Over twenty years ago, in ConAgra v McCain (1992) (ConAgra), the Full Federal Court of Australia found that a complainant in a passing off action did not need to prove it had business activity in Australia, provided that it had a sufficient reputation here as a result of its commercial activity overseas.
In a recent UK case, Starbucks (HK) v British Sky Broadcasting (link), the UK Supreme Court rejected the Australian approach. The Court found a complainant in a passing off action must show it had both UK customers and sales to succeed on that ground. It was not sufficient to show that UK consumers were aware of the complainant’s goods or services provided overseas.
The approach in ConAgra has been applied in a number of decisions by Australian courts and reflects the practicalities of modern trade, international travel and the internet, where reputation quickly and easily spills into places other than the place in which the commercial activity occurs. It is also consistent with the underlying policy of passing off’s statutory twin, section 18 of the Australian Consumer Law , which does not require the presence of customers in Australia.
The UK Supreme Court’s concern that the Australian approach to reputation would “tip the balance too much in favour of protection” of traders who have no business in the country is unfounded, given the contrary Australian experience over the past 20 years and by the fact the plaintiff’s reputation in our market must still be sufficient such that a substantial number of consumers in Australia are aware of the complainant’s goods or services, and therefore are likely to be misled or deceived if another trader brands its goods or services in a similar way. The UK restriction is unlikely to be adopted here.