The Concept of Passing-Off Actions in Nigeria

CONTRIBUTED BY AMAEFULE LINDA C.

INTRODUCTION

A passing off action is concerned with the enforcement of one party’s rights to protect their identifiers from being used without permission by another party to the financial and reputational detriment of the owner of the rights.

In a commercial context, where a business has built up goodwill through an identity for its goods and services that is distinguishable from the competition, the law of passing off may be available to remedy losses suffered as a result of another business passing off goods and services as their own. Passing off may be relied on where there is no registered trade mark but where sufficient goodwill has been accrued and attached to the goods and services being passed off.

Where a trademark is in existence, a claim for passing off can be made concurrently with the trademark infringement action. Claims for passing off are, however, generally more complex and time-consuming. It is recommended, therefore, to take legal advice on all options available to enforce and protect intellectual property rights.

This article seeks to analyze the meaning of passing off, the distinguishing factor between passing off action and trademark registration, elements of passing off, as well as the defences available to a Defendant in a passing off action.

WHAT IS PASSING OFF?

Passing off occurs when a person deliberately or unintentionally displays their goods or services as those belonging to another party by the use of such other party’s identifiers, being either a logo, name or such other identifiers connected with the party’s business. This action of misrepresentation often damages the goodwill of a person or business, causing financial or reputational damage.

In addition to straight passing off, there can also be:

• Extended passing off – where misrepresentation of a particular quality of a product or service causes harm to another’s goodwill
• Reverse passing off – where a trader markets another business’ goods or services as being his own

Raising an action of passing off can help you to prevent other people from using the goodwill associated with your business for their own benefit.

As we already know, passing off and trademarking have lots of similarities in common. However, there are some distinctions between them.

DISTINCTION BETWEEN PASSING OFF AND TRADEMARK INFRINGEMENT

1. Action for trademark can be maintained in respect of trademarks that are duly registered under the Trade Marks Act.^[1] Here, it is less onerous to prove that such a trademark is owned by the plaintiff. On the other hand, action for passing off lies in respect of trademark infringement, where the trademark so infringed is not registered. The aggrieved party can therefore institute an action for passing off and would be required to establish his premiere interest of the trademark and also that the trademark has become so notorious and attributable to his product, trade, enterprise or profession. In such a case, the tort of passing off must be specifically proved.

2. Action for the infringement of trademark is statutorily prescribed. On the other hand, action for passing off is not necessarily statutorily prescribed, although it has been codified in some jurisdictions. It is rather an action claimed where there is unlawful economic interference with the trade of the plaintiff. Passing off being a category under economic tort is traceable to the common law.^[2]

3. Clearly, the Federal High Court has the jurisdiction to entertain issues arising from the Trademarks Act. Although there are conflicting opinions on whether or not the Court has Jurisdiction to entertain passing off actions, the Federal High Court has the jurisdiction to entertain actions for passing off.

In Patkun Industries Ltd. v Niger Shoes Ltd^[3], a 1988 decision, the Supreme Court held that the Federal High Court has jurisdiction in trademark infringement and Passing off actions stemming from the infringement of trademarks, whether registered or unregistered.

However, the reasoning and opinion of Nnamani J.S.C, Uwais J.S.C the Chief Justice of Nigeria at the time, and Mohammed J.S.C in the 2003 case of Ayman Enterprises Limited V. Akuma Industries Limited & Ors^[4] was that, a Passing off action for an unregistered trademark should not be instituted in the Federal High Court but a State High Court as the right of action in a Passing off did not arise from the infringement of any Federal enactment and so may only be a common law right but that the Federal High Court has jurisdiction over Passing off claims arising from the infringement of a trademark only if the trademark allegedly infringed was registered.

In Omnia (Nig.) v Dyktrade Ltd.^[5] a 2007 decision, it was held that the Federal High Court has exclusive jurisdiction to hear and determine a claim for Passing off whether the claim arises from the infringement of a registered or unregistered trade mark

These divergent reasoning of learned justices have in no little measure created doubts on the courts to institute an action in Passing off nonetheless, the grundnorm proffers a lasting solution to the jurisdictional issue. The Constitution specifically makes provisions for Passing off actions as follows:

“Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters on any Federal enactment relating to copyright, patent, designs, trademarks and Passing off, industrial designs and merchandise marks, business names, commercial and industrial monopolies, combines and trusts, standards of goods and commodities and industrial standards”.^[6]

ELEMENTS OF PASSING OFF

To establish a claim for passing off, you must meet three key requirements:

1. Goodwill – you must prove that you own a ‘reputation’ in the mark that the public associates with your specific product or service.
2. Misrepresentation – you must show that the trader has caused confusion and deceived or misled the customers into believing that their goods and services are actually yours.
3. Damage – you must prove that the misrepresentation damaged, or is likely to damage your goodwill, or cause actual or foreseeable financial or reputational loss.

Rights relating to passing off are established gradually with use. Goodwill in a mark can be particularly difficult to define. The reputation and goodwill of a business are generally considered as something that provides an identity to a business and its goods or services and distinguishes them from those of its competitors.

REMEDIES FOR PASSING OFF

If you are successful in a passing off claim, there are several remedies available. You can:

1. Apply for an injunction to prevent the business from using your trademark or goodwill.
2. Apply to have the infringing goods destroyed.
3. Sue for damages or seek account for lost profit.

PASSING OFF DEFENCES

There are certain defences available for a passing-off claim, the defendant may argue either of the following:

1. Consent of Plaintiff to the use of the name, mark, sign or slogan.
2. Indistinct name, mark, sign and slogan of the plaintiff15.
3. That the Plaintiff’s name, mark, sign, and hand slogan have become generic/commonplace.
4. Dissimilarities in the mark of the Plaintiff and Defendant.
5. Innocent usage of the Plaintiff’s name.

CONCLUSION

The purpose of an action for Passing off is to prevent one trade from damaging or exploiting the goodwill and reputation built up by another. Hinged on the principle that no man is entitled to represent his goods or his business as that of another, it is not a criminal offence. Any victim of passing off may first make a report to the person/company manufacturing the product, making them aware that another person/company is reproducing a similar product and passing it off as theirs.

1. CAP T13 LFN 2004. ↑
2. https://bscholarly.com/differences-between-passing-off-and-trademark/#:~:text=Action%20for%20trademark,for%20passing%20off. ↑
3. (1988)5 NWLR(pt. 93)138 ↑
4. 4 (2003) LPELR-SC. 116/1999. ↑
5. (2007) 15 NWLR (pt.1058)576 ↑
6. T & A Legal: Nigeria: An Appraisal Of Passing Off Actions Under Nigerian Law ↑