Passing Off

Video overview by Nicolas Suzor on passing off.

Introduction to Passing Off

Protects against the misappropriation of a trader’s business reputation or goodwill by the misrepresentation of another trader. A trader's goodwill and reputation is (Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1990] AC 217 at 223-224 per Lord MacNaghten):

'The benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start.'

Business reputation can be protected in a number of ways:

  • Trade mark infringement
  • Tort of passing off
  • Tort of injurious falsehood
  • Misrepresentation (misleading & deceptive conduct)

The core of passing off is trying to stop another trader from linking their product to that of another trader if it causes or is likely to cause the other trader's business some damage (ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193 at 233). Passing off seeks to stop a person from associating themselves with the trader and taking some of their goodwill for themselves, either overtly or covertly, by implication or directly.

No Established Definition of Passing Off

There is no strict definition of what constitutes the tort of passing off as there are sufficient nooks and crannies to make the cause of action flexible.

Lord Oliver in Reckitt & Coleman v Borden [1990] RPC 341:

'It would, however, be impossible to enumerate or classify all the possible ways in which a man may make the false representation relied on.'

Gummow J in ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 356:

'The law of passing off “contains sufficient nooks and crannies to make it difficult to formulate any satisfactory definition in short form.'

Three Core Elements

These three elements are known as “the classic trinity” (ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 355-356 (Gummow J) citing Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341 at 406 and Consorzio del Prosciutto di Panna v Marks and Spencer plc [1991] RPC 351 at 368-369; TGI Friday’s Australia Pty Ltd v TGI Friday’s Inc (1999) 45 IPR 43, [25]):

  1. That the plaintiff’s goods, business or get-up, including any brand name, enjoy a certain reputation or goodwill, to be recognised by the public as distinctive in the geographical area; and
  2. A misrepresentation by the defendant (intentional or otherwise) in the course of trade; and
  3. That the plaintiff suffers, or in a quia timet action 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.

Passing off is not about stopping competition it is about dealing with the misrepresentation regarding the reputation of the plaintiff. The classic cases of passing off concern a misrepresentation as to the source of origin of goods. Some courts have gone further, extending the tort of passing off and providing protection where there has been passing off as to the quality of goods.

Element 1: Reputation or Goodwill

To establish this element for the purpose of passing off, the following must be shown:

  • reputation/goodwill embodied in or attached to certain trade indicia; and
  • that indicia must have acquired a secondary meaning as being distinctive of the trader’s goods or services;
    • in the relevant jurisdiction;
    • within the minds of consumers or likely consumers.

Who can Establish Business Reputation

Courts have taken a very liberal approach to this question – so, only even vaguely commercial activity would satisfy this – ie professional associations and charities. There is no requirement that the public be aware of the plaintiff’s identity as a proprietor, but only that the public think that the goods come from a particular source which in fact is the plaintiff: Reckitt & Coleman.

There is no need for plaintiff to be the only source of the goodwill attached to a particular trade indicia. The plaintiff may be one of many, perhaps hundreds who share in the goodwill attached to a particular indicia – ie Advocaat case and Champagne Case – the goodwill attached to Advocaat and Champagne respectively were shared by many manufactures: Reckitt & Coleman. Two traders may also be honest concurrent users of particular indicia, in which case each will not normally have an action against the other. This is because the first trader will not normally have had a sufficient reputation at the time the second-comer had also begun trading under the name.

When must Reputation be Established?

The plaintiff’s reputation must be assessed at the date of the commencement of the conduct complained of: (Cadbury v Squash).This means that a plaintiff who would not have succeeded at that date will not do so by the acquisition of a greater reputation. Note, however, that a right of action may be sustained even where the plaintiff no longer trades – provided there is residual goodwill. However, it is vital that the necessary reputation remain. It can be assumed that, over time, reputation will fade, and hence, any rights under passing off will also fade.

Types of Trade Indicia

This may include trade names, the get-up of goods, the title of goods, aspect of packaging, descriptive material, advertising formats, slogans, jingles, characters in a television campaigns, mastheads of newspapers. A Plaintiff’s reputation may be established not only in a trade mark or trade name or in a distinctive description but in any other material or activity which has become associated or identified in the minds of the public, or a sufficient section of the public.

