30 April 2025
The Classic Trinity of Passing Off
Introduction
Business owners often devote considerable time and financial resources to establish the reputation and goodwill associated with the get-up of their goods. This article presents a brief overview of the legal recourse available to owners of unregistered trademarks.
Passing off
Although the owner of an unregistered trademark is precluded from initiating an action for trademark infringement under the Trademarks Act 2019, there exists an alternative remedy that may be pursued. Passing off is a common law tort that, unlike a registered trademark, does not confer a monopoly right on the owner over the use of an unregistered trademark. Instead, it concerns the preservation of business goodwill and confers protection over business reputation to prevent another business from deceiving the public into thinking that the businesses are associated. It is concerned with misrepresentations made by a business which damage the goodwill of another. A business that passes off its goods as those offered by another business, perhaps by using a similar packaging design, risks a successful passing off action brought by the other business. Passing off can also take the form of a similar logo, colour scheme, name, iconic designs, pronunciation, etc. In practice, trademark infringement and passing off actions are often filed in the same proceedings.
Elements of Passing Off: The Classic Trinity
The classic test for passing off was set out in Reckitt & Coleman Products Limited v Borden Inc [1990] 1 AER 873. The test was reaffirmed and relied upon by the Federal Court in Ortus Expert White Sdn Bhd v Nor Yanni Bt Adom & Anor [2022] 2 MLJ 67. The 3 elements that a plaintiff needs to establish, often referred to as “the classic trinity”, in order to succeed in a passing off action are:
- establishing a goodwill or reputation in the goods or services by association with a particular ‘get up’ which would be recognised by the public as distinctive of the plaintiff’s goods and services;
- demonstrating a misrepresentation which is likely to lead the public to believe the goods offered are those of the plaintiff’s; and
- establishing that damage has been or will be caused.
Goodwill
Goodwill is a legal right of property associated with one’s business. It is an asset and is calculated as part of the value of a business when the business is sold. The definition of goodwill by Lord Macnaghten in Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] AC 217, was referred to and accepted by the Federal Court in Mohammad Hafiz bin Hamidun v Kamdar Sdn Bhd [2021] MLJU 816:
“… What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start. The goodwill of a business must emanate from a particular centre or source. However widely extended or diffused its influence may be, goodwill is worth nothing unless it has power of attraction sufficient to bring customers home to the source from which it emanates. Goodwill is composed of a variety of elements. It differs in its composition in different trades and in different businesses in the same trade. One element may preponderate here and another element there. To analyze goodwill and split it up into its component parts, to pare it down as the Commissioners desire to do until nothing is left but a dry residuum ingrained in the actual place where the business is carried on while everything else is in the air, seems to me to be as useful for practical purposes as it would be to resolve the human body into the various substances of which it is said to be composed. The goodwill of a business is one whole, and in a case like this it must be dealt with as such.”.
Misrepresentation
Importantly, not every type of misrepresentation amounts to passing off. Misrepresentations which disparage the goods or reputation of a business fall within the realms of injurious falsehood or defamation. Passing off is usually concerned with misrepresentations that the goods or services of the defendant were those of the plaintiff’s or the defendant’s business is closely associated with the plaintiff when such is not the case.
To establish the second element of the classic trinity, the plaintiff must demonstrate that there is deception to a substantial segment of the public, and not mere confusion as in the case of trademark infringement. It must be proven that the misrepresentation led to or is likely to lead the public to believe that the goods and services offered are those offered by the plaintiff.
Damage
It is essential that the plaintiff proves that there is a real, tangible probability of damage. There is no requirement that actual or special damage must be proven. It is common in cases of passing off for the plaintiff to prove damage to the plaintiff’s goodwill through evidence of trade diverting from the plaintiff and towards the defendant where the parties are in direct competition or the plaintiff’s goodwill and reputation would be adversely affected by the inferior goods or services offered by the defendant.
Remedies
- Interim remedies
Pre-emptive measures such as an interim injunction may be applied by the plaintiff even before the writ has been issued and served on the defendant. The injunction will restrict the defendant from continuing to pass off the defendant’s goods as the plaintiff’s goods. The plaintiff must prove that there has been no delay in making the ex-parte application, that there is a serious issue to be tried and that if the injunction is not granted by the court, damages will not be an adequate compensation to the plaintiff.
Mareva injunction is available to freeze the bank accounts of the defendant with the intention to prevent the defendant from disposing of its assets to frustrate any monetary judgment granted against the defendant. The plaintiff applying for a Mareva injunction must prove that the plaintiff has a good arguable case, that the defendant’s assets are in Malaysia and that there is a real risk that the defendant will dispose of the assets prior to the judgment.
The plaintiff may also apply for an Anton Piller Order to search the defendant’s premises and seize relevant evidence to prevent the defendant from destroying or disposing of the evidence. To successfully persuade the court to grant this order, the plaintiff must prove that there is strong evidence to suggest that the defendant would destroy or dispose of the relevant evidence prior to the trial. Notably, this order does not guarantee access to the defendant’s premises. This is because the defendant’s consent is still required, but withholding consent when the plaintiff has been granted this order amounts to contempt of court.
- Final remedies
After the conclusion of the trial, the court may grant final remedies such as a final injunction, damages and an order for the delivery up of the goods passed off as the plaintiff’s. An account of profits may be granted by the court as an alternative to awarding damages to the plaintiff.
Conclusion
The tort of passing is a recourse against misappropriation and misuse of a registered or unregistered trademark. However, unlike the registration of a trademark being prima facie evidence of ownership, passing off requires the owner to first prove its ownership of the unregistered trademark before moving on to the Classic Trinity. Given the heavier burden of proof and greater evidential requirements of proving the elements of passing off compared to trademark infringement, it is recommended that business owners register their trademarks, which will give the owners the right to use their trademarks to the exclusion of others.
Written by Jocelyn Ong, Associate
This article is intended to provide general information and does not constitute legal advice. If you require further clarification and assistance, please feel free to contact us at info-cpkhon@cpkhon.com.
