Don't you just dislike when you buy a trusted product and then realise it is an identical brand made to look exactly like what you originally wanted? The worst part of this problem is that you need to look very closely at those products to tell the difference, especially when it is of the same specification and supposedly does the same function for what you requested for.
This is a big issue especially in Nigeria where goods on the store shelves are not properly labelled.
Take for instance, Mrs. Ramota went to a supermarket to purchase a seasoning powder, she was in a rush and merely picked the first bottle of her favourite seasoning powder, whilst cooking and about to add a dash of the powder, she was surprised to find that it was another seasoning powder with the same colours and package, the only difference was the substitution of a letter in the name. So, let's say she intended to purchase 'Turio' seasoning powder, what she held in her hands was 'Tunio' seasoning powder.
Her thoughts chased after each other from the disappointment on the waste of money and time, the self-reprimand to inspect products more carefully, whether the contents of the product was indeed a seasoning product or a rip-off, what could have happened to her family if the product contained hazardous substances and a wondering thought, if the Tunio seasoning powder should have been on the supermarket shelf in the first place.
`You may not have been a victim like Mrs. Ramota , but one must think that once the makers of Turio have established a seasoning powder brand in the market with thousands of Naira spent on non-stop radio jingles that become popular sing-along-songs with children together with adverts on the BRT buses, they would have secured a presence in the market and begin to reap the fruits of their labour. Sadly, this is not the case as a "Sharp Fella" will produce a similar product but rather than spend thousands of Naira to create his own brand, will seek to coast on another's success by passing off his product as Turio.
This article seeks to explain the principle of Passing Off, the key components of same, decided cases and remedies available to defendants and victims of Passing off.
What is Passing Off?
Passing off is described as an unfair competition by misrepresentation or literally speaking "the cause of confusion or deception". Generally, an action for Passing off arises where the deception is made in the course of trade, which could lead to confusion amongst customers. This applies to both ecommerce businesses and businesses with physical addresses.
Another definition of Passing off is the act or an instance of falsely representing one's own product as that of another in an attempt to deceive potential buyers.1 Passing off is actionable in tort under the law of unfair competition.
The Duhaime's Legal Dictionary, defines Passing off as making some false representation likely to induce a person to believe that the goods or services are those of another.
Passing off and Trademark Infringement
It is necessary to state that Passing off and trademarks infringement go hand in hand and are very similar in nature. Whilst, Passing off is an action on unregistered marks that have become notoriously attributable to a person or company, a trademark infringement action usually involves a registered mark. This means that a mark, brand, design, name must be registered as a trade mark before one can make a claim on trade mark infringement.
Another distinction is, whilst an action for infringement of trade mark is a statutory remedy conferred on the owner of a registered trade mark, for the enforcement of a right to use the trade mark in relation to the goods/services for which the mark has been registered; an action for Passing off is an action against the deceit on the colourable imitation of a mark adopted by a person/company in relation to goods/services which has acquired a distinctive reputation in the market and is known as belonging to or produced by that person/company only.
An action for Passing off is a common law remedy and the claimant need not establish title for same but must show that the goods/services have distinctive features.
It is arguable to state that Passing off is both a common law and statutory remedy in Nigeria as it is statutorily supported by Section 3 of the Trademarks Act2 which provides that:
"No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark; but nothing in this Act shall be taken to affect rights of action against any person for Passing off goods as the goods of another person or the remedies in respect thereof".
The above connotes that a Passing off action instituted when a mark is not registered is both supported by common law and statutorily backed up, thus giving effect to the legal maxim "There is no law without a remedy".
- In the case of Trebor Nigeria Limited v. Associated Industries Limited3, Trebor Nigeria Limited the makers of Trebor Peppermint brought an action against Associated Industries Limited the makers of Minta Supermint claiming that the wrapper used to package the product by the Defendant was similar to that of the Plaintiff and that they were guilty of Passing off their products like that of the Defendant. The Defendants raised dissimilarities in the two products as a defence to the action, the Judge however found the Defendants liable for Passing off their products as that of the Plaintiff. In this instance Passing off occurred by the use of a package strongly similar with that of another product such as to deceive the public that they are one and the same.
