HM Insights

HM Intellectual Property Snapshot: Passing off and post-sale confusion – an update

Passing off is where a business or entity improperly takes advantage of the goodwill and reputation in a similar brand owned by another business or entity.

The advantage is gained through some form of misrepresentation that its goods and services are in some way associated or connected with the goodwill and reputation already established in the similar brand owner's goods and services. Where this misrepresentation causes confusion to the public, "passing off" is said to have occurred.

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In normal circumstances, the intent of the misrepresentation is to pass off at the point of sale, so as to induce a consumer to purchase a particular brand by association to a more well-established brand.

Post-sale confusion is where there may not necessarily be a misrepresentation at the point of sale, owing to differences between the brands which can be highlighted at the point of sale (such as price or promotion), but following the sale the misrepresentation continues to damage the goodwill of the "greater" brand.

The harm to the more well-established brand continues after the point of sale because those differences which have been highlighted become irrelevant – only the consumer is aware of those. Meanwhile the misrepresentative elements required to prove passing off (such as the way the product looks to someone who sees the consumer using the goods) continue to be relevant after purchase.

Legal remedy for post-sale confusion

The recent English case of Freddy SPA v Hugz Clothing Limited and Others [2020] EWHC 3032 (IPEC) has reaffirmed a business's right to a legal remedy in the event of post-sale confusion. This action was raised by the makers of a novel style of form-fitting jeans (Freddy SPA) against a competitor (Hugz) who was attempting to pass off their style as Freddy SPA's.

The thrust of the action was concerned with Hugz Clothing Ltd's breach of an earlier settlement agreement and a breach of Freddy SPA's patent over the design of the jeans. However, Freddy SPA also argued that Hugz jeans were "an obvious rip-off", with the Defendants having "adopted very similar branding elements".

Judge Stone ruled that passing off, both at the point of sale and after the point of sale, was an actionable misrepresentation against the brand. Judge Stone held that while the consumer may be aware that the jeans were not related to the Claimant's brand, others who see the consumer utilising (in this case, wearing) the product after the sale may make the association.

These comments on post-sale passing off encourage companies to take action when they suspect their brands are falling foul of counterfeiters, or even other brands, attempting to pass off products.

This additional level of protection is likely to be well received by the fashion industry (as well as others), whose business model is predicated on brand recognition throughout the lifetime of the product.

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If you require assistance with any matter related to this issue, or any other intellectual property related matter, please get in touch with a member of our team.