Keeping up with Modern Times; the Law on Passing-Off in Intellectual Property, the Zambian Case.

Introduction

The two decades of globalization and liberalization has resulted in mammoth number of commercial transactions, goods and services in today’s market. The quality offered and the competition has increased manifolds with the growth in the Economic trade. More and more goods and services are introduced in the market, each of which aims at capturing, retaining and increasing a market share exclusive to them. In order to realize this goal it is utmost essential for these products to create an identity and recognition for themselves. Thus to distinguish them from their competition, products and services associate with a Trademark i.e., a graphical representation by which such a product or service is identified.[1] This paper seeks to critically analyse the law on passing off in intellectual property law, by firstly defining Passing Off, then a brief historical background of the law on Passing off, further highlight the importance of trade mark law and a conclusion thereafter.

Passing Off Defined

A discussion of Passing Off would be incomplete without having a definition of the subject matter. Garner has defined Passing Off as follows:-

The act or an instance of falsely representing one's own product as that of another in an attempt to deceive potential buyers. Passing off is actionable in tort under the law of unfair competition. It may also be actionable as trademark infringement. Also termed palming off; misrepresentation of source.[2]

Brief History of Passing Off

The law of passing off arises when there is misrepresentation, goodwill is harmed in the course of trade, which causes damage to the trade or goodwill of the trader by whom the action is brought. The characteristics of passing – off are discussed and explained in number of cases.[3] The concept of passing off was prevalent from the 17th century where in the cases the House of Lords categorized it under tort of deceit and defamation. In 19th century the concept got recognized and started developing. In the case of Singer Manufacturing Co. v. Loog the House of Lords held that “no man is entitled to represent his goods as being the goods of another man; and no man is permitted to use any mark, sign or symbol, device or other means, whereby, without making a direct false representation himself to a purchaser who purchases from him, he enables such purchaser to tell a lie or to make a false representation to somebody else who is the ultimate customer. He must not make directly, or through the medium of another person, a false representation that his goods are the goods of another person.”[4]

So the earlier definition of passing off was limited only to trade mark or trade name, where unauthorized owner deceits the consumers by inducing them that the goods or services offered is that of the authorized owner. Then after wards the scope of passing off was widened and the characteristics of the passing off were laid down in Advocat Case and the classical trinity test held in Reckitt Colman case was upheld in majority of the cases. So, to institute a suit for passing off three elements should exist, i.e. the goodwill, deception caused due to misrepresentation and damage caused to the owner due to misrepresentation. These became the major principles in the UK for the law of passing off.[5]

Passing Off: General Principles

Deception

One cardinal ingredient needed to successfully launch and eventually succeed in a matter pertaining to passing off is the aspect of deception. There must be seen an intended want by an infringing party to deceive the public; the Zambian supreme court has had opportunity to examine this aspect in the case of Trade Kings Limited V Unilever Plc Cheesebrough Ponds (Zambia) Limited Lever Brothers (Private) Limited And Lever Brothers (Zambia) Limited[6]

The brief facts are as follows, On 15th May 1997, the respondents commenced an action in the High Court presumably pursuant to Section 59 of the Trade Marks Act, Cap 401, seeking an injunction to restrain the appellant from allegedly infringing their trade mark Number 83/93 in respect of GEISHA and from passing off the soap GEZA as the respondent’s soap. The respondents also sought ancillary relief by way of delivery up Held:

(i)       Any aggrieved person desirous of attacking a registration which is in force whether by rectification or by expunction has to follow the procedure ordained by the Act, especially Section 37 (for expunction or rectification) and Section 28 (for expunging due to breach of conditions)

(ii)      In Trade Mark cases, it must always be kept in mind that the actual issue is not whether or not the Judge would or would not have personally been deceived, but whether or not after hearing the evidence, comparing the articles, and having had all the similarities pointed out, the true conclusion is that the ordinary average customer or retail dealer is likely to be deceived and destruction of the materials complained of, damages, and an account of profits.

Goodwill and Reputation

Names built on a particular brand line or services offered over a period of time can certainly be associated with a particular person or entity. When such becomes evident is can safely be said one has built a reputation and that the brandline or name begins to speak for itself with little or no effort in the spheres of its intended market. 

