I have heard of Passing-off so many times but, I don’t know what it is.
In business, reputation is everything. Building a recognizable brand takes time, effort, and trust. When someone tries to represent your brand as theirs for personal gain, it can be damaging.
Imagine launching a product and a competitor uses a nearly identical name, packaging, or style. This confuses customers, affects sales, and puts your credibility at risk. This is exactly what the law of passing-off seeks to prevent.
This article explains what passing-off is and helps brand owners recognize threats to their brand identity. We will cover the following:
- What is passing-off?
- Grounds for bringing a passing-off action
- Key elements of passing-off
- Available remedies for passing-off
- Defenses against a passing-off claim
What is Passing-Off?
Passing-off occurs when someone falsely represents their goods or services as those of another. This misrepresentation can damage the goodwill and reputation of the affected business, leading to financial or reputational loss.
An example is when someone uses a similar name, logo, or packaging to that of a known brand, deceiving consumers into thinking they are buying from that brand.
The purpose of a passing-off action is to protect the goodwill associated with both registered and unregistered trademarks.
In Omnia (Nig.) v Dyktrade Ltd. (2005), the court held that the Federal High Court has exclusive jurisdiction to hear passing-off claims, whether involving registered or unregistered trademarks.
Grounds for Bringing a Passing-Off Action
A passing-off action can be brought on the following grounds:
- Using a name resembling that of the plaintiff
- Marketing a product as that of the plaintiff
- Using a product name similar to the plaintiff’s
- Using the plaintiff’s trademark or imitation
- Imitating the plaintiff’s advertisements
- Selling expired goods of the plaintiff as current stock
Key Elements of Passing-Off
1. Goodwill
The plaintiff must prove that their brand has a strong reputation and is easily recognized by the public in relation to specific goods or services.
2. Misrepresentation
The plaintiff must show that the defendant intentionally misled or confused customers into believing that their products or services are associated with the plaintiff’s brand.
3. Damage
The plaintiff must demonstrate actual or potential harm to their brand’s reputation, goodwill, or finances as a result of the misrepresentation.
See Also: What the Law says about Mergers, Acquisitions and Business Takeovers.
Remedies Available in a Passing-Off Claim
If the plaintiff is successful, the following remedies may be granted:
- Injunction: A court order stopping the defendant from continuing to use the mark or brand identity.
- Damages: Financial compensation for losses suffered.
- Destruction of Infringing Goods: Court order for infringing items to be destroyed.
Defenses Against a Passing-Off Claim
The defendant may rely on the following defenses:
- The mark in question is generic and lacks distinctiveness
- The plaintiff does not have established goodwill in the mark
- The plaintiff consented to or encouraged the use of the mark
- There are no actual similarities between the plaintiff’s and defendant’s marks
Conclusion
Passing-off is a vital legal tool to protect business reputation and brand identity from deceit and unfair competition. By understanding the principles of passing-off, businesses can better protect their brands and avoid infringing on others’ rights.
See Also: Corporate Financing: Debt Vs Equity | What Business Owners should know
Disclaimer: This publication is for general guidance and does not constitute professional advice. Please seek specific legal advice for your individual situation.
For legal consultations, contact us:
Email: info@tcorporatelegaladvisory.com
Tel: 08062348867, 09080119975, 09080119980
Written by:
OGHENEYOMA E. IBUJE LL.B, BL
NWOKOCHA ANNASTECIA CHIDINMA, LL.B
T CORPORATE LEGAL ADVISORY
