Abstract
It is a generally accepted truth that the United Kingdom has neither a general statute protecting traders against unfair competition nor has it developed a general tort of unfair competition.1 However, if one examines judicial dicta this conclusion appears less certain. For example, recently in Arsenal v. Reed (2003)2, the ECJ set out important principles as to when use of a registered trade mark is infringing use.3 However, in the United Kingdom where the case originated, Arsenal v. Reed has also been widely touted as the case in which the Court of Appeal finally recognised that domestic law does indeed encompass a general tort of unfair competition. In the case, the claimants were a football club who had a number of registered trade marks, including the word “Arsenal” and a shield logo, registered against a range of goods, including clothing; the defendant Mr. Reed was a trader who had sold clothing carrying the Arsenal trade marks outside the Club’s ground for many years. The claimant brought an action against Mr. Reed for registered trade mark infringement, which raised the questions subsequently addressed by the ECJ. The Club also sued Mr. Reed in the tort of passing off. In his judgement, Lord Justice Aldous noted obiter that the “cause of action traditionally called passing off, [is] perhaps best referred to as unfair competition”.4 In making this observation, Lord Justice Aldous took as his authority a statement made by Mr. Justice Cross as long ago as 19695 referring to another passing off case, Bollinger and Costa Brava Wine 6, decided in 1960.
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References
See for example, Cornish & Llewelyn, “Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights” 13 (5th ed. 2003); Sanders, “Unfair Competition Law: The Protection of Intellectual and Industrial Property” 23 (1997); Robertson & Horton, “Does the United Kingdom Need an Unfair Competition Law?,” 12 E.I.P.R. 568 (1995).
ECJ, November 12, 2002, Case C-206/01, 2003 ETMR 19 — Arsenal v. Reed.
For an account see Sumroy & Badger, “Infringing ‘Use in the Course of Trade’: Trade Mark Use and the Essential Function of a Trade Mark,” in: Phillips & Simon (eds.), “Trade Mark Use” 163–180 (2005).
2003 ETMR 73 CA at Para. 70 — Arsenal v. Reed.
High Court of Justice, 1969 R.P.C. 1 at 23, 28 — Vine Products Ltd. v. MacKenzie & Co Ltd.
High Court of Justice, 1960 R.P.C. 16 and 1961 R.P.C. 116 — Bollinger, J. v. Costa Brava Wine Coy. Ltd.
Supreme Court of New South Wales, 1981 R.P.C. 429, at 463 — Cadbury-Schweppes Pty. Ltd. v. The Pub Squash Co. Ltd.
In turn, Lord Scarman was endorsing the opinion stated a year earlier by Lord Diplock that although the judgement in Bollinger went “rather further” than previous passing actions, it still fell clearly within that tort. 1979 F.S.R. 397 — Erven Warnink Besloten Vennootschap and Another Appellants v. J. Townend & Sons (Hull) Ltd. and Another Respondents. In making his statement, Lord Diplock explicitly disagreed with the statement of Lord Cross in Vine v Mac-Kenzie.
Court_of Justice, 1995 F.S.R. 169 at 175 — Hodgkinson Corby Ltd. and Another v. Wards Mobility Services Ltd.
Art. 10bis of the Paris Convention provides a definition of unfair competition. However, in the UK the law affecting unfair competition has developed without reference to Art. 10bis. Dworkin, “Unfair Competition: Is the Common Law Developing a New Tort?,” 1 E.I.P.R. 242 (1979). On Art. 10bis see also Wadlow, “The Law of Passing Off” 52–93 (3rd ed. 2004).
Whish, “Competition Law” 70 (5th ed. 2003).
Whish, supra note 12, at 67.
Including the Control of Misleading Advertising Regulations 1998, the Consumer Credit (Advertisements) Regulations 1989, the Unfair Terms in Consumer Regulations 1999.
Cornish & Clark make this distinction in their book “Law and Society in England 1750–1950” 267 (1989).
The 1994 Trade Marks Act introduces criminal penalties for trade mark infringement. It is an offence for a person who with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor, inter alia applies to goods or their packaging a sign identical to, or likely to be mistaken for a registered trade mark. (Section 92 (a)). This section of the Act was designed to address the problem of counterfeit goods operations.
