A. Goodwill

An essential element required to make out an action in passing off is the presence of goodwill. Goodwill is the intangible property right that is protected by a successful action for passing off – the defendant’s misrepresentation will only be sanctioned by the courts where this has damaged (or is likely to damage) the claimant’s goodwill.

The classic definition of goodwill which has been repeatedly adopted by the courts in England (including by the Supreme Court in Starbucks) comes, surprisingly, from a case which did not involve passing off. Instead, in a case concerned with the interpretation of the UK Stamp Act 1891, IRC v Muller & Co’s Margarine Ltd Footnote ¹⁷ (the Muller case), Macnaughten LJ defined goodwill as follows:

Thus goodwill should be distinguished from mere reputation: it is, rather, the ability of reputation to attract customers. The court went on to hold that the “attribute of locality” within the UK was an essential element of goodwill within the UK – goodwill is therefore localized and must be attached to a business within a jurisdiction.

In another passing off case, Star Industrial Co Ltd v Yap Kwee Kor,Footnote ¹⁹ Lord Diplock, sitting in the Privy Council, explained that goodwill is incapable of existing by itself, but must be attached to a particular business, and stated that it “is local in character and divisible” so that “if the business is carried on in several countries a separate goodwill attaches to it in each”.Footnote ²⁰ The understanding of this jurisdictional element to goodwill has significant ramifications for foreign traders attempting to pursue a claim for passing off in England.

Therefore in order for a claimant to satisfy this aspect of a passing off action, she must show that her business has goodwill within the UK, in the sense that there is a favourable disposition towards the claimant’s goods and services in the minds of customers caused by the claimant’s reputation. It is not enough to establish reputation alone: the claimant must show that the reputation is sufficient to actually attract customers. Goodwill is jurisdiction-specific, so the claimant must prove that she has goodwill within the UK. The territorial scope of goodwill has been the source of controversy, and was specifically addressed in Starbucks as further elaborated upon below.

B. Misrepresentation

For a claimant to succeed in a claim for passing off, she must prove a misrepresentation made by the defendant which is calculated (in the sense that this is a reasonably foreseeable consequence)Footnote ²¹ to cause damage to the business or goodwill of the claimant.Footnote ²² It does not matter for the success of the action whether the defendant’s misrepresentation was intentional or not.Footnote ²³ For a long time, it was not clear that more than nominal damages would be awarded in relation to the period before the defendant was notified of the passing off; passing off derived from the action for deceit and therefore, the argument ran, it could be said to contain the same restriction to intentional and reckless conduct. However, in the case of Gillette v Edenwest,Footnote ²⁴ Blackburn J made it clear that passing off gives rise to damages regardless of the defendant’s state of mind.

The most common form the misrepresentation takes is to the effect that the goods or the business of the defendant are those of the claimant, or are associated in some sense likely to cause damage. The misrepresentation is almost always made, or alleged to be made, by the defendant using a name, word, device, get-up, or other mark which is the same as, or deceptively similar to, that which the claimant claims to be distinctive to herself. In practice, if the claimant cannot prove the distinctiveness of the name, word, device, get-up, or other mark, an action based on passing off will fail.

The tort of passing off does not confer monopoly rights.Footnote ²⁵ In this aspect it can be distinguished from the law relating to trade marks, in that the use of the name or mark is only actionable if in all the circumstances of the case it is calculated to mislead. In theory, the defendant is free to use such material if she can effectively distinguish her own goods or business.

The misrepresentation must be material if it is to be actionable: i.e. it must create a real, tangible risk of damage to the claimant. This has two aspects: first, it must be material to customers in making their market choices, in that they make their decision by reference to the claimant’s goodwill; and second, the effect on consumer choice must harm (or likely result in harm to) the claimant’s existing connections with her customers. In practice, this almost invariably means that the misrepresentation must be believed by those to whom it is addressed, and the addressees must act in reliance upon it. If the misrepresentation does not actually influence the prospective customer then it is unlikely to be a material misrepresentation.

