Most Read Contributor in New Zealand, September 2016
In Diageo North America Inc v Intercontinental Brands (ICB)
Ltd  EWCA Civ 920, the UK Court of Appeal has developed
the law of passing off on some intoxicating facts.
This Brief Counsel looks at the case, and whether the New
Zealand Courts would reach the same conclusion if the same point
was argued here.
Vodka v VODKAT
At issue was VODKAT: a mixture of vodka and fermented alcohol
with an overall alcohol by volume of 22% (as opposed to the minimum
37.5% required under EC regulations for vodka). The lower alcohol
meant VODKAT qualified for a lower duty so could be retailed for
less than standard vodkas.
The case, taken by a large vodka company, involved what is known
as "extended" passing off. Why extended? Because the
vodka people weren't seeking protection for their product's
brand (the name, logo, style of bottle); they were seeking to
protect the goodwill associated with vodka itself.
This certainly wasn't the first time extended passing off
had been tried, but it was a shift from the standard situation
which has involved premiere products (sometimes with regional
associations) such as Champagne, Advocaat (you'll know if
you've tried it) and Swiss chocolate.
The comparison with the Champagne line of cases
Similarities were drawn with the Champagne litigation. Champagne
is a region in France famous for its sparkling wine. Many countries
make sparkling wine using the same method (although none so famous
as Champagne). So should the Spanish be allowed to call their cava
"Spanish Champagne"? Some consumers would not be aware of
the regional connotation in any event. Others would assume the term
simply denoted a superior type of sparkling wine. The law though
has sided with the "original", including in New Zealand
where sales of "Australian Champagne" were stopped in the
In the Swiss chocolate case, Justice Laddie said extended
passing off applied to "a descriptive term if it is used in
relation to a reasonably identifiable group of products which have
a perceived distinctive quality". The word
"perceived" was important, because apparently some
Spanish champagne is quite drinkable these days, and so Justice
Laddie updated the former test which had a requirement of
VODKAT maintained that extended passing off still needed to
involve superior or luxury products but the Court of Appeal found
no support in the authorities for that position.
The result? Injunction granted. VODKAT could only be sold if it
was actually a vodka.
Do we like this decision? We do. VODKAT was passing off, plain
and simple, and we'd expect the same outcome in New Zealand.
One of the judges noted that this was the first time that there had
been an extension of "extended passing off" to a broad
generic category of products, but coat-tailing should be no
substitute for creativity.
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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