The control of Misleading Advertisements Regulations 1998 (SI 1998/915) is amended to implement the EU Directives on misleading and comparative advertising. There is also a British Code of Advertising, Sales Promotion and Direct Marketing, which is voluntary and requires advertising to “accept the principles of fair competition generally accepted in business” and “to be prepared with a sense of responsibility to consumers and society” <www.asa.org.uk>.
Section 10 (6) TMA 1994. The approach of the UK courts to comparative advertising is addressed in Part 3 below.
(2005/29/EC). It is expected that the Directive will be fully implemented in the UK by June 2007 and come into force in December 2007.
DTI, “Operation of General Rules and the Notion of Fairness in English Law”. According to this report, “English law tends to prioritise different values to those favoured by other European legal systems. First, as a matter of doctrinal form, English contract law prefers specific provisions to general clauses; and, secondly, a matter of doctrinal substance, the default values of English contract law are those of self-reliance and individualism rather than mutuality and cooperation”. Report, Para. 6 <www.dti.gov.uk/ccp/topics1/unfair.htm>.
“Report of DTI Workshop on the Effectiveness of Criminal Sanctions Following Transposition of the Unfair Commercial Practices (UCP) Directive” 18 (June 2005) <www.dti.gov.uk/ccp/topics1/unfair.htm>.
Supra note 22, at 3.
“The Executive Summary of the DTI’s formal consultation paper on implementing the EU Directive on Unfair Commercial Practices and amending Consumer legislation” 7 (December 2005) <http://www.dti.gov.uk/ccp/consultpdf/ucpukcondoc.pdf>.
The Report commissioned by the Government to examine the implementation of the Directive, discusses misrepresentation only in the context of breach of contract between the trader and the consumer, 49. It explicitly states that it will not consider misrepresentation in the context of common law or equity. Twigg-Flesner, Parry, Howells, Nordhausen, Micklitz, Stuyck, Wilhelmsson, “An Analysis of the application and scope of the Unfair Commercial Practices Directive: a report for the Department of Trade and Industry,” May 18, 2005, <www.dti.gov.uk/ccp/topics1/unfair.htm>.
Sanders, supra note 1, at 24; see also Carty, “An Analysis of the Economic Torts” 11 (2001).
Carty, supra note 26, at 2. The other torts she identifies are unlawful conspiracy, intimidation, unlawful interference with trade, deceit and the tort of negligence. See also Dworkin, supra note 10, at 241.
Robertson & Horton, supra note 1, at 569.
Cornish & Llewelyn, supra note 1, at 13. Most obviously by protecting ideas which are communicated under an obligation of confidence, provided they are identifiable, original, of potential commercial attractiveness and capable of reaching fruition. 1984 QB 44 — Fraser v. Thames Television Ltd.
Court of Appeal, 1991 F.S.R. 62 as per Glidewell LJ at 66 — Kaye v. Robertson.
1985 A.C.154 as per Lord Watson at 166 — White v. Mellin. See also High Court of Justice, 1999 F.S.R. 161 at 165 — Schulke & Mayr U.K. Ltd. and Another v. Alkapharm U.K. Ltd.
Supra note 31, as per Glidewell LJ at 66.
Section 3 (1) Defamation Act 1952.
For a full list, see Wadlow, supra note 10, at 386–390.
Carty, supra note 26, at 172.
High Court of Justice, 1975 F.S.R. 323 — De Beers Abrasive Products Ltd. v. International General Electric Co. of New York Ltd.
See for example the comparative advertising cases, High Court of Justice, 1996 R.P.C. 307 — Barclays Bank plc v. RBS Advanta and High Court of Justice, 1997 F.S.R. 34 — Vodafone Group plc v. Orange Personal Communications Services Ltd.
Wadlow, supra note 10, at 401. The courts have developed a similar test in relation to comparative advertising under the Trade Marks Act 1994.
Cornish & Llewelyn, supra note 1, at 629. See also Schulke & Maryr v. Alkapharm as per Jacob J., supra note 32, at 164.
Adams, “Unfair Competition: Why a Need is Unmet,” 8 E.I.P.R. 259, 260 (1992).
Schulke & Mayr v. Alkapharm, supra note 32, at 166.
Hodgkinson Corby v. Wards Mobility Services, supra note 9, at 174–175.
