Tort - Detinue, Conversion And Passing Off

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Detinue

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The tort protects a Pl’s entitlement to possession of chattels – but not necessarily ownership.

The tort is committed by a wrongful failure of a person in possession (or formerly in possession) of a chattel to deliver it up to the person immediately entitled to possession.

Usually, the effects are purely economic: the value of the chattel and damages for its detention are recovered.

However, under William Whitely v. Hilt (1918), return of the item may be ordered where the item is of “special value or interest to the Pl”.

Simplistic Example

A warehouse owner being unable to locate a customer’s purchased goods for several days, having mislaid them due to warehouse reorganisation.

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William Whitely v. Hilt (1918)

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In detinue, return of the item may be ordered where the item is of “special value or interest to the Pl”.

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Detinue - Plaintiff’s Right to Possession

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This is a matter for other areas of the law – contract, property, bailment.

One area of important interest, however, is the finding of valuables whose owner cannot be identified, as might be the case with ancient treasures.

Here, the contenders for possession rights are the finder, the owner of the property on which the item is found, and the State.

Webb v. Ireland (1988) set out the following principles:
i. For chattels attached to or under the land, the owner has a better claim than the finder, unless the owner was never in possession of the land.
ii. For chattels on the land, but not attached to it, the owner will have a superior right only if he has previously manifested an intention to exert control over such chattels, e.g. by searching the property for lost items.
iii. The State trumps both of the other contenders in cases of antiquities of importance with no known owners; this is at least as extensive as the royal prerogative, although here the principle is constitutionally derived – according to the majority, from Article 5. (This principle was the ratio in Webb.)

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Webb v. Ireland (1988)

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i. For chattels attached to or under the land, the owner has a better claim than the finder, unless the owner was never in possession of the land.
ii. For chattels on the land, but not attached to it, the owner will have a superior right only if he has previously manifested an intention to exert control over such chattels, e.g. by searching the property for lost items.
iii. The State trumps both of the other contenders in cases of antiquities of importance with no known owners; this is at least as extensive as the royal prerogative, although here the principle is constitutionally derived – according to the majority, from Article 5. (This principle was the ratio in Webb.)

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Detinue - Wrongful Failure to Surrender Possession

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Establishing a wrongful failure to surrender possession is crucial to proving that detinue has occurred.

Where necessary, the Pl must demand surrender and wait for a failure on the Def’s part before an action can be taken.

Where this is futile (e.g. where goods have been destroyed or passed on to a third party), it is unnecessary.

The Def’s failure to surrender possession will be excused where it is reasonable; onus to prove this is on the Def.

Examples of reasonable failure include where the chattel has been destroyed through no fault of the Def.
 One area of contention is the clamping or impounding of vehicles, which could be said to amount to detinue by the State. The counter-argument, however, is that there is implied consent by the potential Def, given their parking contrary to warning notices.

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Conversion

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This tort protects owners of chattels against conduct which improperly denies his title to them.

The tort also serves to cover instances not covered by detinue, such as

(a) the wrongful taking of chattels, or

(b) sale of goods by a person with neither title nor possession.

Simplistic Example

A warehouse owner selling a consignment of goods belonging to a customer and informing the customer that they were stolen.

Even joyriding, despite its transient nature, may amount to conversion.

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Conversion - Plaintiff’s Title or Right to Possession

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As with detinue, this is primarily a matter for other areas of the law – contract, property, bailment.

The extent of the Pl’s interest is relevant to the ability of the Def to rely on the superior claim of a third party (the jus tertii).

If

i. the Pl had actual possession, then the Def needs to show (a) that a third party has a superior entitlement than the Pl, and (b) that he has authority from the third party.

ii. the Pl did not have actual possession, but is merely claiming a right to possession – and not ownership – then the Def needs only to show that a third party has a superior entitlement than the Pl.

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Passing Off - Introduction

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The tort protects the Pl against misrepresentations by the Def that the Pl’s product or service is his.
 The purpose of the tort is to protect the goodwill of a product generated by the Pl.

Player & Wills v. Gallagher (1983): “The essence of passing off is the adoption by the Def of some element in the manner in which the Pl’s goods are marketed … calculated to deceive persons intending to buy the Pl’s product into thinking that they have bought it, when in fact they have bought the Def’s product”.

