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Passing Off Action Notes

Law Notes > Foundations of Intellectual Property Notes

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5a.Passing off

5a. Passing off Table of Contents

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Note: Passing off's Relationship with trade mark law : s 230 TMA

* TMA doesn't affect law relating to passing off: S 230(1)

* However in an action for passing off arising out of the use by the D of a registered trade mark: o Of which they are the registered owner or authorized user: s 230(2)(a); AND o That is substantially identical with, or deceptively similar to, the trade mark of the P; damages may not be awrded against the D if the D satisfied that court that: o At the time when the D began to use the trade mark they were unaware and had no reasonable means of finding out that the trade mark of the P was in use: s 230(2)(c); and o That when the D became aware of the existence and nature of the P's trade mark immediately ceased to use trade mark in relation to g/s in relation to which it was used by the P: s 230(2)(d) Cheatsheet from AG framework: Can all the elements of passing off be shown? (1) Goodwill (2) Misrepresentation (3) Damage

1. Definition: is one trader representing its goods/services as those of another?

2. Can all the elements of passing off be established?
a. Goodwill = reputation + as a trader + amount to goodwill i. Reputation?
ii. As a trader?
iii. Amount to goodwill (the attractive force that brings in custom). Goodwill is indicated by 'indicia' of reputation, such as:

1. Getup or shape

2. Colour

3. Names (made up, generic or personal)

4. Advertising imagery or themes

5. Trade dress or styles b. Misrepresentation i. Misrepresentation as to source or quality ii. Involving indicia of goodwill; iii. Without a sufficient disclaimer or other defence. iv. Note: must the traders operate in the same sphere of activity?
c. Damage i. Loss of existing trade and profit ii. Loss of future trade and profit iii. Loss of licensing revenues iv. Damage to reputation v. Dilution.

The tests from Advocaat and ConAgra v McCain

* Advocaat - Lord Diplock: o a misrepresentation; o by a trader in the course of trade; o to prospective or ultimate customers; o which is calculated to injure the business or goodwill of another; and o causes actual damage to that other

* As restated by Lockhart J in ConAgra v McCain o Goodwill/reputation o Misrepresentation; and o Damage.

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Passing off notes by eb Overview of passing off Can all the elements of passing off be established?

1. Goodwill = reputation + as a trader + amount to goodwill a. Reputation?
b. As a trader?
c. Amount to goodwill (the attractive force that brings in custom). Goodwill is indicated by 'indicia' of reputation, such as: i. Getup or shape ii. Colour iii. Names (made up, generic or personal) iv. Advertising imagery or themes v. Trade dress or styles

2. Misrepresentation a. Misrepresentation as to source or quality b. Involving indicia of goodwill; c. Without a sufficient disclaimer or other defence. d. Note: must the traders operate in the same sphere of activity?

3. Damage a. Loss of existing trade and profit b. Loss of future trade and profit c. Loss of licensing revenues d. Damage to reputation e. Dilution.

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Req 1#: Goodwill = reputation + as a trader + amount to goodwill

(a) Reputation?
(b) As a trader? (Day v Brownrigg; AG v Holy Apostolic) Reputation as a Trader?

* If no business - not a trader: There might have been harm, but there was no property right in the name 'Ashford Lodge': Day v Brownrigg (1878) o Mr and Mrs Day lived in Ashford Lodge. And General Brownrigg lived nextdoor in Ashford Villa - and decided to change the name to Ashford Lodge. The Days decided to sue Brownrigg. They had a house with a name they didn't want anyone else using it. o Judge said to go away. You may have reputation in your name btu you don't have goodwill. Maybe if it had a business?
o No element of being a trader in the course of trade.

* Charities can be 'traders': AG v the Holy Apostolic & Catholic Church of the East (Assyrian) Australia NSW Parish Association: the church's reputation was 'essentially indistinguishable from commercial goodwill')

(c) Amount to goodwill - consider the indicia of reputation Intro to goodwill.

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Goodwill is the attractive force that brings in custom: IRC v Muller (the benefit and advantage of the good name, reputation and connection of a business).

