SPALDING V.

GAMAGE (1915) 32 RPC 273 (HL)

INTELLECTUAL PROPERTY RIGHTS LAW

PROJECT SUBMISSION

Submitted by-
Sushovan Choudhury
PRN: 16010224009 BATCH: 2016-21
of Symbiosis Law School, NOIDA
Symbiosis International (Deemed University)

In August, 2019
Under the guidance of
Ms. Charvi Kumar & Mr. Mathew Varghese
Symbiosis Law School, NOIDA
 DECLARATION

This Research Project based 'spalding v. gamage (1915) 32 rpc 273 (hl)', submitted by the undersigned to Symbiosis Law
School, NOIDA, Symbiosis International (Deemed University), Pune for the course ‘Intellectual Property Rights Law’
as part of Internal Assessment is based on an imaginary situation which has no relation to any person living or dead. The
research work has not been submitted elsewhere for award of any degree or any other purpose whatsoever.
The contents of the project are original and not plagiarised. The material borrowed from other sources and incorporated in
the project has been duly acknowledged.

I have also taken due care that the contents of my project are not similar or same as another learner‘s project for the
aforesaid course.

I understand that I could be held responsible and accountable for plagiarism, if any, even if detected later.

___________

Name of the Learner: Sushovan Choudhury

PRN: 16010224009

Batch: 2016-21

Division: A

Group: A
 SPALDING V. GAMAGE (1915) 32 RPC 273 (HL)

INTRODUCTION

Passing-Off - Misdescription of another trader's goods - Inferior goods of other trader

No person has a right to sell, or offer for sale, goods of another trader of an inferior or different
class or quality under conditions calculated to represent such goods as goods of that trader of a
superior and distinctive class. If this is done, an actionable wrong is committed, irrespective of
motive or fraud. A plaintiff who establishes a case of this character is entitled to an injunction,
and, if necessary, to an inquiry into damages.

A plaintiff must therefore prove the existence of a commercial reputation or goodwill created
through the exclusive association of the name, mark or other indicia relied upon with its
business, wares or services. This proof necessitates that the plaintiff’s name or mark be
distinctive of the plaintiff’s business, wares or services. Distinctiveness is the very essence of a
trade-mark at common law and under the Trade-marks Act - without it there is no protectable
right.

A trade-mark becomes non-distinctive when it deviates from its registered form, becomes
generic or part of the public domain or is improperly assigned or licensed such that the trade-
mark ceases to be indicative of a single source.
SECTION 7 OF THE TRADE-MARKS ACT

The concept of passing off was developed in the nineteenth century: … no man is entitled to
represent his goods as being the goods of another man; and no man is permitted to use any
mark, sign or symbol, device or other means, whereby, without making a direct false
representation himself to a purchaser who purchases from him, he enables such purchaser to tell
a lie or to make a false representation to somebody else who is the ultimate customer … [H]e
must not … make directly, or through the medium of another person, a false representation that
his goods are the goods of another person.

The tort was "extended" (this explains the phrase "extended form of passing off" seen in some
decisions) to curtail the activities of non-competitors who adopted the identical or confusing
trade-mark/trade-name in association with wares or services which falsely suggested that the
plaintiff's and defendant's business were nonetheless connected in some way. The House of
Lords in Spalding4 identified five characteristics which must be present in order to have a valid
cause of action for passing off:

1) a misrepresentation;

2) made in the course of trade;

3) to prospective customers of his or ultimate consumers of goods or services supplied by him;

4) which is calculated to injure the business or goodwill of another trader (in the sense that this
is a reasonably foreseeable consequence); and

5) which causes actual damage to a business or goodwill of the trader by whom the action is
brought or (in a quia timet action) will probably do so.

The passing off test was recast in 1990 by the House of Lords : The plaintiff must satisfy three
elements: 1) that the plaintiff has the requisite degree of goodwill or reputation in the mind of
the purchasing public; 2) that the defendant has made a misrepresentation to the public; and 3)
that the plaintiff, as a result of the misrepresentation, has suffered, or is likely to suffer,
damage. In 1992, the Supreme Court of Canada confirmed this tri-partite test. The three
necessary elements of a passing off action in Canada are thus: the existence of goodwill, the
deception of the public due to a misrepresentation and actual or potential damage to the
plaintiff.
FACTS OF THE CASE

For about three years previous to 1910 the plaintiffs advertised and sold a novel kind of
football under the name of the "Orb" or "Improved Orb" football, the outer cover of which was
moulded instead of sewn. In 1910, defects having been found in the making of the balls, the
plaintiffs discarded a large number of them as unsatisfactory, and sold them as waste rubber to
a firm who re-sold them to the defendants. In 1912 the plaintiffs brought out a new ball, which
they advertised as the "Improved Sewn Orb," "Improved Orb," or "Specially Tested Orb,"
"patent 15,168," at 10s 6d each In August 1912, the defendants advertised the old "Orb" balls
for sale at 4s 9d each, under the description of "Improved Orb" footballs. "Patent No 15,168."
On August 29 the plaintiffs pointed out to the defendants that the advertisements were not
justified, and on the next day they issued the writ in the present action.

