UK COURT DIARY

Passing Off: Is A Misrepresentation Still Necessary?

Is misrepresentation still an essential ingredient of passing off? An affirmative answer might seem unarguable. Yet two recent High Court cases have considered whether a misleading representation that the defendant’s goods are those of the claimant, or are somehow associated with him, are still a necessary part of a winning case. The judgments are an insightful glimpse into current judicial thinking on the wrongs which the law of passing off cannot right.

Mars UK Ltd. v Burgess
[2004] EWHC 1912 (Ch)

The WHISKAS brand of cat food is an undoubted market leader in the U.K. Its manufacturer, Mars, has taken great pains to establish the WHISKAS range as the brand in the purple pack. Since 1991, WHISKAS cat foods have been consistently sold in packaging which is predominantly purple. While other elements on the pack have developed over the years, the colour purple has remained unchanged.

In May 2004, a much smaller rival, Burgess, launched a range of dry cat food under the name SUPA CAT. It was sold in bags with a band of darker purple at the bottom, and a wider band of the same colour at the top, which included also the word BURGESS in white and SUPA CAT in an oval below it. The larger section of the bag between these bands was another colour, determined by the flavour of the food: blue for fish, yellow for chicken and pink for rabbit. In advertising, Burgess claimed that “Two out of three cats prefer new Burgess SUPA CAT.”

Mars sought an injunction, claiming that Burgess was passing off its goods as those of or connected with Mars whether by causing actual confusion or alternatively dilution of Mars’ reputation in the WHISKAS get-up and packaging. At the hearing in July, Mars showed long-standing use of purple and substantial sales of WHISKAS cat food in the U.K. Mars also showed use of its own slogan, “Eight out of ten cats prefer WHISKAS,” to which it claimed Burgess’ slogan was closely similar.

Mars argued that the presence of a shade, albeit different, of purple on the Burgess packs, when combined with the use of the slogan, created a likelihood that consumers would be confused. Alternatively, Mars argued that it was not necessary to prove a misrepresentation at all. It pointed to an obiter remark by Aldous LJ in Arsenal Football Club plc v. Reed [2003] EWCA, Civ 696 at paras. 70 to 71, in which he referred to the finding of passing off in the Spanish champagne case despite the absence of a misrepresentation (Vine Products v. MacKenzie [1969] RPC 1).

Lloyd J. rejected this argument. Vine Products, he stated, had been one of the “class goodwill” cases, a recognized variant of passing off including such well-known products as champagne, Parma ham and Swiss chocolate. In class goodwill cases, it was not necessary to show a misrepresentation that the defendant’s goods were those of a rival trader. The House of Lords in Advocaat ([1979] AC 731) had determined that misrepresentation was a necessary element in other passing off cases. It would therefore take the House of Lords to decide that it was not.

The learned judge found no evidence that the Burgess SUPA CAT product would be thought to be WHISKAS, or bought by mistake. He accepted that a cat food purchaser would be likely to associate the WHISKAS shade of purple with WHISKAS; indeed, he agreed that WHISKAS customers (of which he was one) tended to identify the product by locating the purple section in the supermarket pet food aisle.

However, the Burgess purple was a different shade and appeared on packs with other, more predominant colours, and the BURGESS and SUPA CAT names. The Burgess slogan was short, and there was nothing to suggest that consumers would not read it in its entirety, in order to see just what it was that cats preferred. Taking all these points into account, the judge concluded that no customer, reasonably alert and with reasonable eyesight, would mistake the SUPA CAT product for WHISKAS.

Perkins v. Shone and Others [2004] EWHC 2249

This case concerned flights for darts, and a long-standing commercial relationship that soured after a change of personnel.

The story began in 1987, when a business known as House of Darts began selling flights for darts under the name PENTATHLON to its wholesale customers. House of Darts sourced them exclusively from Retriever, one of the defendants. Over the years, Retriever manufactured and supplied PENTATHLON dart flights to House of Darts exclusively, although no written agreement governed the terms of this relationship. PENTATHLON became the leading brand of dart flights in the U.K.

In 2003, the owners of House of Darts retired and sold the business to Robert Perkins, the claimant. Perkins fell out with Retriever, after which Retriever began selling PENTATHLON dart flights directly to other wholesalers. Perkins sued Retriever and the wholesalers, claiming that he, as the owner of House of Darts, owned the goodwill in the PENTATHLON name, and that the sale of dart flights under that name by Retriever and other wholesalers without the involvement of House of Darts amounted to passing off.

The case turned on two issues: who owned the goodwill, and whether the sales could constitute passing off given that the goods were the same as had always been offered under the name, with the only difference being that House of Darts was no longer involved.

On the first point, the judge found for Perkins, influenced by the fact that House of Darts had undertaken all promotion relating to the brand, and Retriever always referred third parties interested in buying PENTATHLON dart flights to House of Darts.

On the second point, however, despite the claimant’s ownership of goodwill, the judge ruled that there had been no passing off. There had been no misrepresentation or deception when Retriever sold its dart flights to other wholesalers, nor when those wholesalers advertised that they were now selling PENTATHLON flights. The flights were genuine products, no different to those sold before through House of Darts, and those purchasing them were not deceived as to what they were getting. They might assume that the wholesale distributor of the darts had changed. However, they would not be deceived as to the product they were purchasing.

As in Mars v Burgess, therefore, the judge ruled that there was no evidence of misrepresentation, and thus no passing off.

 

Comment

These cases show that misrepresentation is alive and well as an essential ingredient of a successful passing off action, in all except the “class goodwill” cases. The remarks of Aldous LJ noted in Mars v Burgess show that the possibilities for development offered by the broader concept of “unfair competition” are tantalizing. Yet they have so far been resisted.

Aspects of Perkins v. Shone are disquieting, however. The judge was influenced by the fact that the customers were wholesalers, who were likely to believe that the same branded products could be offered through more than one wholesale source. He considered that a wholesaler and retailers further down the line would know who they had bought the product from, and would not wrongly implicate House of Darts. Given that the products were unchanged and the relevant customers were not likely to be confused, there could be no passing off.

What can be done, then, to stop a manufacturer, after the end of a contract to produce branded goods, from continuing to apply the trade mark to goods for sale to others? The judge considered that a wholesaler might seek a remedy for breach of an express or implied contract term that the manufacturer would not apply the mark to goods and sell them on to others after the agreement was terminated. However, there will often be cases like this one where there is no express term, and the parties must therefore litigate the issue to a resolution over the course of many months, while damaging activities continue.

As observed by the judge, House of Darts’ position would have been immeasurably strengthened had it registered PENTATHLON as a trade mark before the conflict arose at the cost of just a few hundred pounds. Unlike the action in passing off, the case for trade mark infringement would have been clear. Unfortunately, House of Darts took that step too late, and both parties now have U.K. applications pending. The dispute looks likely to continue.