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Cite as: [2002] WLR 2355, [2002] EMLR 32, [2002] EWHC 367 (Ch), [2002] 2 All ER 414, [2002] 1 WLR 2355, [2002] EWHC 367, (2002) 25(6) IPD 25039, [2002] FSR 60

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Edmund Irvine Tidswell Ltd. v Talksport Ltd. [2002] EWHC 367 (Ch) (13th March, 2002)

Neutral Citation Number: [2002] EWHC 367 (Ch)
Case No: HC 0005773PRIVATE 

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL
13 March 2002

B e f o r e :

THE HONOURABLE MR JUSTICE LADDIE
____________________

EDMUND IRVINE
TIDSWELL LIMITED

Claimants

- and -



TALKSPORT LIMITED
Defendant

____________________

Ms Lindsay Lane (instructed by Fladgate Fielder for the Claimants)
Mr Michael Hicks (instructed by Olswang for the Defendant)

____________________

HTML VERSION OF HANDED DOWN JUDGMENT
____________________

Crown Copyright ©

    Mr Justice Laddie:

    Introduction

  1. This is the judgment in an action for passing off. It raises an important point of principle. The first claimant is Mr Edmund Irvine. The remaining claimants are a number of companies through whom or to whom he has contracted to offer various services, including endorsement services. Save where the context otherwise requires, I will refer to the claimants as “Mr Irvine” or “the claimant”. The defendant is Talksport Limited.
  2. The evidence shows, as anyone interested in motor racing would know, that Mr Irvine, referred to generally as “Eddie Irvine”, is a prominent driver on the Formula 1 (“F1”) racing circuit. He is one of a small group of British drivers who have achieved some success in recent years in that sport. 1999 has proved his most successful year to date. During that racing season, Mr Irvine was driving F1 cars made by Ferrari. By a narrow margin he missed being the F1 champion of the year, coming second.
  3. Talksport Ltd runs an eponymous radio station. It is now one of the largest commercial radio stations in the United Kingdom. Until the end of 1999, the station bore the name “Talk Radio”. Under that name it concentrated on what is called commercial news and talk-back programmes. In 1998 or early 1999, it was decided to refocus the area of interest away from news and general talk programmes towards sport. At the times material to this dispute, the company’s sales director was Mr Thomas Bleakley. He became managing director of TWG Impact, another company within the same group as the defendant. More recently he has moved on to other employment. He has explained that the decision to move the centre of interest towards sport was motivated by a desire to capture a larger audience consisting of men earning over £20,000 per year. Part of the implementation of that decision was the rebranding of the station by abandoning its existing name and adopting the name “Talksport”. As Mr Bleakley explains, the defendant entered into a number of contracts which allowed it to broadcast live coverage of certain high-profile sporting events. In 1999 it obtained the rights to cover, inter alia, the F1 Grand Prix World Championship.
  4. To support the change of direction and to generate interest among potential advertisers, the defendant embarked on a special promotional campaign. As part of that, it engaged the services of a marketing and communications agency called SMP Limited (“SMP”) to produce a number of boxed packs to be sent to just under 1000 people who it was thought were likely to be responsible, directly or indirectly, for the placement of advertisements. Three such boxed sets were produced. The first, concentrated on cricket, since the defendant had secured broadcasting rights relating to the England Cricket Winter Tour of South Africa. The third was a more general promotion covering a number of sports. It is the second with which this action is concerned.
  5. The second promotion consisted of a box bearing the image depicted at Annex 1 [empty in transcript] to this judgment. The car in the middle of the photograph is a F1 racing car. The two small photographs at opposite corners of the main image are of another famous F1 driver, Mr Michael Schumacher. On the bottom right of the image there is an instruction that, if undelivered, the box should be returned to an identified PO Box. There is no other marking on the box, save for the address of the addressee. Inside the box is a pair of white shorts and a brochure or ‘flyer’. The shorts bear on the back an imitation of the skid mark left on the road when a car accelerates too forcefully. On the front there are the words “Talk radio 1053/1089 am”. The brochure has four sides (i.e. it is one piece of card folded down the middle). The front is shown in Annex 2 to this judgment. Inside and on the back there is advertising copy extolling the virtues of Talk Radio including, in particular, as a vehicle for carrying sport-related advertisements. The reader is invited to contact a website: www.talksport.net. In the middle of pages 2 and 3 is a partial photograph of an F1 car. On the back page is a further photograph of another F1 car and a photograph of the winner’s podium at the Monte Carlo F1 Grand Prix showing, amongst others, Michael Schumacher, Mikka Hakkinen and Eddie Irvine. All three are F1 drivers. This page is shown in Annex 3 [empty in transcript].
  6. There was no dispute between the parties that the anonymous box and the shorts are likely to be discarded and the brochure retained, assuming that all three are not immediately thrown away by the recipient. It is the brochure which will stay on the recipient’s desk or may be passed to others.
  7. The photograph on the front of the brochure is of Eddie Irvine. There is no question of copyright infringement because the right to use this photograph was purchased from a sporting photograph agency. However the photograph as made available by the agency does not show Mr Irvine holding a radio. He is holding a mobile telephone. SMP took that image and manipulated it to cut out the mobile telephone and to replace it by an image of a portable radio to which the words “Talk Radio” had been added.
  8. It is Mr Irvine’s case that the distribution of the defendant’s brochure bearing a manipulated picture of him is an actionable passing off. He seeks damages but not an injunction because, at a very early stage, the defendant wrote a letter which included the following:
  9. “The flyer was part of a campaign promoting Talk Radio’s live coverage of the FIA Grand Prix World Championship. The initial mailing itself was time critical to coincide with the British Grand Prix at Silverstone on 11 July 1999. …
    Without any admission of liability, we confirm that no more of these flyers will be despatched.”
  10. Before considering the principles of law and the facts in this case, it will be useful to clear up one issue of terminology. Throughout the trial reference was made to sponsorship, endorsement and merchandising. The evidence sometimes referred to one, sometimes another and at times to all of these. As Ms Lane, who appeared for the claimants, explained, this case is concerned with endorsement. When someone endorses a product or service he tells the relevant public that he approves of the product or service or is happy to be associated with it. In effect he adds his name as an encouragement to members of the relevant public to buy or use the service or product. Merchandising is rather different. It involves exploiting images, themes or articles which have become famous. To take a topical example, when the recent film, Star Wars Episode 1 was about to be exhibited, a large number of toys, posters, garments and the like were put on sale, each of which bore an image of or reproduced a character or object in the film. The purpose of this was to make available a large number of products which could be bought by members of the public who found the film enjoyable and wanted a reminder of it. The manufacture and distribution of this type of spin-off product is referred to as merchandising. It is not a necessary feature of merchandising that members of the public will think the products are in any sense endorsed by the film makers or actors in the film. Merchandised products will include some where there is a perception of endorsement and some where there may not be, but in all cases the products are tied into and are a reminder of the film itself. An example of merchandising is the sale of memorabilia relating to the late Diana, Princess of Wales. A porcelain plate bearing her image could hardly be thought of as being endorsed by her, but the enhanced sales which may be achieved by virtue of the presence of the image is a form of merchandising.
  11. The relevant law