On the following day they received a letter from the defendants, who said that they did not wish
to describe their footballs under the description complained of, that the advertisement was due
to a stupid mistake, and that they had taken steps to stop the advertisement, and they offered
an apology. Notwithstanding this letter the plaintiffs proceeded with the action. By the statement
of claim the plaintiffs claimed an injunction to restrain the defendants from selling or advertising
footballs other than the plaintiffs' "Improved Orb" or "Specially Tested Orb" footballs as and for
the plaintiffs' "Improved Orb" or "Specially Tested Orb" footballs, and an inquiry as to damages
and costs.

By their defence the defendants relied on the letter already referred to, and said that they had
stopped all advertisements such as were complained of as soon as their attention was called to
the mistake, and had posted notices in their shops, saying that they did not stock the "Improved
Orb" but only sold the original pattern of "Orb." The defendants subsequently issued
advertisements which were held at the trial to be innocuous in themselves, but which contained
no reference to the mistake which had been made in the earlier advertisements. On an
application for an Interim injunction, the defendants undertook not to sell, advertise, or offer for
sale, or supply footballs other than the plaintiffs' "Improved Orb" or "Specially Tested Orb"
footballs as or for the plaintiffs' balls of those descriptions, and they offered a perpetual
undertaking not to sell any balls other than the plaintiffs' "Improved Orb" or "Specially Tested
Orb" football under those descriptions.

The plaintiffs, however, proceeded to trial. SARGANT, J, granted an injunction and inquiry as to
damages. The Court of Appeal, however, were of opinion that the plaintiffs were not entitled to
an injunction or to an inquiry as to damages. An action of this sort was analogous to a quia timet
action, and even where passing off was threatened the plaintiff could only recover nominal
damages. If actual passing off was proved, substantial damages no doubt might be recovered.
But here, after the issue of the writ, there was no threat or claim of right to repeat the
advertisements complained of, and there was nothing upon which to found an inquiry as to
damages. Accordingly the appeal was allowed and the action dismissed. The plaintiffs appealed.

RELEVANT LAWS, OBITER & RATIO

Ratio: The House considered the requirements for the tort of passing off. The judge has the sole
responsibility for deciding whether anybody has been misled. He will hear evidence, but must
not surrender his assessment to others.
Lord Parker said: ‘This principle is stated by Lord Justice Turner in Burgess v Burgess (LR 14 CD
p. 748) and by Lord Halsbury in Reddaway v Banham (LR (1906) AC at page 204), in the
proposition that nobody has any right to represent his goods as the goods of somebody else. It
is also sometimes stated in the proposition that nobody has the right to pass off his goods as the
goods of somebody else. I prefer the former statement, for whatever doubts may be suggested
in the earlier authorities, it has long been settled that actual passing-off of a defendant’s goods
for the plaintiff’s need not be proved as a condition precedent to relief in Equity either by way of
an inunction or of an inquiry as to profits or damages ( Edelsten v Edelsten 1 De G., J and S 185
and Iron-Ox Remedy Company Ld v Co-operative Wholesale Society Ld 24 RPC 425). Nor need
the representation be fraudulently made. It is enough that it has in fact been made, whether
fraudulently or otherwise, and that damages may probably ensue, though the complete
innocence of the party making it may be a reason for limiting the account of profits to the period
subsequent to the date at which he becomes aware of the true facts. The representation is in
fact treated as the invasion of a right giving rise at any rate to nominal damages, the inquiry
being granted at the plaintiff’s risk if he might probably have suffered more than nominal
damages’ and

‘My Lords, the basis of a passing-off action being a false representation by the defendant, it
must be proved in each case as a fact that the false representation was made. It may, of course,
have been made in express words, but cases of express misrepresentation of this sort are rare.
The more common case is, where the representation is implied in the use or imitation of a mark,
trade name, or get-up with which the goods of another are associated in the minds of the public,
or of a particular class of the public. In such cases the point to be decided is whether, having
regard to all the circumstances of the case, the use by the defendant in connection with the
goods of the mark, name, or get-up in question impliedly represents such goods to be the goods
of the plaintiff, or the goods of the plaintiff of a particular class or quality, or, as it is sometimes
put, whether the defendant’s use of such mark, name, or get-up is calculated to deceive. It
would, however, be impossible to enumerate or classify all the possible ways in which a man
may make the false representation relied on.

