Case No. IP-2016-000182

42.In some of the previous extended passing off cases the misrepresentation has been conceptually easy. For example, in Chocosuisse Cadbury’s use of the words ‘Swiss Chalet’ in its packaging for chocolate confused a significant proportion of the public into believing that it was made in Switzerland. The finding that this was an actionable misrepresentation was made possible by the premise, also found by the court, that ‘Swiss chocolate’ meant chocolate made in Switzerland to a significant proportion of the public. In Fage there was a belief among the public that the words ‘Greek yogurt’ on a yogurt pot meant that it was made in Greece, so there was a misrepresentation if it was not.43.In other cases the nature of the misrepresentation is not so immediately apparent. Danckwerts J concluded in Bollinger that a proportion of the public did not know that champagne came from France. (Others, including those in court where “the case is tried in an atmosphere of educated persons” (at p.282), knew that champagne came from France but those persons were not relevant to the finding of a misrepresentation). The judge found that when members of the public unaware of the geographic origin of champagne were sold ‘Spanish Champagne’ they were confused into thinking that they were getting the wine with the great reputation of which they had heard because for them ‘Spanish’ provided no warning to the contrary (at p.291). It is not clear from the judgment whether the defendants’ wine was made according to the méthode champenoise, but it didn’t matter because the discussion about misrepresentation centred only on geographic origin.44.This seems to create a difficulty. The relevant section of the public neither knew nor cared from which country champagne came. They were told that the defendants’ wine came from Spain, which was true. Where was the misrepresentation?45.In Warnink Lord Fraser identified it in this way (at p.753):“The misrepresentation was not that the defendants’ product was the product of the plaintiffs, or even that it came from France. The misrepresentation was that ‘Spanish Champagne’ was wine of the kind that enjoyed the reputation and goodwill which attached to genuine champagne, and in which the plaintiffs had a property right.”46.In Fage Kitchin LJ indicated (at [66]) that in Vine Products Ltd v Mackenzie and Company Ltd [1969] R.P.C. 1, Cross J had (at p.23) correctly identified the misrepresentation in Bollinger, namely that consumers might well think that a bottle labelled ‘Spanish Champagne’ was the genuine article. Kitchin LJ earlier quoted the relevant passage from Cross J’s judgment: “A man who does not know where Champagne comes from can have not the slightest reason for thinking that a bottle labelled ‘Spanish Champagne’ contains a wine produced in France. But what he may very well think is that he is buying the genuine article – real Champagne, and that, I have no doubt, was the sort of deception which the judge had in mind. He thought, as I read his judgment, that if people were allowed to call sparkling wine not produced in Champagne ‘Champagne’, even though proceeded by an adjective denoting the country of origin, the distinction between genuine Champagne and ‘champagne type’ wines produced elsewhere would become blurred; that the word ‘Champagne’ could come gradually to mean no more than ‘sparkling wine’; and that the part of the plaintiffs' goodwill which consisted in the name would be diluted and gradually destroyed. If I may say so without impertinence I agree entirely with the decision in the Spanish Champagne case – but as I see it it uncovered a piece of common law or equity which had till then escaped notice – for in such a case there is not, in any ordinary sense, any representation that the goods of the defendant are the goods of the plaintiffs, and evidence that no one has been confused or deceived in that way is quite beside the mark. In truth the decision went beyond the well trodden paths of passing off into the unmapped area of ‘unfair trading’ or ‘unlawful competition’.”47.Taking the three reasons given by Cross J in reverse order, the last has been overtaken by emphatic rulings from the Court of Appeal that English law has not been extended by means of creating a tort of unfair competition, see L’Oréal SA v Bellure NV [2007] EWCA Civ 968; [2008] R.P.C. 9, at [135]-[161] and Fage at [24]. Cross J’s second reason addresses damage by blurring, not whether there was a misrepresentation in the first place. Passing off requires a misrepresentation. It is the first reason that matters: the public thought that they were buying the genuine article and they were not.48.The concept of genuineness was also at the centre of the misrepresentation found in Warnink itself. Lord Fraser said (at p.754):“…the misrepresentation was that the respondents’ ‘Old English Advocaat’ was a liqueur of the kind that enjoyed the reputation attached to genuine advocaat in England.”49.This notion of genuineness can seem elusive. Superficially, it appears to be objective. Genuine champagne comes from the Champagne region of France. If wine from elsewhere is sold as champagne there is a misrepresentation because, objectively, it is not genuine. Likewise, ‘advocaat’ is objectively defined by reference to its recipe and if a drink made by another method is called ‘advocaat’ it is not the genuine article – there is a misrepresentation.50.However, if genuineness were to be assessed objectively without reference to the perception of the public, it would not have mattered if over the years the name ‘champagne’ had been used for sparkling wine made anywhere, such that the public universally believed that ‘champagne’ merely