Passing off: joint liability and common design

06 June 2017

Summary

The Court of Appeal has held that two companies whose role in the design of the product established an arguable case of liability jointly with the existing defendant could be joined to a passing off claim.

Background

In Fish & Fish Ltd v Sea Shepherd UK, the Supreme Court set out the principle that an allegation of joint or shared intention is the essence of joint liability ([2015] UKSC 10). It is not enough to show that one party facilitated another's commissioning of the tort. One party must have acted in a way that furthered the commission of the tort by the other and must have done so in pursuance of a common design. There is no prescribed test: each case depends on its own circumstances.

An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued (section 2, Limitation Act 1980).

Facts

G issued a passing off claim against UK company S in relation to the get-up of an asthma inhaler. S agreed to another company in its group, SI, being joined as a party to the claim. G applied to join two other German companies in S's group, A and H.  

G argued that A, H and SI all took an active role in designing S's product and packaging, so should be primary tortfeasors or joint tortfeasors with S. 

The High Court dismissed the application. A and H did no more than facilitate the sale and promotion of the product on the UK market and this did not amount to active co-operation in that sale or promotion. It did not arguably constitute part of a common design with S to sell or promote the product in the UK. It also held that any claim against A and H was statute-barred because it was based on acts carried out over six years before the claim was issued. G appealed.

Decision

The court allowed the appeal. It ordered that A and H be added as defendants to the claim.

G claimed that the strategy of the group as regards respiratory products was the responsibility of SI, which took decisions about the launch and marketing of the inhaler in particular countries. SI, A and H were responsible for the development of the inhaler, and for its design, including the colour, shape, technical design and overall get-up of and its packaging. G alleged that the design and development was carried out knowing and intending that the inhaler would be marketed and sold throughout the EU, including in the UK. A manufactured the product according to the chosen design and in accordance with the marketing authorisation, and supplied it to S. All four companies were alleged to have collected or collated data for the marketing authorisation. S was not involved in the design and planning. 

The court held that if the promotion, marketing and sale of the product in the UK was tortious on the part of S, then it was clear that the commission of that tort had on these allegations been assisted by each of SI, A and H. It was also clearly alleged that SI, A and H shared a common intention and design that the product should be sold in the UK, as well as in other markets, with the chosen design and get-up, subject to obtaining the necessary authorisation. Each of the four companies was alleged to have adopted the particular packaging and get-up with the deliberate intention of deceiving or creating public confusion. In practice, that allegation was directed against SI, A and H, rather than against S, which was not involved in the decisions about the design and get-up. However, this strengthened G’s allegation against SI, A and H of having a common design and intention, and between them, to do or to procure the promotion, marketing and sale of the product in the UK, the acts which on G’s allegations constituted a tort.

S was alleged to be involved later, after the design decisions had been taken, in the process of obtaining marketing authorisation, and in importing and selling the product in the UK. That was the act in respect of which the other three companies were alleged to have combined with a view to its being done. 

G had made out a sufficiently arguable case of liability on the parts of SI, A and H jointly with S for the primary acts of passing off. It did not matter than some of the relevant acts were only done by one or some of the parties, and that S only became involved at a later stage once the decision was made to move towards marketing in the UK, so long as a common design was shared between the parties. 

The claim against A and H was not statute-barred. Following Fish, the accessory was liable not for his acts of assistance but for the primary actor's tortious act, here, the first promotion and sale of the product in the UK in late 2015.

Comment

G's practical aim in applying to add A and H was as a means to obtain disclosure relating to the creation of the product designs. Notably, A and H were added to a claim when their involvement was at the design stage of a product several years before the product was launched. As passing off is a territorial right, to be actionable an act of primary passing off must have been committed in the UK. However, this decision confirms that A and H need not themselves have carried out any acts contributing to the common design in the UK in order to become jointly liable with S for passing off within the UK.    

S has argued that the work carried out by A and H was undertaken without a specific intention to sell in the EU. As shared intention is crucial to joint liability it remains to be seen whether they will be found liable for passing off on the basis of common design after the full facts are established at trial. 

Case: Glaxo Wellcome UK Ltd (t/a Allen & Hanburys) & Another v Sandoz Ltd & Another [2017] EWCA Civ 227.

First published in the June 2017 issue of PLC Magazine and reproduced with the kind permission of the publishers.  Subscription enquiries 020 7202 1200.

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