Unregistered Trademarks

Passing Off No. 3

Emeritus Professor Michael D Pendleton
Copyright, 2017
Lecture overview
1. Passing off: related actions
• Character merchandising
• Injurious falsehood
2. Assignment & licensing of unregistered trade marks
3. The future of competitor actions in HK & elsewhere
• Expanded scope for passing off?
• What should intellectual property protect?
• A general remedy for misappropriation?
Character merchandising,
personality rights and sponsorship

(1) human, non-fictitious persons

Character merchandising,
personality rights and sponsorship

(2) human, fictitious persons

Character merchandising,
personality rights and sponsorship

(3) non-human, fictitious persons

• In essence, it is actionable if the public is
being misled into believing that there is a
business connection or some authorisation
between the plaintiff and defendant, when
in fact, there is not.
• Misappropriation of promotional goodwill,
or the loss of an opportunity to commercially
exploit his character/reputation as opposed
to consumer deception
(misrepresentation)
Extended passing off
‘Here the defendant does not necessarily seek to
disguise the source of his goods or services. He simply
makes a representation which links him with the plaintiff
or his goods. The public while recognising that the
goods or services in question come from the defendant,
is nevertheless deceived into believing that the plaintiff
is somehow associated with them – and this is the
essence of the extended action for passing off. The
proprietary interest filched does not involve the plaintiff’s
trading goodwill; it is promotional goodwill, the ability to
recommend or promote other goods and services – or
merchandising rights – which are appropriated.’ [29]
Early cases

• Radio Corp v Disney (1937) 57 CLR 448

(‘Mickey Mouse’ and ‘Minnie Mouse’ for
radio receiving sets)
• Henderson v Radio Corp (1960) NSWR
279 (ballroom dancers; ‘common field of
activity’)
Misrepresentation?
Misappropriation?
Misrepresentation?
Misappropriation?
• Crocodile Dundee cases
– Hogan v Koala Dundee Pty Ltd (1988) IPC 90
– Pacific Dunlop v Hogan (1987) 12 IPR 225
• Circularity?
– Pacific Dunlop v Hogan (1987) 12 IPR 225;
Gummow J (‘erroneous assumption’)
Misrepresentation?
Misappropriation?
• Children’s Television Workshop v Woolworths (1981) 1
NSWLR 273 (‘Muppets’ plushies case – belief in
commercial arrangement between the creator of a
fictional character and the merchandiser as the basis for
actionable misrepresentation), following the approach in
Henderson
• Rejection of a general remedy for misappropriation?
– Victoria Park Racing and Recreation Ground v Taylor (1937) 58
CLR 479 (HCA)
– Moorgate Tobacco Co Ltd v Philip Morris (1984) 156 CLR 414
(HCA)
• Need for legislative intervention?
Pacific Dunlop v Hogan (1987) 12
IPR 225
• ‘Knife scene’ from Crocodile Dundee
• Trial judge’s description:-
"Mick Dundee and Sue Charlton are walking arm in arm
through the colonnade. They are approached by three
young persons, one of whom asks the hero for a light.
He replies: 'Yeah sure kid. There you go'. But the
response is a demand for the hero's wallet. The heroine
says in alarm: 'Mick! Give him your wallet'. Mick says in
a relaxed fashion: 'What for?' She replies: 'He's got a
knife.' Mick then laughs and responds, 'That's not a
knife', producing a formidable hunting knife with the
words, 'That's a knife'. Mick uses the knife to slash the
jacket of the mugger, then holds the knife to his face.
The mugger and his accomplices then run off."
Pioneering Hong Kong cases
(Sponsorship)

• Shaw Brothers v Golden Harvest (1972)

