Your business’ brand can represent years of effort, creativity, and investment. However, what happens when another company, intentionally or otherwise, capitalises on that hard work by misrepresenting itself (or its goods or services) as being associated with your brand?
If you have a registered trade mark, then you may have a claim for trade mark infringement.
But if you do not have a registered trade mark, is there any legal recourse available to you?
Depending on the circumstances, it might be that you have a claim for passing off. This would enable you to issue proceedings for an injunction to restrain the unlawful behaviour, as well as seek financial compensation for either the losses you have suffered as a result of the passing off, or the profit made by the wrongdoer.
What is a passing off claim in the UK
In England and Wales, establishing a passing off claim involves three key components:
Goodwill
The claimant’s goods and/or services must have acquired goodwill or reputation in the mind of the purchasing public, with those goods/services being known by a distinguishing feature.
Usually, the distinguishing feature will be a brand name or logo but, in some circumstances, a claimant can successfully demonstrate that it is has goodwill or reputation in the shape or a product, or its packaging.
Misrepresentation
Misrepresentation can occur in several different ways, the most common being the use of the same or similar brand name of logo as the claimant.
However, it is possible for misrepresentation to take a different form: for example, Tesco has recently been found liable for passing off, by making a misrepresentation as to equivalence, by misrepresenting (through use of a blue and yellow logo, similar to Lidl’s trade mark) that its goods were price matched with Lidl’s.
Damage
Finally, the claimant must show they’ve suffered or are likely to suffer harm due to the misrepresentation. This damage might take the form of lost sales, harm to reputation, or erosion of the brand’s distinctiveness.
Limits of passing off
The law of passing off can be a very useful tool, enabling a business to protect its brand, without the need for a trade mark registration.
However, what should not be underestimated is the difficulty – and, therefore, the cost – that a claimant may face in demonstrating the existence of the three elements described above.
This is especially true when we consider how to prove the existence of goodwill – cogent evidence concerning turnover, brand recognition, PR spend, and customer base will all need to be cited as evidence by the claimant.
In contrast, all the claimant needs to do is point to the trade mark register to prove the existence of a registered trade mark. Whilst it will still be necessary to prove infringement of that trade mark, that the right (the trade mark) exists is easy to prove by a quick reference to the publicly available register.
With that in mind, while a business should always consider whether it has a claim for passing off (not least because, in some cases, a passing off case can succeed where a trade mark infringement claim fails), it is always worth considering registering a trade mark to protect your brand.
How can we help?
Emma Toes is a Partner in our Dispute Resolution team, specialising in contentious intellectual property matters.
For more information on the subjects discussed in this article, please contact Emma or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.