Reckitt & Coleman Products Ltd v Borden Inc (1990) 17 IPR 1

  • Facts: Since 1956 Reckitt & Coleman sold lemon juice under the name JIF. The product was sold in a plastic squeeze container in the size, shape and colour resembling a lemon. The word JIF was embossed on the side of the container. Attached to the top of the lemon was a green triangular label with the word JIF prominently displayed. Reckitt & Coleman had packaged its JIF lemon juice in this way since 1956. The Defendant (who had previously sold bottled lemon juice under the trade mark ReaLemon) sought to repackage its product in a lemon shaped container similar to that used by Reckitt & Coleman. It had developed three prototypes of the lemon shaped containers, which they were considering adopting as their new packaging. Upon discovering the first prototype, Reckitt & Coleman brought an action for passing off against the Defendant. Upon discovering the second and third prototype, Reckitt & Coleman commenced another action.
  • Issues: (1) Have Reckitt & Coleman proved that their get-up under which their lemon juice was sold has become associated in the minds of substantial numbers of the purchasing public specifically and exclusively with their JIF lemon juice? (2) If yes, does the get-up under which the Defendants propose to market their lemon juice amount to a representation by the Defendants that the juice which they sell is JIF lemon juice?
  • Held: At Trial Walton J found the action for passing off had been made out in both cases (noting that the Defendants had acted with fraudulent intent). Walton J relied on the clear evidence that the purchasing public had come to associate the get-up of the lemon shaped container with Reckitt & Coleman’s JIF lemon juice. There was also evidence of a substantial body of brand loyalty for the JIF brand and that the public who purchased lemon juice in plastic containers did not read the label, but looked only for the plastic lemon which they could assume was JIF lemon juice. The Defendant appealed to the Court of Appeal which held that Walton’s J findings could not be interfered with. The Court of Appeal supported the trial judges finding that the lemon shaped contained had acquired a secondary meaning as indicating that the source of the product was JIF and that only Reckitt & Coleman had the exclusive right to sue that get-up. The Defendants further appealed to the House of Lords, with Reckitt & Coleman cross appealing (although the cross appeal was not heard).

The appeal was dismissed by the House of Lords, which agreed with the decision of the Court of Appeal affirming the permanent injunction against the Defendant preventing him from selling its lemon juice in the proposed packaging (Lord Bridge of Harwich; Lord Brandon of Oakbrook; Lord Oliver of Aylmerton; Lord Goff of Chieveley; Lord Jauncey of Tullichettle).

Jess Walker on Reckitt & Coleman Products Ltd v Borden Inc.

Trade Indicia - Acquiring Secondary Meaning

It is commonly held that descriptive marks must have acquired a secondary meaning, or secondary signification, indicating goods or services connected exclusively with the plaintiff (Reckitt & Coleman; Reddaway v Banham). Where a word has acquired a secondary meaning as indicating the plaintiff’s goods or services, it might be difficult for others to use it without committing a passing off.

However, using a descriptive term, rather than an inventive term, will require much more effort on the part of a plaintiff to establish a secondary meaning that the term is exclusively distinctive of the plaintiff’s goods.

For example in Reckitt & Coleman, the court accepted that the shape of a lemon was used exclusively as indicating that the goods were that of the plaintiff. Other examples of descriptive words having acquired secondary significance include:

  • 'Special Brew’ for beer.
  • ‘Top of the Pops’ for records.
  • ‘Budget’, for a discount car hire company.
  • 'Pure and simple’ for vegetable oil.
  • ‘Plantland’ for a plant nursery.

Advocaat Case: Erven Warnink v J Townsend & Sons [1979] AC 731

  • Facts: Plaintiff and other Dutch companies manufactured and marketed 'advocaat' in the UK for some time (Dutch standards required brandewijn, egg yolks, sugar). Substantial reputation and goodwill. Defendants marketed 'Keeling's Old English Advocaat' (egg powder and sherry). Not able to be mistaken for the Dutch product.
  • UKHL held that the name 'advocaat' had become distinctive of a certain style. Defendants misrepresented the nature of their product to consumers.