*
Can have 'extended goodwill' or 'shared' goodwill for a group of people: Bollinger o Eg champagne growers - collectively own the goodwill.

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Goodwill is indicated by 'indicia' of reputation: Intro to Any marks, names or devices of any kind that are used as ciphers to teach the public how to indicia get the trader's goods amounts to indicia of goodwill: Powell

* Note: it is the indicia by which an activity is known rather than the activity itself that gives rise to goodwill: BBC v Talksport Include:

1. Names (made up, generic or personal) a. Note: Passing off requires secondary meaning for generic names: Reddaway v Banham. The first user of a descriptive name will have to prove reputation to succeed: McCain International v Country Fair i. Failed argument in Stringfellow - no secondary reputation of 'stringfellow' as being about pole dancing clubs.

2. Trademark

3. Shape and look ('getup') (shape may indicate source: Edge v Nicholls; Jif Lemons) a. Eg - goodwill existed in packaging of lemon juice in lemon shaped container: Jif

4. Colour (see Cadbury v Darrell Lea ) a. However note - Cadbury didn't own colour purple: Cadbury b. Woolworths didn't own colour green: Woolworths v BP

5. Trade dress or styles a. Eg - Alexandra - maccas stand alone restaurants.

6. Advertising/Descriptive material or themes: Cadbury Schweppes v Pub Squash. a. Eg advertising themes can sustain reputation - solo had yellow can with manly imagery
- pub squash issued similar product. Held no secondary reputation over yellow cans held by Solo: Cabury Schweppes v Pub b. eg slogans or visual images which radio, tv or newspaper ad campaigns can lead the market to associate with a P's product, provided that such descriptive material has become part of the goodwill of the product: Cadbury c. Test is whether the product has derived from the advertising a distinctive character which the market recognizes: Cadbury

7. Characters a. Eg 'Dundee' - 'Koala Dundee' small shops selling souenoirs - misrepresentation that the reputation of Hogan had associated with them: Hogan v Koala Dundee (now the law of aust that creator of sufficiently famous character having certain visual or other traits may prevent others using his characters to sell their goods - even where the inventor has never carried on any other business) b. Scene from a movie enacted in Pacific Dunlop v Hogan created false message that Hogan recommended a type of shoes. Signficant section of public viewing advertisement would have been misled into believing there was a commercial agreement with Hogan.

8. Themes After this - remember to consider misrepresentation

* Held that consumers are sophisticated enough (at least in relevant market of assam teapots) to know that there are copyists and to look for distinctive brands: Bodum. Here the products were distinguished. Nor reference to other name or logo. Knowledgeable consumer familiar with bodum would expect to see the bodum name/logo on products, as that was how the brand distinguished itself.

* May be that although there is indicia of goodwill (eg a distinctive shoe design has become strongly associated in the market with doc marten product), unable to show misrepresentation if other manufacturers adopt similar design for own cheaper boots with distinguishing labels: Dr Martens

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Consider: if descriptive/generic indicia, does it have secondary reputation?: Reddaway; horsnby; kettle chip; orthotech Test: Descriptive names require secondary meaning to establish passing off: Reddaway Case law:

* First user of descriptive name has to prove reputation to succeed : Mc Cain

* Virtually impossible to use passing off to obtain protection for highly descriptive name: Antec International

* Has there been distinction between the goods? Subsequent traders can concurrently use descriptive name if they distinguish their goods sufficiently: My Kinda Town v Soll

* hard to prove a quickly acquired secondary meaning: year or two insufficient to build secondary reputation in 'oven chips' (MCCain) 6 months of trading insufficient for radio station to build 'gold AM' name: County Sound v Ocean Sound

* Hard to say that certain indicia has secondary meaning if features shared by several other competitors in the market - Nutrientwater v Baco o Held where allegedly appropriated features were of common use in product market, no liability for use of features. o Thus a trader may adopt the features of competitors' products so long as this won't result in deception and mislead ordinary reasonable consumers into mistaking its goods for those of its competitors. Examples:

* 'Kettle' - had obtained secondary meaning: in APand v The Kettle Chip Company - 'kettle' was a key word that had obtained a secondary meaning distinctive of the kettle chip company's product. FFCA confirmed the finding that KCC had developed a secondary reputation among the relevant group of consumers, so passing off occured when using 'country kettle' chips that resembled those sold by kettle chip company.

