Workshop 3: Passing Off

Preparatory Task Question 1

HFC Bank plc v Midland Bank plc [2000] FSR 176

- HFC Bank plc v Midland Bank plc [2000] shows that a claimant evidencing a high volume of trade is not necessarily
enough, on its own, to show that they have the necessary goodwill.
- HFC Bank brought an action to attempt to stop Midland Bank rebranding as HSBC, asserting that Midland would be
passing off by using a similar brand name. A key issue was the existence of goodwill in HFC’s name.
- The court ultimately found that this was insufficient to support a passing-off action, because HFC conducted most
of its business through third parties or using other brand names.
- Accordingly, although HFC did a high amount of trade and had 2.5 million customers in 1998, this did not mean, on
its own, that HFC had goodwill in its name.
- Unprompted recognition by customers is a significant indicative factor, and it was determined that only 1% of
customers would have awareness of HFC’s brand, unprompted.

To amount to passing off, the deception will generally have the following features:
Deception Must Lead Customers To Mistakenly Believe D’s Products Are Associated With The Claimant
- The deception must lead customers to mistakenly believe that the defendant’s products are associated with the
claimant.
- This was not the case in HFC Bank plc v Midland Bank plc [2000], where the Court was satisfied that, even though
consumers may confuse “HFC” with “HSBC”, consumers would not believe HFC Bank to be associated with HSBC.

Phones 4u Limited and Ors v phone4u.co.uk Internet Limited and Ors [2006]
- Registration of a domain name
- Phone4u.co.uk registered the domain name “www.phone4u.co.uk” in August 1999.
- Phones 4u had, by that time, established goodwill in its name; there was a Phones 4u shop in most towns and cities
in the UK, Phones 4u turned over £43m, and there had been widespread newspaper advertising.
- The judge at first instance erred in applying the test for “distinctiveness” for a trade mark, which was a higher
standard than merely whether the business had established goodwill.
- The C of A found that there was a misrepresentation caused by “deception” by registration of the domain name.
- The Court followed BT v One In A Million [1999], in which it was held that:
(a) Mere registration of a domain name could amount to passing off on the basis that it makes a false
representation that the registrant of the domain name is associated or connected with the brand owner, and
(b) Such an act created an instrument of fraud on the basis that any realistic use of those domain name would also
amount to passing off.
- As Phones 4u had the requisite goodwill at the time the domain name was registered, there could not be any
realistic use of phone4u.co.uk, albeit created innocently, without causing deception.
- in Phones 4u Ltd and Another v Phone4u.co.uk Internet Ltd [2006], the court held that Phones 4U had registered its
logo only in red, white and blue.
- Damages (Other Damage): Other damage may take the form, for example, of the risk of e-mails being sent to
unintended recipients due to the purchase of a domain in the name of the business.

Preparatory Task Question 2

HFC Bank plc v Midland Bank plc [2000]

- HFC Bank objected to Midland Bank’s plan to rebrand under the name HSBC.
- HFC had a large customer base (2.5 million customers) and significant trading activity.
- HFC argued that the similarity between “HFC” and “HSBC” could mislead consumers into thinking there was a
connection between the banks.

What A Lay Person Might Expect

Likely to think HFC should win, because:
- The names sound quite similar.
- HFC is a real bank with millions of customers.
- HSBC is a big brand, and HFC might be swallowed up or confused with it.
- It feels unfair for a bigger brand to move into a space occupied by another.

Actual Judgment
- Claim was dismissed.
- The court held that:
• Despite the size of the business, HFC had not built sufficient goodwill in its name.
• The name “HFC” was not well-known or widely recognised by customers—only 1% could recall it unprompted.
• Therefore, HFC failed the first limb of passing off (Reckitt & Colman v Borden): no actionable goodwill.
• No misrepresentation - even if names were similar, there was no public belief that HFC/HSBC were connected.

Legal Takeaway
- High trade volume ≠ goodwill unless customers actually associate the name with the business.
- The key test is whether the public recognise the brand as a badge of trade origin.
- Court applies a more technical test than instinct might suggest.

Summary Comparison
Lay Person’s View Actual Legal Outcome
Similar Names ✅ Yes ✅ Yes
Unfair to Smaller Brand ✅ Yes ❌ Court rejected claim
Brand is Big and Well-Known ✅ Yes (assumed) ❌ Not enough unprompted awareness
Passing Off Successful? ✅ Probably ❌ No goodwill, no deception

Phones 4u Ltd v Phone4u.co.uk Internet Ltd [2006]

- A private individual registered the domain name “phone4u.co.uk”.
- Phones 4u Ltd, a well-known high street retailer with shops nationwide and £43 million in turnover, brought a claim
for passing off.
- Defendant had not even started trading.