J Bollinger v Costa Brava Wine Co.(The Spanish Champagne Case) [1960] Ch 262

  • Facts: 150 growers would have been entitled to use the description 'champagne'.
  • Held: Name was distinctive of both place of origin and quality.

Reputation established in the relevant jurisdiction

The reputation must be established in the jurisdiction, but note that there is no requirement that the trader has actually traded in the jurisdiction, or even that their goods have been sold in the jurisdiction. Rather, reputation can be established by showing that people in the jurisdiction would be aware of the plaintiff’s reputation (ConAgra). For sufficient reputation to be found there must also be a substantial number of persons in the jurisdiction who are aware of the plaintiff’s goods/services (ConAgra per Gummow J).

Con Agra Inc v McCain Goods (Aust) Pty Ltd [1992] FCA 159

  • Facts: McCain copied the name “Healthy Choice” from a product seen in US.
  • Held: Trader must have a reputation in the jurisdiction. No need to show actual trade, but reputation must be established with reference to a substantial number of local consumers. Necessary reputation not established.

Proving Reputation

May be proved by expert evidence, witness evidence or survey evidence. Expert evidence will be admissible if the expertise of the witness arises from specialised knowledge for example marketing experts or exerpts in a certain time of marketing (such as wine marketing in Henschke v Rosemount). Consumer may be brought into court to testify where they have actually been decieved but this type of eivdence is not very probative (Parkdale v Puxu). While the court may accept expert and witness evidence, the probity of this evidence will vary greatly.

Survey evidence was not accepted until 1990s, before this it was rejected as hearsay. Survey evidence will only be admissible if testimonial evidence from the persons responsible for the survey evidence would also be admissible and subject to cross-examination. Factors that go towards whether survey evidence would be accepted by the court include whether:

  • The interviewees are selected so as to represent a relevant cross-section of the public;
  • the size is statistically relevant;
  • It was conducted fairly;
  • All the surveys carried out have been disclosed;
  • The totality of the answers given gave been disclosed and made available to the defendant;
  • The questions are leading;
  • The exact answers are recorded and not abbreviated answers;
  • The coding has been accurately carried out;
  • The instructions to the interviewees have been disclosed; and
  • The coding instructions have been disclosed.

Again, while such evidence is admissible the probity varies and often courts have given little weight to such evidence, often criticising it on the basis of methodology.

Overseas Brands

The court's recognition of the value and impact of indirect advertising techniques makes it easier for owners of well-known brands overseas, that are not sold or directly marketed in Australia, to establish brand reputation in this country. This recognition will make it increasingly difficult for Australians to copy profitable overseas products and to defend such imitations successfully on the basis that the product was not yet officially launched in Australia, and therefore that the reputation was not yet established in this jurisdiction.

Hansen v Bickfords (Monster Energy Drink)

  • Facts: H marketed and sold the Monster Engergy drink in a number of countries around the globe. The drink was not launched in Australia yet because H was attempting to first familiarise Australia with the product before launch. It was doing this through indirect marketing - sponsoring athletes, athletic competitions, clothing, merchandise etc. B, a manufactuer and distributer of beverages in Australia, decided to expand into energy drinks and their own Australian version of the Monster Energy drink. The two drinks had the same name, contained the same ingredients, and came in a can of the same size marked with the same colours. In response to these actions, Hansen brought proceedings seeking an injunction and damages, on the grounds that by selling their Monster Energy drink in Australia, Bickfords had engaged in passing off, among other things. The main issue was whether Hansen had a sufficient reputation in Australia in the MONSTER ENERGY mark, at the relevant date, in relation to energy drinks.
  • Held: On appeal from the Federal Court to the Full Federal Court it was held that in a passing-off claim, it is necessary to demonstrate that a significant or substantial proportion of persons within a relevant market, as opposed to the target market, were misled. He emphasised that this was the case, even if the relevant market was smaller than the target market. Justice Finkelstein was the most vocal on the issue of indirect advertising. On this subject he noted, that on the facts it was open to the primary judge to infer that the indirect advertising employed by Hansen could establish reputation as well as, if not better than, direct advertising and that in the first instance greater weight should have be given to the indirect marketing campaign undertaken by Hansen to establish its reputation. The case was remitted back to the trial judge but was settled before the hearing.

