UK Supreme Court Clarifies 'Passing Off' Law

The highest UK court – namely the UK Supreme Court – has reaffirmed the territorial nature of 'goodwill' in relation to 'passing off ' actions.

A Passing off action is a common law method of intellectual property enforcement that can be used to prevent the unauthorised use of a mark, which is similar to another's registered or unregistered trademark.

Starbucks and PCCW, who provide internet TV services in Hong Kong under the name NOW TV, were unhappy when SKY announced a plan to launch their own internet TV service of the same name.

Accordingly, SKY were sued for trademark infringement and passing off. Both actions were dismissed at first instance and on appeal, but the matter was allowed before the Supreme Court.

Said Court held that it simply wasn't enough for, Starbucks / PCCW to demonstrate that internet TV service had a reputation with a significant section of the UK public. Instead, to be successful in a claim for 'passing off', the pursuers would've had to show they had actual UK-based customers.

Delivering the Court's decision, Lord Neuberger said:

"If it was enough for a claimant merely to establish reputation within the jurisdiction to maintain a passing off action, it appears to me that it would tip the balance too much in favour of protection," he said. "It would mean that, without having any business or any consumers for its product or service in this jurisdiction, a claimant could prevent another person using a mark, such as an ordinary English word, 'now' for a potentially indefinite period in relation to a similar product or service..."

He continued:

"In my view, a claimant who has simply obtained a reputation for its mark in this jurisdiction in respect of his products or services outside this jurisdiction has not done enough to justify granting him an effective monopoly in respect of that mark within the jurisdiction. I am unpersuaded that PCCM's case is strengthened by the fact that we are now in the age of easy worldwide travel and global electronic communication..."

The decision makes it clear how important 'territory' can be when enforcing intellectual property rights in the UK.

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