Analyzing and Evaluating Tort of Passing off - Essay Example

Analyzing and Evaluating Tort of Passing Off affiliation Introduction The law of passing off was created in countries that practice common law such as United Kingdom and New Zealand. Its core aim were to stop any person from using a sign, mark, device or symbol that is used as a trade name or trade-mark by a competitor so that to lure the purchasers falsely in buying of different products or goods rather than buying the authentic goods due misrepresentation of goods being sold and they belong to another person. When the plaintiff goes to court, he or she should capture the reputation or the goodwill in the mind of the public consumer, the accused must have resulted to misinterpretation of the public judgment and the plaintiff should link the misrepresentation with the inflicted damage or the like hood of the damage to be suffered. Pass off control In analyzing and evaluating tort of passing off in the modern intellectual property legal system, it important to understand the term intellectual property, which refers to the legal doctrines that regulate the use of different kinds of ideas and insignia. The law protects expressions such as “Vodka” which has been discussed on this paper. The law also protects images and identities of celebrities against exploitation such as in the case of Eddie Irvine versus Talksport. Tort of Pass off will be used to determine various cases on this paper through the legal systems. The House of Lords in an attempt to curb the pass-off it came up five characteristics that had to be in place in order to achieve valid cause of action. Misrepresentation that had to be made during the trade; to potential customers of products or services supplied by the defaulter which can be measured to cause harm to goodwill or business of a trader or the competitor. Finally the actual damage incurred to the goodwill or the business owned by the trader. For the action of passing off to prevail, the plaintiff had to meet three elements namely goodwill, misrepresentation and damage to goodwill. Goodwill helps consumers to identify goods in the market, misrepresentation involves the convincing members of the public that goods they are consuming are from a particular company while they are from another company. Damages will be as a result of misrepresentation leading to destruction of the goodwill of a plaintiff. The Course of action for passing off is a kind of intellectual property that can be enacted against those who use other people’s trademarks that are either registered or unregistered. Statutory law like the United Kingdom Trade Marks Act 1994 gives directive on the enactment of through infringement proceedings1. While passing off is a kind of common law. The passing off and Trademarks Act are foam of overlapping forms of law that handle different situations in different ways. The two ensure that they do not create a room for monopoly to thrive for any marks or names and does not recognize them as property, but the law of passing off is designed in a way that it prevents misrepresentation during trading with the public. The courts have the mandate to determine the similarity of goods, services, and marks. Looking at goodwill it is not fully defined in the act but it means tangible relationship of the products that attracts the customers towards certain wares and products instead of the competitors. Focusing on the case Manitoba Fisheries Ltd. V. The Queen, (1979) 1 S.C.R.101,at p. 108, the court accepted the term “goodwill” to mean the available connection of the customers and their custom is of value2. However, commercially speaking the term may mean more in regard to other quarters such as reputable association with the mark or name, long experience in a particular venture or particular premises. To convince a court of law the trade name or the trademark has been used against the plaintiff, he must first highlight the peculiar distinctive features that the goods have and prove that the goods had gained a reputation in the market3. The plaintiff must also establish that the product had gained a “secondary meaning" in the consumers mind, and the shape is not just functional. The law undoubtedly seeks to protect the traders’ interests and the public from the consequences of unjust trading and unfair competition. From the 1875 statutory system of registering trademarks, goodwill was established because of its necessity as a passing off action. Through subsequent amendments, Trade Mark directive has been put and implemented in form of Trade Mark Act 1994 (TMA). The purpose is to broaden the scope of any sort of infringement by authorizing the registration of signs that can be represented graphically to distinguish services or goods from a different trader. However, the courts have declined to allow the protection of shapes because it may end up encouraging monopoly and obstruct the freedoms of other traders4. A company like Coca-Cola it tried to register their unique shape of the bottle as a trademark. The company argued that their bottles had become distinctive and recognizable and so it could be said to have qualities of a trademark. However, the presiding Judge, Lord Templeman, dismissed the case. The fundamental reason is that the shape cannot be said to be a registrable mark and that could be said to be an intention to use the intellectual property into a protective law that acts as a source of monopoly. Coca cola was trying to draw its argument from the Reckitt & Colman v. Borden whose passing off action of becoming successful by exploiting the goodwill of the public and riding on it but the case had not been won due to similarity in bottle shape, which the law does not protect5. The cases of “famous marks” goodwill can be associated with the mark on the goods or services, the plaintiff should prove that the consumer is likely to mistake the goods or services provided by the accused and used for commercial purposes6. If the plaintiff is unable to prove the distinctiveness of the trademark, the common law will not