- In the case of Niger Chemists Limited and Nigeria Chemists4, the Plaintiff had an established chemist business using the name "Niger Chemist" while the Defendants established the same business on the same street with the Plaintiff using the name "Nigeria Chemist". The Plaintiff sued the Defendant claiming the name was too similar and likely to deceive the public that there was a relationship between them. The Court agreed with the Plaintiff and granted an injunction against the Defendant on the use of the name. In this instance Passing off occurred by the use of a trade name similar with that of another such as to deceive the public that there exists a business relationship between the two.
Jurisdiction of the Courts
An action for infringement of registered trademarks should always be instituted in the Federal High Court only because the action arises in relation to a Federal enactment which is the Trade Mark Act. However, the courts have variant decisions on the jurisdiction of the courts on Passing off actions.
In Patkun Industries Ltd. v Niger Shoes Ltd5, a 1988 decision, the Supreme Court held that the Federal High Court has jurisdiction in trademarks infringement and Passing off actions stemming from the infringement of trademarks, whether registered or unregistered.
However, the reasoning and opinion of Nnamani J.S.C, Uwais J.S.C the Chief Justice of Nigeria at the time, and Mohammed J.S.C in the 2003 case of Ayman Enterprises Limited V. Akuma Industries Limited & Ors6 was that, a Passing off action for an unregistered trademark should not be instituted in the Federal High Court but a State High Court as the right of action in a Passing off did not arise from the infringement of any Federal enactment and so may only be a common law right but that the Federal High Court has jurisdiction over Passing off claims arising from the infringement of a trademark only if the trademark allegedly infringed was registered.
In Omnia (Nig.) v Dyktrade Ltd7 a 2007 decision, it was held that the Federal High Court has exclusive jurisdiction to hear and determine a claim for Passing off whether the claim arises from the infringement of a registered or unregistered trade mark.
These divergent reasoning of learned justices have in no little measure created doubts on the courts to institute an action in Passing off nonetheless, the grundnorm proffers a lasting solution to the jurisdictional issue. The Constitution8 specifically makes provisions for Passing off actions as follows:9
"Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters on any Federal enactment relating to copyright, patent, designs, trademarks and Passing-off, industrial designs and merchandise marks, business names, commercial and industrial monopolies, combines and trusts, standards of goods and commodities and industrial standards".
The Constitution10 also provides that, - If there is any other law that is inconsistent with its provisions, the Constitution will prevail, and that other law shall, to the extent of the inconsistency, be void. These provisions in the grundnorm places the correct position in perspective and emphasises the position of the Federal High Court as the Court with exclusive jurisdiction in Passing off actions.
Trademark registration in Nigeria begins with an availability search of the mark and ends with the issuance of a certificate of trademark registration. This process takes as long as two years, however in between the availability search and the issuance of the certificate, each applicant is issued an acknowledgment form and thereafter an acceptance form.
It is important to note that these forms do not indicate registration of the mark. Only the issuance of a certificate by the Registrar of Trademarks indicates trademarks registration which is only after the publication of the mark and the receipt of no objections from the public.
As such, a person who has been issued acknowledgment and acceptance forms by the Trademarks Registry without more can at best bring an action for Passing off of the mark. In the Supreme Court decided case of Omnia (Nig.) v Dyktrade Ltd 11, it was held by the trial judge and upheld by Belgore J.S.C that a party is not entitled to sue for infringement of a trade mark which had not been registered and that the mere issuance of acceptance by the Registrar of Trade Marks of the applicant's application does not amount to registration until the issuance of the certificate of registration.
Components to prove Passing off
Aside from the key component of deception, Justice Nnaemeka Agu, in the 1977 case of The Boots Company Limited V United Niger Imports Limited12 carefully listed what he considered to be the ingredients of a successful Passing off action as follows:
- Proof that the name, mark, sign which the plaintiff claims ownership has become distinctive of his goods and is regarded by a substantial number of the public or persons involved in a trade in the relevant market as coming from a particular source;
- That the defendants who are engaged in a common field have used a name, mark, sign so resembling to the plaintiff's that it is likely or calculated to deceive or cause confusion in the minds of the common customer; and
- That the use of the name, mark, sign is likely to cause or has caused injury, actual or probable to the goodwill of the plaintiff's business.