  12. As I have said, Ms Lane has argued that this is an endorsement case (or more strictly a false endorsement case) and falls squarely within modern application of the law of passing off. Mr Michael Hicks, who appears for the defendant, argues that even as an endorsement case, this fails to fall within the scope of passing off. At the forefront of his submission and encapsulating the various strands of his argument he relied on the following passage from the judgment of Simon Brown LJ in Elvis Presley Trade Marks [1999] RPC 567, 597:
  13. “On analysis, as it seems to me, all the English cases upon which Enterprises seeks to rely (Mirage Studios not least) can be seen to have turned essentially upon the need to protect copyright or to prevent passing off (or libel). None creates the broad right for which in effect Mr. Prescott contends here, a free standing general right to character exploitation enjoyable exclusively by the celebrity. As Robert Walker LJ has explained, just such a right, a new “character right” to fill a perceived gap between the law of copyright (there being no copyright in a name) and the law of passing off was considered and rejected by the Whitford Committee in 1977. Thirty years earlier, indeed, when it was contended for as a corollary of passing off law, it had been rejected in McCulloch v. Lewis A. May [1947] 2 A.E.R. 845. I would assume to reject it. In addressing the critical issue of distinctiveness there should be no a priori assumption that only a celebrity or his successors may ever market (or licence the marketing of) his own character. Monopolies should not be so readily created.”
  14. At its heart, Mr Hicks’ argument was that what Mr Irvine is trying to enforce here is just the sort of broad and novel right which Simon Brown LJ rejected.
  15. This dispute raises important questions as to the nature of the cause of action in passing off and whether, as Ms Lane asserted, that cause of action can prevent unauthorised endorsements assuming, of course, that what has happened here amounts to such an endorsement.
  16. The sort of cases which come within the scope of a passing off action has not remained stationary over the years. This is for two reasons. First, passing off is closely connected to and dependent upon what is happening in the market place. It is a judge made law which tries to ensure, in its own limited way, a degree of honesty and fairness in the way trade is conducted. As Lord Morris said in Parker-Knoll v Knoll International [1962] RPC 265, 278;
  17. “My Lords, in the interests of fair trading and in the interests of all who may wish to buy or to sell goods the law recognises that certain limitations upon freedom of action are necessary and desirable. In some situations the law has had to resolve what might at first appear to be conflicts between competing right. In solving the problems which have arisen there has been no need to resort to any abstruse principles but rather, I think, to the straightforward principle that trading must not only be honest but must not even unintentionally be unfair.”
  18. That statement does not define the characteristics of a passing off action, but it does emphasise that an underlying principle is the maintenance of what is currently regarded as fair trading. The law of passing off responds to changes in the nature of trade.
  19. Second, the law itself has refined over the years. As Lord Scarman said in Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1981] RPC 429;
  20. “The width of the principle now authoritatively recognised by the High Court of Australia and the House of Lords is, therefore, such that the tort is no longer anchored, as in its early nineteenth century formulation, to the name or trade mark of a product or business. It is wide enough to encompass other descriptive material, such as slogans or visual images, which radio, television or newspaper advertising campaigns can lead the market to associate with a plaintiff’s product, provided always that such descriptive material has become part of the goodwill of the product. And the test is whether the product has derived from the advertising a distinctive character which the market recognises.”
  21. This passage, although dealing with matters which are not directly in issue in this case, illustrates at least one way in which the law of passing off has evolved over the years. The old cases provide us with the origin of the law. They do not illustrate more recent developments.
  22. As Professor Cornish explains in Intellectual Property 4th Ed p 619, the passing-off action was first developed to meet what he calls the “classic case” the features of which were described, for example, in Lord Halsbury’s speech in Reddaway v Banham [1896] AC 199, 204:
  23. “The principle of law may be very plainly stated, that nobody has any right to represent his goods as the goods of somebody else”.
  24. The need for goods-for-goods substitution as an essential ingredient in the tort was a feature in many 19th century cases and still can be discerned in some early decisions in the last century. Because the claimant had to show this substitution, it was inherent that the he also had to show that he was in business selling goods. Perhaps, to modern eyes, one of the most stark and surprising illustrations of this is to be seen in Clark v. Freeman (1848) 11 Beav. 112, an early case of false endorsement. The plaintiff, Sir James Clarke, was an eminent physician and Physician-in-Ordinary to Queen Victoria. The defendant sold certain pills under the name “Sir J. Clarke’s Consumption Pills”. Before Lord Langdale MR, the claim failed, a major reason being that the plaintiff did not carry on the business of selling pills so, it was held, he suffered no pecuniary injury by reason of the defendant’s activities. It is interesting to note that Lord Langdale said that he could not conceive that anyone in the world would suppose that Sir James’ professional name would be the least damaged by the defendant’s “unscrupulous” use of it. Presumably that view made sense in an era when physicians were treated as the sort of gentlemen who would not soil their hands or their reputation by being involved “in trade”.
  25. Clarke v Freeman was followed, though without conspicuous enthusiasm, in Williams v. Hodge & Co (1887) 4 TLR 175, a case in which another eminent physician tried, but failed, to secure interlocutory relief against a manufacturer of surgical equipment who used his name to boost sales.
  26. Clarke v Freeman was distinguished in another false endorsement case; British Medical Association v. Marsh (1931) 48 RPC 565. Then as now, the plaintiff was the association for medical professionals. In 1874 it was registered as a company not for gain. It carried on no trade. Before the First World War it had published two books which contained the results of analyses which had been carried out on a large number of proprietary medicines. It disclosed which ones were ineffective and which were dangerous. The defendant, a pharmacist, had two retail shops. He sold medicines which were supposed to have been manufactured in accordance with the analyses in the plaintiff’s books. He used the initials “BMA” as a trade mark for his medicines and made liberal reference to the British Medical Association. Maugham J came to the conclusion that the initials would be recognised as referring to the plaintiff.
  27. The defendant relied on the fact that the plaintiff was a non-trading company and had never manufactured or sold drugs or medical remedies and had never been associated with any firm or person who manufactured or sold such goods. The defendant said that it and its predecessors in title had been trading for seven years without complaint, so that the claim should fail as a result of delay and it argued that the plaintiff could not have suffered any damage and therefore was not entitled to relief (see 48 RPC 567 line 47 to 568 line 19). In holding that there was passing off, Maugham J had to address the issue of damage. He held that no actual damage had been proved or had been suggested as having occurred. Notwithstanding this, he found damage by assuming loss of membership, based on an assumption that association with a pharmacist would damage the reputation of the Association. Thus it was damage to the reputation of the association which perfected the cause of action, the loss of memberships was the consequence in money terms of that damage. To the best of my understanding, the correctness of British Medical Association has never been doubted. It is therefore not necessary to consider a number of other professional association cases which went the same way.
  28. Counsel agreed that the most recent endorsement case in England is McCulloch v. May (1947) 5 RPC 58 in which the plaintiff was a famous presenter of children’s radio programmes. He was known as “Uncle Mac”. He had lost one leg and the use of one eye and had limited mobility. The defendant sold cereal food under the same name. It also used various advertising copy on the cartons in which its product was sold. They included “Uncle Mac loves children – and children love Uncle Mac!” and “You know the difficulties of travel these days, and will understand that Uncle Mac can’t get about as freely as he would like to, but rest assured that all will come right in time and that he will always do his best to please his many friends.”
  29. Apparently a considerable number of authorities were put before Wynn-Parry J, but he concentrated on an analysis of the British Medical Association case which had been relied on by the plaintiff. His analysis included the conclusion that in British Medical Association, Maugham J had;
  30. “felt it necessary to find that the Plaintiffs had a business and that, having regard to all the circumstances, it could properly be said that the acts of the Defendants were likely to cause damage to the Plaintiffs in that business, thus pointing, as I understand his Lordship’s judgment, quite clearly to the necessity of showing connection between the two businesses.” (p 66)
  31. Wynn-Parry J then went on to say that, on the basis of the case law, including British Medical Association, the plaintiff needed to show the existence of a “common field of activity” in which it and the defendant were engaged. Finding against the plaintiff he said:
  32. “Upon the postulate that the Plaintiff is not engaged in any degree in producing or marketing puffed wheat, how can the Defendant, in using the fancy name used by the Plaintiff, be said to be passing off the goods or the business of the Plaintiff? I am utterly unable to see any element of passing off in this case.” (p 67)
