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Passing off. Goodwill in a place of business

Written by Michael Coyle on 23 November 2013

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The starting point for any business is to state that it is possible for any small trade to result in sufficient goodwill for a passing off case. But it must not be trivial. For example, in Knight v. Beyond Properties Pty Ltd & Ors [2007] EWHC 1251 (Ch) (24 May 2007) David Richards J said:

 "A reputation on a relatively small scale will still attract the protection of a claim in passing off, but at some point the reputation may exist among such a small group of people that it will not do so. The minimum size of goodwill required for this purpose is a matter of fact and degree. A claim in passing off cannot be sustained to protect goodwill which any reasonable person would consider to be trivial: Sutherland v V2 Music Ltd [2002] EMLR 568 at para 22 per Laddie J".

It is important for a business to establish confusion and misrepresentation. The law of passing off requires that a substantial number of members of the relevant public are likely to be deceived by the use complained of. In Reckitt & Colman Products Ltd. v. Borden Inc. (THE passing of case 'Jif Lemon') [1990] RPC 341 at 407, Lord Oliver said that the question on the issue of confusion was:

 "...on the balance of probabilities, likely that, if the appellants are not restrained as they have been, a substantial number of members of the public will be misled into purchasing the defendants' [product] in the belief that it is the respondents' product?" 

Where the numbers are quite small, Jacob J, said in the absence of satisfactory evidence, that "...if the judge's own opinion is that the case is marginal, one where he cannot be sure whether there is a likelihood of sufficient deception, the case will fail in the absence of enough evidence of the likelihood of deception. But if that opinion of the judge is supplemented by such evidence then it will succeed." 

To sum up, any business that claims passing off will need to have some lenght of use (the more the better) and if so there is passing off even if most of the people are not fooled most of the time but enough are for enough of the time.

I mean enough, to mean a substantial number of customers or potential customers which are deceived for there to be a real effect on your trade or goodwill.

MJC

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