Element 2: Misrepresentation

A misrepresentation in passing off refers to conduct on the part of the trader which relies on the reputation or goodwill of the plaintiff usually by misrepresenting some sort of connection with the plaintiff’s business, goods or services and results in consumers coming to an erroneous conclusion about or being confused about a connection between the goods/services of that traders and those of another trader.

It is necessary to show that the defendant's conduct caused customers to be deceived. The misrepresetation must be capable of causing deception or forseeably cause deception (AG Spalding v Gamage (1915) 32 RPC 273). The misrepresentation may be express or implied, but it will usually be implied. Whether or not there has been a misrepresentation is ultimately question of fact for the court to determine. It is a matter of impression and there is no determinative factor that the court will necessarily turn to answer the question (Interlego Ag v Croner Trading Pty Ltd (1992) 39 FCR 348). The existence of a misrepresentation is gauged by the court’s objective assessment of its impact on consumers.

Possible Forms of Misrepresentation

  1. There is a connection between the plaintiff’s and the defendant’s goods or services, when one does not exist;
  2. the plaintiff’s and the defendant’s goods or services originate from the same source;
  3. the defendant’s product is the plaintiff’s product;
  4. the plaintiff sponsors, endorses, or somehow approves of the defendant’s product; and
  5. the defendant’s product shares some exclusive quality with that of the plaintiff, such as where the defendants’ goods are represented as being made in a particular way or in a particular place when they are not, but the plaintiff’s are.

Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851 (PC)

  • Cadbury Schweppes (Solo): Advertising campaign on TV and radio. Themes of manliness and nostalgia for hotel squash. Campaign had considerable impact. Sold in bottles and cans.
  • Pub Squash: Advertisements with intentionally similar themes of manliness and nostalgia. Similar sized can, colours and image.
  • Held: no passing off. Similar advertising themes did not misrepresent the origin of the goods, despite respondent's intention to capitalize on the Solo advertising. Therefore no damage to reputation or goodwill. Not trying to pass off the product as connected to solo. Doesn’t prevent copying, only prevent misrepresentation as to associations.

Similarity of product:

“the evidence would seem to demonstrate that in most, although not all, cases in which there has initially been a wrong selection by a customer, or the wrong product has been offered by the shopkeeper, the error has been recognised before the purchase has been completed…. This being so, it seems to me that the defendant has sufficiently differentiated its product from that of the Plaintiffs'.” (Powell J at first instance)

Scope of protection:

“It is only if a plaintiff can establish that a defendant has invaded his “intangible property right” in his product by misappropriating descriptions which have become recognized by the market as distinctive of the product that the law will permit competition to be restricted. Any other approach would encourage monopoly.” (at 863 C-D [44])

Philips v Remington (2000) 100 FCR 90

  • Facts: Philips sold the only triple headed rotary electric shaver on the market. Philips registered trade marks were two-dimensional device marks depicting an equilateral triangular shape containing three circular shaving heads. Remington introduced a shaver of similar design.
  • H: Didn't succeed as passing off does not ground a monopoly on products, that is the realm of patent law. Patent has appropriate restraints on the monopoly, passing off does not and are indefinite so it is not appropriate that they function to restrict competition in this way. Remington absolutely copied but this could not be protected under passing off.

Lego System Aktieselskab v Lego M Lemelstrich Ltd (1983) 9 FSR 155

  • Facts: Loss of opportunity for business expansion. Defendant legitimately sold garden equipment under the name 'LEGO' in Israel.
  • Held: EWHC found that LEGO's reputation extended beyond toys and was a 'household word'. No intention to extend to gardening equipment was necessary. Substantial number of consumers would be deceived.