Mills, “Own Label Products and the “Lookalike” Phenomenon: A Lack of Trade Dress and Unfair Competition Protection,” 17 E.I.P.R. 116 (1995). Although, in 1997 R.P.C. 513 — United Biscuits (UK) Ltd. v. Asda Stores Ltd., the court found deception in part because the defendant, a supermarket chain selling “own brand” products, had chosen to “live dangerously” by appropriating aspects of the claimant’s packaging.
The “classic trinity” of goodwill, misrepresentation and damage was identified in 1990 R.P.C. 341 HL — Reckitt & Colman Products Ltd. v. Borden Inc. If goodwill and a misrepresentation are present the court is likely to assume damage or its likelihood. Wadlow, supra note 10, at 254–255.
1901 AC 271 as per Lord Macnaghten — IRC v. Muller & Cos. Margarine Ltd.
Judicial Committee of the Privy Council, 1976 F.S.R. 256 — Star Industrial Co. Ltd. v. Yap Keww Kor (trading as New Star Industrial Co.) as per Lord Diplock. See Wadlow, supra note 10, at 107–114. The question of whether passing off now protects the get-up or indicia apart from goodwill will be considered below.
Reckitt & Colman v. Borden as per Lord Oliver, supra note 46.
High Court of Justice, 1979 F.S.R. 113 as per Foster J. — Morning Star Cooperative Society Ltd. v. Express Newspapers Ltd.
2001 IP & T 787 — BP Amaco plc v. John Kelly Ltd.
For the Directive, see Para. 18. The leading ECJ case on unfair competition is 1 CMLR 1383 (1999) — Gut Springenheide and Tusky v. Oberkreisdirektor des Kreises Steinfurt — Amt für Lebensmittelüberwachung. He has since been imported into European trade mark law. See Davis, “Locating the average consumer: His judicial origins, intellectual influences and current role in European trade mark law,” 2 Intellectual Property Quarterly 183–204 (2005).
High Court of Justice, 1998 R.P.C. 117 HC — Chocosuisse Union des Fabricants Suisses de Chocolat v. Cadbury Ltd.
Wadlow, supra note 10, at 244. See 1984 F.S.R. 175 — Stringfellow v. McCain Foods (GB); Court of Appeal, 1996 R.P.C. 697 CA — Harrods Ltd. v. Harrodian School Ltd.
6 Beav 66 (1842) — Perry v. Truefitt.
84 LJ Ch. 449 (1915) — Spalding AG & Bros. v. A.W. Gamage Ltd. and Benetfink & Col Ltd.
Cadbury-Schweppes Pty. Ltd. v. Pub Squash Co. Pty. Ltd., supra note 7.
United Biscuits v. Asda, supra note 45.
Court of Appeal, 1989 R.P.C.455 — Bristol Conservatries Ltd. v. Conservatories Custom Built Ltd. Often described as the “reverse” form of passing off, it may be viewed as approximating a tort of unfair competition since it can be seen to be based on a simple misappropriation of the claimant’s goodwill. Carty, “Inverse Passing Off: A Suitable Addition to Passing Off?,” 15 E.I.P.R. 370 (1993). See also Carty, supra note 26, at 196, where she argues that such a view is unwarranted since it is still necessary to prove the classic trinity of goodwill, misrepresentation and damage.
High Court of Justice, 1991 F.S.R. 145 — Mirage Studios v. Counter-Feat Clothing; High Court, 2002 F.S.R. 60 HC — Irvine and another v. Talksport Ltd.; Court of Appeal, 2003 F.S.R. 35 CA — Irvine v. Talksport; see Scanlan, “Personality, Endorsement and Everything: The Modern Law of Passing Off and the Myth of the Personality Right,” 25 E.I.P.R. 563 (2003).
Court of Appeal, 2000 R.P.C. 669 — Dawnay Day & Co. Ltd v. Cantor Fitzgerald International.
Warnink v. Townend as per Lord Diplock, supra note 8.
High Court of Justice, 1983 F.S.R. 155 — Lego Systems A/S v. Lego M. Lemelstrich.
For example, High Court of Justice, 1968 F.S.R. 625 — Vine Products Ltd v. Mackenzie & Co Ltd. (No.5), the “sherry” case.
Dworkin, supra note 10, at 244. Carty also warns that the extended form of passing off might lead to an “overextension” of the tort leading it into the territory of “unfair trading”. Carty, supra note 26, at 195.