(‘ 獨臂刀’ ), Huggins J
Pioneering Hong Kong cases
(Sponsorship)
“But why should an author, playwright or film script writer not acquire a right of
property in a fictional character which is his brainchild? First it is said there is no
English case where such a right of property has been held to exist. . . With the
Champagne cases in my mind I would find it hard to accept that absence of authority
in this field of law is a factor of great weight. . . [Citing Chaplin v Anador (US)] It is
the plaintiff’s right to be protected against those who would injure him by fraudulent
means – that is counterfeiting his role – or, in other words, plaintiff has the right to
be protected against ‘unfair competition in business’. [/citation] I can see no reason
why that should not be applied to a case where a character is created not by the
actor but by the script writer or by others responsible for the production … I think
Equity will give...a remedy if a competitor unfairly appropriates what is indeed the
spirit though not the actual substance of their work, namely a character they have
succeeded in building up. ”
- Huggins J in Shaw Bros. v. Golden Harvest

* CF. US cases:
• Lone Ranger Inc v Cox (‘language tending to imply connection’)
• Lone Ranger Inc v Currey (title of the defendant’s presentation, names of the
characters, costume and the accoutrements and distinctive sounds associated with
the character)
Other significant character
merchandising cases
• Surge Licensing Inc v Pearson [1991] 21 IPR
227 (TMNT apparel; exclusive licencee)
• Anheuser-Busch Inc v Castlebrae Pty Ltd [1991]
21 IPR 54 (‘Spuds MacKenzie’; relevance of
public awareness as to character merchandising)
– CF Lorimar Productions Inc v Sterling Clothing
Manufacturers (Pty) Ltd [1982] RPC 395 (‘Dallas’
case)
Other significant character
merchandising cases
• Mirage Studios v Counter-Feat Clothing Co [1991] FSR
145 (‘Turtles’ case – representation as to authenticity +
connection with P)
– Acceptance of public recognition of the rights of the owner of a
popular fictional character to license and protect its image
– Recognition that the action is available for non-traders or
manufacturers where they are in the business of granting
merchandising licences
• Restrictive application of Hogan in English/HK courts
– ‘goodwill’ as opposed to ‘reputation’ as the property protected
by passing off;
– actual or potential damage to the plaintiff – in Hogan, it was
held that a relevant misrepresentation as to a commercial
connection between the image owner and the defendant will
constitute the tort
Passing off? Unfair competition?
• Passing off: the interests of the buying public, preventing
deception/confusion as to the source of the offered product
• Misappropriation: ‘. . . material that has been acquired by
complainant as the result organisation and the expenditure of
labour, skill and money, and which is saleable by complainant for
money, and that defendant in appropriating it is endeavouring to
reap where it has not sown . . . [and] is appropriating to itself the
harvest of those who have sown’ International News Service v
Associated Press (1918) US 215, at 239–240 – preventing unjust
enrichment, defending P’s interest against competitors who abuse
the freedom to compete by using unfair means
• Need for a separate regime? Picus J in Hogan v Koala Dundee
(character merchandising – misrep as to connection with P vs.
wrongful misappropriation of reputation), but cf. Moorgate Tobacco
v Philip Morris (HCA) (personality rights; protection against
commercial exploitation of P’s identity)
Right of publicity (US)
• ‘The inherent right of every human being to
control the commercial use of his or her identity’
– Enjoyment of the fruits of one’s labour/achievements
– Preventing “free-riding” + unjust enrichment
• Protects anything by which an individual can be
identified – ‘personal names, nicknames, stage
and pen names, pictures, and persona in a role
or characterisation . . . physical objects which
identify a person such as aviator sunglasses,
spangled band jacket and single glove cover for
Michael Jackson.’ (J McCarthy, 1989)
Right of publicity (US)
P must prove:-
• (a) his or her publicity rights are worth
protecting; that is, he or she is a true celebrity;
• (b) at least one of his or her attributes has been
clearly represented to the public such that an
unauthorised use is tied to him or her; and
• (c) the unauthorised portrayal is not privileged
(eg news is privileged under 1st amendment) or
not merely an incidental use, but rather a true
commercial use causing some damage or some
irreparable injury.
Need for reform?
• Newton John v Scholl-Plough (Aust) Ltd (1986)
11 FCR 233 (‘Olivia Newton-John? No –
Maybelline’)
• Honey v Australian Airlines Ltd (1990) 18 IPR
185 (Gary Honey; photo used for the purpose of
‘promoting and encouraging sport within
Australia’)
• Lau Tak Wah Andy v Hang Seng Bank [2000] 1
HKC 280 (Chung DJ)
Injurious falsehood
• Mogul Steamship Coy Ltd v MacGregor, Gow & Coy & Ors [1892] AC
25 (Chinese tea; ‘lawful cartel’)
• Lord Field:-
‘It...is undoubted law not only that it is not every act causing damage to
another in his trade, nor even every intentional act of such damage,
which is actionable, but also that acts done by a trader in the lawful
way of his business, although by the necessary results of effective
competition interfering injuriously with the trade of another, are not the
subject of any action. Of course it is otherwise, as pointed out by Lord
Holt, if the acts complained of, although done in the way and under the
guise of competition or other lawful right, are in themselves violent or
malicious, or have for their ultimate object injury to another from ill-will
to him, and not the pursuit of lawful rights… But I think that in all such
cases it will be found that there existed either an ultimate object of
malice, or wrong, or wrongful means of execution involving elements of
injury to the public, or at least, negativing the pursuit of lawful object.’
• Cf. s.24 of the Defamation Ordinance re: proof of special damage
may be dispensed with in certain circumstances
Assignment & licensing of
unregistered trade marks