The most obvious way a misrepresentation could be material is where it causes customer confusion as to the source of goods or services. However, this reference to confusion is somewhat misleading: a lack of confusion does not rule out the presence of a material misrepresentation, and not all confusing misrepresentations are material misrepresentations (for example if harm to goodwill does not result).Footnote ²⁶ Confusion alone is not sufficient for passing off, since confusion may be caused by irrelevant factors (such as descriptive words to which the claimant cannot assert any rights): passing off requires a misrepresentation. Furthermore, passing off is not limited to a misrepresentation about the source of goods or services: material misrepresentations may relate to quality rather than source per se.Footnote ²⁷

C. Damage

The claimant does not need to prove actual damage in order to succeed in a claim for passing off: likelihood of damage is sufficient. However, the action must fail if no damage to the claimant’s goodwill is reasonably likely to occur, even if the facts of the case correspond to the typical passing off action in every other respect. A misrepresentation that the defendant’s goods or business are those of the claimant is treated by the courts as intrinsically likely to damage the claimant if the fields of business of the claimant and the defendant are sufficiently close. This was the case for virtually every successful passing off action for around half a century following its modern inception, and as such any inquiry into damages could be granted with little detailed examination.Footnote ²⁸ However, where the claimant and defendant are in different lines of business, it may be a more complicated task to prove damage to goodwill.

A good short formulation of the test to apply with respect to damage comes from Lord Fraser in Advocaat: the claimant must prove “that he has suffered, or is really likely to suffer, substantial damage to his property in the goodwill by reason of the defendants selling goods which are falsely described by the trade name to which the goodwill is attached”.Footnote ²⁹

However, so called “free riding” or simply gaining an unfair advantage over other competitors is not, under the English law of passing off, damage. Where another trader uses the same mark for wholly different goods and services then the attractive power of the mark may become diminished, even though the public does not associate the goods of the two businesses, either consciously or unconsciously. This concept is known as dilution, which is a term adopted from law in the USA, where it is understood as a form of damage which arises despite the absence of any confusion between the parties, their goods, or services. Although there are some references in English case law to dilution as a head of damage, it is suggested that this word is almost always used in circumstances where there is actual or potential confusion in the normal sense, rather than in the technical sense used in law in the USA where there is no confusion.Footnote ³⁰

A. Misrepresentation or Misappropriation?

Whether the English law of passing off has the potential to – and should – prevent misappropriation of goodwill has been the subject of much academic debate and judicial comment.Footnote ³¹ In reality, what is often lying at the heart of complaints based on dilution may be thought of as misappropriation: when the defendant’s action takes the value of the goodwill away from the claimant’s business – or “dilutes” the claimant’s goodwill – the defendant receives some unfair advantage in their business. Preventing misappropriation protects the rights of the owners of businesses, which have successfully created goodwill, against others who would use it to gain a commercial benefit which they have not themselves earned. This is sometimes referred to as “sweat of the brow” protection, because it seeks to protect the labour and capital invested in the production or promotion of certain products, services, or intangibles. Competitors or new entrants to the market are therefore barred from capitalizing, or getting a “free ride”, on the hard-won market recognition of the brand owner. This, the argument goes, provides an incentive to businesses for innovation: why spend time and money developing a new product or brand when others may simply copy them? This is the idea that underlies the protection of patents, copyright, registered trade marks, and other limited monopolies that are conferred by intellectual property law. The misappropriation approach brings goodwill within the same conceptual umbrella.

Consequently, misappropriation represents a very different concept to misrepresentation, which is founded on the idea of deceiving consumers in a way which causes (or is likely to cause) loss to the claimant’s business. Therefore, the protection against misrepresentation focuses on ensuring that the right information reaches consumers – so long as consumers are not misled, the courts will not uphold a claim for passing off. This approach emphasizes free competition: a company can use any competitive method it chooses, including (within limitations) imitation of a competitor’s products to reach new customers. As such, it also opposes the protection of monopolies, on the basis that consumers will reap the benefits of the enhanced and fierce competition in the market place and the evolution of products. Nonetheless, the English law of passing off, runs the orthodox view, is not intended to confer a monopoly; rather it is intended to restrict the harm done to businesses by customer deception. This does not mean, however, that the tort requires a direct proof that consumers must have suffered, or were likely to suffer, any prejudice through being misled. On the contrary, the tort requires damage to goodwill in order to prove misrepresentation. This requirement can be seen as the acid test for whether consumers have been deceived, and whether the claimant has suffered through, and therefore is the right person to pursue the defendant and be compensated for, this deception.

