The DIFC Law of Passing Off

In my article on the DIFC law of confidence of 27 Jan 2011 I wrote:

"The DIFC (Dubai International Financial Centre) is like a little bit of London in the Gulf. Covering an area of 45 hectares - slightly smaller than Kensington Gardens - it is a free zone for the banking, insurance, trading and other financial services industries with its own legal system. As I said in my article on The DIFC Courts, the interesting attribute of this legal system is that the laws are in English and its courts apply the common law."

The law of confidence is one of two areas of intellectual property law for which there is legislation in the DIFC. The other area is the law of passing off. Both derive from the same source, namely the Law of Obligations.

Art 38 (1) of that law provides:

"A defendant is liable to a claimant if:

(a) the claimant's goods, services or business have acquired a goodwill or reputation in the market and are known by some distinguishing feature;

(b) the defendant makes a misrepresentation which confuses or deceives persons in relation to the goods, services or business of the claimant, or is likely to do so; and

(c) the claimant suffers or is likely to suffer damage as a result of that belief."

Art 40 (1) gives "misrepresentation" the same meaning as in contract law save that a statement made without regard for its truthfulness which is in fact untrue and which induces the representee to enter into a contract, whether or not that was the intention of the representor, shall be a misrepresentation for these purposes. Instances of confusion or deception include the reasonable belief that

(a) the defendant's goods, services or business are the goods, services or business of the claimant, or vice versa;

(b) the claimant's goods or services of one class, quality, condition or state are of another class, quality, condition or state;

(c) the defendant's goods or services belong to a class of goods or services with a discrete reputation, when they do not; and

(d) goods are covered by the claimant's guarantee when they are not so covered.

Art 38 is clearly derived from the Lord Oliver's speech in Reckitt and Colman Products Ltd v Borden Inc and Others [1990] 1 WLR 491, [1990] 1 All ER 873, [1990] UKHL 12, [1990] RPC 341:

"The law of passing off can be summarised in one short general proposition - no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get-up" (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff."

Art 38 (2) adds that it is not necessary for the purpose of art 38 that the persons confused or deceived should be aware of the claimant's identity, provided that they are accustomed to the claimant's goods, services or business. It is spelt out in art 38 (3) that it is no defence that the defendant did not intend to cause deception or confusion. A defendant is liable under art 39 if he knowingly assists or facilitates passing off by another person.