Passing off is the common law's answer to a problem every small business eventually faces: another business trading on the name, logo, packaging or overall look you built your reputation on. In one sentence, it is a legal action that stops a competitor from misrepresenting that their goods or services are yours, or connected with you, when they are not.
Because passing off is a common law action, built up by judges over more than a century rather than written into a single statute, it works even if you have never registered anything. It protects what lawyers call your goodwill: the pull your brand has with customers. If you do not hold a registered trade mark, passing off may still be your strongest legal lever against a copycat. This guide covers:
- What passing off protects: the concept of goodwill and why it matters to unregistered brands
- The three elements of a claim: goodwill, misrepresentation and damage
- How it compares: trade mark infringement and misleading or deceptive conduct under the Australian Consumer Law
- When to get help: the misconceptions that cost business owners, and what a lawyer actually does
The three elements of a passing off claim
Australian courts consistently analyse passing off through three elements: goodwill, misrepresentation and damage. The High Court applied this framework in Campomar Sociedad, Limitada v Nike International Ltd ([2000] HCA 12), and the Full Federal Court restated the traditional elements of the cause of action in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd ([2002] FCAFC 157), describing the action as one designed to protect a trader's goodwill. Every element must be proved, and the evidence for each is different.
Goodwill: the reputation customers associate with you
Goodwill is the reputation and pulling power you have built up in your name, logo, get-up or any other feature customers use to identify you. Courts still describe it in a phrase that goes back to the 1901 English decision Inland Revenue Commissioners v Muller & Co's Margarine Ltd [1901] AC 217, which Australian courts continue to cite, for example in Federal Commissioner of Taxation v Murry ([1996] FCA 622): goodwill is "the attractive force which brings in custom".
Goodwill does not have to be national. In Evans v Graham ([2009] NSWSC 1378), the Supreme Court of New South Wales protected a locksmith who had traded for 25 years in Bathurst under the name "Bathurst Locksmiths" when a competitor began advertising under confusingly similar names. A local reputation, held in one town or one suburb, can be enough.
The evidence of goodwill is usually practical: how long you have traded under the name, your sales figures, advertising spend, media coverage, social media following, and the distinctive features of your packaging, shop fit-out or website. A brand-new business with no trading history has little goodwill to protect, which is why passing off claims are brought by established traders.
Misrepresentation: customers led to believe the other business is you
The second element is a misrepresentation by the other business, express or implied, that its goods or services are yours or are connected with you. This can be an explicit claim such as "we are the official partner of X", or it can be implied by a confusingly similar name, logo, colour scheme, packaging or overall trade dress.
Critically, you do not have to prove the other business intended to deceive anyone. The Full Federal Court confirmed in the Red Bull case that only a likelihood of confusion among prospective purchasers needs to be proven, not an actual, subjective intention to mislead. Deliberate copying of a distinctive get-up can support a claim, but the real question is objective: would a prospective customer, taking the conduct as a whole, be likely to think the other business's goods or services were yours?
Damage: actual or likely harm to your goodwill
Finally, you must show actual damage to your goodwill, or a real likelihood of it. The traditional formulation quoted by the Full Federal Court in the Red Bull case speaks of conduct "which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so". A quia timet action is simply a claim brought before the harm has happened, because it is threatened or imminent.
Damage can take several forms: diverted sales, customers left confused about who they are dealing with, erosion of your brand's distinctiveness, or damage to your reputation from goods of inferior quality being sold under a lookalike brand. Courts will often infer damage where confusion among prospective purchasers is likely, but evidence such as misdirected calls and emails, confused customer reviews, or lost orders makes the claim far stronger.
How passing off compares with trade marks and the ACL
Passing off is rarely the only tool available. Most brand disputes are pleaded across two or three overlapping regimes, and each has a different role.
Trade mark infringement
A registered trade mark gives you a statutory right against infringement under s 120 of the Trade Marks Act 1995 (Cth). Under s 120(1), a person infringes if they use as a trade mark a sign that is substantially identical with, or deceptively similar to, your registered mark in relation to the goods or services for which it is registered. Section 120(2) extends this to similar goods or closely related services, subject to a defence if the use is not likely to deceive or cause confusion, and s 120(3) protects marks that are well known in Australia even against use on unrelated goods.
The practical advantage of registration is that you do not have to prove you have built up a reputation; the registration itself is the right. But registration does not replace passing off. In CI JI Family Pty Ltd v National Australian Nappies Pty Ltd ([2014] FCA 79) the Federal Court confirmed that a registered trade mark does not affect the law relating to passing off. Common law rights in your goodwill continue to exist alongside a registration, and passing off can also reach aspects of your get-up that a registration may not cover.
