Passing Off-Court of Appeal Confirms Test in Galway Free Range Eggs Case

When it comes the economic tort of  passing off there is an accepted 3 part test which a Plaintiff needs to pass in order to win an intellectual property case involving passing off.

The test is as follows: you must prove

  1. Goodwill or reputation in a product
  2. Misrepresentation by someone which may lead to confusion between one product and another in the minds of the public
  3. Damage to the goodwill or reputation as a consequence of the misrepresentation.

This test was approved by the Supreme Court in McCambridge Limited v Joseph Brennan Bakeries and prior to this in Jacob Fruitfield Limited v United Biscuits (UK) limited.

Galway Free Range Eggs

This test was reviewed again in a case involving free range eggs in Galway.

Galway Free Range Eggs Limited had gone to the High Court for an injunction preventing a competitor, Hillsbrook Eggs Limited,  from selling their eggs under the name of “O’Briens of Galway Free Range Eggs”.

Galway Free Range Eggs Limited claimed passing off by Kevin O’Brien, Carmel O’Brien and Hillsbrook Eggs Limited as they claimed there was likely to be confusion in the minds of the public concerning their eggs and those of the Defendants. The High Court had refused the application for an injunction. Galway Free Range Eggs Limited appealed to the Court of Appeal.

Background

Galway Free Range Eggs Limited were unhappy when the defendants began selling their eggs as “O’Briens of Galway Free Range Eggs”.

The High Court had held that the Plaintiff had failed to prove misrepresentation leading to confusion by the defendants and found consumer survey evidence to this effect of limited value.

Court of Appeal

The Court of Appeal held that Galway Free Range Eggs Limited had established that the defendants had engaged in passing off and were entitled to an injunction to protect its good name and reputation. The Court also held that the High Court had erred in dismissing the survey evidence and EU regulations which obliged the defendants to label their eggs as free range did not mean they had to include the words “free-range eggs” in their brand name.

Applying the 3 part test

1. Goodwill/reputation

The Court of Appeal accepted that Galway Free Range Eggs Limited had established goodwill in the use of the word “Galway” in connection with the words “free range eggs”.

2.  Confusion

The Court held that the appropriate test to be applied was whether the public were likely to be victims of confusion arising from the Defendants use of the words “Galway free range eggs” in its packaging and found that the High Court had erred in failing to apply this “confusion” test once it found that the Plaintiff had failed to find misrepresentation leading to confusion.

The Court of Appeal also held that the High Court should have had regard for the survey evidence adduced by the Plaintiff and that it was permissible to admit survey evidence; it was then a matter for the Court as to how much weight was given to that evidence.

The survey evidence showed that there was confusion amongst the 29% of the population and that this was sufficient to establish confusion and fulfill the 2nd part of the test. The Court of Appeal also found it was not necessary to put particular members of the public into evidence to give evidence about confusion and survey evidence could be relied upon.

3. Damage

The Court of Appeal held that it was not necessary to show that the Plaintiff had actually suffered damage but it was the appropriation of goodwill which was sufficient to establish damage for the purposes of the 3rd part of the test and to obtain the remedy-an injunction-sought.
You can read the full Court of Appeal decision in Galway Free Range Eggs Ltd v Kevin O’Brien, Carmel O’Brien and Hillsbrook Eggs Limited here.

Passing Off, Counterfeit Goods and Confidential Information-The Essentials

passing off counterfeit goods

“Passing off” is a common law tort. (A tort is a civil wrong which can be remedied in the Courts).

It generally involves the making of a misrepresentation and there are 5 characteristics of “passing off”.

1.       A misrepresentation

2.      Made by a trader in the course of trade

3.      To prospective customers

4.      Which is calculated to injure the business or goodwill of another trader

5.      And which causes actual damage to a business or goodwill of the trader.

1.       Misrepresentation

There must be a false representation by the defendant so that an association with the plaintiff is made in the minds of the public.

2.      Made by a trader in the course of trade

The misrepresentation must be made in the course of trade.
What is considered to be a trader as far as the law of passing off is concerned is very wide-it has been held to include the BBC for example.
Anyone who makes an income from the provision of goods/services is a trader.

3.      To Prospective customers

For passing off to occur, the misrepresentation must be made to prospective customers; the courts have held that they will decide whether the general public is likely to be deceived.

4.      Business/Goodwill

It has been accepted that goodwill can be created in different ways and is not confined to simply trading within a jurisdiction.

5.      Damage

The plaintiff must prove that the action of the defendant has or is likely to cause damage to the plaintiff in order to prove passing off.

Passing off is closely connected with counterfeit goods.

Counterfeit goods

A trade mark owner can register his trade mark with the Revenue Commissioners and customs officials can destroy goods, which have been abandoned without or before determining whether an intellectual property right has been infringed.

Each consignment of goods from outside the EU will be inspected to see whether the goods are genuine. If they are found to be counterfeit, the customs authorities will destroy the consignment.

Infringement

Exceptions

A trade mark is not infringed by the use of a person of his own name or address, provided it is done honestly.

A trade mark will not be infringed by its use on goods which have been put on the market in the EU by the owner of the trade mark or with his consent. This is known as Exhaustion of Rights of a registered trade mark and stems from EU law.

Remedies

Courts have the power to grant an injunction and/or the destruction of goods and damages.

The District court has the power to request the Garda Siochana to seize goods and ultimately to have them destroyed once satisfied that an infringement has taken place.

Domain Names

A domain name will not necessarily become a trade mark and it is advisable for the owner of a domain name to also register it as a trade mark.

Confidential Information

Information such as knowhow, secret formulae, processes, customer lists are clearly of huge importance to businesses.

The protection of this information can be best protected by a confidentiality agreement with an employee from an employer’s perspective. This can be more effective than registering patents as this involves putting information into the public domain.

Once it is established that an obligation of confidentiality then the person to whom it is given has the duty to act in good faith and only use the information for the purpose for which it was intended.

Generally the law imposes a duty of confidentiality in 2 situations:

  1. The protection of trade secrets/confidential information in non-employment cases
  2. The protection of trade secrets in the course of employment

Once a contract of employment has ended and the employee has left his position he is still under a duty of confidentiality.

It has traditionally been held that in an employment situation there will be 3 types of information:

  1. Public information-not protected;
  2. Skill and experience which is not protected although it could be the subject of a restriction of trade clause in the employment;
  3. Trade secrets-protected and can only be used for the benefit of that employer.

Remedies

Breach of confidential information will lead to an injunction or damages or an account of profits or all 3.
By Terry Gorry
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