Many civil law countries, particularly those of central Europe, have adopted an approach that at least in some circumstances prevents misappropriation of goodwill. This is tied to a willingness to adopt a definition of certain trade practices which are considered unfair from a competition perspective.Footnote ³² Common law countries such as England, on the other hand, have been wary of defining what trade practices are fair and unfair and have thus refused to adopt a general law of unfair competition, either by judicial decision or by statute, preferring instead to keep to the narrowly defined individual torts. In general, the approach of civil law countries is often seen as elevating the goal of fairness above that of competition, and has thus been criticized as anti-competitive. The common law approach, on the other hand, is usually seen as making competition the primary goal, treating fairness as a consideration only when a competitor’s conduct is particularly extreme.Footnote ³³

There have been strong arguments by numerous academics for and against the introduction of a tort of unfair competition into English law, by embracing the concept of misappropriation, which are beyond the scope of this article.Footnote ³⁴ However, in the case of L’Oreal SA v Bellure NV,Footnote ³⁵ the Court of Appeal was invited specifically to address this issue, leading to comments which are particularly illuminating of the favoured approach of English judges.Footnote ³⁶ One of the arguments raised by the claimants was that the requirement for misrepresentation was outdated: the court was invited to embrace a new tort of “unfair competition” for which misrepresentation would not be required. The claimants supported this request with three arguments: first, that unfair competition was generally the rule in Continental EU countries; second, that Article 10(bis) of the Paris Convention for the Protection of Industrial Property (Paris Convention), to which the UK is a signatory, required such protection; and, third, that existing English authorities had indicated that development was possible.

Jacob LJ (with whom Blackburne LJ and Keene LJ agreed) rejected these arguments: briefly discussing the legislation from other countries that had been cited in argument, he concluded that it was not clear that they would preclude any of the activities complained about in the instant case; then reviewing Article 10(bis) of the Paris Convention, he concluded that it did not call for a rule going beyond forbidding deceptive conduct; finally he reviewed the previous English law authorities which were used in argument, and judged that misrepresentation remained a central element in all cases, with the exception of Aldous LJ’s obiter comments in Arsenal Football Club Plc v Reed,Footnote ³⁷ which he said were unclear, not expressly abandoning the concept of misrepresentation, and even if they were pointing towards a tort of unfair competition, he said he did not think it was open to the courts to legislate in this way.

His general comments show an unease about attempting to formulate any such law against unfair competition, on the basis that it would be anti-competitive:

Clear in these statements is the idea of competition, here equated with the interests of consumers, being the good which is to be protected in a conflict with traders’ rights. He went on to call competition “not only lawful but a mainspring of the economy”.Footnote ³⁹ The exceptions to this, i.e. patents, trade marks, copyrights, and designs, each had their own particular justifications, and were prescribed by legislators. A development, for Jacob LJ, that would remove misrepresentation from passing off was a bridge too far for judges and only to be crossed, if at all, by legislators.

B. Goodwill: Hard Line or Soft Line?

The cases on the subject of goodwill have usually been divided by commentators into two camps: one line of cases that adopts what is known as the hard line approach, and another that adopts the soft line approach.

The hard line approach is exemplified by the case of Alain Bernardin v Pavilion Properties Ltd,Footnote ⁴⁰ in which the owner of the Crazy Horse Saloon, a nightclub in Paris, sued a trader operating a nightclub with the same name in London. For 16 years, the claimant had publicized the nightclub in England by distributing promotional material to tourism businesses, and the nightclub had been frequented by customers from England. However, Pennycuick J, applying the concept of locality of goodwill from Muller refused to grant the injunction sought by the claimant saying that “a trader cannot acquire goodwill in this country without some sort of user in this country”.Footnote ⁴¹ It seems that the lack of evidence of customers making bookings while within England was a key consideration. The hard line approach thus rigidly adheres to the requirement that there be a business presence in the jurisdiction, not necessarily in the sense of a registered company, but in the sense that a business has customers within England who make transactions with the business while they are within England.

