If your business becomes successful, you need to be aware of the potential threat of unscrupulous businesses trying to pass themselves off as your company. This could mean that customers buy the other businesses services or products believing they are yours, therefore losing you business in a dishonest (and illegal) way.

There are three main points that need to be met to qualify as passing off; these were stated by the House of Lords in the well known legal case of ‘Reckitt & Colman Ltd v Borden Inc’ (1990). These are enforced under common law.

1. Your business, services, or product has acquired a reputation or goodwill in the marketplace, and are known by a distinguishing features. This could include a name, logo, website or colour scheme; your name or product does not need to be trademarked as long it is known in your marketplace.

2. There has been a misrepresentation by the business that is accused of passing off which could lead customers to believe that they are really buying from you. The misrepresentation does not have to be intentional to qualify as passing off.

3. Your business needs to have suffered some form of damage because of the misrepresentation. This could include lost customers (who used the other business by mistake), future lost custom (they may be worried about using your business again), or a damaged reputation.

If all three of these points are met, then it is likely you could gain compensation for passing off by taking the company to court. You will of course need to prove that your business has a reputation or history; you can use several things to help prove this: 

• Registered Company Information (E.g.: From Companies House)
• An online presence (E.g.: A URL in your business’s name.)
• Letters from customers/suppliers which proves your business standing or reputation.
• A dated (preferably unopened) letter to a solicitor which discusses aspects of your business (such as the name, market or products/services)

Types of Passing Off

The easiest way to tell if a company is passing off as your business is to see whether your customers could mistake their business for yours.

The following are some of the common types of passing off that your business could fall victim to:

Names:

This is the most common form of passing off. An unscrupulous business will trade using a name that sounds similar to yours, or features an altered spelling or other slight name change.

For Example:

Co-Op Store could be considered passing off as The Co-Op (Cooperative) company.

Clarke’s Shoe Repair could be considered passing off as the Clarks shoe company.

HMVE could be considered passing off as the HMV company.

In a passing off case, the judge will use their discretion to look at how many potential names the business accused of passing off could have taken. In most cases there are tens of thousands of potential names; meaning that anything that looks like passing off probably is.

Look in the Yellow Pages and see how many businesses there are with the same name in one business area; the odds are almost none. So if a business has a remarkably similar name to yours, it could be considered passing off; whether intentional or not.

Designs:

If a business uses designs that are very similar to yours, this could also count as passing off; this includes logos, product shapes and styles, and other designs such as your website or promotional material.

For Example:

If your product is known for being a particular unusual shape, and another business starts producing a product in the same shape, this could be considered passing off.

If another company’s website looks similar to yours, or has similar pictures or writing; it could be considered as passing off.

Colours:

If another business’s colour scheme is similar to yours, then this could count as passing off; this includes the colours used in your logo, your products, your website or other promotional material.

For Example:

If your colour scheme is known as being bright red and another business uses very similar colours then they could be considered passing off as your business.

If your website uses a lot of blue, and another business’s website uses the same kind of colours; that could be considered passing off as your website.

Advertising:

If another business produces advertising that looks similar to yours, or could be considered likely to cause customers to mistake it for you; then that could be considered as passing off. This also includes areas such as online advertising, including website keywords and search engine adverts.

For Example:

If the keywords (meta-tag terms) in Company A’s website mention the competing Company B, it is likely that they will be using this to dishonestly gain website visitors who are in fact searching for Company B.