin of his goods or services, gain an unfair advantage over another . y You can commit this tort even if you do it innocently (no need to prove fraud/ intention/ negligence) Elements of passing off: y Ervin Warnink v Townend o Where a product, such as "advocaat," has gained by reason of its character and ingredients a public reputation under its descriptive name, it should be protected from deceptive use of its name by competitors, even though its ingredients do not come from any particular locality. Prior to this case "collective goodwill", as required for an action in passing off, only applied to names indicating geographic origin. The Court held that wares whose name falsely suggests its character or quality can be prevented from selling the product under that name. o In applying the test for passing off, the Court developed what is known as the "extended" tort of passing off which included any situation where goodwill is likely to be injured by a misrepresentation. o Per Lord Diplock, there are five elements of this tort:  A misrepresentation  Made by a trader in the course of trade  To prospective customers of his or to ultimate consumers of goods and services  Which is calculated (in the sense that it is a reasonably foreseeable consequence) to injure the business or goodwill of another trader  And which causes or threatens actual damage to a business or goodwill of a trader o The misrepresentation need not be intentional, but the public must have been deceived, not just confused. o Procedural key:  C brought a class action. An injunction was granted in this case. CA dismissed the injunction, but HL restored the injunction and that was the end of English advocaat. y Interlocutory injunction a speedy way to solve the case y Reckitt & Colman v Borden Inc o Lord Oliver reduced the 5 elements in Ervin to three elements:  First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying get-up under which his particular goods or services are offered to the public, such that the get-up is recognized by the public as distinctive specifically of the plaintiff s goods or services.  Secondly, he must demonstrate a misrepresentation by the defendant to the public leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff s identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff.  Third, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage 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 plaintiff.

Element 1: Goodwill y Lord Macnaghten in IRC v Muller & Co s Margarine: The benefit and advantage of the good name, reputation and connection of a business... the attractive force which brings in custom y Unlike defamation/ injurious falsehood, there is no element of denegration of the claimant s goods; on the contrary, the defendant lauds the wares of the claimant- The sincerest form of flattery is imitation? y Usually passing off is found if D induces consumers to believe that they are purchasing C s products. But the action of passing off extends beyond such cases. In A G Spalding & Bros v AW Gamage Ltd, it was held that the tort protected goodwill. This theme was picked up in J Bollinger v Costa Brava Wine o Protects appellations of origin o D marketed Spanish Champagne , a sparkling Spanish wine. C was one of several manufacturers of champagne in the Champagne region of France. The court found that members of the public bought D s wine in the mistaken belief that they were buying champagne from the vineyards of Champagne. It was held that D had committed the tort of passing off. o Held that the description champagne was part of C s goodwill and a right of property. Group of persons producing goods in a certain locaility and naming those goods by reference to that locality were entitled to protection against competitors who sought to cash in on their goodwill and reputation by attaching that name to a product originating from a different locality and with which the competing product has no rational association. o In deciding whether a substantial number of the members of the public would be misled by the representation, the court will take account of who the likely customers for the product or service are. y Vine Products Ltd. & Ors v. Mackenzie & Co. Ltd & Ors. o Attempts were made by Spanish producers to claim exclusive right to word Sherry . Long acquiescence in sale of wines was established. The word Sherry simpliciter meant, exclusively Spanish product. Injunction was granted only against use of sherry unqualified by other indication of origin. But wines similar in character sold either as sherry type wines or as British Sherry , South African Sherry , Cyprus sherry or Australian Sherry were allowed. Element 2: Misrepresentation: y Imitating the appearance of the claimant s goods: o White Hudson v Asian Organisaton Ltd:  Cs medicated cough sweets had been sold in Singapore since 1953. They were sold in red cellophane wrappers, called Hacks. Respondents, in 1958, started importing Dutch-made sweets called "Pecto" in similar wrappers. Both sweets were exhibited in glass jars & normally sold loose. Most customers could not read & merely asked for "red paper cough sweets". Judicial Committee of the Privy Council decided that this amounted to the tort of passing off, and the respondents should be restrained. The "get-up" was calculated to deceive, though this was not proved, regard had to be paid to foreign market conditions & type of customers. o Reckitt & Colman v Borden Inc  Where a party alleged passing-off by similarity of the get-up of the goods, the crucial question was whether what the defendants were doing was a misrepresentation.  Since 1955, R Co marketed lemon juice in a distinctive plastic squeeze container the size and shape and colour of a lemon. R Co. by this means achieved about 75 per cent of UK sales of lemon juice. B Co sought to market lemon juice in a similar container and R Co. sought an injunction restraining them from doing so. The trial judge found that many shoppers would inevitably purchase B Co's lemon juice when they thought they were purchasing R Co.'s. Held, that the getup used by B Co constituted a misrepresentation and the injunction granted by the trial judge would be upheld y If the trade name merely describes the goods or their characteristics, then ordinarily the claimant cannot prevent others from using it.