What A Lay Person Might Expect

May assume no passing off, because:
- The defendant had not actually used the domain commercially.
- It was just a registration, not a sale or advertisement.
- The names are similar, but that happens often online.
- Might think Phones 4u are overreacting or trying to bully a smaller party.

Actual Judgment
The Court of Appeal found in favour of Phones 4u. It held:
- Phones 4u had substantial goodwill—brand recognition from physical shops, advertising, turnover.
- The domain name “phone4u.co.uk” created an instrument of fraud, as any realistic use would mislead the public.
- Applied BT v One in a Million [1999]: mere domain registration can be passing off if it implies a trade connection.
- The court recognised that confusion and damage were likely even without actual trading use.

Legal Takeaway
- Courts will intervene to protect strong brands even against pre-emptive or innocent domain registration.
- Passing off can be established before sales occur, if deception is likely.

Summary Comparison
Lay Person’s View Actual Legal Outcome
No Trading = No Passing Off ✅ Likely assumption ❌ Registration = misrepresentation
Big Brand vs Small Party ❌ Big brand overreaching ✅ Brand protection upheld
Similar Names, but Common ✅ Acceptable ❌ Deceptive and misleading
Passing Off Successful? ❌ Probably not ✅ Claim succeeded

Conclusion
These two cases demonstrate how legal analysis of passing off often contradicts intuitive expectations:
- In HFC, despite a large customer base and trade presence, the claim failed because of lack of public recognition—
showing that passing off law values distinctive association, not mere scale.
- In Phones 4u, despite no actual use of the domain name, the claim succeeded—emphasising that risk of deception
and brand misappropriation can be enough.
- In both cases, the courts focused strictly on the three-part test from Reckitt & Colman:
1. Goodwill – actual public recognition
2. Misrepresentation – a false suggestion of connection
3. Damage – likely diversion of business or reputational harm
- A lay person might assume that size of trade or intent is key. The law instead prioritises how consumers perceive
the name or branding, not the scale of the business or whether there was deliberate deception.

Preparatory Task Question 3

- Three-part test for passing off from Reckitt & Colman Products Ltd v Borden Inc [1990] (HL) (“Jif Lemon” case)
- The claimant must prove:
1. Goodwill in the name or get-up being imitated,
2. A misrepresentation by the defendant leading (or likely to lead) the public to believe there is a trade connection,
3. That such misrepresentation causes or is likely to cause damage to the claimant’s goodwill.

1. Goodwill
Definition of Goodwill
- Defined in IRC v Muller & Co’s Margarine Ltd [1901] (HL) as “the attractive force which brings in custom”
- Requires that the relevant public associate the name, mark, or get-up with the claimant’s business.
- Evidence required:
• Goodwill must be proved through use in the course of trade and recognition by the relevant class of customers.
 • See Reckitt & Colman, which confirms goodwill arises from customer association with the claimant’s mark.

Application in HFC Bank plc v Midland Bank plc [2000]

- HFC had 2.5 million customers and significant trade.
- However, only 1% of customers recognised the HFC brand name unprompted.
- Held: High sales volume and customer numbers are not enough to establish goodwill.
- The court found no actionable goodwill because there was insufficient public recognition of the name “HFC”.

Application to JHN Ltd

- JHN has traded under its name for 20 years.
- There are sales and advertising records showing the use of the JHN name in commerce.
- JHN uses its name directly in trading, unlike HFC, which operated through intermediaries.
- The business appears to be widely known in the relevant market (plastics production).
- Anecdotal evidence suggests the name is known to potential customers and competitors.
- Therefore, JHN likely has sufficient goodwill, particularly within the specialist B2B market it operates in
- No consumer survey is necessary (Neutrogena Corp v Golden Ltd [1996] RPC 473), though it may assist.

Conclusion on Goodwill
Goodwill is likely established under the standard in Reckitt & Colman, and JHN is distinguishable from HFC Bank,
where the name lacked recognition.

2. Misrepresentation
Definition of Misrepresentation
- The defendant must make a representation (express or implied) that causes or is likely to cause the public to
believe that the goods or services offered by the defendant are those of the claimant or connected with them.
- The test is not subjective intent, but whether the public is likely to be deceived.
- No requirement of fraudulent intent:
• See Parker-Knoll v Knoll International [1962]: H of L - intention is not required (likely confusion is sufficient)
• Reaffirmed in United Biscuits: passing off despite Asda claiming innocent intent. Court: D had “lived dangerously”.