  33. With respect, it is difficult to agree with the suggestion that in British Medical Association, Maugham J put forward the need to prove a common field of activity. If anything, that authority points decisively away from such a need. Further, if the last-quoted passage had been applied to the facts in British Medical Association it is difficult to see how the plaintiff could have succeeded. There the plaintiff was “not engaged in any degree in producing or marketing” medicines, yet it succeeded in its claim. Furthermore it does not appear to me to be accurate to say, as Wynn-Parry J did, that Maugham J’s judgment demonstrated “quite clearly the necessity of showing connection between the two businesses”. It appears to me that Maugham J accepted that there was no connection between the two businesses. The plaintiff was a non-trading association looking after the interests of the medical profession while the defendant was a retail pharmacist. The only connection between the parties was that the defendant’s activities damaged the plaintiff’s goodwill.
  34. McCulloch v May was considered and not followed by the High Court of New South Wales sitting in its appellate jurisdiction (Evatt CJ, Myers and Manning JJ) in Henderson v Radio Corporation Pty Ltd [1969] RPC 218. The plaintiffs were well-known professional ballroom dancers. The defendant manufactured and distributed a record of ballroom dancing music. On the cover of the record was a photograph of the plaintiffs. The plaintiffs alleged that the use of a picture of them on the record would lead buyers to believe that they recommended the record. They said that this amounted to passing off. At first instance, Sugerman J found for the plaintiffs and granted an injunction but declined to order an inquiry because he was of the view that damages were nominal. The defendant appealed. There was no cross-appeal in relation to damages. In the appellate division, the court held as a fact that the photograph on the record would be understood as a representation that the Hendersons recommended the record and this was used to induce customers to buy it. Furthermore the court cited with approval the British Medical Association case. On the other hand it subjected McCulloch v May to strong criticism. Noting that Wynn-Parry J had dismissed the action because there was no common field of activity, the High Court said:
  35. “We find it impossible to accept this view without some qualification. The remedy in passing off is necessarily only available where the parties are engaged in business, using that expression in its widest sense to include professions and callings. If they are, there does not seem to be any reason why it should also be necessary that there be an area, actual or potential, in which their activities conflict. If it were so, then, subject only to the law of defamation, any businessman might falsely represent that his goods were produced by another provided that other was not engaged, or not reasonably likely to be engaged, in producing similar goods. This does not seem to be a sound general principle.
    The present case provides an illustration of the unjust consequences of such a principle. For the purposes of this part of its argument, the appellant concedes that it is falsely representing that the respondents recommend, favour or support its dance music record, but it claims that because the respondents are not engaged or likely to be engaged in making or selling gramophone records, it is entitled to appropriate their names and reputations for its own commercial advantage and that the court has no power to prevent it doing so. It would be a grave defect in the law if this were so.
    In our view, once it is proved that A. is falsely representing his goods as the goods of B., or his business to be the same as or connected with the business of B., the wrong of passing off has been established and B. is entitled to relief.” (p 234)
    It also said:
    “We have some difficulty in accepting the proposition stated in McCulloch’s case. If deception and damages are proved, it is not easy to see the justification for introducing another factor as a condition of the court’s power to intervene.” (p 234)
  36. Henderson has been followed not only in Australia, but at least in Canada as well. It has recently been cited with approval by the full High Court of Australia (Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ) in Campomar Sociedad, Limitada v Nike International Ltd (2000) 46 IPR 481 as was a passage in Moorgate Tobacco Co Ltd v Philip Morris (No 2) (1984) 3 IPR 545 in which Deane J approved of:
  37. “.. the adaptation of the traditional doctrine of passing off to meet new circumstances involving the deceptive or confusing use of names, descriptive terms or other indicia to persuade purchasers or customers to believe that the goods or services have an association, quality or endorsement which belongs or would belong to goods or services of, or associated with, another or others.”
  38. McCulloch has also been disapproved of in this country. In Harrods v Harrodian School [1996] RPC 697, Millett LJ, which whom Beldam LJ agreed, said:
  39. “There is no requirement that the defendant should be carrying on a business which competes with that of the plaintiff or which would compete with any natural extension of the plaintiff’s business. The expression “common field of activity” was coined by Wynn-Parry J in McCulloch v May (1948) 65 RPC 58, when he dismissed the plaintiff’s claim for want of this factor. This was contrary to numerous previous authorities (see, for example, Eastman Photographic Material Co Ltd v John Griffiths Cycle Corporation Ltd (1898) 15 RPC 105 (cameras and bicycles); Walter v Ashton [1902] 2 Ch 282 (The Times newspaper and bicycles) and is now discredited.”
  40. With respect, I agree. The approach adopted by the High Court in New South Wales in Henderson supported more recently the full court of the High Court of Australia in Campomar are to be preferred and seem to me to be consistent with a long line of English authority both before and since McCulloch v May. For example in Annabel’s (Berkeley Square) Ltd v G Schock [1972] RPC 838, the Court of Appeal granted interlocutory relief to restrain the defendant from running an escort agency under the name “Annabel’s”, a name which was used for the plaintiff’s high class night club. McCulloch was referred to the court during argument. There was no question of the plaintiff running an escort agency. Indeed it was anxious that the defendant’s activities might lead people to think that it had branched out into this new type of activity. The court declined to approach the issue on this basis. Instead it said that looking at overlapping fields of activity was simply a question which is involved in the ultimate decision whether there is likely to be confusion (see p 844).
  41. However if the narrow approach in McCulloch is not right, so that identifying overlapping businesses is not a necessary ingredient in a passing off action, and nor is goods-for-goods or service-for-service substitution, what is the scope of the cause of action in its current form and does it cover false endorsement?
  42. The law of passing off is not designed to protect a trader from fair competition. It is not even to protect him against others selling the same goods or copied goods. If the latter is possible at all it is only as a result of the application of the law of copyright, designs, patents or confidential information (see British American Glass Co v Winton Products [1962] RPC 230). Furthermore, passing off does not create or protect a monopoly in a name or get up. The latter point was made clearly over a hundred years ago by Parker J in Burberry’s v Cording [1900] 26 RPC 693;
  43. “The principles of law applicable to a case of this sort are well known. On the one hand, apart from the law as to trademark, no one can claim monopoly rights in the use of a word or name. On the other hand, no one is entitled to the use of any word or name, or indeed in any other way to represent his goods as being the goods of another to that other’s injury. If an injunction be granted restraining the use of a word or name, it is no doubt granted to protect property, but the property to protect which it is granted is not property in the word or name but property in the trade or goodwill which will be injured by its use.”
  44. What is protected is goodwill. The nature of goodwill was described by the House of Lords in Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] AC 217. The oft-quoted passage from the speech of Lord Macnaghton reads;
  45. “What is goodwill ? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom.”
  46. However there is another passage in that speech which is just as important and throws light on rights held by the owner of goodwill;
  47. “It is very difficult, as it seems to me, to say that goodwill is not property. Goodwill is bought and sold every day. It may be acquired, I think, in any of the different ways in which property is usually acquired. When a man has got it he may keep it as his own. He may vindicate his exclusive right to it if necessary by process of law. He may dispose of it if he will – of course under the conditions attaching to property of that nature.” (p 223)
  48. Expressed in these terms, the purpose of a passing off action is to vindicate the claimant’s exclusive right to goodwill and to protect it against damage. When a defendant sells his inferior goods in substitution for the claimant’s, there is no difficulty in a court finding that there is passing off. The substitution damages the goodwill and therefore the value of it to the claimant. The passing off action is brought to protect the claimant’s property. But goodwill will be protected even if there is no immediate damage in the above sense. For example, it has long been recognised that a defendant can not avoid a finding of passing off by showing that his goods or services are of as good or better quality than the claimant’s. In such a case, although the defendant may not damage the goodwill as such, what he does is damage the value of the goodwill to the claimant because, instead of benefiting from exclusive rights to his property, the latter now finds that someone else is squatting on it. It is for the owner of goodwill to maintain, raise or lower the quality of his reputation or to decide who, if anyone, can use it alongside him. The ability to do that is compromised if another can use the reputation or goodwill without his permission and as he likes. Thus Fortnum & Mason is no more entitled to use the name F W Woolworth than F W Woolworth is entitled to use the name Fortnum & Mason.