In the case of Mulenga Beatrice Mubanga V Chasemah And Advertising,Media Limited[7] the plaintiff contends that after being a runner-up in the M-Net/Nokia Face of Africa Modelling Competition, she was given a contract at O-Model Africa (Pty) Limited of South Africa pursuant to which she featured in a number of ladies fashion magazines which are available for sale both in Zambia and South Africa.

In addition, the plaintiff's image has also featured prominently in Zambia where it has been used to advertise among others, Zambian Airways, Zambia Dairy Producers Association. As a result of the foregoing, she has built up and owns a substantial goodwill in the endorsement, licensing, merchandising, and sponsoring of the products of others.

Held: Passing off is a common law tort which can be used to enforce unregistered trademark rights. Passing off is concerned with the protection of business goodwill, and reputation.

Reddaway v Banham[8] is a famous decision of the House of Lords on the tort of passing off. The Court held that purely descriptive product names such as "camel hair belting" can acquire secondary meaning, and consequently, is protected from passing off. Frank Reddaway made machine belting which he sold under the name "Camel Hair Belting" for many years. George Banham was a former employee of Reddaway who left to start his own business manufacturing machine belting which he also called "Camel Hair Belting". Reddaway sued Banham for passing off. He argued that there was a large portion of the public who recognized the name "Camel Hair Belting" as his product. He was also able to demonstrate that there were people who were getting the products confused.

The Court of Appeal held that the name was merely descriptive and so could not be protected.

The House of Lords overturned the decision of the Court of Appeal. Lord Herschell held that the words had acquired a secondary meaning through its broad notoriety, and that the public clearly associated the name "Camel Hair Belting" with the exact product produced by Reddaway.

Lord Herschell stated:

I cannot help saying that, if the defendants are entitled to lead purchasers to believe that they are getting the plaintiffs' manufacture when they are not, and thus to cheat the plaintiffs of some of their legitimate trade, I should regret to find that the law was powerless to enforce the most elementary principles of commercial morality.'

Damage

A three tier approach to proving the a case involving passing off must be adopted in order to be sufficiently successful, therefore requiring that after establishing that there was goodwill and reputation, and damage to that effect, one must lastly prove that there has been damage due to the defaulting parties actions

In the classic case of Spalding v Gamage[9] the Court established a three-part test for a successful claim of passing off. First, the claimant's product must have goodwill. Second, there must be a misrepresentation by the defendant's product, and third, there must be damages inflicted upon the claimant.

Another example is that of Samuel v Producers Distributing[10] the claimant wrote a revue sketch, ‘The New Car’ which achieved fame particularly by its inclusion in Royal Command Performance. The defendant made a film of a different sketch, ‘His First Car’ and advertised it in a way suggesting that it was the sketch seen at the performance.

The Court of Appeal held this to constitute a form of passing off. Romer L.J. observed:

It is said that there has been no passing off. It is true there has been no passing off in fact or indeed, perhaps, threatened, in the sense in which the word “passing off” is used in what are popularly known as passing off actions; that is to say, the defendants have never contended that the film which they were producing or going to produce was a film prepared to be made by or on behalf of the claimant. But the cases in which the court has restrained passing off in popular and unusual sense, are merely instances of the application by the court of much wider principle, the principle being that the court will always interfere by injunction to restrain irreparable injury being done to the claimant’s property. In the present case, if, as we hold to be the case, the claimant was entitled to his copyright in “The New Car”, he was, by virtue of the Copyright Act, entitled to sole right of producing the sketch film form. That was an item of his property, and how it can be said that these advertisements might not cause irreparable damage to that property of the claimant passes my comprehension.

Sanctuary on the subject matter is further sought in Warnink v Towend[11] also known as the Advocate case is a leading decision of the House of Lords that further developed the common law tort of extended passing off for the Commonwealth as originally established in Bollinger v. Costa Brava. Prior to this case "collective goodwill”, as required for an action in passing off, only applied to names indicating geographic origin. The Court held that wares whose name falsely suggests its character or quality can be prevented from selling the product under that name.

