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            High Court finds that there was no goodwill in colours

            A recent IP case provides as a reminder to IP owners not to pick-and-choose the parts of their product that suit their claim for passing-off; as the Court will always consider the bigger picture.

            Date: 25/04/2016

            On 20 January 2016, the Intellectual Property Enterprise Court handed down judgment in the case of Gama Healthcare Limited ("Claimant") -v- Pal International Limited ("Defendant"). The Claimant had brought a claim for passing off in relation to the "get-up" of the Defendant's products, specifically in relation to the colours being used on the Defendant's packaging and some other elements of the design.

            Case details

            The Claimant, founded in 2004, had developed a universal disinfectant wipe intended for use in the healthcare industry. The first wipes were sold to the NHS in 2006, which led the Claimant to develop and sell a greater range of wipes under the brand name "Clinell". The Claimant used different colours on its packaging of the wipes to visually denote the difference between them; disinfectant wipes carried a green/white motif, whilst detergent wipes were yellow/white. By 2013, the Claimant had established itself as the market leader for the supply of disinfectant wipes to the NHS.

            The Defendant had historically been engaged in the food sector and was a manufacturer of hygiene work-wear. In 2000, it started to sell healthcare wipes in the Middle East, before manufacturing wipes on a "white label" basis for other brands. In 2011, the Defendant decided to expand into the UK healthcare market and developed its own brand of healthcare wipes under the brand name of "Medipal". The Defendant used similar colours as the Claimant to denote the differences between its types of wipes. In 2013, after significant marketing efforts and packaging redesign, the Defendant's wipes were added to the NHS Supply Chain catalogue.

            The Claimant issued proceedings in September 2014, alleging that the "get-up" adopted by the Defendant for its own disinfectant and detergent wipes was so similar to the Claimant's packaging that it was likely to lead members of the relevant trade to believe that the Defendant's wipes were those of the Claimant or connected with the Claimant. The Claimant put forward two main arguments as to how the design of the packaging was similar:

            1. Green/white was used to denote disinfectant wipes and yellow/white for detergent wipes.

            2. The two colours were separated by a horizontal curved line, with the upper area being white.

            Judgment and influencing factors

            Ultimately, the Judge found that the Claimant had not been able to successfully establish a case for passing off and awarded in favour of the Defendant. A constant theme in her decision was the generality in which the Claimant had presented its case, and how they were not able to establish any goodwill in the colours used for different types of wipes.

            The Judge noted from the outset that, "it is not easy to establish passing off where the allegedly distinctive indicia consist only of get-up, and the parties' products bear distinctive names". The starting point from case-law was "whether the thing – taken in its entirety, looking at the whole thing – is such that in the ordinary course of things a person with a reasonable apprehension and with proper eyesight would be deceived". The Claimant had not met this standard, and had instead effectively selected which elements of the packaging suited their claim, namely the colours and some design elements, and had ignored the other features that made the Defendant's product distinct. 

            The Defendant's product clearly stated the "Medipal" brand which was written in capital letters on the front of the package, along with on the sides of the package. The Defendant also used different proportions of colour, slight variations in colour, variation in the design of the separating curved line and an additional "swoosh" of colour. The Claimant's case was that it had built up significant goodwill in the use of the colours, and based the majority of their claim for passing off on this fact.

            The Judge found that there was a convention within the healthcare industry that green packaging denoted a disinfectant wipe, and yellow a detergent wipe. Indeed, it was conceded by the Claimant that other companies had used this colour distinction before the Claimant had begun to do so, and that it was seen as the "overriding industry norm". The fact that the Defendant had researched the market prior to entering it, including looking at the Claimant's packaging, indicated that the Defendant was seeking to compete with the Claimant but with no intention to deceive or pass off. To the contrary, the Defendant was seeking to build goodwill in the "Medipal" brand, and it was therefore in its interest to distinguish itself from the Claimant.

            Another key element of the Judge's decision was the definition of "relevant consumer" and whether there was a risk they would be deceived. Both parties supplied the healthcare industry, and dealt with hospital procurement departments or other staff with the responsibility of maintaining stock. The average relevant consumer was not a member of the general public. Rather, the relevant consumer would have a reasonable level of expertise as to what products they were supposed to be ordering. The Judge was not convinced that the similarity in packaging was such that it would confuse, mislead or deceive hospital staff into ordering the Defendant's product over the Claimant's.

            Analysis: A critical failure

            The Judge suggested that a critical failure of the Claimant's case was in inviting the court to "look at only part of [the Defendant's packaging] and ignore the most conspicuous difference of the trade name". This shows that a claim for passing off remains strongest where there is a substantial similarity between the names/brands being used. The conscious choice to use a similar name is more suggestive of an intention to confuse and/or deceive. Following the ruling in this case, it is clear that the same cannot be said for packaging colours when there are other clear distinguishing features. Claimants should remember to consider the whole object for the purposes of bringing a claim for passing off, and not to pick-and-choose the parts that suit their case. The Court will always consider everything.

            It is interesting to note that the Judge did not go so far as to say that goodwill could never be established in the colours used on packaging, however in this case the Claimant fell short. It would be interesting to know what the decision would have been if the colours used were not industry standard, and were more unique to the Claimant. Equally, the relevant consumer in this case (certain staff members in NHS hospitals who had responsibility for ordering stock) is quite niche. Goodwill may have been more easily established had the general public had access to the products, as the scope for confusion would have increased. However, as it was, the Judge concluded that "most people will not be fooled most of the time, but there is a small risk of deception of some people in atypical circumstances".

            If you have any questions about this article or would like more information, please contact one of our specialists below.

            Author: Roger Cartwright

            Related people

            Ed Meikle

            • Partner // Head of Retail Group

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