meant any sparkling wine. The champagne houses would still have succeeded because, objectively, wine from Spain can never be champagne. Similarly, had the facts in Warnink been that there was a universal public belief that ‘advocaat’ means an alcoholic drink made to any sort of recipe using eggs and alcohol, this would not have hindered the plaintiffs’ case.51.If extended passing off were really made possible by an objective misrepresentation, it would follow that the relevant public need not be misled about anything. I do not believe that this is what either the House of Lords or Danckwerts J can have had in mind.52.The law of passing off has long recognised that a representation can be both objectively true and misleading. What matters is whether the relevant public are misled by the statement. In John Brinsmead & Sons Ltd v Edward George Stanley Brinsmead (1913) 30 R.P.C. 493, Buckley LJ (with whom Hamilton LJ agreed) began his judgment in this way (at p.506):“Before dealing with the facts of this case I must say something as to the law which the Court has to apply. The law, as I understand it, is this: – if a man makes a statement which is true, but which carries with it a false representation and induces the belief that his goods are the plaintiffs’ goods, he will be restrained by injunction. He cannot rely on the fact that his statement is literally and accurately true, if, notwithstanding its truth, it carries with it a false representation. Instances of that proposition are found in the ‘Glenfield Starch’ case, the ‘Camel-Hair Belting’ case, and the ‘Stone Ale’ case; and many other instances might be adduced.”53.The converse would seem to apply: if the representation is objectively untrue in the sense, for instance, that it not consistent with regulations governing the origin of the product, but it induces no false belief in the mind of the relevant public, there is no passing off. The misrepresentation would not be operative.54.In Consorzio del Prosciutto di Parma v Marks & Spencer plc [1991] R.P.C. 351 Italian law required that ham could be sold as ‘Parma ham’ only if sold either (a) as a leg on or off the bone bearing the mark of authenticity or (b) in slices cut off from such a leg in the presence of the consumer, taken to be at the point of retail sale. Marks & Spencer imported hams from Parma bearing the mark of authenticity, then sliced and packaged the ham for sale in their stores. At first instance the court refused to strike out the claim for passing off. The claim was based on the argument that Marks & Spencer’s product could not be lawfully marketed as ‘Parma ham’ because of the Italian regulations and because the ham was not sliced in front of consumers. The Court of Appeal allowed the appeal, striking out the claim.55.Nourse LJ, with whom Balcombe and Leggatt LJJ agreed, cited the three elements of passing off and continued (at p.370):“As to reputation, the producers will face the obvious difficulty that many people's normal, perhaps their only, experience of Parma ham in this country comes from consuming it in restaurants, where it is very rarely, if ever, sliced off the leg in their presence. However, the judge accepted that the evidence certainly disclosed that to some people in England Parma ham was synonymous with a whole ham bearing the crown sliced in the presence of the ultimate purchaser. That evidence came from people in the wholesale and retail food trades, restaurateurs and publishers and writers of books on food. I am not quite sure whether the judge was of the view that it established a serious question to be tried as to the existence of the alleged reputation amongst a section of the public, but for my part I am prepared to assume that it does.Where then is the misrepresentation leading to confusion? There must be both. Let us assume, first, that there is a misrepresentation. It will not confuse the section of the public to whom the reputation is known. They will know that Marks & Spencer's ham cannot be the real thing and may decide to buy it or not as they choose.” 56.The section of the public who knew about the Italian regulations would know that labelling Marks & Spencer’s ham as ‘Parma ham’ did not comply with the Italian laws and that the product was not ‘genuine’. There was in that sense a misrepresentation, but it was not an operative misrepresentation because this section of the public was in no way misled by it. Nourse LJ went on to consider members of the public who knew nothing about the Italian regulations. They would not be misled either. They would expect only that Parma ham must be the authentic product from Parma, and Marks & Spencer’s ham was certainly that.57.Thus, Nourse LJ indicated that to establish passing off the misrepresentation must mislead the relevant public. Specifically, if the relevant public are not aware of rules limiting the use of the name of a product – in casu that for sliced ham to be given the name ‘Parma’ it must be sliced in front of the consumer – then breach of such rules will not lead to an operative misrepresentation. The judgment of the Court of Appeal in Consorzio del Proscuitto di Parma underlines that the misrepresentation cannot be merely assessed objectively, such as by reference to laws protecting the origin of products. As Nourse LJ put it, there must be both a misrepresentation and confusion.58.That being so, where in Warnink there was reference to a misrepresentation that the defendant’s product was genuine, the House of Lords had something mind other than an objective concept of genuineness.59.In Chocosuisse Chadwick LJ said (at p.837):“Misrepresentation is an essential element in the tort of passing-off. But misrepresentation, in this context, lies