Sir Robert McAlpine Ltd. v Alfred McAlpine Plc

Passing off may arise where a trader uses a jointly owned name without a distinguishing feature and thereby represents that it is the only business identified by that name, or is associated with the other goodwill owner. Mere confusion is insufficient, but a person who corrects the mistake may still have been misrepresented to.

Damage is not confined to diverted sales. A real risk of adverse association, dilution, erosion of exclusivity, loss of control over reputation, or one co-owner effectively elbowing out another may suffice. The court must assess the relevant market, audience and activities in context. Shared goodwill does not give one owner an unfettered right to adopt the common name as its principal trading identifier.

The claimant and defendant were construction groups which shared goodwill in the name “McAlpine”. For many years each used a distinguishing forename, “Robert” or “Alfred”. In October 2003 the defendant re-branded its business principally as “McAlpine”, while retaining “Alfred” only in limited formal contexts.

The claimant alleged that the new trading style misrepresented the defendant’s construction, civil engineering, property development and related services as those of, or associated with, the claimant. It sought an injunction. The central issues were whether the re-branding constituted misrepresentation and whether the claimant faced a sufficient likelihood of damage to its goodwill.

1. Passing off established. The claimant established goodwill, misrepresentation and a sufficient likelihood of damage. An injunction was granted in substantially the terms sought, subject to any minor amendments after further argument.
2. The governing analysis was the three-stage passing-off framework stated by Lord Oliver in Reckitt & Colman v Borden [1990] RPC 341: goodwill, misrepresentation likely to deceive, and damage or a real likelihood of damage. Mere confusion alone is insufficient.
3. Goodwill may be jointly owned. There is no separate tort of appropriation of goodwill, but one joint owner may bring a passing-off claim against the other where the ordinary elements of the tort are established. A representation of association is sufficient; it is unnecessary to represent that one business is literally the other.
4. “McAlpine” was capable of referring to the claimant in the construction industry, although it could also refer to the defendant. The defendant’s deliberate removal of “Alfred” from its trading identity, without providing an adequate replacement distinguisher, represented that it was the entity known as “McAlpine”. The fact that some members of the public would identify the defendant correctly did not prevent misrepresentation to others.
5. The relevant goodwill covered construction, civil engineering, private finance initiative, property development and related capital-project services. Some activities, such as vehicle-fleet services and possibly IT-network services, might fall outside that scope, but the blanket re-branding operated across a very large area where misrepresentation arose.
6. Damage was not limited to direct substitution of sales. The authorities recognised damage through injurious association, dilution, erosion of distinctiveness and loss of control over reputation. It was enough that adverse publicity, mistaken exclusion from tender opportunities, or other reputational effects presented a real and non-fanciful risk. The claimant also suffered damage because the defendant’s adoption of the shared name as its principal identifier increased the defendant’s ability to “punch above its weight” and partially displaced the claimant from the value of the shared goodwill.