Passing Off: What’s in a Name?

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Commercial disputes increasingly involve copyright and patent issues, reflecting the high value attached to the intellectual property of a business. The expert Bahamas lawyers at ParrisWhittaker are highly experienced in intellectual property disputes in a commercial context.

Commercial disputes increasingly involve copyright and patent issues, reflecting the high value attached to the intellectual property of a business. The expert Bahamas lawyers at ParrisWhittaker are highly experienced in intellectual property disputes in a commercial context.

Establishing goodwill

A recent case in the UK looked at the degree of difficulty in establishing goodwill in passing off cases.(1) The court was particularly required to consider to what extent the scope of protection of a descriptive name with a secondary meaning is narrower than that afforded to an inherently distinctive name.

This case involved a passing off action brought against Cranford College Limited (CCL) (a privately owned educational establishment offering courses for post-school-age students), by Cranford Community College (CCC) (a company operating a state secondary school).  Both organisations are in London.

There were two key issues in the case:

• Descriptive use: defending the claim, CCL argued the CCC names were descriptive and provided no basis for a passing off action; or alternatively even minor differences in the trading style used by CCL were enough to afford a defence. CCL also argued that the term ‘Cranford’ was even more descriptive. However, the court said a ‘literally’ descriptive trade name could still be protected by passing off law – if it has acquired a secondary meaning in the relevant market that distinguishes the claimant’s goods or services from those of other traders.  In those circumstances, the scope of protection is liable to be narrower, depending on the extent to which the secondary meaning is established in the mind of the relevant public so as not to be easily displaced.
• Relevant public:  the claimant in a passing off case must prove misrepresentation that confuses or deceives the relevant public (or is likely to do so).  There was a fair amount of evidence and argument concerning the extent to which the activities of CCL and CCC overlapped, and the relevance of this.  The court agreed that whilst there is no rule of law requiring the claimant to prove a common field of activity, the closeness or otherwise of the activities of the claimant and defendant are nonetheless relevant – sometimes highly so.

In this case, the court held that the relevant public only included individuals living in the relevant part of London for whom ‘Cranford College’ had acquired a secondary meaning (though the class would be relatively narrow).  In his judgment, the judge observed that one cannot include in this class persons that do not have a “good deal more” than just a cursory or transitory awareness of the relevant name.

What’s in a logo?

The court also addressed the issue of the logo and found that it is possible that despite no secondary meaning for ‘Cranford College’, CCC had goodwill associated with one or more of CCC’s logos. These are distinctive and so there was no need to establish a secondary meaning.

However, the difficulty any claimant has where it uses a logo as well as a trade name is proving that the public identifies its goods or services by reference to the logo rather than the trade name, such that the claimant has significant goodwill associated solely with the logo. The court found no evidence of that in this case.

Finally, the court decided there had not been any likelihood of a misrepresentation by CCL, or that CCC owns goodwill of a nature such that a misrepresentation could arise. The action therefore failed.

What does this mean?

It is potentially difficult in passing off cases to establish goodwill, particularly where it concerns descriptive names. This means using a ‘descriptive’ name can significantly limit the scope of protection afforded and make it relatively difficult to establish the requisite degree of confusion.

How can we help?

The commercial litigation lawyers at ParrisWhittaker have years of experience advising commercial organisations on their liabilities to third parties including where intellectual property matters are at issue.  If you have a potential claim against another organisation or you are facing legal action, we advise you to contact us straightaway for urgent advice.

_{1Cranford Community College v Cranford College Ltd [2014] EWHC 2999 (IPEC)}