Passing Off and giving away another brand as a prize

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Cheeky shop owner Mandeep Singh, 34, from Wolverhampton has opened up his brand new Singh'sbury Local off-licence and convenience store on Bushbury Road in Wolverhampton. January 23, 2020. A cheeky shop owner has launched a new store called Singh'sbury Local, which bears an uncanny resemblance to one of the UK’s most famous supermarkets. See SWNS story SWMDshop. Mandeep Singh Chatha, 34, has opened the new convenience store on Bushbury Road, Wolverhampton, with its sign featuring the famous orange colouring of Sainsbury’s. Since opening in December Mr Chatha, who previously worked as a sandwich delivery driver, said the logo was drawing in crowds or walkers by to take a look. Many have been amused by the branding, with people even stopping to take pictures and selfies. He said: "I decided on the name. My name is Singh and it is on Bushbury Road!" The entrepreneur, who always dreamed of starting his own business, decided to capitalise on the similarity and registered the name at Companies House.

There are clearly defined rules when it comes to trademark infringement, created to protect registered rights such as logos, trademarks and taglines. But, what about the goodwill and reputation of your brand and where do you stand if you are giving away another brand’s products as a prize? Jorja Knight, Legal Counsel, gives her point of view.

What is Passing Off?

Trademarks are registered and protected by legislation but passing off is a more subtle challenge and is fundamentally about protecting your goodwill and brand reputation which is not registered from those who may damage it. If a trader has a legally protected right to these it is illegal to sell a product that is confusingly similar or associate yourself with the trader’s trademarks and logos and you could land up in hot water. So, for example when a shop owner who claimed it was just a ‘coincidence’ that his “Singhsbury’s” store resembled retail giant Sainsbury’s was threatened with legal action –he changed the name to ‘Morrisinghs’. Interestingly, Morrisons took a different approach and a Morrison’s spokesperson suggested it was flattered by the name choice! Similarly, last year Hugo Boss sent cease-and-desist letters to small businesses and charities who use the word ‘boss’ in their names. These included a small Welsh brewery who then lost £10,000 defending itself in legal challenge over their award winning “Boss Black” beer. The point is that copyright infringement and violating of a brand’s intellectual property is a serious offence – and it can be a costly one too. Essentially, if there a third party causes confusion with consumers and there is a foreseeable harm to a trader’s reputation, there could be a challenge for passing off. To establish a claim for passing off, you must meet three key requirements:

  1. Goodwill – you must prove that you own a ‘reputation’ in the goods, name or mark that the public associates with your specific product or service
  2. Misrepresentation – you must show that the trader has caused confusion and deceived or misled the customers into believing that their goods and services are actually yours
  3. Damage – you must prove that the misrepresentation damaged or is likely to damage your goodwill, or cause actual or foreseeable financial or reputational loss

Passing off and prizes

Passing off gets even more interesting where prizes are concerned because Reputation & Association are involved, and a brand will always want to control any outside influences and threats. Brands also must consider how someone giving away their products might affect the exclusivity of their lucrative partnerships or sponsorship agreements. Plus, there may also be conditions of sale where concert or festival tickets are involved. A simple caveat is that if all three elements above are present it will probably not survive any legal challenge if, but it’s also worth considering if this would create bad press.

When an Instagram influencer recently tried to run a prize draw with Glossier make-up products the brand asked her to ‘refrain from featuring Glossier product in any sort of giveaway as it violated their Terms & Conditions’. They stated that the promotion used their trademarks, service marks and logos without their consent, even though the influencer bought the products herself, used her own photography and clearly stated that the promotion was not affiliated with the brand in any way. After a flurry of negative publicity from the Instagram community that it markets to, the brand backtracked, particularly once it was pointed out that copyright does not apply to a commercially produced tangible product.

And it’s worth remembering that back in 2010 the Stella McCartney fashion house lost an ASA Ruling after complaining about a Bodyform sanitary towels prize draw to win £100 of their underwear. The ASA rejected claims that the promotion took unfair advantage of or denigrated Stella McCartney products and meanwhile the Stella McCartney brand took a beating in the press for being so arrogant. Similarly, the Hugo Boss copyright story has received a lot of negative coverage – comedian Joe Lycett recently changed his name by deed poll to ‘Hugo Boss’ to highlight how controlling and unfair the brand is to smaller businesses.

PromoVeritas POV

Our advice is simply to be careful when you want to involve another brand’s products in a prize promotion but don’t be put off – it can be done. Always exercise caution because a trader has a right to protect their brand and reputation and might take legal action. So, if you are planning a promotion the first step is to take legal advice about gaining permission, or about how you use another brand’s products in your marcomms without getting into trouble. For instance, you might need to state that you are giving a ‘luxury handbag’ or ‘designer sunglasses’ instead of naming the specific brands in your promotional materials – as long as you are clear about the prize on offer in your Terms & Conditions and you are very clear that there is no association or sponsorship between the two.

Just remember that it is always best to get legal advice in the early stages of your promotion before you have drafted Terms & Conditions, purchased any prizes, or gone to the expense of printing or publishing packs or advertising. Our legal team can assist you with all of this, and help to ensure your promotions always run smoothly. To find out more contact info@promoveritas.com or call 0203 325 6000.

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