Phones 4u Ltd v Phone4u.co.uk Internet Ltd [2006]

- C of A: even registering a domain name that creates a false impression of trade connection is misrepresentation.
- The court followed BT v One in a Million [1999] in finding that domain names can be “instruments of fraud”.

Application to JHN Ltd

- “JHSN” is visually and phonetically similar to “JHN”.
- It is likely to cause confusion in written communication (e.g. invoices, order forms, websites).
- Anecdotal evidence suggests that:
• Sales have been made to customers who thought JHSN was an “established company” in the field.
• Some JHN sales representatives report actual confusion among potential customers.
- There is no suggestion that JHSN Ltd is deliberately copying JHN Ltd’s branding or that it is using identical logos,
slogans,or get-up.
- However, under the principles established in United Biscuits, passing off can still arise where a defendant “lives
dangerously” by adopting branding or a trading name likely to cause confusion, even if there is no outright copying.
- Phones 4u: not necessary for D to have actively promoted their services using the similar name; registration alone,
where it was likely to deceive the public into assuming an association, was sufficient for liability.
- The court held that even where a name is a “common formula”, if the public is likely to assume a connection with
an existing business, misrepresentation is made out.
- In this case, “JHSN” and “JHN” are extremely close.
- The average consumer, especially in a B2B environment where decisions are made based on written
documentation or web searches, could easily assume JHSN Ltd is a rebranded or subsidiary company of JHN Ltd.
- No survey evidence is required to establish confusion; it is enough to rely on anecdotal evidence, especially where
confusion is already occurring in practice, as in this scenario.

Conclusion on Misrepresentation
- There is strong evidence of a likelihood of deception.
- Similarity of names, existing confusion among customers and trade in same sector strongly support this element.
- JHN Ltd is likely to satisfy the second limb of the test in Reckitt & Colman.

3. Damage
Definition of Damage in Passing Off
- 3rd limb of Reckitt & Colman requires that the claimant shows actual/likely damage arising from misrepresentation.
- This can include:
• Loss of sales/customers; Damage to business reputation/brand distinctiveness; Erosion of goodwill; Loss of
control over brand image.
- In Irvine v Talksport Ltd [2002], damage was found even where the misrepresentation merely suggested a false
endorsement. The court recognised the value of brand exclusivity and image.
- In LRC Products Ltd v Lilla Edets Kommun [1973], the court held that damage could arise even where the parties did
not directly compete. If the claimant’s brand integrity or commercial control is undermined, that suffices.
- Phones 4u also supports the principle that loss of control over how a brand is perceived—especially online—can
amount to damage.

Application to JHN Ltd

- Sales representatives reported lost opportunities/diverted custom where buyers mistakenly approached JHSN Ltd.
- There is evidence of customer confusion, which can be sufficient to infer damage to JHN Ltd’s business and goodwill
even without precise quantification of lost sales.
- Courts accept inferred damage where the misrepresentation is likely to result in:
• Diversion of trade (see Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] - “Advocaat” case),
• Blurring or erosion of brand distinctiveness (Irvine v Talksport Ltd),
• Loss of exclusivity or control over how a business name is perceived (LRC Products).
- Given that JHSN Ltd is trading in the same market sector (plastics production), using a confusingly similar name, and
evidence exists that some customers have believed they were dealing with an established company (i.e. JHN Ltd),
there is a strong likelihood of damage.
- The cumulative effect of confusion is commercially significant. If a competitor is gaining sales due to that confusion,
this constitutes actionable harm.

Conclusion on Damage
- Actual damage appears to be already occurring.
- Even if not fully quantified, courts can and do act on the likelihood of loss in passing off actions (see Phones 4u,
Irvine, United Biscuits).
- The third limb of Reckitt & Colman is therefore likely to be satisfied.

Overall Conclusion
JHN has a strong passing off claim against JHSN. Each element of Reckitt & Colman trinity is likely to be made out:
- Goodwill exists through 20 years of trade under the JHN name, with evidence of commercial activity, customer
recognition and market presence. This distinguishes it from the position in HFC Bank v Midland where the name
lacked recognition.
- Misrepresentation arises from the use of “JHSN”, which is nearly identical to “JHN” and has already resulted in
actual confusion.
- The facts align with Phones 4u and United Biscuits, where name similarity and consumer misperception were
sufficient to establish this element.
- Damage is both actual and likely. Confused customers have been diverted, harming JHN Ltd’s commercial
reputation and exclusivity. This satisfies the third limb under Irvine, LRC Products, and Erven Warnink.
- There is no evidence that JHSN Ltd has adopted the name in good faith or is unaware of the risk of confusion.
- The conduct appears to fall within what courts have described as “living dangerously” (United Biscuits), which
increases the likelihood of a successful claim.
- JHN Ltd should therefore consider pursuing injunctive relief and/or damages to prevent further loss.

