Morons in a Hurry, Buying Lemons in a Jiffy

Grace Teoh concentrates on a landmark case on passing off.

You should consider that imitation is the most acceptable part of worship, and that the gods had much rather mankind should resemble, than flatter, them.”1
Such form of worship may come with its fair share of complications - for example: Customer C has been a loyal consumer of Product A, which is made and sold by Proprietor A, for the last 10 years. Every so often, Customer C walks down the healthcare aisle and puts Product A, packaged in a bright red and gold get-up, in his shopping basket. One day, Customer C finds Product B, packaged in a bright green and gold get-up, right next to Product A. Customer C purchases Product B, believing it to be a newly launched variation of Product A, from the same manufacturer. Customer C consumes Product B, and ends up dancing the Aztec two-step for days. Customer C then demands compensation from Proprietor A.
Proprietor A may be able to claim for trade mark infringement against Proprietor B, assuming that Proprietor A has a relevant trade mark registration. However, trade mark infringement actions are limited by the scope of protection granted by the specific trade mark registration. What if Proprietor A does not have a relevant registration?
The common law tort of ‘passing off’ continues to supplement registered trade mark protection in such situations. The UK House of Lords extensively cultivated the tort in Erven Warnink BV and Ors v J Townend & Sons (Hull) Ltd and Ors [1979] AC 731, then later distilled it into a three-part test in Reckitt & Colman Products Ltd v Borden Inc and others [1990] 1 All ER 873, also known as the ‘Jif Lemon’ case.
Since 1956, Reckitt’s predecessors have marketed lemon juice in 55ml lemon-shaped and lemon-coloured containers with yellow caps, under the ‘Jif’ brand in the UK. After Reckitt took over in 1957, all competing lemon-dupe containers dropped from the market. In 1975, Borden attempted to squeeze into the UK market by selling lemon juice in 250ml bottles under the ‘ReaLemon’ brand, and by 1980, had successfully plucked about 25% share of the total sales of lemon juice in the UK. Reckitt reacted by selling its lemon juice in first 150ml bottles, then 250ml bottles.
Sometime in 1985, Borden attempted to seize a slice of Reckitt’s market share by marketing ‘ReaLemon’ in 75ml lemon-shaped and lemon-coloured containers with red caps. When Reckitt pressed Borden to cease, Borden agreed to do so but subsequently sprouted a plan to launch 75ml and 100ml lemon-shaped and lemon-coloured containers with red or green caps, with small labels identifying them as Borden’s goods.
Reckitt then ran to the courts for a quia timet injunction against Borden. Justice Walton sitting in the High Court found that housewives purchasing lemon juice would not examine the labels but would assume that lemon-shaped and lemon-coloured containers must contain Jif juice. Thus, Justice Walton held that the use of the Borden get-ups would constitute passing off, and he accordingly granted permanent injunctions to restrain Borden from selling lemon juice in any container so nearly resembling the Jif lemon-dupe container as to be likely to deceive, without making it clear to the purchaser that it is not a Jif juice. Justice Walton also found as a fact that Borden was fraudulently intending to pass off their goods as Reckitt’s goods.
Borden appealed to the Court of Appeal, which reversed the findings of fraud but affirmed the decision that the Borden get-ups would constitute an actionable passing off. Borden then appealed to the House of Lords.
The judgment began with Lord Bridge agreeing, albeit with undisguised reluctance, to dismiss the appeal, as the use of lemon-shaped and lemon-coloured containers to package lemon juice was an obvious choice.
Lord Oliver boiled down the law of passing off to one short general proposition: no man may pass off his goods as those of another. His Lordship then set out the three elements for the plaintiff to succeed in an action for passing off:
(a)   Goodwill: First, the plaintiff must establish goodwill or reputation attached to the goods or services which the plaintiff supplies under a particular get-up, be it brand name or some design feature, i.e. that the purchasing public recognises the identifying get-up as distinctive specifically of the plaintiff’s goods or services.
(b)   Misrepresentation: Second, the plaintiff must demonstrate a misrepresentation by the defendant to the public (whether intentional or otherwise) leading or likely to lead the public to believe that the goods or services offered by the defendant are the goods or services of the plaintiff. Whether the public is aware of the plaintiff’s identity as the manufacturer or supplier of the goods or services is irrelevant.
(c)   Damage: Third, the plaintiff must demonstrate that he suffers, or is likely to 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.
Both Lord Oliver and Lord Jauncey impressed in their judgments that customers are to be taken as they are found. The essence of the action for passing off is a deceit practiced on the public and it is no defence that the public would not have been so deceived if they had been more prudent, literate, or discerning.
Lord Oliver reproduced Justice Walton’s various findings, and in particular the following:
  • that shoppers paid little attention to any labels borne by the plastic lemons; the shopper need not read the label to know that they were obtaining lemon juice. Further, there was evidence that the shoppers could and would easily remove the labels after buying the lemons; and
  • that none of Borden’s get-ups caught the shoppers’ attention such as to alert them that they were ReaLemon, and not Jif, lemons. It could be assumed that the shoppers would just assume that the ReaLemon products were variants of the Jif product.
On the facts, it was undisputed that Reckitt had acquired a reputation in the market for the Jif juice get-up in lemon-dupes. There was abundant evidence that customers would be deceived if any of the Borden ReaLemon products were put on the market in their present form, even if the evidence was the result of surveys carried out under somewhat, inevitably, artificial conditions.
Consequently, the House of Lords upheld the injunction against Borden. The House of Lords strained to emphasise that the injunction was not a de jure monopoly as it was only to the extent that Borden marketed its ReaLemon products without taking adequate steps to make it clear to the ultimate purchaser that it is not Reckitt’s goods.
Justice Foster in Morning Star Cooperative Society v Express Newspapers Limited [1979] FSR 113 acerbically dismissed a claim for trade mark infringement and passing off stating, “If one puts the two papers side by side I for myself would find that the two papers are so different in every way that only a moron in a hurry would be misled”.  Lord Denning then reshaped it as a test in Newsweek Inc v British Broadcasting Corporation (1979) RPC 441.
Closer to home, the Malaysian Court of Appeal has allowed this test to steep into the ‘classical trinity’ of passing off elements in Yong Sze Fun & Anor (t/a Perindustrian Makanan & Minuman Layang-Layang) v Syarikat Zamani Hj Tamin Sdn Bhd & Anor [2012] 1 MLJ 585. The Court held that: “In passing off cases, the courts are concerned with the ordinary members of the public and the likelihood of them being confused by the products sold in the open market. As to the appropriate test to apply, Lord Denning in Newsweek Inc v British Broadcasting Corporation (1979) RPC 441, at p 447 aptly said:
The test is whether the ordinary, sensible members of the public would be confused. It is not sufficient that the only confusion would be to a very small, unobservant section of society: or, as Foster J put it recently, if the only person who would be misled would be ‘a moron in a hurry’.
So, in answer to the question posed earlier in this article, if Proprietor A is able to prove that:
(a)     it has goodwill and reputation in the get-up,
(b)     there were instances of the average consumer (who was neither moronic nor in a hurry) being confused or deceived by the get-up of Product B, and
(c)     it had suffered damage as a result thereof,
Proprietor A will be able to restrain Proprietor B from taking advantage of the fruits of its labour even if it did not have a registered trade mark over the get-up.2

End Notes:
1 From the biography titled ‘The Emperor Marcus Antoninus: His Conversation with Himself’.
2 All puns in this article were intended