09 May Product Clones: ‘Passing Off’ Copied Items as Big Brand Goods
What is ‘Passing Off’?
‘Passing off’ is when a business tries to sell its own goods under the pretence that they are the goods of another company. Passing off is similar to trademark infringement, however, it usually applies to rights that are not explicitly registered but very similarly associated with a particular business, goods or services. For example, if you started a business named “Google Advertisement Services” but you are not at all associated with or have authorisation from Google, it could lead to a successful passing off claim by Google.
Passing off is a common law tort (which means a wrongdoing or a crime). This law exists to protect the goodwill or reputation a brand might have in its specific market. Typically, passing off happens on a brand’s logo, colour scheme, name, packaging, or iconic designs – something visual that clearly symbolizes the brand. Passing off is particularly serious when it misrepresents a brand to the public to the point of deceit. We’re not super sure what’s the correlation, but passing off seems to happen most frequently with supermarket goods.
At this point, you might be thinking that passing off and trademark infringement seem very similar, however, they are not quite the same.
An example of another company trying to pass off a product as an alternative to Kellogg’s Sultana Bran.
Source: The Sydney Morning Herald
Passing Off vs Trademark Infringement
Passing off is a common law remedy. This means that it is a decision made by the courts, rather than legislation. Passing off typically prevents the illegal use of unregistered trademarks. More specifically, the passing off remedy prevents businesses from passing off their products as your products through mimicry. A court order will be issued to the offending party to stop engaging in the offending conduct. The court will grant compensation claims only if the offending party has engaged in fraudulent behaviour. To prove some company has passed off their products as your products, you must prove:
- Reputation: Your company must have a strong reputation and have acted in good
- Misrepresentation: The misrepresentation was performed by another company.
- Damage: The damages suffered by your company were a direct result of passing off by another company.
Trademark infringement is a statutory remedy. This means it is a legal remedy created by legislation. Only businesses who have registered trademarks can file for trademark infringement. More specifically, trademark infringement protects any and all illegal use of your registered trademark. This cause of action in embedded into the Trade Marks Act. A trademark infringement occurs when:
- Registered trademark: There is already a registered trademark.
- Deceptively similar: There is an infringing trademark that is substantially identical or deceptively similar to your registered trademark.
- Identical products: The infringing trademark is on an identical or similar products/services as your registered trademark.
It’s also common to see passing off claims or allegations in combination with trademark infringement claims.
Passing off rarely happens on the brand name itself, rather, it’s more on the overall branding and product type that will suggest to the consumer that it is similar to the “original” brand.
Complications In Passing Off Allegations
As we’ve mentioned earlier, passing off allegation is typically made by someone that doesn’t have a registered trademark. That’s where it can become complicated. For whatever reason, businesses may not have registered their trademarks and later, they find that somebody who is effectively copying something from their brand image. Passing off cases can become very difficult cases to be successful in, even more so when compared to actually registering your trademark in the first place. Plus, it is more difficult to argue that the use of a similar name is attempting to pass off an unregistered brand as it is often subjective and contextual.
If you have a trademark registered, you can file for a trademark infringement if you ever need to. The ownership and the rights associated to your ownership is clear in black-and-white. Furthermore, trade mark infringement action can be taken against persons using deceptively similar brands for similar goods/services as well.
If you don’t have a trademark registered, passing off requires proving a reasonable reputation. Only by showing that your reputation is damaged by the company that is trying to pass off as your brand that legal action can take place.
Thus, according to these conditions and requirement, if you are a very small local business that does not really have the reputation, you might not be successful in bringing a passing off action. Even if you used your brand name for many years, if you do not have a particularly high level of recognition in the marketplace by consumers in general, it is very difficult for you to claim that someone else is trying to pass off as you.
The Passing Off test: Hmm… Does this product remind you of something from another brand?
Entertainment Daily UK
Why Reputation Damage Is Such an Important Argument for Passing Off Actions?
For instance, somebody else on the other side of the country might be using a similar brand to yours – let’s say yours is Maria’s Cookies and that person’s is Maria’s Biscuits – but in this case, it is not likely to damage you because your reputation (given that your reputation is limited to only being recognized by the locals in your state), and that other use of a similar brand is unlikely to be perceived or assumed as being affiliated with yours. In this case, you might not succeed in a passing off claim. In another argument, in those same circumstances, you very well could file for a trademark infringement instead, if you had your trademark registered.
Not registering a trademark is more common than you think, even more so if the company is not a mega-sized corporation. A company can make hundreds of products and have no idea which one of them will suddenly become extremely popular and all of a sudden becomes a representation or brand association of the entire company. In the absence of the trademark being registered, all they really have to rely on is a passing off or misleading deceptive conduct claim to try and get that alleged infringer to stop.
A hungry person may not spot the difference immediately if these two cookie brands are mixed up in a big bowl.
That’s the definition of public deception.
Source: Entertainment Daily UK
What You Can Do
The best thing you can do to avoid someone else trying to pass off as your brand is to trademark as many marks as is necessary and is within affordable means for you. It is not necessary to prove any reputation or deception in order to enforce an already registered trademark.
Trademarking, however, is quite a feat of its own and you might need some help to make sure you are not accidentally copying or passing off as another brand during your application process.
2. Know your rights
If it comes to a point where you are faced with a situation that requires taking action under the common law, you need to get professional help to find ways to meet the criteria of proof. You need to prove that you have developed a reputation in the unregistered trademark and that use of the infringing mark would be likely to confuse or deceive the public. At this point, this can be very difficult and expensive to prove, but it is still well within your rights to do so.
3. Taking action
If you have received or wish to send a letter alleging infringement, passing off or similar, please get in touch with an intellectual property professional before responding. It is important both senders and receivers of letters know their rights before issuing or responding.
Of course, if you are worried about a person using a confusingly similar brand name to yours within Malaysia, we encourage clients to register their brands as a trademark. It is most often much easier to successfully establish a trade mark infringement claim than rely purely and simply on passing off or misleading and deceptive conduct claims.
Intellect is an intellectual property agency that specializes in all things related to the legalities and rights of your business. Speak to us if you need some advice.