Following the High Court's recent review of the law on passing off, Samuel Chacko summarises the salient points of the case of Momentum Creations Pte Ltd v Tan Eng Koon t/a De Angeli.
The High Court in Singapore, in its recent decision in the case of Momentum Creations Pte Ltd v Tan Eng Koon t/a De Angeli ('the Momentum case'),1 reviewed the existing law on passing off and set out the principles applicable in such a claim. The plaintiffs in the Momentum case were a company in the business of manufacturing and selling furniture. They claimed they had incurred substantial expenses in developing and promoting the mark and names used by them to specifically identify their range of furniture and had accordingly acquired goodwill in relation thereto.
The defendant, an individual, sold furniture through various firms owned or operated by him. The essence of the plaintiffs' claim was that the defendant was selling various items of furniture that were strikingly similar to those sold by the plaintiffs and was passing off his furniture as those of the plaintiffs'.
According to the plaintiffs, the passing off occurred as a result of oral representations made by the defendant's sales representatives to prospective customers to the effect that the defendant's furniture was identical or similar to the plaintiffs' furniture, both in design and quality, or were obtained from the same distributors. The passing off also occurred through the defendant's use of the plaintiffs' printed leaflets containing pictures and information on the plaintiffs' furniture. These leaflets printed by the plaintiffs contained photographs of the various items of furniture designed and manufactured by them and had, printed alongside these photographs, the trade names used by the plaintiffs to describe the furniture depicted in the photographs.
The plaintiffs alleged that the defendant's sales representatives were using the plaintiffs' leaflets to promote the sale of his own furniture by showing these leaflets to prospective customers and by representing that various items of furniture being offered for sale by the defendant were in fact those depicted in the plaintiffs' leaflets.
The defendant denied the plaintiffs' allegations and argued that to prove their claim in passing off, the plaintiffs had to establish that:
Exclusivity - No Longer a Requirement
The defendant argued that as the plaintiffs did not have the right to the
exclusive use of the mark and names in question, their claim in passing off in
relation thereto could not succeed.
The High Court, after an extensive review of the case law, ruled that the exclusive right to use a particular mark or name is no longer a requirement to establish a cause of action in passing off. Though some earlier English cases had stipulated that such a right was an essential element of the tort of passing off,2 the law had developed such that exclusivity was no longer considered to be an essential element of the tort of passing off.3
The decision of Lord Oliver in Reckitt and Colman Products v Borden Inc [1990] 1 All ER 873 as well as the Singapore Court of Appeal's decision in Tessensohn v John Robert Powers School Inc [1994] 3 SLR 308, was cited by the Singapore High Court as basis for the proposition that there were three essential elements for the law of passing off, namely:
Reputation and Goodwill
In resisting the plaintiffs' claim, the defendant also contended that the
plaintiffs had not established goodwill in relation to the plaintiffs' mark and
names that were in issue in the suit. The defendant's argument was that as the
plaintiffs did not adduce evidence of a survey of the public showing that the
mark and names in question were known to the public as signifying the
plaintiffs' goods exclusively, the plaintiffs had failed to establish goodwill.
On the issue of reputation and goodwill, after reviewing various authorities, the court ruled that:
Use of the Plaintiffs' Leaflets
In finding that the defendant's use of the plaintiffs' leaflets was in itself
evidence of the goodwill enjoyed by the plaintiffs, the court relied on the
decision of the English Court of Appeal in Bristol Conservatories Ltd v
Conservatories Custom Built Ltd [1989] RPC 462. The plaintiffs in that case
brought a passing off action against the defendants on the grounds that the
defendants had shown their customers, as examples of their work, photographs of
conservatories that were in reality designed and constructed by the plaintiffs.
Though these photographs did not make any reference to the plaintiffs, Lord
Justice Ralph Gibson held (at 462) that:
There can, I think, be few better ways of demonstrating the good name and reputation of a business of designing and selling conservatories specially built to fit particular houses or buildings than a collection of photographs showing the work which the owners of the business have done.
The court further went on to hold (at 465) that the plaintiffs':
... goodwill was asserted and demonstrated as the photographs were shown and was at the same moment misappropriated by Custom Built (defendants).
The aforesaid decision of the English Court of Appeal was applied by the High Court in the Momentum case. The court found that the plaintiffs in the Momentum case were in a stronger position than the plaintiffs in Bristol Conservatories Ltd v Conservatories Custom Built Ltd as the plaintiffs' leaflets used by the defendant in the Momentum case contained not just photographs of the plaintiffs' furniture but also their address and the trade names of their various items of furniture. Though the defendant had tried to argue that his use of the plaintiffs' leaflets was essentially to highlight the differences between his product and those of the plaintiffs as well as to inform his prospective customers of the various options available in relation to the colour and shape of his products, the potential of confusing and misleading a prospective customer into thinking that the products offered were those of the plaintiffs was a real one.
The court in the Momentum case held that:
... the use of the leaflets was intended to and did misrepresent to the public that the four items of furniture sold by De Angeli (defendant) were of the same quality as those of OM (plaintiffs) and/or that the manufacturers or suppliers of these items sold by De Angeli and OM were the same.
The court went on to find that damage had been occasioned to the goodwill of the plaintiffs and that accordingly, the claim of passing off had been made out.
Conclusion
The Momentum case raises interesting issues as to the use one party may make of
another's advertising or promotional materials. The danger of using advertising
materials, such as leaflets, brochures and photographs of other parties, to
promote one's own product is that it could well give rise to a claim in passing
off. Such a claim would be all the more likely where there is a close similarity
in the design and features of the products in question. Given the risks
involved, businesses would be well advised to cease such practices should they
wish to avoid a claim in passing off.
Samuel Chacko
White & Case, Colin Ng & Partners
Endnotes
1 Grounds of decision of Woo Bih Li JC dated 20 June
2001.
2 Jarman and Platt v I Barget Ltd and Ors [1977]
FSPLR 260.
3 Erven Warnick Besloten Vennootschap and Anor v J
Townsend and Sons (Hull) Ltd and Anor [1979] AC 732 and J Bollinger v Costa
Brava Wine Co Ltd [1960] Ch 262.
4 Judgment of Justice GP Selvam in Alteco Chemical
Pte Ltd v Chang Yean Wah [2000] 1 SLR 119.
5 ElectroCad Australia and Ors v Mejati RCS Sdn Bhd
and Ors [1998] 3 MLJ 422.