Turbo-K Ltd v Turbo-K International Ltd

Passing off requires goodwill, a misrepresentation and damage. Goodwill generated by trading under a name and get-up belongs to the trading entity where the public associates the goods with that entity, even if manufacture is outsourced or distributors are involved. Supplies made ex works in England may support a passing-off claim where the goods are likely to deceive customers in the destination market. A trade mark registration is invalid under Trade Marks Act 1994 where earlier passing-off rights prevent its use or where the application falls below the standards of acceptable commercial behaviour. A person is jointly liable for a company’s tort where he substantially assists acts carried out pursuant to a common design.

Turbo-K Limited claimed that Turbo-K International Limited and Rony Roselli had passed off turbine-cleaning products as products connected with Turbo-K Limited. It also sought invalidation of Turbo-K International’s UK trade mark on the grounds of earlier passing-off rights and bad faith.

Turbo-K International counterclaimed for infringement of its registered mark by Turbo-K Limited and Oliver Harald Platz. The central issues were ownership of goodwill in the Turbo-K name and logo, whether the defendants’ conduct constituted passing off, whether the registration was invalid, and whether Mr Roselli and Mr Platz were personally liable.

1. Passing off. Turbo-K Limited had goodwill in the Turbo-K name and logo before the relevant date. Its sustained sales, marketing, OEM approvals and CEFAS ranking associated the products with Turbo-K Limited. Outsourced manufacture by Midland and distribution through other entities did not transfer or share that goodwill.
2. Turbo-K International’s incorporation, use of the name and logo, marketing, sale of the products, arrangements with Midland and trade mark applications constituted actual or threatened misrepresentations. The use of substantially similar branding and copied marketing material reinforced the likelihood of confusion. Supplies made ex works in England could found liability even where distributors or ultimate customers were abroad.
3. Turbo-K International’s UK registration was wholly invalid under sections 47(2) and 5(4)(a) of the Trade Marks Act 1994. At the application date, Turbo-K Limited’s earlier rights made use of the identical name in relation to identical or sufficiently similar goods liable to be prevented by passing off.
4. The application was also invalid under sections 47(1) and 3(6). The relevant knowledge was that of the company’s directors. The application was made in circumstances where key participants knew, or probably knew, of Turbo-K Limited’s legally protectable rights and sought to undermine its exclusivity. That conduct fell below the standards of acceptable commercial behaviour.
5. Applying Fish & Fish Limited v Sea Shepherd UK, the conditions for common-design liability were substantial assistance, assistance pursuant to a common design, and an act constituting a tort. Mr Roselli was an active participant in the creation, management, marketing and sale of Turbo-K International’s products. He was therefore personally liable for the passing off.
6. Turbo-K International’s infringement counterclaims against Turbo-K Limited and Mr Platz had no foundation and were dismissed.

First-instance decision. The judgment determined the claims and counterclaims in the High Court.