  49. The point is particularly clearly demonstrated by the so-called “champagne” cases in which the claimants share a reputation in the name under which their type of wine is sold. In such cases a defendant would not escape liability for use of the name “Champagne” on a beverage which is not authentic French Champagne by showing either that his product was as good or better than the claimants’ or that he had not diverted any measurable sales from them. One type of damage which can support the modern form of passing off action was explained in just such a case; Taittinger SA v Allbev Ltd [1993] FSR 641. In that action the claimants were a number of Champagne houses. The defendant made a non-alcoholic drink which it sold under the name “Elderflower Champagne”. At first instance the court held that the use of the word “champagne” on the defendant’s product would give rise to a misrepresentation to members of the public and that the claimants had a protectable goodwill but dismissed the action on the basis that the claimants had failed to establish a likelihood of substantial damage, not least because it was of the view that the claimants would lose very few, if any, sales. The decision was reversed on appeal. Peter Gibson LJ, with whom Sir Thomas Bingham MR and Mann LJ agreed, analysed the nature of the harm to goodwill which is relevant in a passing off action. Having noted that in Vine Products Ltd v MacKensie & Co Ltd [1969] RPC 1 Dankwerts J was concerned about “blurring” or “diluting” of the plaintiff’s goodwill and references to “encroaching the reputation and goodwill” or “erosion of distinctiveness” in certain New Zealand cases, said;
  50. “By parity of reasoning it seems to me no less obvious that erosion of the distinctiveness of the name champagne in this country is a form of damage to the goodwill of the business of the champagne houses.” (p 670)
  51. Much the same point was made by Sir Thomas Bingham MR Having commented on how the cause of action for passing off had expanded over the years, he noted;
  52. “But it is now, as I understand, clear that a defendant need not, to be liable, misrepresent his goods to be those of the plaintiff if he misrepresents his goods or his business as being in some way connected or associated with the plaintiff’s.” (p 676)
  53. He then went on to consider the question of damage;
  54. “Like the judge, I do not think the defendants’ product would reduce the first plaintiffs’ sales in any significant and direct way. But that is not, as it seems to me, the end of the matter. The first plaintiffs’ reputation and goodwill in the description Champagne derive not only from the quality of their wine and its glamorous associations, but also from the very singularity and exclusiveness of the description, the absence of qualifying epithets and imitative descriptions. Any product which is not Champagne but is allowed to describe itself as such must inevitably, in my view, erode the singularity and exclusiveness of the description Champagne and so cause the first plaintiffs damage of an insidious but serious kind. The amount of damage which the defendants’ product would cause would of course depend on the size of the defendants’ operation. That is not negligible now, and it could become much bigger. But I cannot see, despite the defendants’ argument to the contrary, any rational basis upon which, if the defendants’ product were allowed to be marketed under its present description, any other fruit cordial diluted with carbonated water could not be similarly marketed so as to incorporate the description champagne. The damage to the first plaintiffs would then be incalculable but severe.” (p 678)
  55. In my view these cases illustrate that the law of passing off now is of greater width than as applied by Wynne-Parry J in McCulloch v May. If someone acquires a valuable reputation or goodwill, the law of passing off will protect it from unlicensed use by other parties. Such use will frequently be damaging in the direct sense that it will involve selling inferior goods or services under the guise that they are from the claimant. But the action is not restricted to protecting against that sort of damage. The law will vindicate the claimant’s exclusive right to the reputation or goodwill. It will not allow others to so use goodwill as to reduce, blur or diminish its exclusivity. It follows that it is not necessary to show that the claimant and the defendant share a common field of activity or that sales of products or services will be diminished either substantially or directly, at least in the short term. Of course there is still a need to demonstrate a misrepresentation because it is that misrepresentation which enables the defendant to make use or take advantage of the claimant’s reputation.
  56. Not only has the law of passing off expanded over the years, but the commercial environment in which it operates is in a constant state of flux. Even without the evidence given at the trial in this action, the court can take judicial notice of the fact that it is common for famous people to exploit their names and images by way of endorsement. They do it not only in their own field of expertise but, depending on the extent of their fame or notoriety, wider afield also. It is common knowledge that for many sportsmen, for example, income received from endorsing a variety of products and services represent a very substantial part of their total income. The reason large sums are paid for endorsement is because, no matter how irrational it may seem to a lawyer, those in business have reason to believe that the lustre of a famous personality, if attached to their goods or services, will enhance the attractiveness of those goods or services to their target market. In this respect, the endorsee is taking the benefit of the attractive force which is the reputation or goodwill of the famous person.
  57. This was supported by the evidence at the trial. Mr Bleakley, who gave evidence on behalf of the defendant, summed the position up neatly in his witness statement:
  58. “Endorsement arrangements by sports stars are often entered into with a view to influencing the target audience’s choice.” (Witness Statement para 39)
  59. He also gave evidence on this subject under cross examination. Other relevant passages will be referred to below. For present purposes I need only refer to one:
  60. “Q. Presumably, if you could get it, if you told your recipients that you had celebrity endorsement that would attract them?
    A. If we had celebrity endorsement, from a radio broadcaster’s point of view that would mean somebody broadcasting on the radio; that would be something we would specifically shout about, yes, no doubt.
    Q. It wouldn’t necessarily have to be somebody broadcasting on the radio, it could be, say, David Beckham saying “I love listening to Talk Radio”?
    A. That could be, and think there are famous people that listen to various radio stations and have made that public. That tends to be PR that you are not in control of, as opposed to something you would actively pursue.
    Q. But if you could get celebrity endorsement that would help you?
    A. Yes, association would definitely would of assistance to any brand, definitely, but from a radio station’s point of view and for the advertising, media market, what I’m trying to influence, the most important thing is are you talking about people that influence the content, and therefore the listeners to the station - you know, a brand association with anybody or anything is not necessarily how the industry is driven, I would say, but by the very nature of it if David Beckham said he listened to Talk Radio that wouldn’t be a bad thing.” (Transcript Day 2 p 116)
  61. This was supported by the evidence given by Mr Ian Phillips who has long been associated with F1 racing and, in 1999, was director of business affairs of Jordan Grand Prix Limited, one of the eleven teams involved in the F1 World Championship. He has extensive knowledge of motor racing not only as a result of his own connection with a number of F1 teams, but also as a motor sports journalist. He told me that over the last 15 years the receipt of endorsement fees had become a particularly important part of the income of F1 drivers and others whose period at the top of their respective sports was likely to be short-lived.
  62. Manufacturers and retailers recognise the realities of the market place when they pay for well known personalities to endorse their goods. The law of passing off should do likewise. There appears to be no good reason why the law of passing off in its modern form and in modern trade circumstances should not apply to cases of false endorsement. Indeed, it seems to me that this is not a novel proposition in this country. The British Medical Association case and similar trade association cases are all ones in which passing off was used to prevent false endorsement. The most recent case which stands against this is McCulloch v May which, as explained above, is discredited.
  63. In my view nothing said above touches on the quite separate issues which may arise in character merchandising cases, a considerable number of which were cited to me during the trial. In those cases the defendant’s activities do not imply any endorsement. For example, although it was a trade mark registration case, in Elvis Presley Trade Marks (supra) much of the argument turned on whether the appellant had merchandising rights in the name Elvis Presley or in his image. It wanted to prevent third parties from selling products such as bars of soap and drinking mugs bearing the name of the performer and photographs of him. There could be no question of the performer endorsing anything since he had been dead for many years. So the argument being advanced was one which amounted to an attempt to create a quasi-copyright in the name and images. The Court of Appeal’s rejection of that is, with respect, consistent with a long line of authority. As Robert Walker LJ said in Elvis Presley Trade Marks;
  64. “However this appeal is not an appropriate occasion on which to attempt to define precisely how far the law of passing off has developed in response to the growth of character merchandising, still less to express views as to how much further it should develop or in what direction.” ([1999] RPC 582)
  65. The same point can be made here. Whether such a new right may be created either by development of the common law or as a result of the passing of the Human Rights Act, is not relevant to this action.
  66. It follows from the views expressed above that there is nothing which prevents an action for passing off succeeding in a false endorsement case. However to succeed, the burden on the claimant includes a need to prove at least two, interrelated, facts. First that at the time of the acts complained of he had a significant reputation or goodwill. Second that the actions of the defendant gave rise to a false message which would be understood by a not insignificant section of his market that his goods have been endorsed, recommended or are approved of by the claimant. I shall turn to those two issues.
  67. In 1999 did Mr Irvine have a substantial reputation or goodwill?

