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Passing Off


A humourous example of the tort of passing off can be found within the movie Coming to America, among others.  In the movie, Eddie Murphy (as Akeem, a rich Prince) takes on a commoner persona and goes to work at a hamburger restaurant known as McDowell's and styled very similarly to McDonalds.  There is a scene where Mr. McDowell attempts to explain away the apparent infringement by describing some minor differences between the two such as, "McDonalds has golden arches" and "McDowell's has golden arcs".  It is presumed that such a minor difference would fail to pass mustard (pun intended) in a court.  To watch the movie scene, click here!

Three elements establish passing off; the existence of goodwill, the deception of the public due to a misrepresentation, and the actual or potential damage to the plaintiff: Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120.  Passing off may occur without proof of intention; Consumers Distributing Co. v. Seiko, [1984] 1 S.C.R. 583.  Passing off was articulated well in Carey Industries v. Carey, 2013 ONSC 5607 wherein it was said:

[30] In Ciba-Geigy Canada Ltd. v. Apotex Inc., the Supreme Court of Canada held that the three necessary components for a passing off action are as follows:

(a)   Existence of good will or reputation attached to the goods or services which the plaintiff supplies in the mind of the purchasing public via association with the identifying “get up” (which can be a trade name);

(b)   Deception of the public due to a misrepresentation by the defendant leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff; and

(c)  Actual or potential damage to the plaintiff by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the plaintiff’s goods or services is the same as the source of those offered by the plaintiff.

Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC),  [1992] 3 SCR 120

[31] There is no requirement that the defendants actions be intentionally fraudulent, malicious or even negligent.  The tort of passing off is complete without reference to the defendant’s state of mind.

Dentec Safety Specialist Inc. v. Degil Safety Products Inc., 2012 ONSC 4721 (CanLII)  para. 8

[32]  In general terms the law of passing off can be summarized in one short general proposition, “No man may pass off his goods or services as those of another.”

[33]  The essence of the tort is deceit by the defendant suggesting that the defendant’s product or service is the plaintiff’s product or service which thereby causes confusion in the minds of consumers as to whose products or services are being sold.  It is not necessary for the plaintiff to establish the consumers were actually mislead by the defendant’s conduct but simply that the defendant made an attempt to mislead the public.  It is important to avoid confusing anyone who has an actual or potential connection with the product or service.  Such confusion may enable a competitor to secure a commercial advantage by affecting sales it would not otherwise achieve or it may result in a consumer purchase that might not otherwise have taken place. 

Dentec Safety Specialist Inc. v. Degil Safety Products Inc., supra, para. 10

[34] Practically speaking, cases of passing off typically fall into one of two broad categories, namely:

(1)  where competitors are engaged in a common field of activity and the defendant has named, packaged or described its product or business in a manner likely to lead the public to believe that the defendant’s product or business is that of the plaintiff; or

(2)  where the defendant has promoted his product or business in such a way as to create the false impression that its product or business is in some way approved, authorized or endorsed by the plaintiff or there is some business connection between them thereby capitalizing on the plaintiff’s reputation and good will.

Proof of actual deception is unnecessary as the legal test is whether the names are confusing and likely to deceive (accidentally or otherwise); Unity Insurance Brokers (Windsor) Ltd. v. Unity Realty & Insurance Inc., 2005 CanLII 7664 at paragraphs 12 to 23.  Further to the common law tort of passing off, passing off is codified within the Trade-Marks Act, R.S.C. 1985, c. T-13, s.7(b), as amended.