Business owners are rightfully concerned about their business’ reputation.
When a business (A) tries to represent its business as someone else’s (B), business A is borrowing off the reputation of business B. Business B’s reputation can be damaged. The cause of action for this scenario is known as “passing off”. An action under the Australian Consumer Law for misleading and deceptive conduct would also be available for business B in this scenario.
Passing off gives business owners a right to sue when their distinctive brand is being misrepresented to the public by another business as their own.
A claim for passing off should be brought only if the following 3 elements can be established.
That the plaintiff’s business, B, has a reputation or brand that they want to protect. The plaintiff must prove that its “get-up” or brand, such as its packaging, shape, name or design etc. has some reputation in the market that is distinctive to B.
The plaintiff’s brand must be misrepresented to the public by another business, the defendant, A. The plaintiff must prove that the misrepresentation by the defendant to the public (whether or not intentional) leads, or is likely to lead, the public to believe that the goods offered by the defendant are the plaintiff's goods.
The defendant’s misrepresentation of the plaintiff’s business must have caused, or be likely to cause the plaintiff to suffer loss or damage. Evidence such as the plaintiff suffering reduced sales or profit, or direct evidence from a potential customer could establish this element.
If the plaintiff can establish the above elements, it can sue the defendant for damages for “passing off” to compensate it for its losses.
There are other remedies or relief that a plaintiff can claim for passing off, such as an injunction or exemplary damages.
An injunction is a Court order restraining the defendant from doing something, in this case, the conduct that gave rise to the passing off claim.
Exemplary damages are damages to punish the defendant for its conduct. These damages are only awarded in serious cases and in addition to compensatory damages to compensate the plaintiff.
If the plaintiff is successful at Court for its passing off claim, it should also be awarded costs (legal costs) and interest.
You do not need to have a registered trade mark or a registered business name to sue for passing off. However, the more your business’ reputation is protected, the better.
Together with a claim for passing off, quite often a plaintiff will also bring a claim for misleading or deceptive conduct under section 18 of the Australian Consumer Law, Schedule 2 to the Competition and Consumer Act 2010 (Cth) and if they have a registered trademark, a claim for breach of trademark under section 120 of the Trade Marks Act 1995 (Cth).
Please contact our office if you are concerned about harm to your business’ reputation.
Proper experience in dealing with intellectual property disputes, and in particular passing off claims is essential. Aitken Whyte Lawyers are focused on results. Our commercial law team will advise you on the proper course to take to protect your business’s reputation, you to defend you if a claim for passing off has been brought against your business.
Aitken Whyte Lawyers can assist you with all commercial business matters.
Aitken Whyte Lawyers
11/8 Pikki Street,
Maroochydore Qld 4558
Ph: +617 5408 0655
Fax: +617 3211 9311