in marketing goods in a way which will lead a significant section of the public to think that those goods have some attribute or attributes which they do not truly possess. That arises where there is confusion, or the likelihood of confusion, in the minds of the public between the goods of the defendant and other goods which do possess that attribute or those attributes.”60.The public must be led by the misrepresentation to think that the defendant’s goods have attributes or characteristics that they do not truly possess. Warnink indicates that this does not depend on the public knowing anything about such attributes or characteristics. A misrepresentation may take the form of a false suggestion, created by the defendant’s use of the distinctive name in issue, that his product has the same characteristics as the product known by that name, whatever those characteristics may be – and is in that sense genuine.61.Here a distinction must be drawn. In order for the product in issue to acquire a reputation and thus generate goodwill in the business in that product, it must necessarily have qualities recognised and appreciated by the public. However, the product may have further characteristics not known to the public and the alleged misrepresentation may turn on these. In Bollinger the relevant section of the public did not know that champagne comes from France. In Warnink: the relevant public did not know about the Dutch recipe from which advocaat had been made, the key feature of which was that the ingredients consisted of spirit and eggs but not wine. Danckwerts J took the view that champagne was not genuine unless made from grapes grown in the Champagne region of France; the House of Lords were of the opinion that advocaat was not genuine unless made from spirit and eggs and, importantly, contained no wine. Attention focussed on those essential characteristics because they were seen to be signifiers of what was ‘genuine’.62.The misrepresentations in Bollinger and Warnink were operative even though the relevant public had no notion of the essential characteristics of champagne or advocaat, or what, in that sense, made the product genuine. The finding of a misrepresentation was based on the relevant public believing that a drink marked with the distinctive name had all the essential characteristics of the product with that name. Such a belief seems to have been assumed in both Bollinger and Warnink. The defendant used the distinctive name in question for its product and thereby falsely represented that its product had all the essential characteristics of the drink with the famous name, which characteristics consisted of or included those identified by the court. In fact the defendant’s drink did not have those characteristics. The public were in that way misled.63.It may be that in some circumstances there could be an issue regarding the correct identification of the essential characteristics of a product. Resolving that issue might threaten to come close to an objective determination of genuineness depending on how the resolution is approached, particularly from an evidential perspective. That is not something I need pursue. I would add that it will always be safer for a claimant in an extended passing off claim to base his allegation of misrepresentation on the premise, proved on the evidence, that the relevant public not only believe the name in question to be distinctive of a product with known characteristics, but also believe that the name implies possession of the characteristic(s) relied on to establish the misrepresentation. For example, in the case of ‘Greek yogurt’ that the yogurt comes from Greece.64.As with classic passing off, the misrepresentation need only be operative in relation to a significant proportion of the public in England and Wales. In Fage Kitchin LJ referred (at [64]) to the discussion of this topic by Morritt LJ in Neutrogena Corporation v Golden Ltd [1996] R.P.C. 473, at 493. I considered Neutrogena in Moroccanoil Israel Ltd v Aldi Stores Ltd [2014] EWHC 1686 (IPEC); [2015] F.S.R. 4 at [13]-[16], taking into account what had been said by the Court of Appeal in Interflora Inc v Marks and Spencer plc [2012] EWCA Civ 1501; [2013] F.S.R. 21 at [30]. I concluded that a significant proportion of the public could be less than half, possibly quite a lot less:“Morritt LJ implied that starting with the relevant minimum proportion of the public is the wrong way around. I think the better approach is instead to … assess whether it is likely that sufficient individuals have made or will make the false assumption such as to cause material damage to the goodwill of the claimant.” Damage 65.If goodwill and an operative misrepresentation are established, damage is almost certain to follow. It may include lost sales and will almost certainly include dilution of the collective goodwill, as identified by Cross J in Vine Products in the passage cited above. See also Fage at [67]. Relevant date 66.The relevant date for assessing whether the defendant’s conduct constitutes passing off is the date on which the conduct complained of began, in conformity with the rule for classic passing off, see Starbucks (HK) Ltd v British Sky Broadcasting Group plc [2015] UKSC 31; [2015] F.S.R. 29 at [16] and Chocosuisse at p.836. Services and types of organisation 67.All cases to date have concerned the name of a product. In principle, I see no reason why the law of passing off should not similarly protect goodwill associated with the name of a type of service. In fact, MML sought to take things a step further and to protect goodwill associated with a name given to a type of organisation. Again, I see no objection to this in principle. None was raised.