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O'Neills Irish International Sports Company Ltd. v. O'Neills Footwear Dryer Company Ltd. [1997] IEHC 75 (30th April, 1997)

THE HIGH COURT

1995 No. 9692P

O'NEILLS IRISH INTERNATIONAL SPORTS COMPANY LIMITED

AND CHARLES O'NEILL COMPANY LIMITED

PLAINTIFFS

AND

O'NEILLS FOOTWEAR DRYER COMPANY LIMITED

DEFENDANT

Judgment of Barron J. delivered on the 30th day of April, 1997

1. The Plaintiffs manufacture and sell sports goods under the name O'Neills. They have a large annual advertising budget and trade successfully in competition with three multi-national companies operating in the same field.

2. The Defendant company was formed on 4th March, 1995 by John O'Neill. He qualified as a motor mechanic but now specialises in automobile electrics. In 1994, he obtained a patent for an electrically operated shoe dryer. He sought to interest sports manufacturers including the Plaintiffs in his invention but without any success. One manufacturer suggested that it might be interested if he could establish sales in the product. Not being able financially to manufacture the product for commercial purposes, he imported from the Far East a similar product for this sole purpose of establishing sales figures.

3. The product, as imported, is packaged in a box approximately the same size and shape as a normal shoe box. The sides of this box show pictures of different types of shoes and of the dryer and generally indicate the nature of the product. Before putting the product on sale the Defendant Company had labels printed which were placed over the two main sides of the box. These labels show that the product is "O'Neill's Footwear Dryer", and refer to Cellbridge, Co. Kildare, Ireland. Elsewhere on the box are the words "made in China". There is no other indication as to the person putting the product on the market.

4. The product as so labelled has been on sale in various department stores and other stores around the country. In the main the product has been sold through sports outlets. In addition to the packaging, the product is also sold by means of a large advertising panel headed "O'Neills Footwear Dryer", which is generally similar to the overprinted labels on the box. Whereas O'Neills in the name of the Defendant company is spelt with one apostrophe between O and N, the name O'Neills as it appears on the overprint labels has an additional apostrophe between the second L and the final S. The panel used to promote the product in the sports departments and other places where it is on sale has only the one apostrophe between O and N. Probably nothing turns on this difference but in any event I attach no importance to it.

5. The Plaintiffs became aware that the Defendant was putting O'Neills footwear dryer on sale in Ireland sometime in the month of July 1995. Proceedings were commenced by plenary summons dated 8th December, 1995. Although the Plaintiffs own a number of trademarks involving the name O'Neills which it alleged in its pleadings had been infringed, at the hearing the Plaintiffs sought to obtain relief solely upon the basis of the tort of passing-off, and then limited only to an injunction.

6. In the present case the Plaintiffs maintain that they have acquired a reputation in the name O'Neills and that the Defendant is deliberately trading on their reputation in that name. From the evidence which I heard I am satisfied that the word O'Neills is associated with the Plaintiffs in relation to sports goods and that they have built up a considerable reputation in the name. I am equally satisfied that the manner in which the Defendant's product is being marketed is calculated to lead persons seeing that product and its advertising panel to believe that the product is the product of the Plaintiffs.

7. The attitude of John O'Neill, the Defendant's Managing Director and the patentee of the other shoe dryer was that the action was uncalled for and that in any event there was no advantage to have the word O'Neills on the product. I regret that I cannot accept his view on either matter. The action is clearly one which is called for nor do I accept that there is no advantage in having the name O'Neills on the packaging and advertising for the product. Time is important to the Defendant. Clearly, the faster that it can establish a market for this type of product the sooner it will be able to interest successfully a manufacturer to manufacture the product. In my view, it is no accident that the Defendant is marketing the product in the way in which it does so. It was clearly expected that more sales would be obtained by using the word O'Neills and by so doing is deliberately trading upon the reputation of the Plaintiffs. The Defendant did not contest the reputation of the Plaintiffs. Its main submission was that what was being done was permissible because the Plaintiffs did not sell footwear nor footwear dryers.

8. No doubt John O'Neill believed that since his name was O'Neill he could form a company with O'Neill in its name and market his product under that name. In that belief he was wrong. While a person may use his own name in the course of trade and cannot be faulted on that ground alone, that does not entitle him to use his own name in such a way as is calculated to lead others to believe his goods are those of another. That is the case here.

9. The nature of this tort is to be found in its name. The wrong is that of passing-off ones goods as those of another. This can be done by similarity of name, appearance, get-up or any other similarity which achieves the same purpose. How it is done is immaterial so long as the similarity is calculated to deceive those who might buy or otherwise deal in the goods. Deliberate intention is not necessary.

