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Unregistered IP rights: passing off & lookalikes

The case of “Moroccanoil” against “Miracle Oil” demonstrates the importance of registering your Intellectual Property (IP) rights prior to product launch. The tort, or wrongful act, of “passing off”, in theory protects a business’ goodwill from misrepresentation, but it is difficult to prove ‘passing off’. However, registered IP gives stronger protection against infringers. To prove “passing off” you have to record and produce large amounts of evidence from customers. The evidence should, for example, be returned goods or complaints to you and not to your competitor.

“Moroccanoil”  vs Aldi’s “Miracle Oil”

The case concerns Moroccanoil’s hair oil product, marked under the name  “MOROCCANOIL”, against Aldi’s hair oil product, marked under the name “Miracle Oil”. The case was heard in the Intellectual Property Enterprise Court (“IPEC”).

Representation and packaging for “MOROCCANOIL”
Representation and packaging for “Miracle Oil”

To win their passing off claim, Moroccanoil had to prove:

  1. Goodwill in the business and product;
  2. Misrepresentation by Aldi, whether or not intentional;
  3. Damage to goodwill by reason of misrepresentation.

During the trial, the Judge considered the arguments on confusion and deception. He thought what really mattered was misrepresentation. It was Moroccanoil case that there was misrepresentation generated by the name and get-up i.e the shape, colour and packaging of Aldi’s product. However, Moroccanoil emphasised similarities in the get-up, rather than the name.

Why Moroccanoil lost

The Judge agreed that get-up probably plays a significant role in product recognition. Nevertheless, he found that misrepresentation by reason of similar get-up likely depends on customers not noticing the different name. In terms of the above list, Moroccanoil won on point 2. IPEC accepted that Aldi intended to make customers think about Moroccanoil’s product when they saw Miracle Oil on an Aldi shelf. Aldi had ‘lived dangerously’ by consciously designing their packaging to be indicative of Moroccanoil’s packaging. Moroccanoil lost on point 3. Moroccanoil produced no evidence to prove damage to goodwill by reason of misrepresentation. So IPEC found that Moroccanoil failed to establish “passing off”, because the evidence did not support misrepresentation by Aldi.

How to protect your business and products against infringement

Registered IP gives stronger protection against infringers. The Moroccanoil case would have been stronger if they had registered their IP rights in their product’s packaging.

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