British Vacuum Cleaner v New Vacuum Cleaner Co:  In considering whether the name of a registered company so nearly resembles the name of another company previously registered as to be calculated to deceive within the meaning of s. 20 of the Companies Act, 1862, the principles to be applied are at any rate extremely analogous to those which are applicable in ordinary passing off cases.  A distinction must always be drawn between cases in which the words complained of are words of common ordinary meaning and cases in which the words complained of more or less partake of the character of fancy words or primarily do not relate to the article, but to the person who makes it. y Held, that, the words vacuum cleaner were merely descriptive words; that the words had no secondary or subsidiary meaning; and that the plaintiff company was not entitled to have the defendant company restrained from using the words. y Held, also, that the plaintiff company, by allowing subsidiary companies to be formed under names containing the words vacuum cleaner in conjunction, had admitted that another company with a name so containing those words would not necessarily be confused with the plaintiff company.  The onus of proving that words which are commonly and properly used as descriptive words have such a secondary or subsidiary meaning as to entitle the person who has used them to their exclusive use lies on that person, and is not easily discharged. o Canadian Shredded Wheat Co Ltd v Kellogg Company of Canada Ltd  Shredded wheat introduced in 1893 by Henry Perky. Commercial success attained by his shredded wheat products. By 1938, shredded wheat as a product had become generic.  In the US: The pillow shaped biscuit which was the form in which shredded wheat was made should not be able to be copied by Kelloggs. But the US court found that this shape was functional and not an attempt by Kelloggs at passing off.  Both UK and US courts found that shredded wheat had become a generic product and could not be protected by the tort of passing off. A very heavy burden of proof is cast on the claimant who seeks to establish that a name which is merely descriptive of the product has acquired a technical secondary meaning, so exclusively associated with the claimant s own product, that its use by others is calculated to deceive purchasers. This burden was nonetheless discharged by the makers in the following case: o Reddaway v Banham  A trader is not entitled to pass off his goods as the goods of another trader by selling them under a name which is likely to deceive purchasers (whether immediate or ultimate) into the belief that they are buying the goods of that other trader, although in its primary meaning the name is merely a true description of the goods.  The plaintiff had for some years made belting and sold it as Camel Hair Belting, a name which had come to mean in the trade the plaintiff's belting and nothing else. The defendant began to sell belting made of the yarn of camel's hair, and stamped it Camel Hair Belting so as to be likely to mislead purchasers into the belief that it was the plaintiff's belting, endeavouring thus to pass off his goods as the plaintiff's.  Held, that the plaintiff was entitled to an injunction restraining the defendant from using the words camel hair as descriptive of or in connexion with belting made or sold or offered for sale by him and not manufactured by the plaintiff without clearly distinguishing such belting from the plaintiff's belting. False advertising: o Cadbury Schweppes v Pub Squash  False advertising may also amount to passing off. But in this case, the action failed because the public was not deceived. o