* 'Office cleaning services' - hadn't acquired it hadn't acquired secondary meaning as denoting the P's services, so couldn't prevent the Ds from trading under 'Office Cleaning Association': Office Cleaning Services v Westminster Window and General Cleaner

* Acronyms can acquire secondary meaning: In Orthotech acronym for prosthetic knees (not distinctive) said that acronym acquired secondary meaning so as to be distinctive of the earlier trader's product. More it is like a descriptive name then the heavier the onus of the plaintiff to establish a secondary meaning.

* 'CPA' had acquired special meaning: In CPA Australia v Dunn (s 52 case) CPA Australia brought proceedings to restrain Dunn from representing that he was a 'certified practicing accountant' as the letter CPA had acquired a special and distinctive meaning in relation to the accountancy profession in Australia. Word 'certified' meant more than qualified with an accounting degree.

* 'Malted milk' hadn't acquired secondary meaning: used by Horlick in relation to their milk without competition for 25 years - but this expression was used in conjunction with name 'Horlick' and it was held they couldn't restrain use of 'malted milk' alone: Horlick

* 'Hornsby centre' passing off as Sydney centre': because many years of Sdney Building Information centre using that title meant that public associate its particular business with that type of activity:: Hornsby Centre case - Sydney Building Information Centre restrained Hornsby Building Information Centre. o S 52 principles discussed: Names were merely descriptive. o Sydney Centre - had price to pay for using descriptive trade name. o Here - evidence of confusion in minds of member of public

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5a.Passing off o Wasn't that use of Hornsby centre's name is itself misleading o deceptive but rather that intrusion into the field originally occupied by Sydney centre caused degree of confusion

(d) In Australia? (Geographical requirement): ConAgra v McCain Rule: Goodwill only extends to jurisdiction where the reputation extends. (Thus we consider where the consumer's minds are who know of the trader's products, not where the trading is): ConAgra

*
Two traders can concurrently possess separate goodwill in different parts of the same jurisdiction.

*
It's fine if the P does not have a physical presence in the forum - not an element of the tort. The question is whether or not the P's business has goodwill or a reputation in the jurisdiction.

*
Rationale: goods and services are often preceded by their reputation abroad (in the current age of sophisticated communications less limited by national boundaries). No requirement of very slight form of business activity.

*
Test: Real Q is whether the owner of the goods has established a sufficient reputation with respect to his goods within the particular country in order to acquire a sufficient level of consumer knowledge of the product and attraction for it to provide custom which, if lost, would be likely to result in damage to him.

*
How to prove reputation in jurisdiction: "Reputation within the jurisdiction may be proved by a variety of means including advs on tv or radio or in magazines and newspapers within the forum. IT may be established by showing constant travel of people between other countries and the forum, and that people within the forum (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owners': ConAgra o Consider the nature of the products: probably not going to know household products sold overseas - may know restaurants but no

*
Maxim De Paris - a P is entitled to protection against passingoff although his business is carried on abroad, where the goodwill of the business extends to England: Maxims v Dye o Club in Paris notable and known in London. Reputation where there is a law for passing off - then that will support it. o Just because you have laws here in Britain or the US doesn't mean it's everywhere. Notes: "Goodwill is geographical, and depends upon whether people in the relevant area are attracted to do business with the trader. This may or may not span the whole of the jurisdiction.. Old cases:

*

BM Auto Sales v Budget O Car - here Gibbs J did not decide whether the reputation which a trader has to establish in order to sustain an action for passing off must flow from that trader's business activity within the jurisdiction. Only held that slight activities in Engaland were enough to suffice

*
In Taco Bell - held that very nature of the business (conducting fast food outlets) and great distances separating America from Sydney makes it imporbable that customers would be travelling to the one palce for the other. Hence knowledge of taco bell restaurants in the US held to be not evidence of relevant reputation nor of existence of a goodwill here which the respondent or Taco Bell of California entitled to protect by an action of passing off. o The FFCA held that there was no actual or probable damage to the appellant.

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