Unit Task 1

1. HFC Bank plc v Midland Bank plc [2000] FSR 176

(a) Facts
- HFC Bank sought to prevent Midland Bank from rebranding as HSBC.
- HFC had 2.5 million customers and a large turnover.
- HFC argued that use of “HSBC” would confuse customers into believing the two banks were connected.

(b) Issues
- Whether HFC had sufficient goodwill in the HFC name.
- Whether HSBC’s rebrand was likely to mislead the public into believing there was a trade connection.
- Whether there was a likelihood of confusion causing damage.

(c) Court’s Decision

- HFC’s claim failed.
- Although commercially active, only 1% of customers knew “HFC” unprompted: no public association = no goodwill.
- No misrepresentation found; similarity in names alone insufficient.
- No passing off established.

2. Phones 4u Ltd and another v Phone4u.co.uk Internet Ltd and others [2006] EWCA Civ 244

(a) Facts
- Defendant registered “phone4u.co.uk” domain.
- Claimant was a major national mobile phone retailer, “Phones 4u”, with large turnover and widespread advertising.
- Phones 4u claimed the domain created confusion and sought to restrain its use under passing off.

(b) Issues
- Did Phones 4u have sufficient goodwill in its name?
- Did the domain registration amount to misrepresentation?
- Could passing off occur even without trading use?

(c) Court’s Decision

- Claimant succeeded.
- Strong goodwill found through branding and advertising.
- Domain name created an “instrument of fraud” — misrepresentation found.
- Even without actual use, registration was enough due to likelihood of deception.

3. Application of the Cases to the Client’s Situation (JHN Ltd)

- JHN Ltd has traded under its name for 20 years, directly using the brand in its market.
- Unlike HFC, JHN uses its name on the front line of business, not via intermediaries.
- There is anecdotal evidence of actual confusion, e.g. customers thinking JHSN is the “established company”.
- Similarity between “JHN” and “JHSN” is close, as in Phones 4u.
- JHSN may be benefiting from JHN’s reputation — living dangerously (United Biscuits v Asda).

4. Does the Client Have a Good Passing Off Case?

(a) Goodwill
- Defined in IRC v Muller & Co’s Margarine Ltd [1901] AC 217 as the “attractive force which brings in custom”.
- Confirmed in Reckitt & Colman and Neutrogena that public association is key.
- JHN has:
• 20 years of trade under “JHN”.
• Recognisable name in its industry.
• Evidence of customer recognition.
- Goodwill is likely to be established.

(b) Misrepresentation Leading to Confusion

- Reckitt & Colman: misrepresentation = public likely to believe D’s goods/services are connected to claimant.
- Phones 4u: similarity in names and potential association = misrepresentation.
- United Biscuits: even without intent, misrepresentation arises if defendant “lives dangerously”.
- JHSN uses a confusingly similar name.
- Evidence shows customers already confused.
- Misrepresentation is likely.

(c) Damage
- Irvine v Talksport: damage includes loss of control over brand image.
- Warnink v Townend (Advocaat case): diversion of trade is damage.
- JHN reports lost enquiries/sales due to confusion.
- Potential erosion of brand exclusivity and reputation.
- Damage is likely occurring or will occur if not restrained.

(d) Summary
- All three elements of the passing off test (Reckitt & Colman) are satisfied:
✅ Goodwill
✅ Misrepresentation
✅ Damage
- Distinguishable from HFC Bank, where brand recognition was minimal.
- Comparable to Phones 4u, where a confusingly similar name led to liability.
- JHN Ltd has a strong passing off claim against JHSN Ltd.

Unit Task 2

Identify Relevant Rights

Registered Trade Mark Rights
- Jupiter Ltd owns a registered UK trade mark in “FelixBar” (registered in 1975).
- Statutory basis: Trade Marks Act 1994 (TMA 1994).
• s10(1): Identical sign used for identical goods.
• s10(2): Similar sign for identical or similar goods where there is a likelihood of confusion.
• s10(3): Similar sign used for any goods or services where use takes unfair advantage of or is detrimental to the
reputation or distinctive character of the registered mark.
• s14: Provides civil remedies for infringement.
• s15–16: Allow for delivery up and destruction of infringing goods.