Element 2: Representation must be likely to deceive the claimant s customers: y Test: Relies on sophistication of the public to make the distinction between the parties o Cadbury Schweppes v Pub Squash  Held that the tort of passing-off could encompass slogans or visual images associated with a product in an advertising campaign, and a plaintiff could acquire an intangible property right by virtue of the product deriving a distinctive character recognised by the market from the advertising.  P Co sold "Solo" in Australia. "Solo" was a soft drink, packaged to look like beer, i.e. in a can bearing a medallion. P Co ran an advertising campaign to associate the drink with manliness and adventure. In 1975, D Co launched a similar soft drink called "Pub Squash," also in beer-style cans with medallions. D Co also ran an advertising campaign emphasising manliness and adventure. The sales of the plaintiffs' drink declined and they brought an action against the defendant for damages and an injunction in respect of passing off. In giving judgment the judge first considered the issue of passing off and decided that on the facts the defendant had sufficiently differentiated its product from that of the plaintiffs.  However, on the facts, although D Co had deliberately taken advantage of P Co's advertising campaign, the public had not been misled, and the judge was entitled to find as he had o Clark v Associated Newspapers  C, an MP, author and well known diarist, brought an action against AN after one of its newspapers published a series of articles written by B comprising parodies of C's diaries. The title of the articles described the diaries as being those of C and a photograph of him was included together with a stand to the column giving information about C. C, under the law of passing off, sought an injunction restraining publication of the articles on the basis that a substantial number of readers attributed the authorship of the articles to him. Injunction granted because he managed to prove the above 3 elements: y C was a well known diarist y C had adduced significant evidence that rational persons had been deceived, but even without reference to that evidence, it was clear that the articles contained conflicting messages as to who had written them and a substantial number of readers would be left believing that C was the author of the diaries. y The attribution of the authorship of the articles to C could clearly cause serious damage to the goodwill and reputation he had established as an author and he was entitled to both an injunction and an enquiry as to damages.  However, the injunction would not prevent AN publishing the articles provided that their authorship was not attributed to C and it was made plain that it was B who had written the material. United Biscuits (UK) Ltd v Asda Stores:  The manufacturer of "Penguin" biscuits sued for injunctions to restrain a chain of supermarkets from selling similar chocolate biscuits under the appellation "Puffin".  Finding for the plaintiff w.r.t. passing off, Robert Walker J applied the principles summarized by the Court of Appeal in Harrods v Harrodian School [1996] RPC 697. Of the three probanda of the so-called "classic trinity" of an action for passing-off, the plaintiff's reputation and the likelihood of damage were clearly shown. As to misrepresentation, he took the view that judicial impression was important where the goods in question were familiar and inexpensive. The packaging would not have been deceptive had it not been for the prominent picture of an upright dark coloured bird with a white front. That picture and the word "Puffin" suggested a connection between the manufacturer of the defendant's biscuit and the manufacturer of "Penguin" even though most consumers might not know the name of that manufacturer.

Domain names o British Telecommunications v One in a Million  O, dealers in Internet domain names, appealed against a decision granting injunctive relief to M&S and other well known commercial enterprises in their actions against O for passing off arising from O's registration of their business names as internet domain names.

Whether a name constituted an instrument of fraud was to be determined by considering all the circumstances, including the similarity of the names and the intention of the defendant. O's purpose in registering the domain names was to extract money from the owners of the goodwill in those names by the threat, whether express or implied, that the goodwill would be exploited by itself or by those it equipped with the names. It had been rightly concluded that passing off and threatened passing off had been established in all the actions and that the domain names registered were instruments of fraud, and injunctive relief was appropriate. o Phones 4U Ltd v Phone4U.co.u.Internet Ltd  C were well known mobile phone retailers that had the registered domain name "phones4u.co.uk". H had registered and used the domain names and email addresses "phone4u.co.uk" and "phone4u.com" in the same year as C registered its domain name.  Action found in passing off. y Goodwill test: Enough that very large numbers of people knew the name, far more than that needed to establish goodwill. (2) y Misrepresentation: Since the inevitable inference was that "phones4u" had an established goodwill at the relevant time, the court did not see how there could be any realistic use of "phone4u.co.uk", albeit created innocently, without causing deception. y Damage: Evidence was produced to show that customers thought they were communicating with those who owned and ran the phones4u shops and a significant number thought so even after having visited H's website. The website itself was not enough to "undeceive" those persons and H had sought to take advantage of the initial deception. The email evidence showed clear and convincing evidence of damage to goodwill. The judge had fallen into error by limiting himself to considering damage by trade diversion and not considering the other kinds of damage to goodwill protected by the law of passing off.  Classic case which shows that where the trademark issue doesn t work, the passing off tort might. Element 3: Damage y A passing off action can be brought even where no damage can be proved (Draper v Trist). The probability of damage suffices. The crucial test is whether a false representation has in fact been made, fraudulently or innocently, and whether this will foreseeable result in consumers being misled. Proof of intention to deceive is also not essential (by contrast with the tort of deceit). It is unnecessary to prove that any members of the public were actually deceived. y If the public would not in any sense be confused, there is no tort. An example of failure for this reason is Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd. y Harrods v Harrodian School o In order to be successful in finding an action of passing off, P needs to be able to prove that D s action will have an adverse effect on its own reputation. o Harrods appealed against the passing off decision against Harrodian School, which was situated on the old Harrods site. It was argued that the name was chosen to ride upon the good reputation of Harrods, and that this school would have an adverse effect on Harrods reputation. This claim was dismissed because it said it had to be proven that the name of the school would have an effect of Harrods sales, but it could not be proven.

