We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
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 "Gleneagles" for a proposed development that
included a film studio complex, 5 star hotel and golf course on the
basis that the defenders had deliberately tried to attract the
attention of the public by borrowing the claimants' name and
its associated goodwill. The proposed development was only a few
miles from the Gleneagles Hotel and could be classed as a leisure
facility. There was no indication that the defenders would have
chosen to use the name "Gleneagles" if it had not been
for the already established business that the claimants ran under
that name. It was also relevant that the claimants' business
was long established, whereas the defenders' business was
little more than a "vision".
An action was raised to prevent a trader carrying on the
business of chauffeur driven car hire using the name
"Hollywood Nights" or any other name incorporating the
word "Hollywood" on the basis that the claimants already
used the name "Hollywood Limousines". They had traded
under that name for over 3 years, hiring out chauffeur driven
stretch limousines, predominately in west and central Scotland. The
claimants argued that they had built up substantial goodwill in
those areas. They had spent a considerable amount on advertising
and argued they had established a reputation as a reliable and
efficient company offering a quality service. The defender had only
been trading for a few months as "All American
Limousines". This was a very similar business and operated in
the same geographical area. The claimants argued that these facts,
and the use of the word "Hollywood" for a similar
business, was likely to cause confusion in the minds of present and
potential customers, who were likely to be misled into supposing
that the business activities of the defenders were associated with
the claimants. There was no obvious need for the defender to use
the word "Hollywood " in his trading name and he had been
aware of the claimants' business when he decided to do so.
Conclusion
No one has the right to represent their goods and services as those
of someone else and if you think that a competitor has been acting
in this way to the prejudice of your business, it is worth
considering legal proceedings to prevent this.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On 21 July 2017, the UK's Competition Appeal Tribunal ("CAT") dismissed an application for certification of the second ‘opt-out' collective proceedings to be brought in the UK.
Online travel agencies which greatly helped maintain occupancy rates during the difficult years in the 1990s have been accused of exploiting their position of strength in a manner that contravenes the rules of fair competition.
The European Court of Justice (ECJ) yesterday delivered its judgment in relation to Intel's appeal from the General Court, and has set aside the General Court's judgment on the basis that it failed...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
