Protecting the Brand of a Business
Author: Patrick Tan & Kaden Goh
The importance of a brand, a logo or a mark (“Brand”) can hardly be overstated, for a great Brand provides instant recognition for the business and, by providing a distinctive badge for goodwill to be attached to, connects consumers’ minds to the business. It is therefore of little surprise that others might attempt to free-ride on the goodwill attached to an established company by having a similar Brand. This article focuses on the tort of passing off (“Passing Off”), a legal recourse that a business owner (the “Original Business”) can consider when others sell their goods or services under the misrepresentation that they are the goods or services of the former. In particular, this article will consider Passing Off with regard to similar brands, logos or marks.
Elements of Passing Off
Passing Off comprises of three elements, viz, goodwill, misrepresentation and damage. In a situation where the tortfeasor (the one committing Passing Off) attempts to create confusion by creating a similar Brand, the main issues generally faced by the Original Business in proving Passing Off are that of establishing goodwill and misrepresentation.
Goodwill is required as Passing Off is concerned with the protection of the goodwill that exists between the business and his customers that may be associated with the business’ Brand, name, or even modus operandi. The goodwill of a business must be founded upon a distinctive badge that identifies the Original Business as the source of a product or service. In this regard, the brand of the Original Business can form a distinctive badge upon which goodwill can be founded on.
Further, the appropriate point for assessing goodwill is the time when the conduct complained of commences, i.e. when the similar Brand was published/marketed to the public.
The making of a false representation is the gist of Passing Off, as the tortfeasor is essentially attempting to sell its goods or services under the misrepresentation that they are the goods or services of the Original Business (or in some cases, the misrepresentation that the tortfeasor is connected to the Original Business).
In Passing Off, an actionable misrepresentation is one that has the effect of confusing or deceiving the public (i.e. those who are likely to acquire goods or services of the Original Business). This article now turns to the crux of Passing Off using a similar Brand – assessing the similarity of the Brand to determine whether there is likely confusion.
In examining the similarity, the court will avoid a close and minute comparison of the Brand as the customer would usually only have a general and imprecise recollection of the Original Business’ Brand. However, in the local case of Louis Vuitton Malletier v City Chain Stores (S) Pte Ltd  2 SLR(R) 684 (a case concerning trademark infringement which is arguably analogous as regards determining whether there is a likelihood of confusion due to visual similarities), the learned judge appeared to have compared the marks in that case by examining them closely.
The learned judge in Louis Vuitton Malletier seemingly compared the shape and details of each mark before determining whether the differences are significant when looking at the two designs holistically. Accordingly, while the application of the legal test ultimately depends on the facts of each case (or the Brand in question), it appears that a relatively high degree of similarity is required for the court to a likelihood of confusion.
That said, it should be noted a lesser degree of similarity between the Brand may nonetheless be offset by a greater degree of similarity between the goods and services offered by the Original Business and tortfeasor.
The final element of Passing Off is the fact of damage or likelihood of damage. This article is mainly concerned with the types of damage that the Original Business can claim under.
Where the Original Business and the tortfeasor are engaged in a common trade, the loss is usually quantified in terms of the loss of trade and profits arising from the wrongful diversion of the Original Business’ custom. That said, proof of actual diversion is usually not required as the courts would often be prepared to infer damage once the elements of goodwill and misrepresentation are established.
Alternatively, where the Original Business and the tortfeasor are in dissimilar trades, the types of damage become more onerous to prove. Nonetheless, it is possible for the Original Business to claim damages based on, amongst other things, injury to the Original Business’ reputation and/or the loss of potential trade.
In conclusion, Passing Off is a viable option for business owners to protect the goodwill they have built over time by employing sound marketing and branding strategies, not to mention the quality of its products and services. In instances where business owners are faced with other businesses with similar Brand, Passing Off could serve to prevent a further loss of goodwill and allow business owners to claim damages for the loss caused.
Written by: Patrick Tan & Kaden Goh