Defences y Defence of Damnum absque injuria y No action for passing off where: o No interference with Trade  Definition of trade extended wider than the normal meaning: y British Diabetic Assoc. v Diabetic Society Ltd o Extends the meaning of trade to include fundraising charities, and passing off incorporated the deception of the public by one fund-raising charity in a way that would damage another charity's goodwill. y Kean v McGivan o Definition of trade does not encompass political parties because P was not involved in commercial activity in the sense required to found a passing-off action. o No intention to deceive (very important in defence: if D did it innocently, might be able to escape a claim against himself) y As a general rule, you can use your own name/one that you have acquired by reputation, even if it is injurious to another. o Corporation of the Hall of Arts & Sciences v Hall Passing Off and Trademark Protection y Significant overlap between the tort of passing off and the law of registered trademarks; the Trade Marks Act 1994 made a significant change in the law, in that it is now possible to register the shape of goods or their packaging, whereas previously it was only possible to use the law on passing off to protect an interest here. o But despite statutory protections, the tort of passing off comes in to fill in the gaps of the latter.  United Biscuits (UK) Ltd v Asda Stores: y U's claim under trademark failed, however. Evidence from witnesses who had taken part in a survey referred to similarity between the two products, but it was unlikely that a significant proportion of supermarket shoppers would fail to distinguish the products if placed on sale side by side, although many would suppose or assume an association between them.  Phones 4U Ltd v Phone4U.co.u.Internet Ltd

2001: Regulation of market practices through the tort of passing off is wholly ineffective . Discuss. A tort of unfair competition? Discuss with respect to passing off. In the United Kingdom there is neither a common-law tort nor a statutory regulation dealing with unfair competition comprehensively. Passing off comes closest to regulating unfair competition in the UK. The HL in Erven Warnink BV v J Townend & Songs (Hull) Ltd, extended the classic tort of passing off to a wider class of misrepresentations resulting in damage to a rival s goodwill. It also paved the way towards the tort becoming a means of controlling unfair trading practices. It is of great practical relevance and the most important common-law action because it can be applied to a broader range of activities than the provisions of the UK Trade Marks Act 1994 ( UK TMA ). However, although the scope of the passing off action has been extended over the last decades, there is still commercial conduct that might be seen as unfair but which is neither covered by the passing off action nor by any other common law tort or any statutory law yet. It is not wholly ineffective, but it could do better if its requirements were either extensively interpreted or if the elements of the tort were amended. The elements in a passing-off action Passing off is based on the so-called classic trinity , which is formed by goodwill, misrepresentation and damage as established in Reckitt & Colman Products Ltd v Borden Inc . Goodwill The basic goal of the passing off action is the protection of traders from definite unfair and dishonest conduct of competitors. The object of protection is goodwill of another trader based on an association between a trader and a certain good, service or business, because the establishment of such a connection might often require traders to invest a great amount of money and personal effort. The scope of the first element, goodwill, can be best assessed by taking a look at the way in which it can be exploited. y In the original form of passing off, the attracting force of goodwill is exploited by copying or imitating the traders' devices, such as the trade mark, business name or product get-up, and attaching these elements to the competitors' own devices in order to make purchasers believe that their goods are those of the original trader (Erven Warnink BV v J Townend & Sons (Hull) Ltd). y Further, it constitutes passing off to offer a trader's goods of a certain quality or category as goods of a different quality or category from this trader, for instance by offering second-hand products as brandnew ones (AG Spalding & Bros v AW Gamage Ltd). y Moreover, in the modern form of the tort, goodwill may be damaged in the classic sense where the defendant sells inferior goods in substitution for the claimant's but also in a less direct sense, where the defendant's goods are not of inferior quality but their presence on the market serves to dilute or blur the claimant's goodwill. For example, in Taittinger SA v. Allbev Ltd., the defendant made a nonalcoholic drink which it sold under the name Elderflower Champagne . The Court of Appeal held that although it was unlikely that the defendant's product would reduce the claimants' (owners of champagne houses) sales in any way, this was actionable in passing off since the effect of the defendant's product was to erode the exclusiveness and distinctiveness of the name Champagne . y Finally, passing off has been even further extended to cases where the name or picture of a person with a certain popularity is used as advertisement for the trader's goods or services without having obtained a licence (false endorsement) [Irvine v Talksport Ltd] It is clear that it is no longer necessary to show that the claimant and defendant share a common field of activity or that sales of products or services will be diminished in order to succeed in a claim for passing off.