• Tin Tin Yat Pao v Tin Tin Publication

Development Ltd [2000] 3 HKC 1
– cf. Harrods Ltd v Harrod’s (Buenos Aires) Ltd
(1997) FSR 420 (use of a name)
The future of competitor actions

• Unfair competition? Lord Diplock in Advocaat vs. Lord

Scarman in Pub Squash?
Expanded scope for passing off?
• Inherently flexible
• Pressure on UK Parliament to create a law of unfair
competition in line with the EEC
• Developments in the area of franchising or
merchandising rights to circumvent the common field of
activity test
• Extended protection for consumers, by consumer
legislation actionable by competitors cf. Lord Diplock in
Advocaat; increased criminal sanctions in the IP field
The future of competitor actions

Factors militating against an expanded

scope for passing off
• Creates extensive monopoly rights
• Introduces the dangers inherent in
competition by litigation
• Assimilates the interests of consumers to
those of competitors by introducing
consumer law analogies
What should intellectual property
protect?
• Range of information related ‘products’ for which
protection is sought is ever-increasing e.g.:-
– software, chip design, performances, cable and satellite
broadcasts
– genetically manipulated animals, biological ‘memories’ as
substitutes for silicon chips, sports routines and computer
generated simulated acting
• Information or aspects of information which is the result
of ingenuity, hard work or expenditure of time or
money, about which the law may grant exclusive or
semi-exclusive rights to restrict access, bearing in mind
the need to balance competing interests
A general remedy for
misappropriation?

• Intellectual property + the pressure to embrace many disparate

subject matters
• Inappropriateness of property as a conceptual/legal device to
protect the interests of those with legitimate interests in
protecting/accessing information ‘products’; devisors/innovators,
competitors, end-users (consumers)
– An exclusionary device primarily designed to exclude trespassers
• ‘It is entirely possible that western legal systems have too much
concern for creation of the stock of knowledge and too little concern
with usage and access. One explanation for such imbalance has
already been hinted at: Anglo-American law has a tradition of
formal ordering through the ascription of extended property rights
and it is more convenient to adapt existing rules and procedures
than to think anew.’ Professor Grant Hammond
A general remedy for
misappropriation?

• An expanded law of unfair

competition/misappropriation which deems it
unlawful for a person to take the labour, skill,
effort and investment of time and money of
another without adding to it sufficient additional
independent, labour, skill and effort and
investment of time and money.
• Not a substitute for all existing intellectual
property forms and actions; particularly patent
law