IL-2023-000007 - [2025] EWHC 2863 (Ch)

PASSING OFF

It is common ground that the applicable legal principles were recently set out by the Court of Appeal in Lidl at [27]-[35]. As Arnold LJ there observed (at [29]), the most comprehensive statement of the law remains that of Lord Diplock in Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731 at 742:

“My Lords, A. G. Spalding & Bros. v. A. W. Gamage Ltd., 84 L.J.Ch. 449 and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so.”

By closing submissions, it was Getty Images’ case that the claim for passing off would ultimately “stand or fall” with the Trade Mark Infringement Claim and they relied upon the evidence to which I have already referred in that context.

However, as Stability points out, there is at least an argument that passing off does not extend to post-sale confusion – the only exception in the authorities being where the party purchasing the goods does so in order to make a further misrepresentation and the trader intentionally trades off the back of this intention. See the analysis of Freddy SpA v Hugz [2020] EWHC 3032 (IPEC) in Thom Browne v Adidas [2024] EWHC 2990 (Ch) at [755]-[758]. The court did not need to decide the point in that case, but on any view, the question there articulated may potentially be relevant here. The tort with which I am concerned only crystallises after the user has made the decision to download the Stable Diffusion model weights and source code, or to sign up for DreamStudio or to use the Developer Platform/API.

Getty Images did not address me on this point but simply asserted that if the case on sections 10(2) and/or 10(3) TMA succeeded, then they had a legitimate claim of misrepresentation which had deceived or was likely to deceive the public and which had caused damage. I am not so sure that this analysis is correct on the facts of this case, but where the point has not been properly argued before me I decline to address it. Getty Images has succeeded in part in its claims under sections 10(1) and 10(2) TMA and I do not presently see that its claim of passing off adds anything to my findings on those claims. I gave the parties the opportunity to make further submissions on this point upon circulating this judgment in draft, but neither party sought to do so and indeed it was Stability’s position that the court ought not to entertain further substantive argument on the issue after conclusion of the trial. In circumstances where neither party invites me to consider the point further, there is no need for me to do so.