Diageo North America, Inc & Anor v Intercontinental Brands (ICB) Ltd & Ors

Extended passing off protects a descriptive or generic term where it denotes a reasonably identifiable class of goods with a reputation and goodwill. The class need not be perceived as superior or have geographical significance. The claimant must establish goodwill, a misrepresentation likely to confuse a substantial number of relevant consumers, and damage or likely damage. Damage may include erosion of the term’s distinctiveness and diverted sales. A product incorporating genuine ingredients associated with the protected class may still be passed off where its name, get-up, merchandising and promotion create a misleading overall impression.

The claim concerned VODKAT, a 22% alcoholic drink containing vodka and neutral fermented alcohol. The claimants marketed SMIRNOFF and other vodkas. They alleged that “vodka” denoted a defined class of goods with protectable goodwill and that VODKAT was marketed as vodka or as a weaker version of vodka.

The defendants relied on the regulatory definition of vodka, minor market exceptions, the product’s lower alcoholic strength and price, its descriptions as a spirit or schnapps drink, and the absence of an intention to deceive. The issues were whether “vodka” had the necessary goodwill, whether the marketing constituted a misrepresentation, and whether the claimants had suffered damage.

1. Extended passing off. The protected class must be identifiable with reasonable precision, have recognisable or distinctive qualities in the perception of the relevant public, and have a reputation giving rise to goodwill. There is no requirement that the class be geographically defined or perceived as superior. A liking for the class may generate goodwill just as a perception of superior quality may do so.
2. Vodka. At the relevant date, “vodka” denoted a clearly defined class of goods. The regulatory definition, market practice and consumer perception established a class generally understood as a clear, tasteless, distilled, high-strength spirit. Minor exceptions, vodka-containing ready-to-drink products and vodka-based liqueurs did not destroy that definition. The term had a reputation and protectable goodwill.
3. Misrepresentation. VODKAT’s name suggested vodka, a version of vodka, or a product containing vodka. Its descriptions, get-up, merchandising and promotion failed to distinguish it sufficiently from vodka. The later “Classic Schnapps Drink” description and New Get-Up remained insufficient, particularly given the product’s established history. Actual confusion supported the finding, but was not essential.
4. Damage. The evidence established confusion among a substantial number of consumers. Some SMIRNOFF sales were lost through confusion, and the marketing was likely to erode the distinctiveness of “vodka” by extending it to lower-strength products containing fermented alcohol.
5. Disposition. ICB had passed off VODKAT as vodka in both the Old Get-Up and the New Get-Up. The claim succeeded.