Twentieth Century Fox Film Corporation v South Australian Brewing Co Ltd (1996) 66 FCR 451

  • Facts: The Simpsons' producers had acquired substantial goodwill and reputation in Australia in the characters, names and images of The Simpsons, including “Duff Beer”. Duff's dictionary meaning not descriptive of beer, but had acquired a powerful secondary meaning associated with The Simpsons. The breweries’ use of “Duff Beer” was sufficient to create associations between the product and The Simpsons in consumers' minds. The breweries, in using the name “Duff Beer”, made use of an element which belonged to the reputation and goodwill of The Simpsons. The breweries intended to exploit the association between their product and The Simpsons - not an element of passing off, but can assist an applicant's case. Extensive licensing by the producers in Australia of T-shirts, caps and other merchandise depicting images from the series, including Duff Beer.
  • Held:The false impression created by the breweries’ product was that the producers had licensed the name - passing off.

Tamberlin J at 466-467:

'Their intention was to “sail as close as possible to the wind” in order to “cash in” on the reputation of The Simpsons without stepping over the line of passing off or deceit. The breweries knew that they were able by use of the name “Duff” alone to evoke the powerful association without using names or images. I do not think that the changes in can colour or the “tidying up” of the way “Duff” was written was effective to eliminate the association. Accordingly, I consider this knowledge is important evidence to support the inference that the goal of creating and exploiting the powerful association with The Simpsons had been achieved.'

Mars Australia Pty Ltd v Sweet Rewards Pty Ltd (2009) 81 IPR 354

  • There was no evidence of intention to deceive or imitate by using the name MALT BALLS in relation to a product similar to MALTEASERS. Difference in names, and the appearance of those names, was decisive. Red floating balls conventional in the confectionary industry. No passing off – upheld on appeal.

Perram J at 362 [32]:

‘Because the principal component in the Maltesers get-up is the word “Maltesers”, it is highly unlikely that any ordinary consumer of chocolate confectionary could mistake something which is not called a Malteser for a Malteser. In that sense, Mars is a victim of its own success. The fact that the Delfi jars carry the name “Malt Balls” and use slightly different visual features is sufficiently clear to distinguish them from the Maltesers products.’

Caroline Burrows on Mars Australia Pty Ltd v Sweet Rewards Pty Ltd.

Henderson v Radio Corp (1960) 60 SR (NSW) 576

  • Facts: Image of the Hendersons used as a cover for a compilation entitled 'Strictly for Dance'.
  • Held: NSW SC found that consumers could be misled to thinking that the Hendersons had approved or recommended the record. Misrepresentation amounted to passing off. There was no need for a common field of activity.

Fraud is not an Essential Element

Proof of fraudulent misrepresentation is not necessary to prove passing off there is no requirement that deception be intended, but such an intention will be relevant to damages, and proof of an intention to deceive will assist in proving actual or likely deception (ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193; Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd (1980) 32 ALR 387). Deliberate appropriation of attractive features of a competitor’s product may lead to an inference of an intention to deceive (Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157).

The Full Federal Court in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157 held:

'… where a trader, having knowledge of a particular market, borrows aspects of a competitor’s get-up, it is a reasonable inference that he or she believes that there will be a market benefit in so doing. Often, the obvious benefit will be the attraction of custom which would otherwise have gone to the competitor. It is an available inference that such borrowing was “fitted for the purpose and therefore likely to deceive or confuse… Of course, the trader may explain his or her conduct in such a way as to undermine the availability of that inference. Obviously, this reasoning will only apply where there are similarities in get-up which suggest borrowing …'

In determining intent to defraud the conduct of the defendant must be viewed as a whole - consideration cannot be given to words or acts which in isolation would be likley to mislead if those words or acts, when put into context, were not capable of misleading (Parkdale Custom Built Furniture Pty Ltd v Puxo Pty Ltd (1982) 149 CLR 19). In Parkdale the defendant's furniture closely resembled that of the plaintiff in a way that suggested deliberate copying. However, becuase the defendant adequatley labelled their furniture so as to show the true origin of the goods, there was no passing off.

