Protect Your Goodwill
Most Traders work very hard to establish goodwill in their business. Goodwill is the reputation which a trader builds up in relation to specific goods or services which attracts customers. If a competitor tries to steal that goodwill then, in legal terms, it is known as “passing off”. Passing off occurs where a person or organisation sells goods and/or services and purports to be another person or organisation, usually a more established brand or competitor, when that is not in fact true.
Passing off attracts strict liability which means that the Defendant will be liable even where he was unaware of the fact that he was using the trade mark or the goodwill belonging to another business. Therefore intention is not required for someone to be guilty of passing off. Typically, a claim in passing off arises when someone has copied a competitor’s name or packaging.
Passing off protects traders’ goodwill in relation to their goods and services and so only traders who have generated goodwill will be able to bring an action for passing off, a company or an individual who has not traded will not have a cause of action.
To bring a passing off action, you must be able to demonstrate that:
- The public associate the goods that you produce or the services that you provide with you.
- You have built up a reputation in the goods and services and goodwill is therefore attached to that.
- A third party has made misrepresentations to the public, whether intentionally or not, leading or likely to lead the public into believing that the goods or services offered by them are your goods or services.
- This has caused damage to the goodwill of your business.
The remedies available in a claim for passing off include applying for an injunction to stop the Defendant from using the Claimant’s trade mark or goodwill and/or pursuing a claim for compensation where damage has been caused to the Claimant’s reputation or he has lost potential revenue due to the Defendant’s actions.
Partner and Head of Dispute Resolution
Commercial Dispute Resolution
LPatel@LawBlacks.com
0113 227 9316
@LukeLawBlacks
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Luke Patel
