Passing off is an area of intellectual property law that protects the reputation and goodwill of a business and prevents people from selling goods under the pretence that they are the goods of another. It does not require a registered trademark to proceed, so effectively can be seen as a form of protection of an unregistered trademark, and as such it’s particularly useful for small businesses who can’t afford the costs associated with a registered trademark.
There are three limbs to bringing a successful passing off action:
- That goodwill or reputation is attached to the goods or services.
- A misrepresentation is made to the public by the defendant.
- Damage is suffered by the claimant/plaintiff.
While a passing off action will fail if the 3 necessary requirements are not met, there are additional defences that can be raised. These include where the defendant is simply using his/her own name. Courts are reluctant to prevent an individual using his own name when trading. In addition, it can be argued by a defendant that they have an independent or concurrent right to use the mark. This could occur where businesses have marks of independent origin yet naturally expand into new areas where they come into conflict with each other. Neither party with a concurrent right to use a name or mark can prevent the other from continuing to use it.
In a recent case one psychotherapist sued another psychotherapist for passing off. The two had previously been friends, and indeed had trained with each other in the past. The Defendant (D) had previously rented space from the Claimant (C) for her own personal practice, and had also appeared on C’s website, but they had subsequently fallen out.
C’s argument was that D was passing herself off by using Google listings that used her branding but with D's telephone number. This claim was unsuccessful, as the Judge felt that there was insufficient evidence of an actionable misrepresentation (limb 2 above). This was because the listings had been automatically generated by Google by merging certain information belonging to both parties.
However, in response to what she perceived to be passing off, C had published a series of derogatory Facebook posts and tweets about D. These asserted that D was guilty of fraud, had admitted this to the police, was a danger to clients, had behaved unethically and was a danger to other therapists.
Defamation is the legal term that is used when a statement is published or communicated to a third party and the content of that statement seriously damages or is likely to seriously damage, the good reputation of another identifiable person or business. To qualify as defamation, the statement must identify or refer to the individual or entity in a way that identifies that individual or entity. There are various defences, the most common being:
- The content of the statement is substantially the truth;
- It’s publication of a statement on a matter of public interest that was made in the reasonable believe that it was in the public interest to publish the statement;
- The statement is an expression of an honest opinion or comment.
The court felt that the publications caused or were likely to cause serious harm to D's reputation. C’s defence was that her posts were true, but the court did not accept there was any evidence to back her assertions up. The court also felt that the publications were not a matter of public interest but were part of an ongoing and publicly targeted vendetta.
C was also found liable for harassment. The publications had been made for a period in excess of four years. For a harassment claim to succeed there needs to be a “course of conduct” and as these posts were part of a public campaign, the court in this case felt that this was satisfied, as they were sufficiently targeted at D for her to become aware of them. This was made worse by the fact that the claims were both untrue, and sometimes contained threats of violence.
D was awarded £75,000 for her counterclaims in defamation and harassment, including a component of aggravated damages, as well as an injunction to prevent any further publications by C.
The case is a useful reminder of what is needed to be proved for a successful claim in passing off. However, it also serves as a warning as to the correct way to handle such scenarios. Any potential passing off claimant needs to think carefully before embarking on any court case, to make sure they are as confident as they can be that their clam will succeed. They also need to make sure that they themselves have not resorted to unprofessional, unethical or unwise conduct in response to the perceived wrong, because as with any legal claim, there is always the possibility of a counterclaim as well as a defence.