There are three essential elements of a claim for damages under the law of passing off, namely misrepresentation, damage, and goodwill. This was accepted by the House of Lords in the case of Reckitt & Colman Ltd v Borden Inc (1990) 17 IPR 1, in which the court said:
- "First he [the plaintiff] must establish a goodwill or reputation attached to the goods or services...Secondly he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods or services offered by him are goods or services of the plaintiff...Thirdly, he must demonstrate that he suffers [loss or damage as a consequence]."
See also Con Agra Inc. v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193.
The law of passing off prevents one person from misrepresenting his or her goods or services as being the goods and services of the plaintiff, and also prevents one person from holding out his or her goods or services as having some association or connection with the plaintiff when this is not true.
Passing off is often used as a form of intellectual property enforcement, particularly for unregistered trade marks or against trade marks which are marginally different from registered trade marks. It has to be distinguished from infringement of registered trademarks which is another tort preventing a defendant from misappropriating a trade mark or product get-up. Passing off is found in common law, as opposed to statute law such as the UK Trade Marks Act 1994 which regulates trademarks.
Passing off and the law of registered trademarks deal with overlapping factual situations, but deal with them in different ways. Passing off does not confer monopoly rights to any names, marks, get-up or other indicia. It does not recognize them as property in its own right.
Instead, the law of passing off is designed to prevent misrepresentation to the public where there is some sort of association between the plaintiff and the defendant. Where the defendant does something so that the public is misled into thinking the activity is associated with the plaintiff, and as a result the plaintiff suffers some damage, under the law of passing off it may be possible for the plaintiff to initiate action against the defendant.
Types of misrepresentation include:
- using the mark of the plaintiff's product
- using the get-up of the plaintiff's product
- using the plaintiff's advertising theme
- using the design or shape of the plaintiff's product.
For misrepresentation to be actionable, it must be one calculated to cause damage to plaintiff's goodwill. The plaintiff need not prove actual or special damage, a real and tangible probability of damage is sufficient for a claim of damages. Whether damage is done can be considered an acid test for which misrepresentations are actionable, and those that are beneath notice of the law.
One of the instances where passing off is actionable is the extended form of passing off, where a defendant's misrepresentation as to the particular quality of a product or services causes harm to the plaintiff's goodwill. An example of this is Erven Warnink v J Townsend & Sons (Hull) Ltd  AC 731, in which the makers of advocaat sued a manufacturer of a drink similar but not identical to advocaat, but which was successfully marketed as being advocaat.
The extended form of passing off is used by celebrities as a means of enforcing their personality rights in common law jurisdictions. Common law jurisdictions (with the exception of Jamaica) do not recognise personality rights as rights of property. Accordingly, celebrities whose images or names have been used can successfully sue if there is a representation that a product or service is being endorsed or sponsored by the celebrity or that the use of the likeness of the celebrity was authorised when this is not true.
- Dastar Corp. v. Twentieth Century Fox Film Corp. - lawsuit over "reverse passing off"