Passing Off – Is the Concept of Brand Confusion an Irrelevance?

Per Lord Oliver, “no man may pass off his goods as those of another”.

Reckitt & Colman Products Limited v Borden Inc. [1990] R.P.C. 341, elucidated the classic three-stage test required to prove passing off. Goodwill in the mark or get-up, misrepresentation of said product and damage – must all be established.

However, establishing these distinctly dissimilar conditions is not as simple as one may think.

PCCM is a Hong Kong based internet protocol television (IPTV) service, operating under the name, ‘NOW TV’. It was, in 2012, the largest pay TV operator in Hong Kong. People in the UK could not receive NOW TV, although some UK residents were aware of it. UK residents could become acquainted with the service through various web sources, PCCM’s websites and its YouTube channel. PCCM wanted to expand its NOW TV subscription service into the UK, and in June 2012, launched its first UK “app”. In July 2012, Sky launched a new IPTV service in the UK under the name ‘NOW TV’. PCCM alleged that use of that name amounted to passing off.

Starbucks (Hong Kong) v British Sky Broadcasting [2015] UKSC 31, went toe-to-toe over this very issue. Ultimately, it was held that a successful passing off claim had to establish that it had actual goodwill in the jurisdiction and that such goodwill involved the prescience of customers in the jurisdiction of the products or services in question.

Ultimately, mere reputation is not sufficient to amount to goodwill. The relevant product market of the goods or services is the crucial element when it comes to the three-stage test. A reputation acquired through advertising is not enough.

The Supreme Court ruled a likelihood of confusion does not rely upon whether the plaintiff enjoyed goodwill or mere reputation.

Whatever the determination of the court regarding the question of goodwill versus reputation, the facts on which the court relies in support of likelihood of confusion are the same. This means that there will be instances in which there is apparently a likelihood of confusion, but no actionable passing off, because no goodwill has been proven.

The law of passing off then is willing to accept a likelihood of confusion in the name of maintaining a proper balance between intellectual property protection and free-market competition.

In the words of the Supreme Court, if the plaintiff’s position was correct:

“… it would mean that a claimant could shut off the use of a mark in this jurisdiction even though it had no customers or business here, and had not spent any time or money in developing a market here—and did not even intend to so.”

All of this is well and good as it is obviously important to prevent a company from monopolising a trade mark in a market it has no interest in competing in, but it is difficult to reconcile how the Supreme Court may completely disregard the concept of confusion?

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