  68. In my view there can be little doubt on this score. Mr Irvine gave unchallenged evidence of the size and public exposure of F1 racing. He said that it represents the pinnacle of motor racing. Each race is watched by over 350 million television viewers worldwide. There is a large following in England. Races take place in different locations around the world. There is one F1 race each year in England. At present there are eleven teams who compete in the FIA Formula 1 World Championship. Each team can race two cars in each race. The Championship usually consists of sixteen or seventeen races during a season which lasts from March to October. These races take place throughout the world including one in the UK. One of the most famous teams is Ferrari. As noted above, in 1999 Mr Irvine was driving for that team.
  69. A driver and his team is awarded points according to how high up the field he finishes in each race. The aggregate of points determines who wins the Drivers World Championship and the Constructors’ (i.e. the teams’) World Championship.
  70. Publicity plays a large part in the funding of the sport and its participants. In the UK, television broadcasting rights are held by ITV while radio broadcasting rights are held by BBC Radio 5. There is enormous print media coverage, with hundreds of journalists and photographers attending each race. Mr Irvine gave the following evidence concerning the general practice of sponsorship and endorsement:
  71. “Drivers also benefit from the significant media coverage. The celebrity status of Formula 1 drivers means that there is demand for drivers to be involved with endorsements, private sponsorship and merchandising. Typically a driver will have some space on his race suit or cap for his own sponsors. Sponsorship is where a company will pay a driver a fee usually in return for the driver displaying the sponsor’s logo on his race suit or cap. A driver will also endorse products and services that do not conflict with the team’s sponsors. Endorsement is where the driver’s image is used to promote a product or service typically in an advertisement. I would always obtain the consent of the team I drove for in respect of any such endorsements or sponsorships.”
  72. He also gave evidence about merchandising activities although, as I have indicated, no one has suggested that this is a merchandising case. The considerations which apply to merchandising and, in particular, whether our law offers protection to it is not before me.
  73. Mr Irvine’s first season with Ferrari was in 1996. He finished 10th in the Drivers Championship. In 1997 he finished 8th. In 1998 he finished 4th. By the last race in 1999, he was in the lead of the Championship but he came third in that race and was the runner up in the Championship. When a driver comes in the first three places in a race, he stands on the winners’ podium at the end of the race and usually indulges in a tradition of spraying champagne over his co-drivers and anyone within striking distance. In 1999, Mr Irvine was on the winners’ podium for half the races in the season.
  74. Mr Irvine also explained that while he was driving for Ferrari, and particularly in 1999, he received what he described as an immense amount of press coverage. For example he was on the front page of a number of car-related and non-car related magazines and his book was serialised in the News of the World. Some flavour of the enthusiasm generated in 1999 can be gathered from the front covers used on the magazine Autosport during that year. The March 11 issue has a front cover with a large picture of a smiling Mr Irvine holding aloft the victor’s plate from the Australian F1 race. The copy on the cover reads “EDDIE’S FINEST HOUR – We join Brit hero Irvine as he revels in glory of first win”. The cover of the July 15 issue also carries a picture of a smiling Mr Irvine with the following copy “FERRARI – EDDIE’S OUR MAN! – Irvine gets backing for title charge”. The cover of the 29 July issue carries a photograph of a F1 racing car (presumably being driven by Mr Irvine) with the banner headlines “WHO NEEDS SCHUEY? – Ferrari star Irvine takes pressure cooker victory in Austria”. The reference to “Schuey” is, no doubt, a reference to Mr Michael Schumacher, another famous F1 driver. Examination of the examples of press coverage, whether in racing or non-racing publications, produced for the trial shows that it frequently includes large pictures of Mr Irvine. Furthermore Mr Irvine has been engaged to sponsor a variety of products including, amongst others, sun glasses, mens’ toiletries, fashion clothing, footwear and car racing helmets.
  75. This was supported by the evidence given by Mr Phillips. In his witness statement he said:
  76. “In the summer of 1999 Eddie Irvine was at the height of his career with Ferrari. He had won three races and had a realistic chance of winning the Drivers World Championship. During that year his image appeared in numerous television, newspaper and magazine articles partly as a result of his racing success and partly, as I understand it, as a result of efforts by his management to exploit his position. I would say that he was easily and still is the most high profile British driver in Formula 1 that year, as Damon Hill was in decline. He was also probably the next most recognisable of all drivers after Michael Schumacher.”
  77. Although Mr Phillips was cross-examined by Mr Hicks, Mr Phillips’ competence to give this evidence was not challenged. It was accepted that he had great knowledge both of F1 racing and the whole world of endorsement, sponsorship and merchandising. The only parts of the above evidence which were challenged were the suggestions that Mr Irvine was the most high profile British F1 driver in 1999 and was the second most recognisable driver. On the first of these points, the cross examination went as follows:
  78. “Q. Right. Now, what I want to suggest to you is that in July of 1999, I make the position quite clear, if you were a follower of Formula 1 you might well know the name Eddie Irvine, of course you would know it, and you might well be able to recognise his face, but that so far as the man in the street was concerned, in England, other drivers were much higher up on the spectrum because they had had much longer careers at the top whereas Mr Irvine was a man who, at that point, was just about to break into the big time?
