When another firm uses a trading style that you think is a copy of yours, you might consider that an action for ‘passing off’ is appropriate.



Passing off occurs when a business represents itself in a way that causes buyers to confuse it with another business and therefore damages that other business. Claims are usually in respect of lost profits on sales.



A recent case, in which a skincare manufacturer brought an action for passing off against a very small business that manufactured nail care products, shows the sort of considerations the court will take into account when making its judgment.



The following factors were considered relevant:

• The small size of the defendant firm’s customer base and the limits on its reputation and goodwill, evidenced by the fact that most of its customers dealt with the directors personally;
• The lack of evidence that the publicity in the press received by the defendant had had an impact on the claimant’s business;
• The fact that the two companies operate in different areas of the beauty industry;
• The lack of evidence that the defendant’s mark would confuse members of the buying public generally;
• The absence of ‘side-by-side’ display of the two companies’ products, which might increase the probability of confusion; and
• The existence of evidence that customers understood that the two businesses were unconnected.

In order to be successful in an action for passing off, it is necessary to show that confusion in the mind of a buyer is a likely outcome. It is also necessary in any action for damages to be able to quantify the resulting loss. In this case, as in many similar instances, a better solution could probably have been achieved by negotiation.