The soft line approach, on the other hand, is a category of cases which support the idea that the existence and extent of a trader’s goodwill should not be delineated by the requirement for a business presence in a particular jurisdiction. For example, in Baskin-Robbins Ice Cream Co v Goodman,Footnote ⁴² Graham J remarked that he did not think the territoriality requirement limited goodwill to the “boundaries of the country where the particular business is registered or established”.Footnote ⁴³ Following this decision, in Maxim’s Ltd v Dye Footnote ⁴⁴ the same judge restrained an English restaurant from using the name of a famous Parisian restaurant. He acknowledged that one could not “legitimately … distinguish the case” on the facts from the Crazy Horse case, but rather held that his views expressed in Baskin-Robbins represented the true position.Footnote ⁴⁵

The soft line approach is exemplified by the case of Pete Waterman Ltd v CBS UK Ltd Footnote ⁴⁶ in which Browne-Wilkinson V-C observed that the advent of satellite television had led to advertisements crossing national boundaries and creating “worldwide marks, worldwide goodwill” and that the law ought to keep pace with such advancements. Regarding Crazy Horse, the judge held “with diffidence … that the case was wrongly decided”.Footnote ⁴⁷ According to the judge, the correct position of the law was that a claimant could bring a passing off action in England by showing the presence of customers in England forming part of the plaintiff’s goodwill, “wherever that goodwill is situate[d]”.Footnote ⁴⁸ Therefore, according to the soft line of reasoning, if a business is conducted entirely in a different jurisdiction, so long as its customers are present in England (e.g. perhaps they travel out of the country to purchase the claimant’s goods) the claimant will not be precluded from bringing an action, even where those customers do not make transactions with the business while they are in England.

It is important to note that in neither line of judgments, hard line or soft line, is there any indication that the law of passing off will protect mere reputation. It is necessary, in any event, to show the presence either of transactions/business with customers, or simply of customers (depending on the hard or soft line approach adopted), to make out a claim for passing off.

The division between the soft line and hard line approaches has attracted controversy. There has been widespread criticism that the hard line approach is outdated.Footnote ⁴⁹ In the contemporary business environment, a business may make significant investment in advertising and brand awareness before officially launching its products in a new market, an approach made more common with the rise of the Internet. However, the hard line approach will not protect such a business from imitators who may use the public’s recognition of the original product to cash in by selling look-a-likes. As such, a business may have no effective redress to recover the investment made in a pre-launch marketing campaign which profits unscrupulous local businesses. Furthermore, in the modern world where frequent international travel is not uncommon, to restrict goodwill on jurisdictional lines when the consumers, who are the source of the goodwill, repeatedly cross such lines may be criticized as unrealistic.

To give a hypothetical example, a business in Thailand may spend significant time, effort and investment marketing its products to English tourists in Thailand. However, even where such business builds up a hugely successful brand among English tourists, even to the extent that the brand becomes indisputably famous in England, the Thai business will not enjoy protection under the English law of passing off unless there are purchases of its products made from within England. Until such transactions occur, businesses in England may freely imitate the Thai business’ brand to sell to its customers within England, profiting from the success of the Thai business.

Whilst the soft line approach does not go so far as to protect mere reputation, it would at the very least offer protection if there is evidence of its customers within a jurisdiction. Therefore, a business’ goodwill would travel with its customers: a substantial number of existing customers residing in England would offer an overseas business comfort in deciding, for example, to launch an advertising campaign prior to selling its products in the domestic market, on the basis that it would benefit from protection against imitators under soft line passing off. Therefore, the soft line approach is arguably more appropriate for the modern business environment, where cross-border trades and investment are commonplace.

C. The Approach in Starbucks

Significant light has been thrown on the debate between the hard line and soft line approaches by Starbucks. The facts of this case are that the claimants, a Hong Kong based media group, provided internet protocol television under names including NOW TV. The set-top service was provided in Hong Kong, where it was very popular; in the UK, it was only accessible through YouTube, the claimants’ website, and as part of in-flight entertainment. The claimants had planned to launch in the UK, but were pre-empted by Sky’s own NOW TV service. The claimants launched a claim for passing off which was appealed to the Supreme Court on the basis that the claimants’ reputation in the UK was sufficient for passing off.

