Passing off

This is the general title given to the principle of law which forbids the running of a business in such as way as to filch a competitors trade by misleading conduct. The essence of the rule is to protect business goodwill. In order to protect that goodwill, the law forbids a trader from conducting his trade so as to mislead customers in to mistaking his goods or services for someone else's. Nor may he mislead customers in to confusing his business as a whole with someone else's. It makes no difference whether it is other traders or the general public who are deceived, nor whether the deception is fraudulent or merely mistaken or accidental, nor how it is brought about. The deception is known as "passing off" and anyone who suffers financial loss as a result of it is entitled to bring an action in the Courts claiming compensation for loss and asking for an Interdict (in England Injunction) against continuance of the deception.

Passing off does not extend to non deceptive encroachments upon goodwill. It is not passing off to say "my tyres are as good as Dunlop's but half the price".

For a passing off claim to be successful, generally the applicant and the defender must be in the same line of business and there must be a genuine likelihood of confusion or deception. It is the goodwill of a particular business which is to be protected. Thus, if a small florist on the north side of Glasgow is called "Blooms" and if its customer base is drawn primarily from its immediate locale then it is extremely unlikely to be able to prevent another florist opening on the south side of Glasgow under the same name if the second florist is not going to draw its customers from the north side. Although some connection between the two businesses may be implied, there would have to be a detrimental effect on the goodwill for any passing off action to be successful.

Generally speaking, the parties have to be in the same line of business. A florist called Blooms is unlikely to be able to prevent a hat shop using the same name even if they are in the same locality.

If a particular name or trading style is important to your business it would be as well to consider registering that name or style as a trade mark, rather than relying on passing off.

It is of paramount importance when considering registering a trade mark to take advice from an experienced and competent trade mark agent.

A name alone, unless unusual, is unlikely to be registerable. Normally it would have to be registered along with a logo and would have to be registered in relation to specific categories of goods or services.

The rights of a registered owner of a trade mark go far beyond simply preventing others from using his mark as a trade mark on their goods. Just how far beyond is not entirely clear, but in the case mentioned above if a trader says "my tyres are as good as Dunlop's but cheaper" and if Dunlop is a registered trade mark, the trader runs the risk that Dunlop will be able to stop that advertisement. This is how most companies stop comparative advertising. The most important requirement for a registerable mark is that it must be distinctive, in the sense of being suitable for distinguishing goods or services with which its owner has some business connection from those of other concerns. Invented or fanciful words and designs will only be refused registration if they are proved to be in common use in the trade concerned, or are too like existing marks.

Certain marks cannot be registered such as names of countries or substantial towns. Initials are very hard to get registered. Only the very best known companies are allowed to register them (e.g BP, EMI) and even then registration is usually with some sort of pictorial arrangement.

Goods are divided into 34 classes for trade mark purposes, services into another eight and when registration of a mark is wanted for more than one class, separate applications are needed.