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Time to move on

26 September 2018

The Court of Appeal has upheld an IPEC decision in relation to a passing off claim, and rejected the Claimant’s application to adduce new evidence at the appeal.

The Claimant, an organisation which represents businesses in the removals and storage industry, claimed that the Defendants had been holding themselves out to be a member of its organisation in online advertisements. The First Defendant is a removals company, of which the Second and Third Defendants are both directors and 50% shareholders. The First Defendant’s membership of the Claimant’s organisation (the NGRS) expired in 2010.

The IPEC decision

The NGRS claimed passing off in relation to claims made in two online adverts for the Defendants’ business. The first (the 'Bee Moved advert') was posted on the First Defendant’s website. It included a checklist of recommendations for home-movers, one item of which advised customers to use a removal company which is a member of the NGRS. The Claimant argued that this implied that the First Defendant was an NGRS member and that this could result in damage to its goodwill. The Defendant argued that the reference to the NGRS was simply general guidance and not a claim of membership.

The second advert (the 'Really Moving advert') was posted on www.reallymoving.com, a popular website for house-movers. The First Defendant joined this website in 2004, and had posted an advert on its designated page (the 'company page') which stated that it was a 'Member of the NGRS'. The Defendants stated that, when the First Defendant’s NGRS membership ceased, the Third Defendant amended the advert on the company page accordingly. However, he was not aware that this advert had been copied to another page on the website (the 'directory page'). This second advert still stated that the First Defendant was an NGRS member. The Defendants had no knowledge that the directory page existed and were unable to edit it. The Claimant argued that since the words originally came from the Defendants, they were still liable for their use by Really Moving.

The IPEC upheld the claim for passing off in respect of the Bee Moving advert. However, the Court rejected the claim that the Defendants were liable for the Really Moving advert, on the basis that it was posted by a third party without the knowledge of the Defendants. As a result, the Defendants could not be liable for the misrepresentation contained therein.

On Appeal

The Claimant appealed on two grounds:

  • that the IPEC erred in determining that the Defendants’ lack of knowledge prevented them from being liable for the misrepresentation in the Really Moving advert; and
  • that the IPEC should not have accepted the oral testimony of the Third Defendant at trial, which was inconsistent with his written witness statement.

The Court dealt with the second ground of appeal first. The Claimant sought to introduce new evidence which it claimed undermined the Third Defendant’s credibility. This evidence consisted of copies of pages from the Really Moving website which were taken in 2009. They included a copy of the directory page and the company page. The phrase 'Member of the NGRS' did not appear on the company page, which the Claimant argued meant that the Third Defendant could not have deleted this phrase from the company page (as claimed in his oral testimony). The Claimant argued that this further evidence should be admitted at appeal because it had only become relevant as a result of the inconsistency between the Third Defendant’s evidence in his witness statement and that he gave during cross examination.

The Court of Appeal held that it was not appropriate to admit the evidence on the basis that the Claimant would have been able to obtain it before the trial, and should have done so. The Third Defendant had not contradicted himself in a way which made this new evidence relevant where it had not been before. Furthermore, the evidence would likely not have altered the IPEC’s decision, as it was not contemporaneous with the period immediately preceding the expiry of the First Defendant’s NGRS membership. Furthermore admission of the evidence now would likely result in a retrial in the IPEC, which would be contrary to the overriding objective. The second ground of the appeal was therefore dismissed.

In respect of the first ground of appeal, the Claimant argued that the Defendants’ lack of knowledge was not relevant in determining liability. The Claimant relied on the judgment in Reckitt & Colman Products Ltd v Borden Inc & Ors [1990] RPC 341, which stated that passing off requires “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 the goods or services of the plaintiff.” The Claimant submitted that the Defendants’ intention was therefore irrelevant. The Court dismissed this on the basis that the question here was not one of knowledge or intention, but of whether the Defendants “made” the misrepresentation or were responsible for it. The Defendants did not know about the directory page, and so did not make the misrepresentation that was published there. The representation was made by a third party and the Defendants could not be liable for it.

Key Points

  • The Court of Appeal has again refused to allow new evidence to be admitted on the basis that the evidence would have been relevant at first instance and could and should have been adduced then.
  • Where a misrepresentation has not been 'made' by a Defendant in a passing off claim, but was instead made by a third party without the Defendant’s knowledge or consent, the Defendant will not be liable for it.

This article was first published in the September 2018 issue of the CITMA Review, the journal of the Chartered Institute of Trade Mark Attorneys (CITMA). For more information on CITMA, please visit citma.org.uk

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