Shelter is also found in Cadbury Schweppes v Pubsquash[12] where the claimants launched a lemon squash under the name “solo” in yellow cans with a medallion that bore a general resemblance to beer-cans. Intensive and successful television advertising suggested (i) that it resembled squash sold in pubs in former times and (ii) that it was thoroughly masculine to have as a drink. Some months later the defendant brought out a similar drink, also in yellow cans, under the name “pub Squash” and it conducted a similar, though smaller publicity campaign. Soon afterwards, the claimants’ market slumped by 16 per cent. This conduct was alleged to constitute passing off.

Lord Scarman states inter alia:-

It is necessary to explore the law in any depth, because it is now accepted by both sides that the issue in the case is whether in promoting its product the respondent so confused or deceived the market that it passed its product off as the product of the appellant. Nevertheless the case presents one feature which is not to be found in the earlier case law. The passing off of which the appellants complain depends to a large extent on the deliberate adoption by the respondent of an advertising campaign based on themes and slogans closely related to those which the appellants had developed and made familiar to the market in the radio and television advertising of their product. Does confusion or deception, if it is shown to arise from such an advertising campaign, amount to a passing off? To answer the question it is necessary to consider the modern character of tort.

Reckitt & Colman c Borden[13] is also known as the Jif Lemon case is a leading decision of the House of Lords on the tort of passing off. The Court reaffirmed the three part test (reputation and goodwill, misrepresentation, and damage) in order to establish a claim of passing off.

Lord Oliver, at page 880, reaffirmed the classic test for passing off:

First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get-up" (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Second, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. ... Third, he must demonstrate that he suffers or ... that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.

In the case of Reckitt & Colman , it was stated that according to the law of passing off no man could pass off his goods as those of another. It may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. Firstly, goodwill has to be established or the reputation attached to goods or services which he supplies in the mind of purchasing public by association with the identifying “get up” under which his particular goods or services are offered to the public as distinctive specifically of the plaintiff goods and services.[14]

Secondly, he must demonstrate a misrepresentation by the defendant to the public leading or likely to lead the public into believing that goods or services offered by him are goods and services of the plaintiff. Thirdly, he must demonstrate that he suffers or likely to suffer damage by reason of erroneous belief engendered by the defendant’s misrepresentation that the source of defendant’s goods or services is the same as the source of those offered by the plaintiff. There are two necessary elements, first a misrepresentation expressed or implied but not necessary fraudulent and second a consequent likelihood of damage to the plaintiff’s goodwill.[15]

The Importance of Trade Mark Law

It is generally accepted by societies world over that the law acts as a hedge to protect society from atrocities mainly caused by some of its members. This is as true to the law on passing off as it is to any other branch of the law, trade mark law is a hedge of protection against individuals who seeks to run off with other people’s ideas without seeking prior permission and thereafter making a profit from another persons work.

This was clearly demonstrated in DH Brothers Industries (Pty) Limited V Olivine Industries Pty Limited[16] This was an appeal against the judgment of the High Court dismissing the appellant's appeal from the decision of the Registrar of Trade Marks, in which the Registrar had held that the appellant’s Trade Mark "Daily" could not be accorded protection on account of non--registration, even though the appellant had shown sufficient prior use of the mark in Zambia.

Held:

1.        The Trade Marks Act does not offer any protection to an unregistered trademark.

2.        Protection is only offered to registered trademarks, and not similar or identical unregistered trademarks.

3.        section 7 of the Trade Marks Act disentitles a proprietor of an unregistered trademark from instituting proceedings to prevent or recover damages for infringement of an unregistered trademark.

In Societíes Des Products Nestle Sa V Kingdom Investments Limited[17]an appeal arose from the decision of the Registrar of Patents and Trade Marks, where she held that the removal of the appellant's mark was null and void on account of being out of time and that the appellant's mark was not entitled to protection as a well known mark. She consequently dismissed the appellant's objection to the registration of the trade mark limited in the name of the respondent.

 Held:

1.        Under section 25(3) of the Trades Marks Act, it is mandatory for the Registrar to send a notice to the registered proprietor of a mark notifying him or her of the date of expiration of its registration.