Whether or not there has been deception or likely deception is tested against a group of relevant persons, which is generally the class of potential customers likely to be affected by or exposed to the conduct (Parkdale). It is necessary that a significant segment of the relevant class would be decieved: (Parkdale).

In practice the issue is not who is likely to be decieved but rather whether the court decides, based on all the evidence, that conduct is deceptive. To do this the court will place itself in the shoes of a representative member of the relevant class of consumers and assess whether this hypothetical reasonable consumer would likely be decieved (Campomar v Nike).

The hypothetical consumer will take reasonable care, will not be overly gullible or astute, experienced or inexperienced (Parkdale). When considering whether conduct is likely to decieve the courts consider:

  • the price of the goods: the more expensive the goods, the more likely it is that consumers will spend more time enquiring about them and the less likley it is that conduct will decieve.
  • The court will allow for imperfect recollection: deception will be more likely where items are not place side by side, if they are side by side (for example of a super market shelf) it is less likely deception will occur.

Other Requirements for Misrepresentation

Authority suggests misrepresentation must continue up until the point of sale and if cleared up before the point of purchase this will be insufficient for misrepresentation (Cadbury Schweppes). There must be likelihood of actual deception, mere confusion or a cause to wonder whether there is an association is not sufficient (Parkdale). However, if there is a deliberate attempt to create uncertainty, then this would amount to deception: Lockhart J in Bridge Stockbrokers v Bridges (1984) 5 IPR 81.

Proving Misrepresentation

Expert evidence and survey evidence will be less useful in establishing deception than it will be in establishing reputation.

Witness evidence will be crucial where special markets are concerned – for example, goods of a kind which are not normally sold to the public. Consumer evidence will be permitted if it establishes the habits of purchasers. For example, whether goods are normally sold side by side so that visual comparisons are made before purchase. Consumer evidence regarding whether consumers would be deceived is irrelevant as this is a matter for the judge. Evidence of actual deception would be admissible.

Survey evidence will not be admissible to establish whether potential consumers would have been deceived, but evidence of instances of actual deception would be.

Element 3: Damage

There is no requirement that actual damage be shown, only a likelihood of damage - a real and tangible risk of damage (Henderson v Radio Corporation). Moreover, damage must only really be established if the plaintiff wants more than nominal damages or an injunction – ie where the plaintiff is seeking damages or an account of profits. Where the first two elements have been established in an action for passing off, damage will often be presumed. Damage must be by reason of an 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.

Types of Damage

Courts have been liberal with the types of damage that will satisfy the cause of action, the following are some examples:

  • In a classic passing off action, where a defendant is trying to pass his goods off as those of the plaintiff, damage may be proven through a loss of sales or existing trade – that trade has been diverted away from the plaintiff and towards the defendant.
  • Damage may simply be to reputation – that the defendant will depreciate or destroy the plaintiff’s goodwill in the particular field in which the unauthorised conduct takes place, ie where the misrepresentation is to the quality of the goods on offer.
  • It may be damage to the plaintiff’s ability to launch products in the future or to expand into new areas of business.
  • Misrepresentation as to association may damage reputation or may deprive the plaintiff of possible licence fees for the use of the mark, or it may be the loss of potential to exploit their goodwill in the future etc.
  • Dilution – loss of distinctiveness.

Disclaimers

It may be possible to avoid passing off by disclaiming any association with the plaintiff. To be effective any such disclaimer must be as bold, precise and compelling as the trade description itself and must be effectively brought to the notice of any person to whom the goods may be supplied (Norman v Bennett).

It is far less likely that a disclaimer will neutralise the effect of a particularly distinctive trade mark. More often than not, courts will take the view that a disclaimer will not be noticed or understood or that it might be too easily removed: (Hutchence v South Sea Bubble Co). A disclaimer will be less likely to be effective where goods are ‘low involvement goods’ – goods where purchasing decisions are made quickly and without much thought or examination - generally cheap goods.

