Passing Off Versus Misleading and Deceptive Conduct
Read this article to find out the difference between passing off and misleading and deceptive conduct when it comes to intellectual property.
Where one trader misrepresents their goods and services as being goods and services of another, multiple actions may apply. These actions have developed in Australian law as ways to protect the reputation of individual traders. Registering a trademark through the Trade Mark Act 1995 (Cth) is one way to do this. However, in the absence of a registered trademark, alternative actions will need to be relied upon. This is where the tort of passing off and misleading and deceptive conduct provisions of Australian Consumer Law can be useful. These actions protect one trader from using a face, logo, name or word from another trader as their own. This article will explore some key points of difference between these two actions to consider before pursuing a claim.
Proof of reputation
In a claim for passing off, a notable reputation in the good or service being misrepresented must be shown. This is one of the essential elements of the tort. This could be proved through advertising, sales or anything else showing consumers are aware of the good or service. A claim for misleading and deceptive conduct has no such requirement. This makes misleading and deceptive conduct easier to prove.
Proof of loss or damage
Proving loss or damage to your business is another essential element to a passing off claim. A drop in sales figures since the conduct complained of, is a potential example of this. Once again, no such requirement exists for a misleading and deceptive conduct claim. Rather, the focus is on conduct that misleads or deceives consumers into thinking there is some connection between the products. Therefore, the advantage lies with the Australian Consumer Law provisions in this instance.
Trade and commerce requirement
The misleading and deceptive conduct provision has a requirement that the conduct be ‘in trade or commerce’. This is not going to be a problem for the vast majority of cases. However, it does raise the possibility that the provision will not apply in some circumstances. For example, the provision may not apply where the name of a religious organisation has been adopted by another person. This is where the tort of passing off has a distinct advantage. The tort has no such limitation.
If successful in a claim, damages will differ between the actions. An account of profits and exemplary damages are not available in Australian Consumer Law. Only general compensation is usually awarded. The tort of passing off however, allows for an account of profits and exemplary damages if successful. Therefore, the flexibility in remedies makes passing off the preferable action.
Both passing off and misleading and deceptive conduct aim to protect the reputation of businesses. The overlap in actions has largely reduced the importance of the law of passing off. A claim for misleading and deceptive conduct avoids two major hurdles necessary for a passing off claim. On the other hand, passing off can be applied outside of trade and commerce and has greater flexibility in awarding damages. Think you have a claim in either of these actions? Talk to one of our business lawyers to help get you on the right track.