2.        From the wording of section 25(3) of the Trades Mark Act, the intention of the legislature was to make the process of renewing trade marks Registrar-driven, rather than registered proprietor-driven.

3.        In the instant case, the Registrar did not comply with the mandatory statutory provision before declaring the renewal of the appellant's trade mark null and void.

4.        The Registrar's nullification of the renewal of the appellants trade mark was made in error and the decision must be reversed.

Another celebrated example is found in the case of Trade Kings Limited V Unilever Plc Cheesebrough Ponds (Zambia) Limited Lever Brothers (Private) Limited And Lever Brothers (Zambia) Limited[18] On 15th May 1997, the respondents commenced an action in the High Court presumably pursuant to Section 59 of the Trade Marks Act, Cap 401, seeking an injunction to restrain the appellant from allegedly infringing their trade mark Number 83/93 in respect of GEISHA and from passing off the soap GEZA as the respondent’s soap. The respondents also sought ancillary relief by way of delivery up and destruction of the materials complained of, damages, and an account of profits.

Held:

(i)       Any aggrieved person desirous of attacking a registration which is in force whether by rectification or by expunction has to follow the procedure ordained by the Act, especially Section 37 (for expunction or rectification) and Section 28 (for expunging due to breach of conditions)

(ii)      In Trade Mark cases, it must always be kept in mind that the actual issue is not whether or not the Judge would or would not have personally been deceived, but whether or not after hearing the evidence, comparing the articles, and having had all the similarities pointed out, the true conclusion is that the ordinary average customer or retail dealer is likely to be deceived.

Conclusion

Registration of the trademark has become vital with the growth in the competition, growth in the economy. In order to protect one to get harm in the sense of reputation and goodwill one needs to register its name by which he sold his good, i.e. trademark. But those who even do not register their trademark, it does not mean they cannot protect their rights, their interest; they can very well protect the right by the concept called Passing off. Passing Off is a common law tort which protects the goodwill and reputation of trade mark holder against damage caused by misrepresentation by defendant. The action of passing off can be done by using the trade name, trade mark or other get up of the plaintiff as to induce in potential purchasers the belief that his goods or business were those of plaintiff. The tort lies in misrepresentation by the defendant. The misrepresentation is aimed at the potential buyers of the goods or services, who are invited to buy the goods believing that the goods are of the plaintiff. If the authorized person finds that the defendant is using his mark, he can file the suit in the court and the jurisdiction of the court is where the person resides or where the person carries his business and got loss thereof. If he is able to prove harm to reputation or goodwill or misrepresentation, then the person can get damages of the loss occurred. Even he can stop the person to use the mark further by taking injunction against him. In order to protect the right one has to prove reputation and goodwill in the market. As no precise definition or criteria is specified in law to prove goodwill and reputation, many people fails to prove the same and thereby is not subject to such remedies. This creates huge loss to the honest person. Even now with the growth of economy and large area one cannot find out that the same mark in respect of same goods is being used by some other person. When the person gets to know about the same it becomes too late. So it is better to get registered your trade mark as soon as you start using the same. It ensures your rights and interest in better way.[19]

[1] https://www.straffordkentlaw.co.uk/passing-off/ accessed at 09:15 on 01/06/18

[2] Garner A. B., Black’s Law Dictionary, 8th Edition, Minnesota:West Publishing Co., 2004 p.3551

[3] Supra note 1

[4] Ibid

[5] Ibid

[6] SCZ Judgment No. 2 of 2000

[7]2009/HPC/0524

[8] 1986 A.C. 199, HL

[9] 1915 32 R.P.C. 273, HL

[10] 1932 1Ch.201, CA

[11] 1979 A.C. 731, HL

[12] 1981 R.P.C. 429, J.C.

[13] 1990 R.P.C. 342, HL at 406

[14] Supra note 1

[15] Supra note 1

[16] 3RD NOVEMBER, 2010 AND 29TH FEBRUARY, 2012 SCZ JUDGMENT NUMBER 10 of 2010

[17] 2009/HPC/0728.

[18] (SCZ Judgment No. 2 of 2000.)

[19] Supra Note 1