27 May 2010
Art 10bis (1) of the Paris Convention for the Protection of Industrial Property requires contracting parties to assure effective protection against unfair competition. “Unfair competition” is defined by art 10bis (2) as “any act of competition contrary to honest practices in industrial or commercial matters.” In particular, “all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor” are prohibited by art 10bis (3) (i) of the Convention.
The Action for Passing Off
There is no statutory prohibition of unfair competition as such in the UK but there is a common law action of passing off. This was summarized pithily by Lord Oliver in Reckitt and Colman Products Ltd v Borden Inc. and Others  1 WLR 491,  1 All ER 873,  UKHL 12,  RPC 341 as “no man may pass his goods off as those of another”.
The Classic Trinity
Lord Oliver continued that the tort of passing off may be expressed in terms of the elements that a claimant (then called a “plaintiff”) has to prove. There are three such elements known as “the classic trinity”:
- The claimant’s goods or services must have acquired a goodwill or reputation in the market by reference to a name, logo, get-up or some other distinguishing feature.
- There is a misrepresentation by the defendant (whether or not intentional) in that he adopts a trade name, logo or other inidcia that is the same or similar to the claimant’s that leads or is likely to lead the public to believe that goods or services offered by the defendant are goods or services of the claimant.
- The claimant loses sales or suffers other damage such as the erosion of his or her goodwill.
In practice, damage presumed if the first two probanda can be established.
Inverse Passing Off
These rules have been developed to cover the case of a trader claiming his or her competitor’s work as his or her own. In Bristol Conservatories Ltd v Conservatories Custom Built Ltd”  RPC 455, for example, salesmen for the defendant company allegedly showed prospective customers pictures of the claimant’s conservatories as if they were samples of the defendant’s products and workmanship. The Court of Appeal held that those facts would, if proved, be capable of amounting to passing off. The thrust of the representation was that if the customers purchased from the salesmen, they would be getting the conservatory which had been designed and made by the people who had earned the goodwill in the products shown in the photographs.
Extended Action of Passing Off
These basic principles have been refined over the years to protect appellations of origin, such as Swiss chocolate in Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd.  EWCA Civ 856  EWCA Civ 856, or champagne as in J Bollinger v Costa Brava Wine Co. Ltd.  Ch 262. Geographical origins can also be protected by collective and certification marks in trade marks law and EU legislation protecting designations of origin.
In England and Wales claims for passing off are brought in the Chancery Division of the High Court of Justice or certain designated county courts. The vast majority of such claims are disposed of upon an application for interim injunction. The reason for that is that the losing party either has to change its packaging or quit the market. Either way, it usually has much less interest in the brand by the time the action comes on for trial.