High Court of Justice, 1993 F.S.R. 641 — Taittinger SA v. Allbev Ltd.
Supra note 66, as per Lord Bingham at 677.
See for example, Carty, supra note 26, at 220. See also Russell, “The Elderflower Champagne Case: Is this a Further Expansion of the Tort of Passing Off?,” 15 E.I.P.R. 379 (1993). For an alternative view, see Robertson & Horton, supra note 1, at 569.
For example Dawnay Day v. Cantor Fitzgerald, supra note 61; also 2004 R.P.C. 36 — Sir Robert McAlpine Ltd. v. Alfred McAlpine Plc. In Harrods, in a minority opinion, Sir Michael Kerr endorsed the view of “dilution” taken by the Court of Appeal in Taittinger.
Carty, “Dilution and passing off: Cause for Concern,” 112 L.Q.R. 632–666 (1996).
Carty, supra note 70, at 634.
Carty, supra note 70, at 655. See also Carty, supra note 26, at 235–237.
Reckitt & Coleman v. Borden, supra note 46, at 406; see also Cornish & Llewelyn, supra note 1, at 15–17.
Cornish & Llewelyn, supra note 1, at 16.
For the latter point, see Court of Appeal, 1999 R.P.C. 567 CA — Elvis Presley Trade Marks, Re. See also Davis, “The King is Dead, Long Live the King,” Case note, 2000 Cambridge Law Journal 33–36. Cornish and LLewelyn point out that this reluctance intensified over the course of the twentieth century with the introduction of universal suffrage.
See for example, Robertson & Horton, supra note 1, at 569.
DTI, supra note 21, at 6.
Hodgkinson v. Ward Mobility, supra note 9, at 173.
Carty, supra note 26, at 1–2.
Cornish & Llewelyn, supra note 1, at 14.
Cadbury-Schweppes v. The Pub Squash, supra note 7, at 491.
Sanders, supra note 1, at 55. See for example, dicta of Buckley LJ in Bulmer v. Bollinger, supra note 6, at 25.
Warnink v. Townend, supra note 8, at 743.
Directive 97/55 of the European Parliament and Council, amending Directive 84/450, concerning misleading advertising so as to include comparative advertising. On the relationship between the provision and the Directive see 2000 F.S.R. 541 — British Airways plc v. Ryanair Ltd. and High Court of Justice, 2005 ETMR 61 — O2 Ltd., O2 (UK) Ltd. v. Hutchinson 3G UK Ltd.
British Airways v. Ryanair, supra note 86.
Particularly at the stage of a pre-trial injunction. British Airways v. Ryanair, supra note 86, at 551.
British Airways v. Ryanair, supra note 86, at 552; see also Barclays Bank v. RBS Advanta, supra note 39.
British Airways v. Ryanair, supra note 86, at 552; see also Barclays Bank v. RBS Advanta, supra note 39.
British Airways v. Ryanair, supra note 86, at 552; see also Barclays Bank v. RBS Advanta, supra note 39 and Vodafone v. Orange.
He noted at 554 that it might be caught by the voluntary code of the ASA; but he also suggested this it is possible to denigrate a competitor’s mark without being dishonest. The courts’ failure to recognise the dilution aspects of the comparative advertising provisions of the TMA 1994 has been criticised by Carty, in her article, “Registered Trade Marks and Permissible Comparative Advertising,” 24 E.I.P.R. 294 (2002).
This approach was confirmed in the recent Court of Appeal decision, O2 Holdings v Hutchison 3G (2007). The issue arose as to when the use of a mark in comparative advertising, which isconfusingly similar to another’s registered trade mark, is necessary or idispensable for the purpose of complying with the Comparative Advertising Directive. According to Lord Justice Jacob: “To construe the CAD as not permitting that would not be to interpret it ‘in the sense most favourable’ to comparative advertising”. The questions has now been addressed to the ECJ. Court of Appeal, 2007 ETMR 284 — O2 Holdings Ltd. (formerly O2Ltd) v Hutchison 3G Ltd.
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Davis, J. (2007). Unfair Competition Law in the United Kingdom. In: Hilty, R.M., Henning-Bodewig, F. (eds) Law Against Unfair Competition. MPI Studies on Intellectual Property, Competition and Tax Law, vol 1. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-71882-6_11
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