Passing Off - Tort

The tort of passing off is when one business or individual misrepresents or 'passes off' their goods or services as if they were the goods or services of another. Passing off is classified as an economic tort and the resultant harm therefore does not cause physical, but rather economic loss to a supplier who has subsequently lost customer due to the acts of the defendants. This can be done through similar branding, description, or through the misleading of consumers which would result in them being tricked into believing the business that they are actually buying from. Budd J in the case of Polycell Products Ltd v O'Carroll & Ors noted clarified this, “[The tortious conduct] injures the complaining party’s right of property in his business and injures the goodwill of his business. A person who passes off the goods of another acquires to some extend the benefit of the business reputation of his rival trader and gets the advantage of his advertising.” The principle underlying the tort of passing off is that “A man is not to sell his own goods under the pretence that they are the goods of another man” Perry v Truefitt (1842).

Litigation involving passing off are a rare phenomenon in Irish courts, however there have been cases involving business' seeking litigation to prohibit a person/business from passing off their goods or services. Furthermore, more often than not, cases involving passing off are settled outside if court without the need to proceed to trial. This is evident in the case of Tribune Newspapers plc v Associated Newspapers. The most notable Irish case on the tort of passing off is the Supreme Court decision in McCambridge Limited v Joseph Brennan Bakeries [2012] where the Court held that Brennan's were guilty of passing off McCambridge's whole meal bread.

McCambridge Ltd v Joseph Brennan Bakeries [2012] - case involved an allegation of passing off by Brennans bread. Court, in considering the case, had regard to several images. The Supreme Court endorsed the three stage test for passing off, "it is common case that the applicable criteria for establishing passing off are to be found in the "triple test" laid down by the House of Lords in Reckitt and Coleman Products Limited v Bordon Inc [1990]." In the case, the court expressly endorsed the following phrasing of the test:

a. the existence of a reputation or goodwill in the claimant's product including, where appropriate, in a brand or name or get up;

b. misrepresentation leading to confusion between what is alleged to be the offending product and the claimant's product; and

c. whether damage to the claimant's goodwill or reputation by virtue of any such confusion has been established.

This three-tier test is the means by which the courts will consider the question of whether or not the tort of passing off has occurred.

Goodwill/reputation

Plaintiffs in passing off litigation must show that they have built up 'goodwill' in their product. In the case of DSG Retail v PC World (1989), the plaintiff had built up goodwill in PC World but couldn't seek to have PC protected. There is debate as to what actually constitutes goodwill. In the case of Budweiser v Budvar (1984), Budweiser couldn't prevent Budvar from trading in the U as they didn't sell their products there, in spit of goodwill built up through tourism and advertising. Due to the nature of the modern global marketplace, this approach was criticised and as a result, a wider approach (triple test) has been established to further protect products international reputation.

Law on Passing Off in Ireland

The recent Court of Appeal case Galway Free Range Eggs Limited v Kevin O’Brien, Carmel O’Brien and Hillsbrook Eggs Limited [2019] is an important case which has clarified the law on passing off in the Irish jurisdiction. The plaintiff in the case, Galway Free Range Eggs Ltd, successfully sought litigation obtaining a permanent injunction restraining the Defendants from passing off their goods as the goods of the plaintiff. The facts revolved around the trading name of the two companies primarily and the argument brought forward by the defendants. was that advertising and branding their eggs with similar names would mislead customers to mistakenly purchase the defendants eggs and not the eggs of the plaintiff. The court applied the triple test, as is necessary in order to secure a successful claim in the law of passing off. Both the High Court, and the Court of Appeal referenced the case of Jacob Fruitfield Limited v United Biscuits Limited [2007] in establishing and setting out the three test. First, a reputation or goodwill must exist in the plaintiff's product (if appropriate, this would include a brand name). Secondly, a 'misrepresentation' must occur which leads to a consumer confusion between the alleged offending product and the plaintiff's product. The alleged passing off need not be a deliberate act on the infringer. Finally, the court assess whether the damage done to the plaintiff's goodwill or reputation by virtue of the confusion has been established. Each aspect must be satisfied in order to be successful in an action of passing off. In egg case, the plaintiff was unsuccessful in the High Court as O'Connor J stated that the plaintiff failed to satisfy the three test. The plaintiffs appealed to the Court of Appeal who re-applied the test and confirmed that the plaintiff had actually satisfied the requirements needed to succeed in passing off litigation. As such, it was held that the High Court had erred in its treatment of the survey evidence believing it to be tenuous and unreliable. The Court of Appeal however, found that the survey evidence is admissible in passing off claims to prove public opinion on confusion of products. Thus, the Court of Appeal confirms and re-states the triple test as an integral part of the Irish law on passing off and confirms that passing off may occur on the basis of one characteristic alone. Subsequently, as the plaintiff had a goodwill under the name 'Galway Free Range Eggs' the confusion with the similar branding of the Defendants was enough to amount to passing off.

The remedy in passing off claims, if successful, usually takes the form of an injunction order to prevent the Defendant from further using the offending materials such as advertising, packaging or branding/name. Further, an application will often be made for an interlocutory injunction at an early stage in the proceedings. This being said, most judgements are given at early stages in the proceedings as the main issues at stake involve concern over the granting of injunctions.

In the case of Fenty v Arcadia Group Brands [2013], the Defendant was selling t-shirts with a picture of the plaintiff on it (Rhianna). The judge held that the issue of misrepresentation leading to confusion would "always depend on the nature of the relevant market and on the perceptions of the relevant customers. It is certainly not the law that the presence of an image of a well-known person on a product like a t-shirt can be assumed to make a representation that the product has been authorised." Rather, the court held, "to be passing off, a false belief engendered in the mind of the potential purchaser must play a part in their decision to buy the product."

Concluding thoughts

The tort of passing off provides for supplemental protection to the goodwill of businesses and is designed to prevent another trader from unlawfully passing off products as those of the plaintiff. Passing off is defined as the misrepresentation made by a trader to prospective customers which is calculated to injure the business/goodwill of another trader and actually causes economic damages as a result. McMahon & Binchy note how "[over] the last seventeen years, it seems the tort of passing off is holding its own as a litigation strategy”. The 'triple test' is the one used in the Irish jurisdiction and each element must be satisfied in order for a plaintiff to be successful in litigation.