Yours Naturally Naturally Yours Limited v Kate McIver Skin Limited & Anor.

Passing off protects goodwill in a business, rather than property in a name, mark or get-up. Goodwill requires a business with customers in the jurisdiction; reputation alone is insufficient. Reverse passing off is not a separate tort where the alleged conduct satisfies the ordinary requirements of passing off.

An express representation that a trader created a product may carry an inevitable implication that the trader created the same product sold by another source. Damage may consist of harm to product reputation or loss of distinctiveness, even where particular lost sales are not proved. For malicious falsehood, reasonably available implied meanings must be considered, but pecuniary loss remains necessary. Foreseeable loss is insufficient to establish intention for causing loss by unlawful means.

The claimant operated a skincare business and sold a serum under the name Elixir. The defendants sold the serum and later reformulated products while representing that the deceased defendant had created it. The claimant alleged passing off, malicious falsehood, causing loss by unlawful means and copyright infringement.

The court considered whether the claimant had goodwill associated with Elixir, whether the defendants’ representations were false and damaging, whether the requirements of the relevant economic torts were met, and whether the claimant had licensed use of marketing text. The principal issues were the effect of the representations on goodwill, proof of pecuniary loss, intention to cause loss, and the duration of the copyright licence.

1. Passing off succeeded. The claimant’s business had acquired goodwill through continuous sales of the serum from 2015. Goodwill attached to the business and its association with the trade name Elixir, not to the defendants’ labels or to the claimant’s use of the name Kate McIver or Secret Weapon. The court applied the three elements stated in Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 791, qualified by Starbucks (HK) Ltd v British Sky Broadcasting Group plc [2015] UKSC 31, and the five characteristics in Erven Warnink Besloten Vennootschap v J. Townend & Sons (Hull) [1979] AC 731.
2. The statements that the deceased defendant had created the serum expressly represented that she was its creator and necessarily implied that she had created the Elixir serum sold by other sources, including the claimant. Those representations were false. The reformulations and continued use of the word “original” and earlier promotional material did not prevent the misrepresentation from continuing.
3. Although inferred loss of sales was not proved, damage to the reputation of Elixir and the risk of quality-related harm and loss of distinctiveness were sufficient. The court treated the conduct described as reverse passing off as falling within ordinary passing off; Bristol Conservatories Ltd v Conservatories Custom Built Ltd [1989] RPC 455 and Plomien Fuel Economiser Company, Limited v National Marketing Company [1941] Ch 248 fitted the ordinary requirements.
4. Malicious falsehood failed. The relevant falsehood included the implied meaning that the claimant had not created the serum. Reasonably available meanings, including implied meanings, had to be considered, following Ajinomoto Sweeteners SAS v Asda Stores Ltd [2010] EWCA Civ 609 and Cruddas v Calvert [2013] EWCA Civ 748. Malice was established, but pecuniary loss was not.
5. Causing loss by unlawful means failed. The claimant did not prove an intention to cause loss. Promotion of the defendants’ own business, even if foreseeably capable of causing loss, did not establish loss as an intended end under OBG Limited v Allan [2007] UKHL 21, whose analysis was endorsed in Secretary of State for Health v Servier Laboratories Ltd [2021] UKSC 24.
6. Copyright infringement succeeded in part. The claimant granted a bare licence to use supplied marketing text while the defendants bought the serum from the claimant. The licence ended on 30 November 2018. Any subsequent relevant use was infringing.

First-instance decision. No prior appellate decision is stated in the judgment.