    A. No, he broke into the big time when Jordan Grand Prix sold him to Ferrari. He made a bit of a name for himself when he made his Grand Prix debut with Jordan in 1993. Having starred in the race he got physically assaulted by Ayrton Senna, which led to a disciplinary hearing against Mr Senna with a suspended ban, that’s something pretty tough on a three times world champion, never happened before. Mr Irvine, himself, actually got a ban during 1994 for an alleged involvement in a huge accident which occurred in a British Grand Prix. We appealed on his behalf against the ban that he was given. The ban was extended, so he achieved fame and notoriety from his very first drive in Formula 1. The week before the British Grand Prix, which was the French Grand Prix, he was actually leading the race which was eventually won by the Jordan team, but he arrived in the pits and the team were busy watching his team mate out on the circuit and left him sitting in the pit for 45 seconds with no wheels on the car. 4.5 million people watching television the week before the British Grand Prix, probably at the time this flyer had gone out would have known who he was, he was the top British driver at the time, the top British racing driver is a well-known person, not just in the sports pages.” (Transcript Day 2 pp 83-5)
  79. Mr Hicks then went on to challenge the assertion that Mr Irvine would be recognised from a picture:
  80. “Q. I agree for a moment that people might have heard of his name if they had heard about Formula 1, what I’m saying is that they would not necessarily recognise his face, that’s the point I am making. The faces they would recognise would be faces of people who over the year had got a bigger track record, Damon Hill, David Coulthard or Nigel Mansell, those were the names in 1999 that people could put a face to. That in mid-1999 putting a face to Eddie Irvine was something only a racing aficionado?
    A. I disagree, he had been in gossip columns, fashion magazines, he had a regular newspaper column which featured his photograph. Remember he’s only the second British driver ever to have driven for Ferrari in 50 years. If you are a Ferrari Grand Prix driver you are known around the world, believe me.” (Transcript Day 2 p 85)
    and
    “Q. You, therefore, don’t accept my proposition. I’ll put it to you one more time: so far as members of the public are concerned, not a racing enthusiast, just a normal member of the public not specifically interested in Formula 1, in mid-1999 people could put faces, perhaps, to the name of Damon Hill, ex-world champion, David Coulthard or Michael Schumacher, or perhaps even Ayrton Senna, but after that putting names to faces would be a difficult thing for just an average member of the public to do?
    A. I would disagree with you, perhaps I’m too intimately involved in the sport. Eddie Irvine was a race winner that year, on and off the leadership of the championship for the whole of the year, plus the newspaper columns, his outspokenness, his willingness to comment and make intelligent informed comment unlike some of the other personalities that you have mentioned, made him a much sought after, well known and recognised sportsman.” (Transcript Day 2 p 87)
  81. I think it is necessary to bear in mind Mr Phillips’ close connection with the F1 industry for many years. His knowledge of the personalities in the sport will inevitably be greater than that of many members of the public so his views will not accord with those of all members of the public. The public is not a homogenous mass. Some will have no interest in either F1 racing or the personalities involved in it. Others will be passionate supporters. A significant portion of the public will occupy the space between these two extremes. However it must be remembered that stories about Mr Irvine and pictures of him have appeared in large numbers of publications, including many high volume non-specialist newspapers. For example the sample documents produced to the court show that Mr Irvine and his photograph have been featured prominently in, amongst others, The News of the World, The Yorkshire Evening Press, The Daily Mail, The Times and The Daily Telegraph. In my view it is proved that Mr Irvine was, in 1999, an extremely ‘hot property’ in the field of motor racing and was well known by name and appearance to a significant part of the public in this country. In my view he would have been even more well known among, or would be well known to an even greater proportion of, those who are concerned to seek endorsement of their goods from sports personalities.
  82. This conclusion is consistent with the actions of the defendant. Although it has not given a full explanation of how Mr Irvine’s face ended up on its brochure, I think the only reasonable inference is that those who designed this promotion knew of Mr Irvine’s fame and wanted it to be attached to the launch of the new sports-related programme. Indeed, I think that the suggestion that the addressees of the brochure would not have recognised the picture as being of Mr Irvine is not only contrary to common sense, it is also contrary to the defendant’s own evidence. It should be remembered that the distribution of this brochure was deliberately timed to take place shortly before the British F1 Grand Prix. It need hardly be stated that the prospects of the leading British F1 driver in that event would be the subject of much press coverage at the time. If, as was suggested, few or none would recognise the picture of Mr Irvine, one is left with no adequate explanation of why a picture of him was bought from a specialist sports photographic library and why it was manipulated so as to remove the mobile phone and replace it with a radio bearing the words “TALK RADIO”. If the photograph was really anonymous, the defendant could have used a photograph of anyone dressed up as a racing driver. Furthermore Mr Bleakley said in his witness statement that the manipulated image was “designed to amuse the target audience, who would have instantly realised from the photograph and its context that it had been manipulated.” I will return to the issue of whether the manipulation of the image was obvious below, but it is difficult to see how the target audience could have been “amused” if they did not know whose picture was being used. Mr Bleakley gave other evidence which also is consistent with the claimant’s case that Mr Irvine was very well known at the time:
  83. “Q. Going back to your answer in response to what you would have done if you had actually had a real genuine celebrity endorsement, you seem to be saying that you need to shout that from the tree tops otherwise your recipients would not have understood it?
    A. There are a couple of things there. This is trade promotion so it’s going to a very, very small select group of people. Believe me, Eddie Irvine being part of Talksport’s content would be big news - not trade news, this would be national news. I suppose that’s the difference really. There are lots of sports personalities on the station, in our literature, in brochures, photographs in various form, and that photograph could have been anyone. Indeed, after looking at the photograph on the box, another sales promotion agency could probably have done the same thing with Schumacher. Looking at that photo - they just selected the best shot to get the angle, it wasn’t specific to any angle, it was specific to the sport really and the people in it.” (Transcript Day 2 p 126 – emphasis added)

