Emulating another business – when is there passing off?

Quick read

In an important ruling in Original Beauty v G4K Fashion, the English High Court has considered whether emulating aspects of another business – including its website – amounts to passing off. The Court reluctantly found no passing off despite clear evidence that the defendants had "obtained an advantage by copying a successful competitor".

What happened?

This was an action for infringement of UK and EU unregistered designs in the claimants' well known bodycon and bandage dresses, and for passing off by trade connection.
The court found infringement of seven of the claimants' unregistered designs. Due to the flagrancy of the infringements (eg the defendants' designer had sent images of some of the claimants' garments to their factory to be replicated), the claimants were awarded additional damages.
However, the Court reluctantly found no passing off, as there was not enough evidence that consumers were deceived. This was despite clear evidence that the defendants had intended to emulate the claimants' business, including its business model and focus, garment designs, photoshoots and models, packaging and website.
The case is a good example of the limits of passing off claims, especially where the parties' business names are different, with the court commenting that passing off is "not a tort of unfair competition".

Want to know more?

The claimants sell bodycon and bandage garments under the main brand House of CB. The defendants are competitors who also sell bodycon and bandage garments online under the brand Oh Polly. The action for infringement of the claimants' unregistered designs was relatively straightforward. The more interesting aspect of the judgment is the Court's finding of no passing off.

The claimants alleged that the defendants emulated several aspects of their business in which they had goodwill. As a result, consumers would be deceived into thinking that the defendants' Oh Polly business was a sister brand of – or otherwise connected to – the claimants' House of CB business. The claimants emphasised that it was the fact that the defendant emulated a combination of elements of their business that amounted to passing off.

The evidence showed that there clearly were similarities between the respective businesses:

Business model and focus: Both parties were internet businesses selling celebrity-inspired fashion and relied heavily on influencers and social media (with few hard copy ads). They both focused on figure-hugging bandage and bodycon dresses. However, this was not unique in the fashion industry.
Garment design: The judge had already found some copying in the design infringement claim and there was clear evidence of a public perception that the defendants copied (or took inspiration from) the claimants' garments.
Photoshoots and models: The judge found that some of the defendants' marketing campaigns were strikingly similar to those of the claimants. The judge did not accept the defendants' arguments that this was a coincidence. The same models were used, often in the same locations, and they adopted similar poses. There was a course of conduct adopted by the defendants to emulate the location, themes and styling of the claimants' photo shoots.
Packaging and logos: The defendants' packaging was highly similar to that of the claimants' – a deliberate act by the defendants to make their packaging look similar to the claimants' and dissimilar from other competitors. The judge also found that the defendants had moved their logo closer to the claimants' logo.
Websites: There were many obvious similarities between the two websites and aspects of the defendants' internet presence which clearly and intentionally emulated that of the claimants. This included banners, headers/footers, arrangement of garments by colour, use of "flatlays", use of the word "depot", and use of mottled pink as the background for studio photographs.

The defendants pointed to differences between the two businesses including their business and garment names.

The evidence established that consumers noticed similarities between some of the indicia relied on by the claimants and the judge was therefore satisfied that goodwill subsisted in those indicia. The judge also concluded that the defendants had clearly set out to emulate the claimants' business. However, he did not consider the evidence to indicate that there was a level of deception in the market. Even after several years of the similarities being apparent to consumers, there was no evidence that any consumers (other than perhaps one) considered the two businesses to be sister brands or to share a trade connection. Because of this, there was no misrepresentation and the passing off case failed.

The judge reached this conclusion with some reluctance. He noted that the defendants had "ridden on the claimants' coat-tails", and rather than investing in their own development, had "obtained an advantage by copying a successful competitor". However, he noted that passing off is "not a tort of unfair competition".

What does this mean?

This case serves as a reminder of the difficulties in establishing passing off especially where the parties' business names are different. Flagrant copying and a clear intention to emulate another business is not enough of itself – a significant number of customers must be deceived. This can be difficult to show especially where businesses have successfully co-existed for some time.