Passing off and breach of the Fair Trading Act 1986

Alex McDonald | Intellectual Property Lawyer

Passing off and breach of the Fair Trading Act 1986 are intellectual property best buds.

They are both used in look-a-like situations where one business tries to pass itself or its products off as the business or product of a rival.

To prove passing off a business needs to show that:

  • a distinguishing feature or combination of features of its goods or services has acquired a goodwill or reputation in the market so that its business is known and recognised by that feature or combination of features; and
  • the defendant has done something (either intentionally or unintentionally) to lead consumers to believe its goods or services are the goods or services of the plaintiff. This is called a misrepresentation; and
  • that the plaintiff has suffered or is likely to suffer damage as a result of the defendant’s misrepresentation.

The misrepresentation doesn’t have to be an express statement made by the defendant. It can be implied from the use of names, marks or product ‘get-up’ that are sufficiently similar to cause confusion in the minds of the public.

The Court’s decision in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd is an oldie but a goodie in terms of explaining the workings of passing off. In 1985 Klissers sold and marketed its Vogel’s range in polythene bags with checks of different colour and size or both and with the bags tied at one end to produce ponytail effect (yes, in 1985 the ‘ponytail’ was new). A rival bakery started selling its bread in polythene bags also featuring checks and tied with a ponytail. The Court decided that the rival was indeed trying to pass its ‘milk and honey’ loaf off as Klissers by adopting similarly distinctive packaging and issued an interim injunction.

Likewise in Big Blak Saks New Zealand Ltd v D & A Marketing Ltd the plaintiff claimed rights in the packaging and overall presentation of a range of rubbish bags. While Big Blak Saks did not have a registered trade mark for the appearance of the product it was able to persuade the High Court that it had a reputation and goodwill in the overall appearance of the goods and that the appearance of the defendant’s products was a misrepresentation calculated to pass off the defendant’s product as that of Big Blak Saks causing it loss of sales.  Those factors were sufficient to enable it to obtain an interim injunction to prevent the competitor marketing and selling look-a-like products.

Compared to passing off and breach of the Fair Trading Act 1986 is a more agile beast. Under the Fair Trading Act 1986 there is no requirement to prove damage with the result that rival traders can bring an action under the FTA even though they have suffered no loss.