Until 1996, trademarks had no statutory protection, and the tort was essential for Pl companies.

The main focus is on (a) whether the consumer is confused by similarities between products, and (b) whether the Pl will lose custom or goodwill because of the associations between him and the Def.

The law does not require proof of deception or misrepresentation, but will infer this where the similarities are overwhelming.

The scope of the tort is broad, encompassing name, design, style, advertisement, and packaging.

In modern passing off, the following needs to be proven:

i. Misrepresentation (whether intentional or not);

ii. made by a trader in the course of a trade common to the Pl;

iii. directed to prospective customers or ultimate customers of his products;

iv. calculated to injure the business or goodwill of another trader;

v. which causes actual or potential damage to the Pl.

These can be distilled into the four central aspects: (a) goodwill; (b) confusion; (c) common course of trade; (d) damage/loss.

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Player & Wills v. Gallagher (1983)

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“The essence of passing off is the adoption by the Def of some element in the manner in which the Pl’s goods are marketed … calculated to deceive persons intending to buy the Pl’s product into thinking that they have bought it, when in fact they have bought the Def’s product”.

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Goodwill and Reputation

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The Pl must establish that he has built up goodwill and reputation in the mark or set-up, such that the consumer associates the mark or set-up with the Pl.

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Goodwill and Reputation - The Traditional Approach

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Traditional approach: courts have focused on the element of goodwill, defined in Inland Revenue Commissioners v. Muller (1901) as “the benefit and advantage of the good name, reputation, and connection of a business”. The court held that the goodwill must be attached to a business; it does not stand alone.

The courts have traditionally insisted that commercial goodwill be built up in the jurisdiction where the action for passing off is taken; this provides difficult where a brand is known in a jurisdiction where the company has not yet traded, as they cannot prove commercial goodwill toward the brand, e.g.:

Budweiser (US) -v- Budweiser (Cz)(1984): Budweiser (US) and Budweiser (Cz) - the case failed in the CA goodwill requires actual commercial activity under a brand name; a vague international reputation is insufficient.

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Inland Revenue Commissioners v. Muller (1901)

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Goodwill defined as “the benefit and advantage of the good name, reputation, and connection of a business”

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Budweiser (US) -v- Budweiser (Cz)(1984)

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Budweiser (US) and Budweiser (Cz) had an agreement whereby the former sold beer under the name in the US, the latter in Europe. No agreement existed for the UK. The latter started to sell beer in the UK in the 1970s; the former sued for passing off, basing the argument on its reputation in the UK; the case failed in the CA goodwill requires actual commercial activity under a brand name; a vague international reputation is insufficient.

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Bernardin v. Pavilion Properties (1967)

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The owner of the Crazy Horse Saloon in Paris failed to restrain the Def from opening up an establishment of the same name in England, because the Pl had not planned to opened a branch in England.

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Goodwill and Reputation - Difficulties with the traditional approach

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The following two arguments have been advanced against the traditionally restrictive interpretation of goodwill:

i. The “loss of control” argument: recognises that if the imitator’s goods are inferior, they cause the Pl indirect damage through loss to prestige and exclusivity; they can also lead to consumer confusion;

ii. The “loss of expansion potential” argument: recognises that the Pl should have the opportunity to expand his brand into a new jurisdiction; when he does, the market for his wares may be diminished by the pre-emptive passing off.

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Goodwill and Reputation - Recent developments

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Some recent cases recognise that reputation can be as valuable an asset as commercial goodwill, and are willing to protect it by injunction or damages.

C&A Modes v. C&A Modes Waterford (1976): despite never having traded here, the Pl took a case on the basis that C&A was well known to Irish consumers; the injunction was granted on the basis that the brand was indeed known: “goodwill does not stop at a frontier”.

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C&A Modes v. C&A Modes Waterford (1976)

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Despite never having traded here, the Pl took a case on the basis that C&A was well known to Irish consumers; the injunction was granted on the basis that the brand was indeed known: “goodwill does not stop at a frontier”.

