The United Kingdom Supreme Court has released a new judgment, reconsidering the law relating to passing off in light of the emergence of a global marketplace.
The appellants are members of a group of companies based in Hong Kong, referred to throughout the judgment as PCCM. PCCM runs NOW TV, which is the largest pay television operator in Hong Kong.
It was acknowledged by PCCM that people in the United Kingdom cannot receive PCCM's closed circuit service. There have been no set top boxes for NOW TV supplied in the UK, nor has a subscription been registered to a subscriber with a UK billing address. In addition, there is no evidence of any subscriptions having been paid for with credit or debit cards with billing addresses in the UK. The content was only available in the UK through PCCM's website (which had Chinese language content) or on PCCM's channel on You-Tube.
Nevertheless, the Supreme Court noted that "a number of Chinese speakers permanently or temporarily resident in the UK in 2012 were aware of the NOW TV service through exposure to it when residing in or visiting Hong Kong."
In 2012, the British Sky Broadcasting Group (Sky) established a new "over the top" service for delivering its existing content. Originally intended to be named "Sky Movies NOW"; on the advice of a consumer research agency it was renamed "NOW TV".
PCCM began proceedings against Sky, on the grounds that the use of the name amounted to passing off.
The Supreme Court's decision
The Supreme Court declared that "[t]he law of passing off can be summarised in one short general proposition – no man may pass off his goods as those of another".
There are three elements required to establish passing off:
- a goodwill or reputation attached to the goods or services in the mind of the purchasing public;
- a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are those of the plaintiff; and
- damage caused by the misrepresentation.
The High Court found that PCCM had established the second and third limbs. However, the judge in the High Court, and the Court of Appeal, decided that "it was not enough for PCCM to establish that it had a reputation among a significant number of people in this country, if it had no goodwill in this country".
The United Kingdom Supreme Court reviewed the existing case law on passing off in the United Kingdom and a number of other jurisdictions, including Canada, New Zealand, Australia and Singapore. Lord Neuberger (delivering the judgment of the whole court) noted that:
PCCM's argument was that:
Lord Neuberger acknowledged that there is force in that argument, but said that:
He noted that there needed to be a balancing exercise, as passing off is "a compromise between two conflicting objectives, on the one hand the public interest in free competition, on the other the protection of a trader against unfair competition by others". Lord Neuberger decided that:
The United Kingdom Supreme Court therefore dismissed the appeal, finding that a claim could not be made in passing off where there is no goodwill in the jurisdiction, and that an international goodwill is not sufficient.
The New Zealand position
The Supreme Court's decision agreed with New Zealand's leading case on the issue, Dominion Rent A Car Ltd v Budget Rent A Car Systems (1970) Ltd  2 TCLR 91. While that case was decided some time ago, before the emergence of a global marketplace for many goods and services, given Lord Neuberger's reasoning, it is likely that New Zealand courts will follow the same path as the United Kingdom.
A copy of the judgment is available here
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