have anything to protect because the case should be based on the distinguishing feature. The second element involves the misinterpretation of public decision through deception by misrepresentation. The courts require that the plaintiff prove that treacherous activities, unfair competition, or involvement of unethical motives in order to start getting the liabilities of the passing off. When a judge verifies that the accused used the plaintiffs trademark, and the secondary meaning or goodwill was misrepresented, the accused cannot provide an excuse that it was just a misrepresentation. Under the statutory or the common law, the court will establish misrepresentation and take action for passing off as provided in section 6 of the Trademarks Act7. If misrepresentation is innocent or deliberate and it is done by a competitor or a non-competitor and has the ability to cause misjudgment to the goodwill of the consumers who are direct or ultimate customers of the plaintiff goods or services, and the lack of probability for confusion makes the passing off claim to be harsh on offenders. After the plaintiff has clearly noted that goodwill or reputation associated with services or goods that could be represented by a symbol, design or word can lead to misrepresentation leading the public in making mistakes to choose the defendants services or goods8. Misappropriation and Unfair competition Misappropriation in tort of passing off is a concept that occurs together with misrepresentation, which is a principle that governs against cheating. However, misappropriation is different because it does not require confusion of the public. Misappropriation involves taking unfair advantage of a trademark that is reputable. The general concept of misappropriation in modern intellectual property is weighed through the basic moral feelings, where third parties may try to take advantage of a trademark to benefit from it. The third parties do not make their own efforts to create and maintain goodwill or giving any financial compensation. The kind of exploitation highlighted above is translated as taking advantage unfairly. Usually there is harm caused to the proprietor, which may cause confusion to the public although it is not a requirement for misappropriation to be in existence. The concept of unfair competition can be divided into two parts, the first part narrowly means the confusion of customers to where the product originates. The second part involves the unfair trade practices through actions such as bait, false advertisement, and changing of selling tactics. The two concepts of unfair competition are discussed comprehensively under reverse extension and extended passing off. Extended passing off Extended passing off happens in an instance that passing off is actionable, and misrepresentation and the quality of service or a good can result into harm for others good will. For example, American-made product was sold bearing the name "Greek yoghurt” in the United Kingdom market. The extended passing off action could have been achieved through the traders having a collective goodwill in a particularly used trademark. Five elements characterize passing off action9. First, passing off an action may involve a class of goods being sold under a certain trade name. It must also be present in the public minds and a part of the public is able to distinguish the trade name from other related goods. Thirdly, there should be an attachment of the goodwill on the trade name10. The claimant is a member of the traders’ class and has a significant value of ownership of the goodwill. Finally, the claimant has a probability of suffering a significant damage due to the defendant disposing of goods that are falsely represented by the trading name. Cases In the case of Eddie Irvine Versus Talksport, a high court judge confirmed that false endorsements could lead to pass off. The case entailed Talksport radio station sending promotional material to multiple potential advertisement buyers. One of the recipients of the advertisement was Eddie Irvine, an F1 racing driver who had been featured in a brochure’s photograph. The photograph had been altered and the cell phone Eddie was using had been replaced by a portable radio bearing the words “Talk Radio.” Eddie was informed by Mr. lan Phillips, the director in charge of business affairs for the F1 team in Jordan. He congratulated him for being featured in a promotion and getting a sponsorship deal with Talk Radio. He believed the using of Irvine’s photograph was an action of personal endorsement when he was giving his evidence in a court of law. Talksport put an argument that, Irvine’s endorsements had been channeled through a network of companies and the plaintiff was not entitled to any rights in such a case. The judge preceding the case pointed out that Irvine had been misrepresented as endorsing talk radio and his reputation and goodwill had exploited by Talksport through creating a falsehood message in the brochure. Thus, the judge dismissed the argument and to the advantage of Irvine, his companies had presented themselves to counter the claimant’s argument. The case plays a critical role in the modern intellectual property, which involves the protection of ideas, expressions, and in our case the protection of a celebrity image and identity. Irvine as a celebrity driver of F1 Company his image is used inappropriately through exploitation of his reputation and goodwill. Tort Pass off law comes to the rescue of the celebrity and forbids the use of his image falsely without consent of endorsing a particular product such as “Talk radio.” Although the case is ruled to the favour of Irvine an open question is left unanswered, whether it possible to have a liability for passing off in a situation that the celebrity has agreed his/her name to be used in an advertisement without implying the endorsement of the product being advertised. The origin and geographical indication has been covered in the Council regulation 1151/2012/EU for the provision of quality schemes for foodstuffs and