Remedies in a Passing off action
The following reliefs/ remedies can be claimed in a Passing up action as follows:
- Injunction: This is an order of the Court to prohibit or suspend the use of a mark. This is usually the first relief sought to suspend the use of the mark pending the outcome of the case and a perpetual injunction when the case has been concluded to totally stop the use of the mark.
- Damages: It has been established through decided cases that a successful litigant in a Passing off action is entitled to damages. Damages here could be general, special or punitive. These usually emanate from losses which are presumed to have been suffered by a Plaintiff in a Passing off action.
- Delivery up for destruction of infringing goods: This is usually claimed where physical goods are involved. This occurs where goods are produced in breach of the trademark of another identical product. Thus, the Plaintiff usually claim for the goods to be delivered up especially so that it can be destroyed.
- Anton Piller Orders: This is an order for inspection and delivery up of infringing materials in the possession or control of an infringer. Ferodo Limited & Anor. V. Ibeto Industries Limited13.
- Account of profit14: Here the Plaintiff is entitled to profit on goods wrongly sold by the infringer.
Defences available to a Defendant in a Passing off action
The defences available against a claim of Passing off include the following:
- Consent of the Plaintiff to the use of the name, mark, sign or slogan.
- Indistinct name, mark, sign and slogan of the plaintiff15.
- That the Plaintiff's name, mark, sign hand slogan has become generic/common place.
- Dissimilarities in the mark of the Plaintiff and Defendant16.
- Innocent usage of the Plaintiff's name.
Conclusion and Recommendation
The purpose of an action for Passing off is to prevent one trade from damaging or exploiting the goodwill and reputation built up by another. The principle is that no man is entitled to represent his goods or his business as that of another. It is therefore our recommendation that the necessary framework for Passing off actions be strengthened to defend the goodwill and reputation of businesses.
Unfortunately, Passing off is not a criminal offence, such that Mrs. Ramota above could make a report to the Police or relevant institution. However, any victim of Passing off may first make a report to the person/company manufacturing the product one intended to purchase to make them aware that another person/company is reproducing a similar product and passing it off as theirs. Mrs. Ramota may also go further to report the misrepresentation by the manufacturers of 'Tunio' seasoning powder to the Consumer Protection Council ("CPC") and seek compensation as a dissatisfied consumer.
Though she may not have the locus standi to pursue a civil suit in this regard, the CPC will be happy to investigate the subject matter. The main objective of this being to increase the awareness of Passing off towards the association of Passing off to bad business.
Furthermore, small and medium businesses should be enlightened and educated to explore the possibility of seeking legal actions on Passing off and take advantage of the remedies available to protect their goodwill, trade name and profits.
The Supreme Court should also resolve with one voice the jurisdiction of the Federal High Court in line with the Constitution to prevent unnecessary objections and delay of justice at court.
It is also suggested that the Trademarks Act be further amended to reflect the times, happenings and changes in the Nigeria. In particular, we have observed that the Trademarks Registry has witnessed a serious backlog in the successful completion of the registration of marks and this has the resultant effect of limiting the rights of most product owners to Passing off as opposed to the an action on the infringement of a trademark.
1 Black's Law Dictionary Ninth Edition
2 CAP T13 Laws of the Federation of Nigeria, 2004.
3 (1972) NNLR 60
4 (1961) ANLR 180
5 (1988) 5 NWLR (Pt 93) 138
6 (2003) LPELR-SC.116/1999
7 (2007) 15 NWLR (Pt. 1058) 576
8 This refers to the 1999 Constitution, which is the Supreme Law of the Federal Republic of Nigeria, hereafter refers to as the "Constitution"
9 Section 251 (f) of the 1999 Nigerian Constitution.
10 Section 1 (3) of the 1999 Nigerian Constitution.
11 Supra @ 7 above.
12 (1977) 1 A.N.S.L.R 144
13 (2004) LPELR-1275(SC)
14 Nwabachili, Chudi C, Intellectual Property and Law in Nigeria
15 Supra in 13 above.
16 Supra in 3 above.
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.