Lord Neuberger took the opportunity to make some very clear statements about the Supreme Court’s approach on the hard line-soft line debate. In a judgment which contains an extensive review of authorities, including consideration of the development of the tort in other common law jurisdictions, Lord Neuberger gave unequivocal support for the hard line position:

In making this decision, Lord Neuberger recognized that it was open to the court to change the law but also that “changing the common law sometimes risks undermining legal certainty”.Footnote ⁵¹ The judge also recognized that his analysis could be said “on some occasions to lead to some difficult questions of fact and to result in some decisions which could appear rather harsh”.Footnote ⁵² However, he was conscious of a balancing exercise, quoting from Somers J in a New Zealand case Dominion Rent A Car Ltd v Budget Rent A Car Systems (1970) Ltd,Footnote ⁵³ that required a compromise between objectives of public interest in free competition with the protection of a trader against unfair competition by others:

Indeed, Lord Neuberger, though going short of expressly ruling on this point, doubted that a passing off claim could be brought by a claimant who has not yet attracted goodwill in the UK but has launched a substantial advertising campaign within the UK making it clear that it will imminently be marketing its goods and services there. The reasoning for this appears to be that it would risk overruling Maxwell v Hogg, Footnote ⁵⁵ the source of the hard line approach, and would have to be justified by “commercial fairness” rather than principle.Footnote ⁵⁶

Accordingly, Starbucks seems to have settled the current position in favour of the hard line approach: a claimant must show that she has goodwill within the jurisdiction, by showing business being transacted within the jurisdiction; the mere presence of customers is not sufficient. Regarding the misrepresentation-misappropriation debate, although Starbucks did not specifically address the misrepresentation-misappropriation debate, it seems from previous cases such as L’Oreal that English law requires a claimant to prove misrepresentation rather than simple misappropriation. Therefore, the English tort of passing off has currently adopted a position which is more friendly to free competition and arguably less friendly to foreign businesses with a view to investing in the UK.

A. The Scope of Section 18

Thai law offers broad protection for names through Section 18 of the Civil and Commercial Code, of which a translation is as follows:

This section offers a person the right to demand another person to stop using a name to which the former is entitled, where the former’s interest is harmed by the fact that another uses it without permission.Footnote ⁶⁰ It is arguably not clear, on the plain meaning of the words, whether injury is required or not due to the presence of the word “or” (หรือ, reu), however this has been settled by the reasoning of the Dika Court as described below. The Section also provides the ability to request an injunction where such injury will continue in the future.

In practice, actions under Section 18 are usually combined with an action under Section 420 of the Civil and Commercial Code, which is the general provision that deals with torts:

Section 18 allows a claimant to request the court to order a defendant to stop using the relevant name. Section 420 allows the claimant to claim damages where such right (i.e. the right to use the name, recognized under Section 18) has been injured wilfully or negligently. Therefore in the case of the innocent use of the claimant’s name, the defendant may be required to stop using the name, under Section 18, but will not be required to pay damages, under Section 420.

On a cursory reading, it might seem that Section 18 does not apply to trading names of companies (less still logos or get-up), especially given that Section 18 lies within the section of the Civil and Commercial Code for which the title is “Natural Persons”, surrounded by provisions which relate to the personality and capacity of natural persons under Thai law. Indeed, the part of the Code titled “Juristic Persons” begins at Section 65. However, a line of Dika Court cases reveals that Thai judges have been willing to interpret this section to provide injured businesses with remedies in situations similar to those offered by the English tort of passing off, using a similar concept and test. Although Thailand does not have a concept of stare decisis in any formal sense,Footnote ⁶² being considered a civil law jurisdiction, nevertheless it is submitted that this is an area of law that is very much a product of judicial decisions as shall become evident from the following discussion.

Although Section 18 refers to the right to use a name, there is judicial recognition that this will extend to logos, or marks. For example, a relatively recent Dika Court decision in relation to Section 18 (2905/2552, decided in 2009 CE) concerned a claim brought against a defendant for using the word BENZ and the Thai word “เบนซั” (bens) and also the logo containing three pointed stars in a circle in the operation of its trade: the sale and maintenance of vehicles. The Dika Court judgment, after referring to the long use of the trade name and logo in Thailand by the claimant, stated that: “Such name and logo are the claimant’s property and the claimant thus has the right to use the trade name and logo in the operation of the claimant’s trade, according to Section 18 of the Civil and Commercial Code”.Footnote ⁶³ From this, it is clear that Section 18 protects not just a trade name, but also a logo. Given the focus on misrepresentation, as discussed below, it is certainly possible that Section 18 might be interpreted to apply even more widely, covering other material as has been seen in the development of the English law of passing off as described above. However, such other materials have not yet been the subject of published judicial decision in Thailand.

