Stealing ideas and passing off

Unprotected Intellectual Property Rights

Part of starting or developing a company is to cultivate a social personality for the company and establish its reputation in society. Protecting your Intellectual Property Rights (IPR’s) can be easily overlooked, particularly when business is thriving and you trust the people involved in the business.

What is ‘Passing Off’?

Passing off is a common law claim which can be brought against someone infringing on unregistered Intellectual Property Rights. 

How can you prove passing off?

If a third party is benefitting from the Intellectual Property for example by manufacturing or selling goods associated with a brand or perhaps using a logo or something very similar to a distinct brand, without consent, a claim may be brought against them. In order for a passing off claim to be successful the claimant will need to satisfy the court that :

• the goods or service or branding which are the subject matter of the alleged passing off have goodwill, or a reputation, directly connected to it; and
• that the misrepresentation has created a situation where members of the public would be confused between the real thing and the subject matter of the alleged passing off; and
• the person bringing the claim has suffered damages (losses) caused by the infringement of the IP; and

If the unregistered IPR’s are being infringed upon, the common law claim of passing off can sometimes allow a court to intervene and stop the third party use, despite a trade mark not legally being in place. Passing off allows a company to protect its goodwill from misrepresentation and falsification.

Passing Off damages goodwill

Goodwill means intangible assets which affect the way clients and the general public interact with a business. An example of goodwill can be the name of a company, for example, Amazon or Google. Both of these names have a brand behind them, hold prestige and are household names. They alone add value to the company. Goodwill is essential when dealing with unregistered IP.

A successful passing off claim allows a merchant to prevent other companies unfairly using their goodwill.

What is Misrepresentation in a passing off claim?

Misrepresentation in the case of passing off relates to misleading or confusing customers and the general public. It must be considered whether the unregistered IP and the passing off are similar enough in looks, names, nature, or even market sector, to deceive a customer into connecting with a company they did not intend to connect with.

Damages for Passing Off

In a passing off claim, it must be sufficiently proved to the court that the person bringing the claim has suffered a loss. The loss could relate to loss of money or profit, the poaching of customers, or injury to the reputation attached to the goodwill of the IP, just to name a few.

Why is Passing Off difficult to prove?

Although the idea of passing off sounds hopeful to unregistered IPR’s owners, it has a very high threshold on actually being successful. Passing off is very difficult to prove because the claimant must prove that at least some proportion of the public is confused by the misrepresentation and this has directly lead to a loss; and have evidence to prove this is the case.

Passing Off vs Trademark Infringement

The difference between a passing off claim and a trademark infringement claim is solely based on whether or not the IPR’s have been registered. A trademark infringement claim can be brought against a third party who is using IP which is already registered to another person or company. The trademark itself helps massively on the success of trademark infringement claims, as if one of the prohibited acts in the trademark has occurred, a breach can more easily be identified. In comparison, passing off is a wider claim as the IP has not been defined within a trademark.

Often passing off and trademark infringement claims are both brought against an infringement. This allows the claimant essentially two tries at preventing the violation and receiving a remedy. If the trademark infringement claim fails, the passing off claim survives for the claimant to fall back on, although usually the passing off claim will fail and the claimant can fall back onto the infringement claim.

Legal advice for passing off

Our team is equipped with specialist solicitors well versed in initiating and seeing through passing off claims and providing legal support for our clients. Alternatively, our team can also help defend  passing off claims. Our aim is to always work closely with our client to achieve the best possible outcome. We will always consider the best options including the use of alternative dispute resolution or mediation, to save costs and time, but are not afraid to litigate if needed.

 Please do call us on 020 7438 1060 or email.