There appears to be considerable diversity of opinion as to the nature of the right, the invasion
of which is the subject of what are known as passing-off actions. The more general opinion
appears to be that the right is a right of property. This view naturally demands an answer to the
question – property in what? Some authorities say property in the mark, name, or get-up
improperly used by the defendant. Others say, property in the business or goodwill likely to be
injured by the misrepresentation. Lord Herschell in Reddaway v Banham (LR (1906) AC 139)
expressly dissents from the former view; and if the right invaded is a right of property at all,
there are, I think, strong reasons for preferring the latter view. In the first place, cases of
misrepresentation by the use of a mark, name, or get-up do not exhaust all possible cases of
misrepresentation. If A says falsely, ‘These goods I am selling are B’s goods,’ there is no mark,
name or get-up infringed unless it be B’s name, and if he falsely says, ‘These are B’s ‘goods of a
particular quality,’ where the goods are in fact B’s goods, there is no name that is infringed at
all. ‘ and ‘Further, it is extremely difficult to see how a man can be said to have property in
descriptive words, such as ‘Camel Hair’ in the case of Reddaway v. Banham where every trader
is entitled to use the words, provided only he uses them in such a way as not to be calculated to
deceive. Even in the case of what are sometimes referred to as Common Law Trade Marks the
property, if any, of the so-called owner is in its nature transitory, and only exists so long as the
mark is distinctive of his goods in the eyes of the public or a class of the public.’

ARGUMENTS MADE BY BOTH THE SIDES & ANALYSIS

It was argued on behalf of the respondents that there was no evidence beyond a comparison of
the documents to show that the conduct of the respondents was calculated to deceive any
member of the public. I think that there was some relevant oral evidence, but there is no
necessity for such evidence if the court is satisfied, on the comparison of the documents before
it, which it is for the court to construe, that the respondents did issue an advertisement
calculated to represent that they were offering for sale the "Improved Sewn Orb Footballs" of the
appellants included in their catalogue for 1912, whereas in fact the footballs so offered for sale
were of a different and inferior class. Subsequently to the issue of the writ the respondents
issued further advertisements. These advertisements, taken in connection with those already
issued, appear to me, so far as they are relevant, to aggravate the original offence, and there is
evidence that they deceived one of the witnesses, Ritson.

Romer KC argued forcefully that the litigation was unjustified, the claimants having “made
donkeys of themselves” were now “crying stinking fish”. He asserted that there was nothing in
the advertisements “which would mislead any sane human being on any point which was
material.
CONCLUSION

Trial Judge concludes that the defendant has adopted and used a mark or name which is likely to
be confused with the plaintiff's distinctive mark, name or design in which the plaintiff owns
goodwill or a secondary meaning, the requirement to prove misrepresentation is satisfied. The
fact that the misrepresentation is innocent is no defence.

Certainly, any deliberate conduct engaged in by the defendant to deceive will always be a
relevant factor. The presence of such misconduct will make it easier for the plaintiff to satisfy the
misrepresentation requirement. If the defendant itself believes the mark is worthy of filching,
the Court will likely conclude it is worthy of protection.

The Federal Court and Federal Court of Appeal have more recently concluded that where there is
no evidence that the defendants’ use of its trade-mark has led to the plaintiff's loss of business;
or there is no evidence that the plaintiff has suffered damage in the sense of a loss of control
over its reputation, image or goodwill, the requirement upon the plaintiff to prove damage has
not been satisfied. A bifurcation Order does not relieve the plaintiff from the necessity of proving
the existence of damage as an element of its cause of action.

The constitutionality of specific provisions of the Trade-marks Act has been challenged but the
validity of the Act as a whole has never been conclusively determined.

Court concluded that the protection of unregistered trade-marks in the regulatory scheme was
necessary to ensure the protection of all trade-marks since the Trade-marks Act is more than
simply a system of registration.

Having concluded that the Act creates a scheme regulating both registered and unregistered
trade-marks, the functional relation of s. 7(b) to the scheme in the Trade-marks Act is apparent.
In its pith and substance, s. 7(b) is directly connected to the enforcement of trademarks and
trade-names in Canada: the civil remedy in s. 7(b) protects the goodwill associated with trade-
marks and is directed to avoiding consumer confusion through use of trade-marks.