It is argued that Thai judicial decisions have demonstrated that, in order to bring a successful claim under Section 18, a company must prove the same three basic elements as in the English law of passing off: goodwill; misrepresentation rather than misappropriation; and damage. Indeed, in relation to goodwill it seems that Thai judges have, throughout the history of Dika Court judgments in Thailand, adopted an approach to goodwill that accords with the hard line view affirmed by the UK Supreme Court in Starbucks.

B. “Goodwill” under Thai Law

Case 37/2541 (decided in 1998 CE) shows clear recognition of the requirements for both goodwill and damage similar to English law passing off. Here, the Dika Court considered a claim brought by a claimant company, registered in Hong Kong, which operated a hotel business (as owner or operator of hotels) around the world using the name “REGENT”, including in Bangkok, Thailand. The defendant in the case was a juristic person running a seaside resort called Chaweng Regent Beach Resort. In the judgment, the Dika Court stated that the claimant needed to show that it had “a reputation which is called “goodwill [ชื่อเสืยง, chua sieng]”” to be protected under Section 18:

These statements are clear recognition that a claimant’s goodwill is the interest protected by Section 18. It is clear also that the element focused on here is deception of the public (by way of a misrepresentation that the defendant’s business is the claimant’s business) which results in harm to the claimant through loss of reputation which is tied to the claimant losing actual revenue, albeit in a different locality to the defendant – Bangkok rather than Samui.

The Dika Court went on to clarify that Section 18 does require actual damage, or the threat of damage: a claimant could ask the court to prohibit the defendant from using a name “only when the use of such name or trade name causes damages or causes him to worry that such damages will continue into the future.”Footnote ⁶⁵ In this case, the Dika Court in fact decided that the claimant had not sufficiently discharged its burden of proof that the defendant’s business, which used the claimant’s trade name, had caused the claimant damage. The claimant had not proved that the defendant did not meet a good standard of service which might cause the public to “lose faith” in the claimant’s business such that it may cause the claimant to suffer any damages or reduction of revenue:

While the conclusion of the Dika Court in this case may perhaps be controversial – it is hard to imagine how there was no real risk of the defendant’s standards dropping and harming the claimant’s goodwill in the future – it offers very clear statements about the requirement for both goodwill and also for the goodwill to be damaged, or at risk of damage, for a claim to be made out: mere misrepresentation without damage is not sufficient.

Although no exact definition of goodwill is offered here, or elsewhere in the Dika Court judgments on Section 18, there is a useful note added to a recent Dika case (7071/2551, decided in 2008 CE). This note is not part of the judgment handed down by the judges on the bench, but has been written by a research judge and is obviously considered important enough to be included as an addendum to the published version of the judgment. The note states that the use of a trade name gives rise to an association by members of the public with that person or business, and a trade name may be a guarantee of the quality of goods or services of that business in the same way as a trade mark. The note makes clear that there is a distinction between the Thai words ภาพพจน์ (pab pod) and ความมีชื่อเสียง (kwarm mee chua sieng). Both equate broadly to the English word reputation, though the first is more literally “image,” while the latter is a variation of the word which has been consistently used by Dika Court judges: ชื่อเสียง (chua sieng).Footnote ⁶⁷ In this context, the implication must be that reputation without substance – image, or mere reputation, ภาพพจน์ (pab pod) – is not protected by Section 18. What is required is ความมีชื่อเสียง (kwarm mee chua sieng), a more substantial type of reputation, the best translation of which must surely be “goodwill”: a substantive reputation that demonstrates the power to draw in customers.

C. Misrepresentation or Misappropriation?

It is submitted that, while the language of Section 18 might suggest a judicial approach that would focus on misappropriation, the evidence from the Dika Court judgments is that the claimant must make out a misrepresentation which actually causes, or is likely to cause, damage. The plain wording of Section 18 is that a person who has the right to use a name may stop another person using it if the latter’s use results in injury. There is no mention within the plain wording of the other person using the name to mislead members of the public, or using the name to represent that the goods and services of the other person are those of the former person. The plain wording would suggest that mere use of the name is sufficient, if it cause injury.