10. The authorities bear out this definition of the tort. It is defined at Chapter 16 - 02 of Kerly on the law of trade marks and trade names, 12th edition as follows:-

"It is an actionable wrong for the defendant to represent, for trading purposes, that his goods are those or that his business is that of the plaintiff, and it makes no difference whether the representation is effected by direct statements, or by using some of the badges by which the goods of the plaintiff are known to be his, or any badges colourably resembling these, in connection with goods of the same kind, not being the goods of the plaintiff, in such a manner as to be calculated to cause the goods to be taken by ordinary purchases for the goods of the plaintiff".

In C. & A. Modes -v- C. & A. (Waterford) Limited 1976 I.R. 198, the plaintiff was the owner of department stores carrying on business outside the State but which was well known within the State. The defendant had taken the plaintiff's name with the intention that people would associate its business with that of the plaintiff. The main issue in the case was whether the plaintiff could establish sufficient reputation within the State though not trading within the State so as to be able to satisfy the test that persons dealing with the defendant would be deceived into thinking that they were dealing with the plaintiff. It was held in the High Court and on appeal in the Supreme Court that there was a passing-off. In dealing with the question what a plaintiff has to prove to establish his reputation, Henchy J. said at p.212:-

"What has to be established for the success of a plaintiff's claim in an action such as this is that by his business activities....he has generated within the State a property right in a good will which will be violated by the passing-off."

11. Later in the same paragraph he said:-

"If there are in this State sufficient customers of a plaintiff's business to justify his claim to have a vested right to retain and expand that custom, then there is ample authority in principle and in the decided cases for the conclusion that, no matter where the plaintiff's business is based, he is entitled to be protected against its being taken away or dissipated by someone whose deceptive conduct is calculated to create a confusion of identity in the minds of existing or potential customers".

In Falcon Travel Limited -v- The Owners Abroad Group Plc 1991 1 I.R. 175, it was contended on behalf of the Defendant that as a matter of law a party could not succeed in an action for passing-off unless he established that the action complained off not merely gave rise to confusion but confusion which caused damage or at least the real likelihood of damage and that as a matter of fact no such damage had been caused in the particular action nor was to be expected. Murphy J. rejected this argument. In his view, it was the appropriation of good will which constituted the damage necessary to sustain an action for passing off. At page 182 he said:-

"....Nobody would doubt that damage is established where the wrongdoer gains business by his improper conduct even though there was no corresponding loss to the plaintiff. ....However, it seems to me that these ...categories of loss are no more than the consequence of the wrongful (though perhaps unintentional) appropriation by the defendant of the good will of the plaintiff in its goods or business and it is this appropriation of good will which constitutes the damage necessary to sustain an action for passing-off".

In D. & S. Limited -v- The Irish Auto Trader Limited 1995 2 I.R. 142, McCracken J. dealt with the question of confusion. At page 145 he said:-

"In my view, there is a serious issue to be tried based on the argument that the person seeing the defendants magazine might think that the plaintiff had extracted the motor section of their 'buy and sell' magazine and launched it as a separate magazine, and therefore potential customers would purchase the defendant's magazine in the belief that it was published by the plaintiff".

12. However, that was an application for an interlocutory injunction and on the balance of convenience interlocutory relief was refused.

13. In that case it was accepted that the characteristics identifying passing-off as enumerated originally in Spalding -v- Gamage 32 R.P.C. 273 were:-

"(1) a misrepresentation,

(2) made by a trader in the course of his trade,

(3) to perspective customers of his or ultimate customers of goods or services supplied by him,

(4) which is calculated to injure the business or good will of another trader (in the sense that it is a reasonably foreseeable consequence),

(5) which causes actual damage to a business or good will of the trader by whom the action is brought or (in quia timet action) would probably do so."

14. It is this test which is relied upon by the defendant in his submission that no tort has been committed. He submits that there is no evidence of any damage to the plaintiff since the plaintiff does not deal in the particular goods and cannot, therefore, have lost any sales.

15. As the cases to which I have referred have already identified the damage as being the violation of the Plaintiffs' property right in its reputation or good will this is not an argument which, in my view, can succeed. The other characteristics exist equally. I am satisfied that the Defendant has presented its goods to the public in such a manner as to be able to take advantage of the reputation and good will generated by the Plaintiffs. This will result in confusion in that persons buying his product will have been and will in the future be deceived into thinking that they are buying the product of the Plaintiffs. This unwarranted and impermissible use of the Plaintiffs' reputation and good will is in itself sufficient damage to constitute the wrong of which complaint is made.

16. In the course of the evidence it was suggested on behalf of the Plaintiffs that their reputation would be damaged by the belief on the part of the public that it is advocating the use of heat for the drying of leather, something which is inadvisable and which will damage leather goods. While I am satisfied that there is a genuine fear that this may be so, it seems to me that it is unnecessary to add this as a ground for holding in favour of the Plaintiff since I am quite satisfied that the onus of proof lying on it has been satisfied by the matters to which I have referred.

17. The Plaintiffs are entitled to the relief which they seek.