Brand protection: Key points on passing off unregistered trademark

AS businesses strive to distinguish themselves in the marketplace, they face increasing risk of deceptive and unfair trade practices ( knowingly or unknowingly) by imposters masquerading as competitors. Where business brand is properly protected, the integrity of the market will not only be guaranteed but also more revenue will undoubtedly accrue to its owners. Hence, brand protection in Nigeria is no longer a cost center but a profit centre.

The intellectual property law in Nigeria clearly offers protection to registered trade mark. However, owners of unregistered trade mark are not without some remedies if their brand has acquired some goodwill in the course of doing business. At common law, a brand owner may sue for tort of “passing off” in the event of any infringement even if such brand is not a registered trademark.

Passing off, originally a common law tort, is designed to protect a person’s business reputation and goodwill from unfair trade practices and sharp practices by imposters or impersonators. Please note that the Supreme Court in Patkun Industries Ltd v. Niger Shoes Ltd. ( 1998) 5 NWLR ( Pt. 93) 138 held that “passing off” is now a statutory right ( and not just a common law right), having been promulgated in section 3 of the Trade Marks Act, 1965. What the foregoing means is that the Nigerian law recognises the right of a business owner to sue for passing off if any imposter attempts to unlawfully benefit from a brand built on the sweat or labour of the brand owner.

What is passing off?

Passing off is the false representation of one’s brand, product or business as that of another person with a potential to confuse the consumers as to the source of the falsely represented brand, product or business. According to the court in Virgin Enterprises Ltd. V Richday Beverages Nig. Ltd ( 2009) 12 NWLR ( Pt. 1151) 136, an action for passing off is an action for deceit for colourable imitation of a mark adopted by a person in relation to his goods which has acquired a distinctive reputation in the market as referring to the goods belonging to or produced by that person only. In the case of U. K. Tobacco Co. Ltd v. Carreras Ltd. ( 1931) 16 N. L. R. 1 an action for passing off was successfully brought by the owner of “Bandmaster cigarette” to restrain a competitor, the importer of “Barrister cigarette” on the ground that the consumers were likely to be confused and deceived into believing that both products were of the same origin.

What are the forms of passing off?

Passing off occurs in many forms. The common forms are: i Marketing products with another business’ trademark

This form of passing off involves using the name or a naclosely resembling the name of another. This could mislead the public into thinking both brands or trades are the same. In Niger Chemists Limited v Nigeria Chemists ( 1961) All NLR 180, the plaintiffs had an established chemist business using the name “Niger Chemist” while the Defendants established the same business on the same street with the plaintiff using the name “Nigeria Chemist”. The plaintiffs successfully obtained an order of injunction to stop the Defendant from trading as Nigeria Chemists. Palmer J, quoting Lord Cozens Hardy MR in Ewing v. Buttercup ( 1917) 2 Ch 1 held:

“I know of no authority, and I can see no principle, which withholds us from preventing injury to the plaintiff in his business as a trader by a confusion which will lead people to conclude that the defendants are really connected in some way with the plaintiff or are carrying on a branch of the plaintiff’s business” and thereafter held: ‘ That is the danger which can reasonably be foreseen in the present case, namely that people will be misled into thinking that Nigeria Chemists are a branch of, or in some way connected with, Niger Chemists. It is a confusion which leads to deception.”

Packaging, marketing or trading the infringer’s goods as though of the real owner’s

This form of passing off involves the marketing of goods using another’s trademark or its imitation. Passing off occurs when a person engages in advertising and selling the goods of another business owner as though the goods are his own, thus wrongfully profits from the goodwill and reputation of that business owner. See British American Tobacco & v Int’l Tobacco & 2 ors ( 2006) 5 IPLR 290. In the case of Trebor Nigeria Limited v. Associated Industries Ltd. ( 1972) All NLR 468, the plaintiff’s action for ‘ passing- off’ succeeded because the defendant packaged and marketed its good in a manner that resembled those of the plaintiff.

What are the elements of a passing- off action?

The necessary elements in a passing- off action, which a plaintiff must prove, are as follows:

( i) Misrepresentation: The plaintiff must prove a false representation by a defendant of another’s brand in the course of trade. This is established by evidence of actual or potential confusion in the minds of existing or prospective customers. A trademark distinguishes its class of goods from other similar goods in the market. The defendant must have imitated or adopted plaintiff’s brand name or a feature of the packaging or labelling of its goods which has led to confusion or can lead to potential confusion to the consumers. The mark must have become distinctive of its goods in the eyes of the buying public, and that by the adoption of the distinctive mark by the infringer ( i. e. the defendant), the buying public is deceived or is likely to be deceived into believing that the goods of the defendant are that of or from the plaintiff. See CPL Industries Ltd v Glaxo Smithkline & Anor ( 2011) 6 IPLR 243 and Boots Company Ltd v United Niger Imports & Anor ( 1977) 2 IPLR 56.

( ii) Goodwill: A party seeking to sue for passing off must show that his business has acquired some goodwill or reputation that makes his product or service highly recommended, reliable or preferable to the consumers. The false representation is calculated to injure ( including to benefit from) the goodwill of a business reputation. As a result of the reputation of the goods or services, there is goodwill attached to the trademark. In British American Tobacco & v Int’l Tobacco & 2 Ors. ( supra), the court held that in proving passing off, proof of reputation– goodwill is necessary.

It is not enough to show that there is a resemblance of goods; the plaintiff has to further prove a reputation of goodwill attached to the goods under the Trade Mark/ Name sufficient for members of the public to be misled by the defendant’s conduct into thinking that they are purchasing the goods of the plaintiff.

To be continued tomorrow.