On the other hand, where goods are expensive, disclaimers are likely to be more effective because the goods will be subject to closer inspection prior to purchase. Courts will also consider whether normal labelling of product and if the product is labelled in the normal and reasonable way to indicate its correct origin, this will go against a finding of passing off (Parkdale v Puxu). There are no blanket rules when it comes to disclaimers:

Tamberlin J in Twentieth Century Fox v South Australian Brewing:

'In considering cases involving associations between a name and a product there must always be room for differences in each case arising from variations in the target market; the nature and strength of the associations conveyed by the use of the name; the way in which the product is distributed; and the way in which the use of the name is calculated to attract the market. These considerations make it unsafe to treat any particular decision as a precedent. Of course, some general guidance can be derived from particular decisions, but there is no formula to the effect that the use of any particular words of disclaimer such as “unauthorised” or that disavowal in the form of an express statement of disassociation will always serve to dispel such association in the marketplace'

Remedies

  • Injunction.
  • Damages.
  • Where fraud – account of profits.
  • Where there is evidence of fraud – exemplary damages.

See Hogan v Koala Dundee Pty Ltd [1988] FCA 333, Pacific Dunlop Ltd v Hogan [1989] FCA 185 and Irvine v Talksport Ltd [2002] EWHC 367 (Cth).

Defences

  • Honest concurrent use
  • Bona fide use of one's own name
  • Consent
  • Shared goodwill
  • Effective use of a disclaimer/sufficiently distinguishing the defendant's goods from the plaintiff's

Passing Off Outside “Trade or Commerce”

A-G ex rel Elisha v Holy Apostolic Church of the East (1989) 37 NSWLR 293

  • Facts: Dispute as to which group within a church had the right to use the Church’s name in Australia.
  • Held: Young J recognised that a body formed to conduct religious services does not engage in trade or commerce. A religious organisation is entitled to the same protections of any goodwill in its name as commercial organisations. Passing off established.

Extension of Passing Off - Character Merchandising and Celebrity Endorsements

Can be used for character merchandising or celebrity endorsement purposes Provides, for famous people, an ability to prevent others from using their likeness. The basis for this is that consumers may be mislead into thinking the reputable person has endorsed the goods or services.

  • Character merchandising = using the reputation of a well-known fictitious character to give a name to and add to the popularity of goods not otherwise connected with the character.
  • Celebrity endorsements = Using a celebrity to endorse and contribute to the popularity of a particular product (that may or may not be connected to the particular celebrity).

Billy Young on Character Merchandising

Elements

The elements of passing off for character merchandising and celebrity endorsements are (Irvine v Talksport Ltd (2002) 57 IPR 621):

  • The subsistence of some reputation acquired by the fictional character or celebrity; and
  • A misrepresentation by the defendant; and
  • The existence or threat of actual damage or likelihood of damage to the plaintiff as a result of the conduct in question.

Examples of Character Merchandising

Children’s Television Workshop Inc v Woolworths (NSW) Ltd [1981] 1 NSWLR 273

Korean-made toys looked sufficiently like the characters in the television program ‘Sesame Street’ such that persons (especially children) would be misled into believing that the toys were produced and sold with the approval of the CTW (the owner and producer of the television program and the characters and who licensed the right to reproduce the characters as soft toys).

Hogan v Koala Dundee Pty Ltd [1988] FCA 333

The inventor of a sufficiently famous fictional character having certain visual or other traits can prevent others from using his/her character to sell their goods and may assign the rights to use the character. In this case, Pincus J remarked:

‘The essence of the wrong done … is not in truth the misrepresentation that there is a licensing or sponsoring agreement between the applicant and the respondent; it is .... namely the wrongful appropriation of a reputation or, more widely, wrongful association of goods with an image properly belonging to the applicant.’

Pacific Dunlop Ltd v Hogan [1989] FCA 185** Beaumont J said:

'The question for the judge to decide in the present case was whether a significant section would be misled into believing, contrary to the fact, that a commercial arrangement had been concluded between the first respondent and the appellant under which the first respondent agreed to the advertising.’