Common Law – Passing Off

- Framework: Reckitt & Colman Products Ltd v Borden Inc [1990] (“Jif Lemon” case) - 3-limb test:
 1. Goodwill in the mark or get-up,
2. Misrepresentation by the defendant leading or likely to lead to confusion,
3. Damage caused or likely to be caused to the claimant’s goodwill.
- Further supported by:
• United Biscuits v Asda [1997]
• Irvine v Talksport [2002]
• Neutrogena Corp v Golden Ltd [1996]

Further Information Required from the Client

Trade Mark Specifics
1. Trade Mark Scope: What is the exact specification and class under which “FelixBar” is registered?
2. Logo Protection: Does registration cover cat image/just the word “FelixBar”? Was logo ever registered separately?
3. Use: Has mark been used continuously since registration? (s46 TMA allows revocation for non-use >5 years).
4. Visual Comparison: Obtain samples or images of both products to assess overall impression, including:
• Font; Colour scheme; Placement of name and logo; Size/shape of product; Positioning on shelf
5. Reputation: How widely is FelixBar sold? National/regional consumer recognition? Market share/ad spend data?
6. Evidence of Confusion: Any complaints or recorded consumer enquiries? Any retail feedback?

Passing Off Considerations

1. Cat Image Use: How long has the cat image been used? Is it consistent across all packaging?
2. Sales & Market Presence: Turnover, number of stockists, extent of advertising.
3. Consumer Recognition: Any surveys, reviews, social media data or marketing studies demonstrating recognition?

Preliminary Legal Analysis

Trade Mark Infringement – TMA 1994
s10(1) TMA – Identical Sign for Identical Goods
- “FelixBar” vs “FelineBar” = not identical, so s10(1) not applicable.

s10(2) TMA – Similar Sign for Identical Goods

- Both products are chocolate bars = identical goods.
- Names “FelixBar” and “FelineBar”:
• Visually and aurally similar.
• Both reference felines and use a cat image.
• Likely to cause consumer confusion, especially when sold side by side in supermarkets.
- Supported by:
• Sabel v Puma [1998]: global assessment of similarity.
• Canon v MGM [1999]: interdependence between similarity of goods and signs.
• Phones 4u v Phone4u.co.uk [2006]: similar names likely to deceive.
- Conclusion: s10(2) infringement likely.

s10(3) TMA – Reputation + Unfair Advantage/Detriment

- Jupiter would need to prove “FelixBar” has a reputation in the UK market.
- If proven, use of “FelineBar” with similar branding may:
• Take unfair advantage (L’Oréal v Bellure [2009] ECJ),
• Dilute the distinctiveness of the “FelixBar” mark (Intel v CPM [2009] RPC 15),
• Cause tarnishment if More4u’s version is lower quality.
- s10(3) does not require confusion, only association and damage.
- Conclusion: s10(3) may apply if reputation can be shown.

Passing Off – Common Law

Goodwill
- “FelixBar” has been on the market since 1975.
- If sold nationally, likely has significant market presence.
- Consistent use of the cat image builds visual goodwill (see Neutrogena, United Biscuits).
- Goodwill extends to both name and packaging if consumers associate these with Jupiter.

Misrepresentation
- “FelineBar” and “FelixBar” are conceptually and phonetically close.
- Both use a cat image.
- Based on United Biscuits, even non-identical packaging can mislead where the theme and branding are similar.
- As in Phones 4u, similarity of names alone can mislead consumers.

Damage
- Potential for:
• Diverted sales (Warnink v Townend); Loss of control over brand image (Irvine v Talksport); Erosion of exclusivity.
- If confusion occurs, Jupiter’s goodwill is clearly at risk.

Conclusion: Strong case in passing off.

Options and Remedies
Immediate Legal Options
- Send a Letter Before Claim alleging: s10(2) and s10(3) trade mark infringement; Common law passing off.
- Demand: Immediate cessation of use of “FelineBar” and the cat image; Rebranding of the product; Damages or an
account of profits (s14 TMA); Delivery up/destruction of infringing stock (s15–16 TMA).

Legal Remedies if Dispute Continues

- Seek an injunction to restrain further infringement or passing off.
- Pursue damages (compensatory) or account of profits (disgorgement of unlawful gain).
- Option to bring claim in the IPEC or High Court depending on value and complexity.

Summary
Jupiter Ltd likely has a strong claim in both:
- Trade mark infringement under s10(2) and potentially s10(3) TMA 1994; and
- Passing off under the Reckitt & Colman trinity: goodwill, misrepresentation, and damage are all present.