    Did the actions of the Defendant create a false message which would be understood by a not insignificant section of its market to mean that its radio programme or station had been endorsed, recommended or are approved of by Mr Irvine?

  84. As pointed out already, this case is concerned with endorsement, not merchandising rights. For that reason, Miss Lane does not argue that her client can succeed simply by showing that his image was used for commercial purposes on the defendant’s brochure. She accepts that she must go further and show that there was an implicit representation of endorsement or that members of the target audience would believe that to be the case.
  85. This is an issue which, in the end, has to be determined by the court. Evidence may be helpful, but it is not determinative. In particular I must bear in mind that the likely impact of the brochure will differ from person to person. The question is whether, on a balance of probabilities, a significant proportion of those to whom this brochure was sent would think that Mr Irvine had endorse or recommended Talk Radio. The approach I have tried to adopt is that sanctioned by the Court of Appeal in Chocosuisse Union v Cadbury Ltd [1999] RPC 826, 837-8.
  86. On this issue there was some evidence relating to the reaction of at least one recipient, Mr Phillips. He was supplied with the brochure although he almost certainly did not receive the box in which it had been posted. The latter point makes no difference to the issues I have to decide, since it was accepted that the packaging would be expected to be discarded and only the brochure would be retained and passed around inside a recipient’s office and studied. It is the brochure which is intended to do the marketing of defendant’s new sports-related business. In his witness statement, Mr Phillips said that when he received the brochure he thought it was authorised by Mr Irvine and he sent it on to Mr Irvine’s manager, Mr Enrico Zanarini. This was not covered by Mr Zanarini in his two brief witness statements, which concentrated on detailing Mr Irvine’s various commercial relationships. Both Mr Phillips and Mr Zanarini were cross examined in relation to Mr Phillips’ reaction to the brochure.
  87. Mr Phillips expanded on his written evidence under cross-examination. He said that he believed that, on receiving the brochure, he telephoned Mr Zanarini to congratulate him on having negotiated a sponsorship deal with the defendant. He said that Mr Zanarini denied any knowledge of the Talk Radio brochure. As a result Mr Phillips sent it to him. This and other matters are covered in the following extract from the cross-examination:
  88. “Q. Now, I want to understand what you said to him on the telephone then, could you explain what happened in the course of that conversation?
    A. Well, I was sort of congratulating him on having done a deal, it was quite clearly a personal endorsement and I quite fancied getting a personalised Talk Radio myself it being a sports person, I thought obviously as part of the deal he would have a few free radios to give away, that’s normally what you do with these things, it was so obviously a tampered or set-up photograph that I presumed that it just had to be a deal which had been done by Irvine or by Zanarini for Irvine.
    Q. You say you thought it was authorised, if that was the case I don’t understand whether you are saying you actually thought it was authorised, or are you saying in reality you thought it was something which ought to have been authorised and he should be getting a fee for?
    A. There are an awful lot of rouges in this business that are taking hold of images and using them for commercial gain, it’s part of what I - I do police this sort of thing. I congratulated Mr Zanarini on having done a deal and he told me he knew nothing about it which is why I sent it to him.
    Q. I want to say, it strikes me, if you thought it was obviously doctored that you might well have been sending it to him on this basis, “Look, I wonder whether you would be interested in chasing this up Mr Zanarini because it looks if there are some rouges out there”, is that more precisely what happened?
    A. Absolutely not at all. I said to Enrico, “Well done, it looks like a good deal” and he said, “I don’t know what you are talking about.”” (Transcript Day 2 pp 76-7)
  89. Although he was pressed on this issue, his evidence remained unshaken.
  90. Although Mr Zanarini gave no written evidence on this topic, he was cross examined on it. He supported what Mr Phillips said but accepted that his recollection of what had been said during a telephone conversation some while ago was not clear. I do not think that his evidence on this adds or subtracts much.
  91. Mr Hicks suggested that Mr Phillips’ evidence should not be trusted for two reasons. First, as he put it, Mr Phillips was an enthusiastic supporter of Mr Irvine’s case and knew him well. He had a vested interest in the claimant succeeding in this action since he is employed in organising sponsorship, endorsement and merchandising deals for other F1 drivers. Second, Mr Phillips was not representative of the kind of person who received the brochure. He was too close to the individuals and the sport.
  92. As far as the first of these points is concerned, it would, perhaps, have been better had Mr Hicks put it to Mr Phillips that he was partisan. Nevertheless I think Mr Hicks’ point has merit. It is clear that a favourable outcome of this action as far as Mr Irvine is concerned would benefit Mr Phillips. I also accept that Mr Phillips would have been closer to the individuals and the sport than most of the recipients of the brochure. I am by no means convinced that the latter point makes him more likely to be confused than others. I would have thought his exposure to this market and (as Mr Hicks suggested to him in cross-examination) his knowledge that there are many ‘rogues’ about, might have made him less likely to be confused.
  93. With these considerations as a background, I have considered carefully Mr Phillips’ evidence. As will be seen from the extract from his cross examination set out above, Mr Phillips told me that he not only thought that Mr Zanarini had procured an endorsement deal with the defendant but that, as a result, Mr Zanarini would be likely to have some free radios, and Mr Phillips was hoping to get one of these. If Mr Hicks is right and Mr Phillips realised at all time that this was not authorised by or on behalf of Mr Irvine, it must mean that Mr Phillips evidence on this issue was thoroughly misleading. There was nothing about Mr Phillips’ evidence which led me to believe that he was being untruthful or was putting self interest in front of honesty. I accept that he did think that Mr Irvine had endorsed the brochure.
  94. In coming to that conclusion, I do not think that Mr Phillips was being either hypersensitive or unreasonable. The brochure was put out at just the time when media interest in the British F1 Grand Prix, and in the most prominent British competitor, Mr Irvine, would be at its highest. As noted above, the defendant described this promotion as being “time critical” to coincide with the British Grand Prix at Silverstone in early July 1999. The brochure showed Mr Irvine listening to Talk Radio. It was in a brochure which was designed to encourage the recipients to think of placing advertisements on Talk Radio’s programmes. For that purpose it was beneficial to convince the recipients that Talk Radio would be likely to attract a large audience. It seems to me that letting people know, or suggesting to them, that Talk Radio enjoyed the endorsement of Mr Irvine would significantly help Talk Radio to deliver that message.
  95. What is at issue here is the likely effect of the brochure on those to whom it was sent. If it is likely to have the effect of conveying to a significant number of the recipients that Mr Irvine was endorsing Talk Radio, then it does not matter whether or not that was the defendant’s intention. Nevertheless, what the defendant intended to achieve by the promotion can give some indication of what it was likely to achieve. After all, the promotion was designed by experts who probably had a good idea of the impact the promotion would make.
  96. Mr Bleakeley’s witness statement discloses that the defendant instructed SMP, an experienced marketing and communications agency to create material promoting the opportunities of advertising on Talk Radio. Talk Radio had used SMP to produce materials for previous campaigns it had run. SMP was provided with information on the extent and depth of the coverage which would be offered in respect of the various sporting events and the advantages of advertising on Talk Radio during the sports coverage concerned. From this material SMP were asked to create appropriate copy and artwork for the brochures. It appears that it was SMP which then designed the promotional literature and the packaging for it. Mr Bleakley said that it was SMP which was responsible for obtaining all the images which were to be included in the packs. Mock-ups were reviewed and approved by Talk Radio. In accordance with this procedure, the images which are featured in the brochure were obtained by SMP from a specialist motorsport image library that licensed the use of the images for this purpose. In the process of creating the mock-up of the brochure, it was SMP, not Talk Radio, which decided to alter the image of Mr Irvine so as to make it appear that he was listening to Talk Radio and I assume it was also SMP which decided to use that doctored image on the front cover.