Misrepresentation

The second element of passing off, misrepresentation, consists of an implied or explicit false statement of facts which is likely to cause confusion of the public and has been broadened hand in hand with the extension of goodwill. The conduct of the defendant must actually or potentially make customers believe that the former's goods or services are those of the claimant (basic form), have a particular quality (extended form) or that there is a certain business connection between the defendant and the claimant (endorsement or licensing cases). The misrepresentation need not be intentional. The consumer would not be expected to study the two products for any great length of time; a quick glance will be enough. The test that would be applied, from Morning Star v Express Newspapers, is that the consumer who is confused must be more than a moron in a hurry . Nonetheless the degree of examination required is no more than a glance. It is not essential that every consumer is confused, merely a majority. However, it is not enough to argue that consumers unfamiliar with the product would be confused as from these consumers, P has not generated goodwill. y Applying a commercial environment test of misrepresentation, Laddie J. considered in Irvine that a false endorsement case could succeed where the claimant could prove that he has a significant reputation or goodwill and that the defendant's actions gave rise to a false message to the public that the defendant's goods were endorsed, recommended or approved of by the claimant. No doubt that loss of sales, damage to the claimant's reputation and damage to the claimant's trading relations are well established forms of damage. In addition, it seems as if diminishing the distinctive and exclusive character of certain goods or services, so-called dilution, is also accepted by the courts as a form of damage.

Damage

In light of the above, we can see that the action of passing off has been developed and extended since its establishment but by maintaining the requirements of the classic trinity the courts have avoided turning the passing off action into a general tort against unfair competition, which would provide traders with an exclusive right in their devices. But despite all the developments mentioned above there are still some major shortcomings in the present UK unfair-competition law. First of all, the courts have always stated that the passing off action in its current form does not apply if the customer is not actually or potentially confused at the time of sale, even if there was a certain likelihood of confusion before this point. In regard to pre-sale confusion, the courts explicitly refused passing off protection if consumers had been attracted by confusion in the initial stage of the sale process but had discovered their confusion before actually purchasing the good or service. In BP Amoco Plc v John Kelly Ltd the passing off claim was denied because the court argued that the motorists who had been attracted by the defendant's misleading sign would have noticed their confusion at the time of sale. Therefore, it concluded that the requirements of the tort were not fulfilled. This limited interpretation of the term confusion will cause a gap of legal protection in situations where trade-mark protection does not apply. In support of the court's approach one can argue that competition should be as free as possible. It is acknowledged that free competition might be a good thing, but only as long as the conduct of the traders is fair and honest. However, as the presented case illustrates, not every conduct that does not cause actual or potential confusion at the time of sale should be accepted as fair and honest competition. Thus, the reluctance of the courts to protect traders and consumers from conduct causing pre-sale confusion forms a substantial shortcoming in the UK system. Another deficit of the passing off action in its current form is its incapacity to cover situations where competitors design the look of their goods or services (look-alikes) closely related to the appearance of the products of another trader, which is called freeriding . Where the look of the copycat product is as similar to the original as to cause likeliness of confusion about the trade

