C and D were both derived from an original company founded by Sir Robert McAlpine. After his death, two companies divided on geographical lines into separate companies. In 2001, D decided to rebrand itself as ‘McAlpine’ and drop word ‘Alfred’ from name. C sued for passing off, claiming that D was misrepresenting it was associated with C so that:
i) any bad publicity associated with D would reflect upon C; and
ii) D would benefit from C’s goodwill and would be trading on the joint goodwill of the 2 parties, causing a dilution in value of C’s goodwill.
Held:
· Is a misrepresentation by D.
1) Loss of control of reputation: is a real riskthat D’s actions in future will damage C’s goodwill; e.g.:
- any noteworthy engineering mishap
- any work that attracts public anger
2) dilution: deception caused by loss of prefix ‘Alfred’ by D would cause a dilutionin value of C’s name.