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Requirement of Consumer Confusion

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The Pl must satisfy the court that the purchasing public – the “casual unwary shopper” is likely to be confused by the two products. If the public is not likely to confuse the products, the Pl’s goodwill will not suffer damage.

In considering this, the court will look at many elements (name, design etc.) and also the context.

In Reckitt Colman v. Borden (1990): jiff lemon case; the court held the products to similar and subject to confusion.

SmithKline Beecham v. Antigen (1999): the Pl’s argument that “solfen” and “solpadene” were subject to confusion failed because in most cases an experienced pharmacist would be dispensing them.

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In Reckitt Colman v. Borden (1990)

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Jiff lemon case; the court held the products to be similar and subject to confusion.

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SmithKline Beecham v. Antigen (1999)

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The Pl’s argument that “solfen” and “solpadene” were subject to confusion failed because in most cases an experienced pharmacist would be dispensing them.

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Requirement of Common Course of Trade

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Traditionally, the courts’ restrictive view of passing off involved a strict requirement that the goods of Pl and Def were available in the same sectors of the market, thus constituting direct competition to each other.

The requirement has been loosened somewhat; now the Pl must simply show that the products are related somehow.

Harrods v. Harrodian School (1996): the action failed (but also because the likelihood of consumer confusion was so low – the Pl’s customers were highly unlikely to think the Pl had opened a school).

Guinness v. Kilkenny Brewing (1999): despite the lack of common course of trade, the court granted the injunction because consumers were likely to draw a false association.

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Harrods v. Harrodian School (1996)

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The famous department store attempted to restrain a preparatory school operating under an adaptation of its name; primaril on the basis of the lacking common course of trade, the action failed (but also because the likelihood of consumer confusion was so low – the Pl’s customers were highly unlikely to think the Pl had opened a school).

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Guinness v. Kilkenny Brewing (1999):

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Guinness v. Kilkenny Brewing (1999): Pl owned a brand “Kilkenny Beer” and sought to restrain the Def from using “Kilkenny Brewing Company”, even though the Def was a company established purely to hold land for the purpose of carrying out brewing; despite the lack of common course of trade, the court granted the injunction because consumers were likely to draw a false association.

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Damage and Loss

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Modern perception of the tort allows a broad definition of damage, including indirect effects which may flow from false associations between Pl and Def.

Falcon Travel v. Falcon Leisure Group (1991): The court found that there had been a submergence of reputations, and that appropriation of goodwill can be damage in itself; commercial loss need not necessarily be shown. In a novel award, damages were granted instead of an injunction, to enable the Pl to embark on an advertising campaign to clarify the difference.

This suggests a low bar for the “damage” criteria, as the court found for the Pl merely on the basis that there was evidence of confusion – without looking at the commercial effect of this confusion.

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Falcon Travel v. Falcon Leisure Group (1991)

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Pl was a travel agent in Dublin since 1985; in 1988 the Def – an English tour operator set up under a similar name in Dublin; there was clear proof of confusion, even in media reports about mishaps; the Pl argued that this constituted passing off. The court found that there had been a submergence of reputations, and that appropriation of goodwill can be damage in itself; commercial loss need not necessarily be shown. In a novel award, damages were granted instead of an injunction, to enable the Pl to embark on an advertising campaign to clarify the difference.

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Distinct Forms of Passing Off - Use of Own Name

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An individual is not entitled to use his own name for a brand where this represents deliberate trading on the reputation of the Pl.

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Jameson v. Irish Distillers (1900)

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Pl = well-known distillers; Def sold whiskey under “William Jameson & Co”, but to save a failing business, changed this to “Jameson’s Whiskey”. The court held that the Jameson brand had come to be so associated with the Pl that it could not be used by the Def without some form of qualifying words which would avoid confusion.

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Injunctions

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The most common remedy sought in passing off actions is an interlocutory injunction, restraining the Def from using the mark until the full hearing.

The court will usually examine

(a) whether there is a “fair and bona fide question” to be tried; and – unusual in interlocutory injunction actions

(b) the relative strengths of the Pl’s and Def’s arguments.
Usually, the case does not progress past this stage:

(a) if the Pl fails to be granted the injunction, he usually gives up at this point;

(b) if the injunction is granted, the Def usually develops a new trademark, so the proceedings do not go to full hearing.