agriculture products. Company F produced the “Total Greek yoghurt”, and it was sold in the United Kingdom and the company had a 95% market share in the year 2012. Then a different set of producers C had American made yoghurt known as “Chobani Greek Yoghurt” sold in the United Kingdom market. F went to a court of law for extended passing off, stating that it had owned an existing goodwill that existed in “Greek yoghurt” of the product that had been prepared in Greece using a traditional method11. F further based an argument on common field of activity, insisting that the use of the phrase “Greek Yoghurt” in C’s phrase “Chobani Greek Yoghurt” was leading to confusion with their product “Total Greek Yoghurt.” In addition, F had an enough reason to argue that C’s intension was cause confusion and misinterpretation of their product for C’s product in the market. After the hearing, the court ruled in favour of F on the grounds that a substantial number of the United Kingdom buyers had the opinion that Greek yoghurt had been prepared in Greece, and it was crucial to them. In different case there was Diageo (the producer of Smirnoff Vodka) Versus Intercontinental Brands Ltd (the producers of VODKAT). VODKAT is a mixture of naturally fermented alcohol and vodka. According to the EU Council Regulation No.110/2008/EC, there is a requirement that vodka should have an alcohol volume (ABV) of not less than 37.5 percent. However, VODKAT’s ABV was 22 per cent and was marketed in a get-up leading to strong reminiscent of Vodka. Diageo being the plaintiff argued that ICB’s idea was equal to passing off. The judge upheld Diageo’s argument that “vodka” was a product that has a reputation and needed goodwill. It was approved that passing off had occurred and VODKAT was marketing their product in a misleading manner that would make them believe it was vodka. The judge-dismissed ICB’s argument which was that passing off should only apply to premium or superior products, vodka was not, and it did not warrant protection. The court from a preview of a different case concluded that Vodka had qualities and characteristics that had created goodwill and a reputation making the product unique in the minds of the public. In addition, ICB was to refrain from using the name VODKAT on their products or they had to be vodka or have clear distinction from vodka. In the case above common field, activity was highly probable, this was because VODKAT was intending to cause confusion to the public and make the public believe it was Vodka from the marketing strategy they had deployed. The marketing strategies of the two products had a similarity leading to the judge approving it as a pass off. Reverse Passing Reverse passing is another form of pass off that involves the defendant trying to pass on the services or products of the plaintiff using its authorized brand rather than using a new product brand or trademark all together. The idea of reverse passing off is found in section 43(a) Lanham Act of the United States of America. In the act, two general theories of liability are provided. The first was the false representation endorsement or association related to the origin of services and goods by wrongly using another product’s trade address, name or distinctive mark. The second was false representation through falsely advertising quality of goods or services12. The Lanham Act 43(a) provides that the plaintiff must bear a valid and protectable trademark and the defendant ought to be using colorable imitation that looks like the authentic trade in order to cause confusion to the purchasers13. In the case under the Indian Law, reverse passing off revolves around the principle that there is nobody who is allowed to utilize a trademark of certain manufactured goods not having exclusive permission from the original manufacturer. The case was presented in Bombay High Court between Plomein Fuel Economiser Coy.Ltd .Verses National School of Salesmanship Ltd. The court interpreted the principle of reverse passing off in a unique way. Despite there being no sufficient evidence to show that any person had bought an economizer from the defendants and they were familiar with the plaintiffs, but for passing off to occur there is no need for the person to have known who levels complains of a passing off. The person being sent to acquire the goods have specific commercial source and are reinforced by false statements to receive the products that are supplied by another commercial source14. In the case of Economizer Coy. Ltd versus National School of Salesmanship Ltd. Common field activity can be argued to have taken the center stage. This is because the products are not only being introduced into the market as the authentic product, but also the product bears the same trademark used by Economizer in order to confuse and manipulate the consumer to think he or she is using the original product. After the products arrive in the shop, they sell the consumer a different product rather than the one they had come to purchase. The seller ends up selling products of a different manufacturer that they have a preference to. The judge makes a rhetoric comment that, “if that is not passing off, I really do not know what is?” Conclusion In conclusion, common law tort of passing off is an important type of protection on intellectual property even after the establishment of a registered system that deals with trademark protection. Trademark law protection, which was extended by TMA in the year 1994 leaving action of passing off to be outstanding in relation to protection through the elements of passing off such as goodwill, misrepresentation and then the establishing of damage suffered. References Anne, Z. (2010). The Securitization Markets Handbook. John Wiley & Sons. Batten, D. (2011). Gale encyclopedia of American law. Detroit, Mich.: Gale. BELEW, S. (2011). Starting an online business all-in-one for dummies. Hoboken: John wiley. Chow, D. (2009). The legal system of the Peoples Republic of China in a nutshell. 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