  97. Unfortunately the defendant produced no evidence from SMP so one is left in the dark as to what it understood its brief to be and as to why it chose to use a photograph of Mr Irvine apparently listening to Talk Radio on a brochure designed to coincide with the British F1 Grand Prix. Miss Lane did cross examine Mr Bleakley on this issue. He said that the promotion was intended to grab the attention of the target audience to which it was sent so that it would “receive your message”. Mr Bleakley was not clear what that message was supposed to be. In his witness statement he said that the manipulated image was designed to amuse the target audience (Witness Statement para 27) but under cross examination he accepted that there was nothing particularly amusing about the doctored image of Mr Irvine. He was asked why the undoctored photograph, showing Mr Irvine talking into a mobile telephone, was not sufficient for the defendant’s purposes. His answer was;
  98. “The promotions agency are always specifically for - going back to your point about irreverence, some kind of catchy, twangy angle. I think talking into a mobile phone as opposed to listening to the radio with Talk Radio on caught the mood of that particular promotion. So they are looking for angles in any shot that is going to deliver that cut through. That would be their view of that.” (Transcript Day 2 p 122)
  99. I am not sure that that response really discloses what the defendant’s purpose was behind using this photograph. It may well be that the defendant did not think too closely about this, leaving it to SMP to decide how to impress the target audience. It should be remembered that the defendant had expertise in running a radio station. SMP was the expert in marketing and making promotions and was trusted as a result of the work it had previously done for the defendant. The possibility that SMP was primarily responsible for the campaign while the defendant took a back seat is supported by another answer given by Mr Bleakley;
  100. “A. Yes. SMP sourced the photographs from what I believe was a grand prix or F1 photograph agency, and with hindsight I probably wouldn’t have done it but I assumed from SMP’s point of view that that was okay. I didn’t spot that as something which would be, you know, would have a detrimental effect down the line, personally, so I signed it off. I didn’t see a problem with it.” (Transcript Day 2 p 125)
  101. Mr Bleakley did go on to say that it was not his intention to mislead the target audience. I accept that. But the fact is that the company which designed this promotion with the intention of grabbing the attention of the audience decided not to use a photograph of an unknown holding a radio with the defendant’s name on, but selected a photograph of the most famous British driver at the time and manipulated the image so as to represent to the viewer that he was listening avidly to the defendant’s programme. In the absence of evidence from SMP, I think it is legitimate to conclude that part at least of the intention was to convey the message to the audience that Talk Radio was so good that it was endorsed and listened to by Mr Irvine. Mr Irvine’s support of Talk Radio would make it more attractive to potential listeners with the result that more would listen to its programmes and that would make Talk Radio an attractive medium in which to place advertisements.
  102. Taking into account the above matters, I have come to the conclusion that a not insignificant number of recipients of the brochure would have made the same assumption as to endorsement as Mr Phillips did. I should add that Mr Hicks argued that the photograph was obviously doctored and this meant that it was less likely that anyone would believe that Mr Irvine had endorsed his client. Even if it were true that the photograph was obviously doctored, I do not see how that could make any significant difference to the impact the brochure would have on its recipients. Furthermore I am unable to accept that the doctoring was obvious. On the contrary, when I first saw the brochure it did not occur to me that the photograph was doctored. The replacement of the mobile telephone has been done so skillfully that, even now, it does not look like a doctored picture to me.
  103. The other major point relied on by Mr Hicks was the fact that the brochure was only distributed once to just under 1000 recipients. This meant that the confusion, if any, was limited to only a comparatively few people. He said that the claimant needs to prove substantial damage (see Erven Warnink B V v J Townend & Sons (Hull) Ltd [1980] RPC 31) and has failed to do so here. It is true that, once it had received the claimant’s complaint, the defendant indicated that it would not repeat the use of the brochure, but it maintained that it had not breached Mr Irvine’s rights and clearly reserved the right to do something similar in the future. Furthermore, it appears to me that the approach adopted by Sir Thomas Bingham, as he then was, in Taittinger SA v Allbev Ltd and set out at paragraph 37 above, applies here as well. It is possible that the damage already done to Mr Irvine may be negligible in direct money terms but the potential long term damage is considerable.
  104. There was one other set of points relied on by Mr Hicks. I hope I do not do them a disservice if I lump them all together under the general heading of “other people’s rights”. Mr Hicks said that Mr Irvine had no rights because he provided his endorsement services through a network of companies. I do not think that there was anything in this. The fact that the claimant, no doubt for tax reasons, makes his endorsement available through companies does not alter the fact that it is his fame and personality which is being exploited and that the misrepresentation made to the relevant public, who would know nothing about his corporate arrangements, is that it is he who has endorsed the defendant’s radio station. In any event, to counter this point Miss Lane sought and obtained permission to join Mr Irvine’s other companies as claimants. The other part of this defence is that in 1999 Mr Irvine was under contract to Ferrari and one of the terms of that contract was that he could not appear in the distinctive Ferrari red clothing in an endorsement save where that endorsement was through and on behalf of Ferrari. It follows that since the photograph on the brochure shows Mr Irvine wearing Ferrari overalls and a Ferrari cap, he would not have been permitted him to use it to support a private endorsement undertaken on his own behalf. Because of this, Mr Hicks argued that Mr Irvine had no goodwill in images of himself in Ferrari uniform. Accordingly he has suffered no damage. This argument fails for two reasons. First, on the evidence it was tolerably clear that in 1999, had they been asked, Ferrari would have permitted to endorse a product by appearing in a photograph wearing its uniform. Second, even if that were not so, this has no relevance to Mr Irvine’s claim. For reasons given above, Mr Irvine has a property right in his goodwill which he can protect from unlicensed appropriation consisting of a false claim or suggestion of endorsement of a third party’s goods or business. The fact, if it be one, that he might not be free to engage in a particular form of endorsement when wearing particular clothes or because of some other contractual restraint between him and another, does not alter the fact that the goodwill remains his and can be protected against intruders.
  105. For the above reasons, I have come to the conclusion that Mr Irvine succeeds in this action.
  106. By way of postscript I should refer to one other matter. At an early stage in the trial, I asked whether there was a Human Rights Act point in this case. I referred Counsel to the provisions of Article 8 and those relating to the protection of property in Article 1 of the First Protocol, particularly in the light of Van Marle v Netherlands (1986) 8 HRR 483. As a result Miss Lane and Mr Hicks addressed me on this interesting subject. Had I come to the conclusion that passing off had not developed sufficiently to cover false endorsements it would have been necessary to go on to consider whether this new strand of law was effective, to use the words of Sedley LJ in Douglas v Hello! Ltd [2001] FSR 732, to “give the final impetus” to reach that result. As it is, for reasons set out above, I have come to the conclusion that the law of passing off secures to Mr Irvine the protection he seeks and no recourse needs to be had to the provisions of the Act.


© 2002 Crown Copyright


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