Documentation:Torts/Passing off

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Index
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Passing off
The tort of passing off entails intimating goods or services as those of another business so as to cause damage to that business.[1] Passing off involves securing an economic advantage through the use of the plaintiff's reputation or goodwill.[2] As such, it covers both scenarios where the defendant passes their product off as the plaintiff's and scenarios where they pass their product off as being endorsed by the plaintiff.[3] Importantly, there is no requirement for the defendant to intentionally mislead consumers, or be negligent thereof, under this tort.[4]

The development of the tort of passing-off

"IP basics - The law of passing off"
In "IP Basics - The Law of Passing Off", Gowling WLG associate, Lucy Singer, explains the tort of passing-off in the UK and breaks down each element.[5]

The tort of passing-off was recognized in the 1842 judgment of Perry v. Truefitt [6], where the Court famously stated, "[a] man is not to sell his own goods under the pretence that they are the goods of another man.”[7] More insight into the tort was provided in the 1880 judgment of Singer Manufacturing Co. v. Loog, where James LJ stated that:[8]

[N]o man is entitled to represent his goods as being the goods of another man; and no man is permitted to use any mark, sign or symbol, device or other means, whereby, without making a direct false representation himself to a purchaser who purchases from him, he enables such purchaser to tell a lie or to make a false representation to somebody else who is the ultimate customer. ... [H]e must not, as I said, make directly, or through the medium of another person, a false representation that his goods are the goods of another person.[8]

More recently, in the 1990 judgment of Reckitt & Colman Products Ltd. v. Borden Inc., the House of Lords provided a summary of the state of the tort of passing-off in the common law:[9]

The law of passing off can be summarised in one short general proposition, no man may pass off his goods as those of another.  More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed.  These are three in number.  First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get-up” (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff’s goods or services.  Second, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. . . .  Third, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff. [Emphasis added.]

The Supreme Court of Canada clarified the state of the tort of passing-off in Canada in the 1992 judgment of Ciba-Geigy Canada Ltd. v. Apotex Inc.. The Court affirmed the three elements set out by the House of Lords in Reckitt & Colman Products Ltd. v. Borden Inc.[1]

Elements of passing-off[10]
1. [T]he existence of good will;
2. [D]eception of the public due to a misrepresentation; and
3. [A]ctual or potential damage to the plaintiff.

The importance of good will in the context of passing-off

Crucial to a successful action under the tort of passing-off is the plaintiff establishing the good will of their product.[11] Good will has been described as the "business benefit flowing from the 'good name, reputation, and connection' enjoyed by a business." or "the 'attractive force' that brings in customers."[12] However, good will cannot be established generally and must be proven in relation to the specific goods or services which the plaintiff supplies to the purchasing public.[13] The Supreme Court of Canada, in Oxford Pendaflex Canada Ltd. v. Korr Marketing Ltd., described good will as a "secondary meaning" which the plaintiff's product has acquired in the minds of consumers.[14] Thus, it is not sufficient for a claimant to show that the defendant's product mimics their product's appearance (also referred to as the product's "get-up").[14] Rather, a plaintiff must show that their product has acquired good will or "secondary meaning" by virtue of the product's "get-up".[15]

No requirement for intention to deceive

There is no requirement that the plaintiff must prove intention[16] or even negligence of the defendant to mislead consumers.[4] However, there is a requirement that public confusion as to whether the defendant's product is the plaintiff's, would be a likely consequence of the sale or attempt to sell.[17] Since passing-off originated from the tort of deceit, while intention is no longer required under the tort of passing-off, there is a requirement for plausible public confusion over the product's similar "get-up" to that of the plaintiff.[2][17][18]

Statutory cause of action under the Trademarks Act

In Canada, section 7 of the Trademarks Act codifies the common-law tort of passing-off within Federal legislation.[19] Importantly, section 7 of the Trademarks Act and the tort of passing-off protect both registered and unregistered trademarks.[20]

Legislation
Trademarks Act, RSC 1985, c T-13, s 7[21]
7.  Prohibitions

No person shall

(a) make a false or misleading statement tending to discredit the business, goods or services of a competitor;

(b) direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his goods, services or business and the goods, services or business of another;

(c) pass off other goods or services as and for those ordered or requested; or

(d) make use, in association with goods or services, of any description that is false in a material respect and likely to mislead the public as to

(i) the character, quality, quantity or composition,

(ii) the geographical origin, or

(iii) the mode of the manufacture, production or performance

of the goods or services.

