When goodwill in the business is not enough: clarifying the role of the trademark in a passing off action

The role of a trademark in the context of a passing off claim may go more to misrepresentation rather than goodwill, depending upon the jurisdiction. Kat friends Chia Ling Koh and Lyndon Choo describe a recent case, Tuitiongenius Pte Ltd v Toh Yew Keat and anor [2020] SGCA 103, a decision of the Singapore Court of Appeal.

The respondent, Toh Yew Keat, started a successful private tuition business marketed as "TuitionGenius" ("TG Mark"). Subsequently, he and a business associate entered into a joint venture in the private tuition business and incorporated the appellant, Tuitiongenius Pte Ltd. Notwithstanding the joint venture, the respondent continued to run his own private tuition business under a modified form of the TG Mark.

The appellant brought action against the respondent inter alia for a claim in passing off, alleging that, by using a mark that is similar to the TG Mark, the respondent was passing off his business as the appellant's. The appellant contended that the TG Mark was distinctive of its business. Under the law of Singapore, the tort of passing off protects a trader's goodwill in his business. To succeed in a passing off action, a claimant needs to prove the three elements of goodwill, misrepresentation and damage.

At first instance, the Trial Judge dismissed the claim on the ground that the TG Mark was not used by the appellant to promote its business. Accordingly, the appellant had no goodwill in the TG Mark. The appellant appealed the result.

On appeal, the Court of Appeal upheld the Trial Judge's decision to dismiss the claim, but on different grounds. The Court of Appeal held that goodwill attaches to the business as a whole rather than the TG Mark itself. The connection between the mark and the goodwill was to be considered under the head of whether there has been a misrepresentation.

The Court of Appeal found that there was sufficient goodwill in the appellant's business on the basis of the following:

(1) the appellant had a business presence in Singapore and generated revenue since 2009. While the appellant was not always profitable, profitability is not a prerequisite to the establishment of goodwill; and

(2) the appellant had spent "a considerable amount" on marketing its business.

However, the Court of Appeal held that misrepresentation had not been made out. There was little evidence of the appellant's use of the TG Mark. As a result, there was insufficient association between the appellant's goodwill and the TG Mark. The appellant's employees testified that the TG Mark was never used to market the appellant's services.

While the appellant had used the TG Mark in its email domain and receipts, the Court of Appeal was of the view that that alone was not sufficient. This is because the email domain was also used by the Respondent in marketing his own separate private tuition services, while the receipts were internal documents which were unlikely to cause confusion.

More importantly, the Court of Appeal also found that the TG Mark had been used by the respondent before the appellant was incorporated, further suggesting that the mark was not distinctive of the appellant's business. Based on the foregoing, the Court of Appeal ruled that no misrepresentation had taken place.

Finally, on the issue of damage, the Court of Appeal made brief observations that the respondent appeared to be the key draw for the appellant's business and there was no evidence that he had relied on the attractive force or goodwill of the appellant's business. Therefore, the appellant suffered no damage from the respondent's actions.

This case is a helpful reminder of the type of interest that the tort of passing off seeks to protect under the law of Singapore. The tort does not per se protect a party's get-up, logos, marks, as the case may be. Rather, it protects the goodwill of the business as a whole.

Given the position under the law of Singapore, whereby the tort of passing off protects goodwill in the business, this case illustrates how easily the distinct elements of the tort in relation to trademarks may be confused. To establish goodwill, one looks at factors such as revenue and advertising of the business (including any logos, marks, etc. Whether, how and to what extent the logos or marks have been used by the business and the tortfeasor would go towards establishing the element of misrepresentation.

The case also illustrates how an action under the tort of passing off under the law of Singapore may not succeed, even if very similar marks are being used. As a result, under certain circumstances, the protection of marks per se may be better achieved through other legal mechanisms, such as registration of the mark or relying on the protection conferred on a well-known mark.

When goodwill in the business is not enough: clarifying the role of the trademark in a passing off action When goodwill in the business is not enough: clarifying the role of the trademark in a passing off action Reviewed by Neil Wilkof on Friday, November 27, 2020 Rating: 5

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