Burchett J said:

‘The consumer is moved by a desire to wear something belonging in some sense to Crocodile Dundee (who is perceived as a persona, almost an avatar, of Mr Hogan). The arousal of that feeling by Mr Hogan himself could not be regarded as misleading, for then the value he promises the product will have is not in its leather, but in its association with himself. When, however, an advertisement he did not authorise makes the same suggestion, it is misleading; for the product sold by that advertisement really lacks the one feature the advertisement attributes to it.’

Twentieth Century Fox Corporation v The South Australian Brewing Co [1996] FCA 1484 Per Tamberlin J:

‘There is no necessity to demonstrate that the viewer or consumer must think in specific terms of permission or allowance in order to constitute deceptive conduct. The intentional use of the name “Duff Beer” which produces the false association is sufficient …’

Examples of Celebrity Endorsements

Henderson v Radio Corp Pty Ltd (1960) 1A IPR 620

The defendant’s use of the image of two well-known ballroom dancers on a record cover gave the impression that the Hendersons had sponsored or authorised the use of their image.

Gary Honey v Australian Airlines Ltd and House of Tabor Inc [1988] FCA 177 Northrop J said:

‘The groups and members of groups receiving the poster would have been aware that the poster was but one of many published and distributed by Australian Airlines depicting sporting activities in which, mainly, the persons whose photographs appeared were non-celebrities. On a true analysis, the poster should be described as promoting excellence in sport and the desirability of participating in sport.’

Talmax Pty Ltd v Telstra Corporation Ltd [1997] 2 Qd R 444 An advertisement (including an article) promoting the Telecom Australian Open Swimming Championships and which featured a picture of Kieran Perkins suggested to the ordinary reader that he was endorsing Telecom products/services or had consented to the article and that he was a member of the Telecom Dolphins, which he was not.

Irvine v Talksport Ltd [2002] EWHC 367 (Ch) Laddie J could not conceive of a clearer example of endorsement than the manner in which the defendant had used Eddie Irvine’s image, namely the use of a ‘doctored’ image of Irvine so as to make him appear to be holding a Talksport Radio and placing the said image on the front cover of their brochure.

Buttrose & Anor v The Senior’s Choice (Australia) Pty Ltd & Anor [2013] FCCA 2050 The defendants had no reasonable prospect of defending claims of copyright infringement, passing off and breaches of the ACL with respect to their use of an image of Buttrose together with a link to an interview she had done with the ABC

Passing Off and Misleading and Deceptive Conduct

Passing off protects reputation and the legitimate rights and business intersts of traders. Consumer protection (misleading/deceptive conduct) legislation protects consumers from being misled or deceived.

Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 88

Passing off v trade marks: passing off operates similary to trade mark infringment, however trade mark infringment is easier to prove. Where a trade mark is not appicable, passing off can prove a remedy.

Be aware of s 29 ACL: false or misleading representations about goods or services: (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

  • (g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or
  • (h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation.

Parkdale v Puxu (1982) 149 CLR 191

Note: this is a Trade Practices Act 1974 (Cth) s 52 case (now Australian Consumer Law s 18), not a passing off case.

Puxu made and sold expensive furniture of distinctive appearance and design. It was advertised widely and had an established reputation. The design had not been registered under the Designs Act. Parkdale made and sold cheaper imitation furniture virtually identical to Puxu’s. Both company's furniture bore labels that could be tucked under the upholstery and hidden.

Not enough that Parkdale’s conduct is confusing or causes people to wonder [cf deceptively similar trade marks]. An ordinary person reading the labels could not be deceived or misled: purchasers of $1,500 furniture would look for a label to check the brand. If an article is properly labelled to name its manufacturer, then close resemblance to another article will not mislead an ordinary reasonable person.

Advantages of Trade Mark Claim over Passing Off

With trade mark infringement, there is no need to prove reputation. Defendants in trade mark actions cannot rely on disclaimers to the same extent as in passing off. Additional damages for trade mark infringement now available under new s 126(2) TMA – not available for passing off.