The doctrine of functionality

In the news
The monopoly on bricks is over?
Model DNA strand built from red and yellow lego blocks
In 2005 the Supreme Court of Canada unanimously decided that long-time competitor, Mega Bloks, did not infringe on Lego's trademarked design.[22] The Court explained that purely functional features, such as the raised-stud design in question, could not be the subject of a trademark or evidence of goodwill.[23]

In Kirkbi AG v. Ritvik Holdings Inc., the Supreme Court of Canada discussed the long-standing common-law doctrine of functionality as it pertains to the tort of passing-off.[24] The doctrine of functionality states that aspects of a product that are purely functional or utilitarian in nature cannot be the subject of a trademark or afforded the intellectual property protections thereunder.[25]

Rationale for the doctrine

The Court explained that this doctrine exists so as to "avoid overextending monopoly rights on the products themselves and impeding competition, in respect of wares sharing the same technical characteristics."[26] In this capacity, Canadian courts have been reluctant to afford intellectual property protections to manufacturers if doing so would impede fair market competition by granting the manufacturer a monopoly over purely functional features.[27]

Within the Trademarks Act

Section 12(2) of the Trademarks Act codifies the common-law doctrine of functionality, disallowing registering trademarks over the purely functional features of a product.[28] In Kirkbi AG v. Ritvik Holdings Inc., the Supreme Court of Canada clarified that the purpose of section 12(2) was not to limit the doctrine of functionality only to registered trademarks and therefore it also applies to actions over unregistered trademarks.[29]

The Court clarified that the principles which apply to the common-law action of passing-off also apply to the interpretation of the statutory cause of action available under section 7 of the Trademarks Act.[30] As such, section 7 of the Trademarks Act requires a claimant to demonstrate some form of distinctiveness as it pertains to their product.[31] The statute does not allow manufacturers to protect monopolies over their products without proving the distinctiveness of their product.[32] Similarly, the Court stated that purely functional features of a product cannot be used as evidence of good will or distinctiveness required to satisfy the first element of the tort of passing-off.[32]

Legislation
Trademarks Act, RSC 1985, c T-13, s 12[33]
12.  When trademark registrable...

(2) A trademark is not registrable if, in relation to the goods or services in association with which it is used or proposed to be used, its features are dictated primarily by a utilitarian function

Discussion questions

  • Does the tort of passing off require that a defendant intended a misrepresentation to the public? Should it?
  • What feature of passing off makes it an intentional tort?
  • Is it principled for Canadian courts to refuse extending trademark protection to purely functional features of product?


  1. ↑ Jump up to: 1.0 1.1 Dentec Safety Specialists Inc. v. Degil Safety Products Inc., 2012 ONSC 4721 (§10.6.1) at para 9, citing Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at para 33.
  2. ↑ Jump up to: 2.0 2.1 Dentec Safety Specialists Inc. v. Degil Safety Products Inc., 2012 ONSC 4721 (§10.6.1) at para 10.
  3. ↑ Dentec Safety Specialists Inc. v. Degil Safety Products Inc., 2012 ONSC 4721 (§10.6.1) at para 11.
  4. ↑ Jump up to: 4.0 4.1 Dentec Safety Specialists Inc. v. Degil Safety Products Inc., 2012 ONSC 4721 (§10.6.1) at para 9.
  5. ↑ Gowling WLG Intellectual Property Podcast, "IP Basics: The Law of Passing Off" (26 Apr 2023).
  6. ↑ Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at para 30.
  7. ↑ Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at para 30, citing Perry v. Truefitt (1842), 49 ER 749.
  8. ↑ Jump up to: 8.0 8.1 Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at para 30, citing Singer Manufacturing Co. v. Loog (1880), 18 Ch D 395 (EWCA).
  9. ↑ Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at para 32, citing Reckitt & Colman Products Ltd. v. Borden Inc., [1990] 1 All ER 873 (UKHL) at 880.
  10. ↑ Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at paras 32–33.
  11. ↑ Dentec Safety Specialists Inc. v. Degil Safety Products Inc., 2012 ONSC 4721 (§10.6.1) at para 14.
  12. ↑ Dentec Safety Specialists Inc. v. Degil Safety Products Inc., 2012 ONSC 4721 (§10.6.1) at para 14, citing Inland Revenue Commissioners v. Muller & Co.’s Margarine, [1901] AC 217 (UKHL) at 223, 235.
  13. ↑ Dentec Safety Specialists Inc. v. Degil Safety Products Inc., 2012 ONSC 4721 (§10.6.1) at para 15, citing Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at para 32.
  14. ↑ Jump up to: 14.0 14.1 Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at para 34, citing Oxford Pendaflex Canada Ltd. v. Korr Marketing Ltd., 1982 CanLII 45 (SCC) at 500.
  15. ↑ Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at para 36.
  16. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at paras 42–55.
  17. ↑ Jump up to: 17.0 17.1 Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at para 35, citing Consumers Distributing Co. v. Seiko Time Canada Ltd., 1984 CanLII 73 (SCC) at 601.
  18. ↑ Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC) at para 36.
  19. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at paras 62–63.
  20. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at para 58.
  21. ↑ Trademarks Act, RSC 1985, c T-13, s 7.
  22. ↑ McNish, Jacquie (23 Nov 2005). "Mega Bloks v. Lego". The Globe and Mail.
  23. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at para 69.
  24. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at paras 42–55.
  25. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at para 45, citing Parke, Davis & Co. v. Empire Laboratories Ltd., 1964 CanLII 74 (SCC) at 354.
  26. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at para 52.
  27. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at paras 44–46.
  28. ↑ Trademarks Act, RSC 1985, c T-13, s 12(2).
  29. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at paras 57–60.
  30. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at para 62.
  31. ↑ Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at paras 62–67.
  32. ↑ Jump up to: 32.0 32.1 Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at para 67.
  33. ↑ Trademarks Act, RSC 1985, c T-13, s 12.
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