C produced champagne and French wines. D produced a cheap drink under name ‘Elderflower Champagne’. Drink was non-alcoholic, but sold in champagne-style bottles with labels and wired corks similar to those on champagne bottles. C sued for passing off. Was found to be a misrepresentation; on issue of damage, held:
· Was passing off
· Gibson LJ
Ø If D is permitted to use word ‘champagne’, goodwill in the term ‘champagne’ will be eroded.
· Mann LJ
Ø Dilution in exclusivity of term champagne’ is not demonstrable in figures of lost sales.
Ø Nevertheless however it will cause incremental damage to C’s goodwill.
Ø Therefore injunction granted.
· Sir Thomas Bingham MR
Ø unfair to let others “cash in on reputation that they had done nothing to establish”