Misleading or deceptive conduct under the ACL
Section 18 of the Australian Consumer Law (the ACL), which sits in Schedule 2 of the Competition and Consumer Act 2010 (Cth), provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
The overlap with passing off is substantial, and the two are routinely pleaded together. The Full Federal Court noted in the Red Bull case that the consumer protection provision (then s 52 of the Trade Practices Act 1974 (Cth), now s 18 of the ACL) is designed to protect consumers, whereas a passing off action is designed to protect a trader's goodwill. That difference matters in practice: a claim under s 18 does not require you to prove goodwill or damage, while a passing off claim does. Section 18 is also enforceable by regulators such as the ACCC, not just by you.
A passing off claim in practice: a worked example
Imagine a café called "Narrow Lane Coffee" that has traded in the same suburb for eight years. Customers know it for its mustard-yellow takeaway cups, its striped packaging and its name. A former employee opens "Narrow Lane Espresso" two blocks away, serves coffee in very similar yellow cups, and tells customers it is "from the team behind Narrow Lane". Confused regulars start posting reviews on the original café's page, and a few suppliers phone the wrong business.
Working through the three elements, the original café has a strong claim. It has goodwill in the name and get-up built over eight years of trading, with sales records, a loyal customer base and advertising history to prove it. The new business has misrepresented a connection that does not exist, through the similar name, the similar get-up and the false affiliation claim, and its intention does not matter. The damage is real: diverted sales, misdirected customer traffic and a blurring of the original café's distinctiveness, with more harm threatened as the new business grows.
This is not a hypothetical confined to big brands. In Evans v Graham, the Bathurst locksmith with 25 years of trading won an injunction against a competitor using confusingly similar names, and was awarded $5,000 in damages. Passing off is a practical, everyday remedy for small and local businesses.
Common misconceptions about passing off
Four misconceptions come up again and again, and each one costs business owners time or money:
- "Copying is illegal by itself": It is not. The law does not give you a monopoly over an idea, a colour or a style of packaging. What passing off prohibits is misrepresentation that is likely to confuse prospective purchasers about the source of goods or services. If a competitor uses generic or functional features without creating confusion about who you are, that is competition, not passing off.
- "I need a registered trade mark before I can act": No. Passing off exists precisely to protect unregistered goodwill, and the High Court in Campomar recognised the competing interests of registered proprietors and traders who hold unregistered common law rights that equity will protect. Registration makes enforcement easier, because you can rely on s 120 of the Trade Marks Act 1995 (Cth) without proving reputation, but it is not a precondition.
- "Registering a business name with ASIC protects my brand": Registering a business name lets you trade under that name and stops anyone else from registering the identical name, but, as ASIC itself explains, only a trade mark can give you exclusive rights to a business name. The business names register and the trade marks system are separate regimes.
- "Passing off is the same as misleading or deceptive conduct": They overlap but they are distinct. Section 18 of the ACL protects consumers generally and needs neither goodwill nor damage; passing off protects your goodwill and needs all three elements proved. Many disputes plead both, but they are different claims with different requirements.
When you need a lawyer and what they actually do
Passing off is a fact-heavy claim, and the value of a lawyer lies mostly in assessing whether your facts are provable before you spend money. A practitioner will want to see the evidence of your goodwill, test whether a prospective purchaser would really be confused, and identify the damage or threatened damage. That assessment determines whether you have a claim worth running or whether a different route, such as trade mark registration or an ACL claim, serves you better.
If the case is strong, the usual path is a carefully drafted letter of demand. It sets out your goodwill, the misrepresentation, the harm, and what the other business must do: stop using the sign, rebrand within a set timeframe, change packaging, transfer a domain name or account for profits. In many disputes that letter, backed by a credible threat of proceedings, is enough. Where conduct is escalating or a launch is imminent, a lawyer can apply urgently for an interlocutory injunction to stop the conduct before trial, and final remedies can include an injunction, damages, an account of profits, or orders for delivery up or destruction of infringing material. Getting the evidence organised early, with dated screenshots and records of customer confusion, is what makes each of those steps faster and cheaper.
The question that decides most passing off disputes
Before you spend anything on a dispute, test your position with one question: if a prospective customer saw the other business's name, packaging or get-up without your name attached, would they reasonably think it was you? If the answer is yes, and you can point to evidence of your reputation such as years of trading, sales figures, advertising or reviews, passing off gives you something to act on even without a registered trade mark.
The misconception that causes the most real loss is the assumption that you have no rights until you register. By the time a copycat has blurred your distinctiveness, both the goodwill and the evidence of confusion are harder to prove. So the practical move is to work out now what customers identify you by, and what you could prove if you had to, because that is the case. The lawyer's job is to run it.