Freeriding

origin, the passing off action might apply if the other requirements are fulfilled as well. Often, however, the look-alikes are specially designed to remind the customer of the original product without causing confusion about its origin. Such cases are not covered by the present form of the passing off action because the courts do not seem to be willing to drop the element of confusion as recently confirmed by the Court of Appeal in L'Oral v Bellure. On the one hand one can argue that the present legal framework and the legality of (non-confusing) freeriding should be maintained. After all, imitation is said to be the life blood of competition as competition consists of offering substitute products. Both consumers and the public in general benefit from a highly competitive environment as this forms the basis for innovation, for a great diversity of products and for lower prices. Restricting competition by banning freeriding would undermine these benefits and provide traders with some kind of monopoly right for their devices. On the other hand there are good arguments against the current approach. First, the investment of the proprietor in developing and promoting the original product might be impaired in an unfair way by the appearance of look-alikes on the market. Further, because of these expenses the proprietor might not be able to sell the product as cheaply as the freeriding competitor and might therefore suffer loss of sales. Damage could also be caused by the fact that the distinctiveness of the proprietor's devices is diluted by the appearance of copycat products. Finally, in cases where a device is not registrable as a trade mark at all, e.g. the overall get-up of a product, there is no trade-mark protection for the proprietor's device and the tort of passing off becomes crucial. The action of passing off has been of great importance in the UK protection system against unfair competition. Although the courts have extended the passing off action in the last decades and despite the fact that there has been legislatory influence by the European Community, there are still several shortcomings in the UK law against unfair competition. It is submitted that the combination of certain policy options would address the deficits of the current unfair-competition law system in the United Kingdom in the most appropriate way: The issue of pre -sale confusion could be addressed by extending the interpretation of the term confusion . This is why there is also a need for the tort to be buttressed by statutory provisions/ enforcement schemes The action of passing off should not only apply if there was confusion at the time of sale; rather should the courts also take into account whether there was a likelihood of confusion before or after the actual purchase. But the extension of the confusion element would still not go far enough as this concept would neither solve the freeriding problem. One might find further policy options by taking a closer look at countries with a comprehensive system of unfair-competition protection, such as Germany. With the establishment of the German Act against Unfair Competition, which is said to be a potent weapon of injunctive relief , unfair commercial practices have been regulated comprehensively. The English law could also provide statutory protection against unfair imitation. Based on s.4(9)(b) of the German Act against Unfair Competition the following provision could be implemented into the CPUT Regulations: Unfair imitation of goods or services: A trader may not offer goods or services which are an imitation of the goods or services of a competitor to consumers or other market participants where the trader takes undue advantage of or causes undue detriment to the reputation of the imitated good or service. The advantage of this clause is that it would cover copycat practices in both business-to-consumer and business-to-business relations.

The tort of passing off should thus be maintained in the future albeit in a slightly amended form. While the pre- and post-sale issue could be addressed by extending the interpretation of the confusion element of the passing off action, the freeriding problem could be solved by legislation. Such a combined approach would build on the existing UK law including the action of passing off and create an appropriate but not too restrictive level of protection against unfair competition.

2007: The law will not allow others to use goodwill to reduce, blur or diminish its exclusivity . Critically evaluate, using illustrative cases, the legal response by the courts in being asked to regulate modern trade practices using the tort of passing off and the problems, if any, arising. In Irvine v Talksport Ltd, having concluded that the scope of the law of passing off had changed, Laddie J. sought to define its current scope. He stated that passing off does not create or protect a monopoly in a name or get up. What is protected is goodwill. He considered both earlier and more recent case law and concluded that, if someone acquires a valuable reputation or goodwill, the law of passing off will protect it from unlicensed use by other parties. The law will vindicate the claimant's exclusive right to the reputation or goodwill. It will not allow others to so use goodwill as to reduce, blur or diminish its exclusivity.

But when does imitation become passing off? It makes good commercial sense to target an established brand and to exploit the goodwill that has been built up over the years. The line has to be drawn between drawing attention to the fact that the products are similar and an actual confusion of the consumer. But new competitors must be careful not to toe the line- caution has to be exercised to avoid legal action. However, once imitation of the brand has crossed a line then the existing brand is entitled to sue for passing off. The elements in a passing-off action Passing off is based on the so-called classic trinity , which is formed by goodwill, misrepresentation and damage as established in Reckitt & Colman Products Ltd v Borden Inc . Goodwill Misrepresentation Damage Despite all the developments mentioned above there are still some major shortcomings in the present UK unfair-competition law. First of all, the courts have always stated that the passing off action in its current form does not apply if the customer is not actually or potentially confused at the time of sale, even if there was a certain likelihood of confusion before this point. Freeriding

Does protect goodwill- but it doesn t go far enough. It is submitted that the combination of certain policy options would address the deficits of the current system in the United Kingdom in the most appropriate way. The tort of passing off should be maintained in the future albeit in a slightly amended form. While the pre- and post-sale issue could be addressed by extending the interpretation of the confusion element of the passing off action, the freeriding problem could be solved by legislation. Such a combined approach would build on the existing UK law including the action of passing off and create a more appropriate but not too restrictive level of protection of the goodwill of traders.