This would suggest a judicial approach centring on misappropriation, i.e. the unauthorized use of a name to which the owner has a right, rather than one focusing on misrepresentation, i.e. deceptive information being transmitted to consumers. Indeed, another reason for expecting a misappropriation approach might be that Thailand is regarded as a civil law country, whose Civil and Commercial Code is largely based on 19^th century German and, to a lesser extent, French models.Footnote ⁶⁸ As such, one might reasonably anticipate an approach protective of traders’ rights, similar to the approach taken by much of central Europe, preventing unfair competition, rather than one focused only on communicating good information to consumers, promoting free competition over unfair trader conduct. However, the decisions of the Dika Court confound these expectations.

In case number 2939/2526 (decided in 1983 CE), the Dika Court heard an appeal on a case which the claimant, whose use of the name “Union Garment Company Limited” was established, brought against the defendant company (and other individuals connected with the company) for using the name “Dee Union Garment Company” in a line of business similar to the claimant’s. The Dika Court found in favour of the claimant, stating that the defendants “infringed the claimant’s right in the name, causing a misunderstanding that the claimant’s company and the first defendant were the same company”. Indeed, the Dika Court specifically mentioned evidence which had been presented, that a person, due to the confusion, had written a cheque to the claimant for an amount which was meant for the first defendant. It is clear that the concept of misleading customers was an important element for the Dika Court in considering whether a right had been infringed causing injury.

In case 425/2537 (decided in 1994 CE), the Dika Court considered whether the use by the defendant of the word “Central” as a part of its trade name infringed the Section 18 rights of the claimant, who had long operated a well-known chain of department stores using the trade name “Central”. The defendant operated a department store business using the name “SorCentral Maesai” – Maesai is the name of the town in which the defendant’s department store was located. The Dika Court found in favour of the claimant, including the following:

This is another clear statement that the defendant’s causing a misunderstanding among customers is an essential element of bringing a successful claim under Section 18. Potential misunderstanding, it seems, is sufficient without any proof of actual customer confusion such as that shown in the Union Garment case. Moreover, the addition of the word “Sor” (an abbreviation of a Thai letter, presumably the first letter of the business owner’s name) or the word “Maesai” (the location of the store) was insufficient in the court’s view to alleviate the potential misunderstanding.

In this judgment, the Dika Court made other statements which are of note to understanding the scope and nature of this provision. Firstly, the Dika Court focused on the defendant’s conduct, specifically that the company initially operated under the name “Central” but, upon receiving a request from the claimant’s lawyer to cease using this name, the defendant switched to “SorCentral Maesai”. The Dika Court saw this as evidence of dishonesty: the defendant trying to avoid the claimant’s suit while persisting with the misrepresentation caused by the use of the word “Central”.

However, it is submitted that dishonesty is not an essential element to bringing a claim under Section 18. This is supported by cases in which dishonesty is not mentioned by the Dika Court, and in which it does not appear to have been present (for example, case number 949/2525, discussed below). Rather, dishonesty is important to the connected claim for damages under Section 420, which requires the defendant’s conduct to be wilful or negligent.

As such, under Thai law, what amounts to an “innocent misrepresentation” in English law terminology would give rise to a right for the claimant to prevent the use of the name, assuming that such use caused injury to, or has the potential to injure, the claimant. Such an activity would not give rise to damages. However, a deliberate attempt by the defendant to mislead customers by the use of the claimant’s name would give rise to the ability to recover damages, as this would constitute wilful injury. And, once the defendant has been made aware of the claimant’s right, any continued use of such name would run the risk of giving rise to a claim for damages, since continued use must constitute either wilful or negligent injury.

Secondly, in this case the Dika Court identified the injury suffered by the claimant in the following terms: “the defendant’s action therefore caused the claimant to suffer damages, because if the defendant runs the business badly, the claimant’s reputation will also suffer. This will result in a reduction of the claimant’s revenue from the business.”Footnote ⁷⁰

This is recognition of heads of damage which are practically identical with those which, in English law, have been seen to be damage to goodwill, for example, damage to the claimant’s reputation within their trade;Footnote ⁷¹ having inferior goods passed off as those of the claimant;Footnote ⁷² an “injurious association” of the defendant’s business with the claimant’s;Footnote ⁷³ and perhaps exposing the claimant to litigation or the risk of litigation through the conduct of the defendant.Footnote ⁷⁴ Indeed, this is suggestive that the Dika Court, in the interpretation of Section 18, is arguably protecting against damage to goodwill in a similar way to the English tort of passing off.