Understanding Passing Off in Canadian Law

This month we are discussing claims for passing off. It is a relatively flexible claim which can be helpful to an aggrieved plaintiff.

Passing Off

A claim for passing off is a tort and is a Judge-made concept which is a part of the common law. The claim has a long history. Originally the claim was like the tort of deceit and required a misrepresentation concerning the origin of the goods which was calculated to deceive purchasers and divert business from the plaintiff to the defendant. This is no longer the case. Over time the doctrine has evolved to consider changing commercial realities and is concerned with the protection of the community from the consequential damage of unfair competition or unfair trading. It also protects the interest of traders in their names and reputation. 

Canadian Courts require that three elements be established to succeed in an action for passing off. 

1. Goodwill  

The plaintiff must establish the existence of goodwill or reputation attached to goods or services supplied, in the mind of the purchasing public by association with identifying “get-up” under which the goods or services in issue are offered to the public, so that the get-up is recognized by the public as distinctive of the plaintiff’s goods or services. The “get-up” may include a common law trademark or a trade description or individual features of labeling or packaging in which the goods are offered to the public. It is the external appearance of the goods in the form in which they are likely to be seen prior to purchase. This type of goodwill is territorial in nature since it is linked to use. 

2. Misrepresentation 

The plaintiff must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods or services offered by the defendant are the goods and services of the plaintiff. Typically, this element requires that the plaintiff establish confusion in the minds of the public as a likely consequence of the sale, or offering for sale, by the defendant of a product not that of the plaintiffs making, under the guise or implication that it was the plaintiff’s product or the equivalent. The final purchaser of a product must be considered in determining whether the tort of passing off has occurred. In the context of prescription drugs the final consumer of the product includes physicians, pharmacists, dentists, and patients. 

3. Damage

The plaintiff must demonstrate that it has suffered or that it will likely suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff. 

An action for passing off is different from an action for infringement of a registered trademark although there may be an overlap. A plaintiff who owns a registered trademark will frequently claim both infringement and passing off in the same action.

If you have questions, please contact me at  jmckeown@LN.Law

John McKeown

Loopstra Nixon LLP.  

130 Adelaide St W Suite 2800Toronto, Ontario, M5H 3P5Canada

 jmckeown@LN.Law

437 290-5960

This article is of general nature and is not intended to provide specific legal advice as individual situations will differ. Specialist advice should be sought about your specific circumstances.