Extended Passing Off - VODKAT is not vodka

The UK’s biggest vodka supplier, Diageo, has succeeded in an action against the manufacturers of VODKAT, Intercontinental Brands, on the basis of “extended” passing off. VODKAT is a mixture of vodka and fermented alcohol, and has 22.5% of alcohol by volume (ABV).

“Extended” passing off applies where:
A) a particular sign has obtained some distinctiveness in relation to goods of a particular quality;
B) goods not having that quality are sold under that sign (or a confusingly similar one); and,
C) any business having goodwill from dealing properly in those goods under that sign has, or is likely to, suffer damage.

In relation to point A), the Court considered that the term “vodka” denotes a clearly defined class of goods (ie clear and substantially flavourless spirits with at least 37.5% ABV), having sufficient reputation to give rise to protectable goodwill.

On point B), it was held that there is an assumption among consumers, retailers and wholesalers that VODKAT and vodka are the same thing, which was considered to be exacerbated by the nature of VODKAT's labelling and marketing. This was considered to amount to the misrepresentation of VODKAT as vodka, rather than a drink containing vodka, leading to the deception of consumers.

In relation to point C), the court considered that Diageo, being the market leader in the supply of vodka in the UK, would undoubtedly have suffered damage. In addition, the marketing of VODKAT is likely to erode the distinctiveness of the term vodka.

The decision puts vodka in the same class of protectable product descriptions as champagne, sherry, Scotch whisky, advocaat and Swiss chocolate.
It was also found that the descriptive sign does not have to cover goods of “superior” quality, only goods of recognisable quality, suggesting that the law of passing off protects any group of products that has recognisable qualities.

25 February 2010

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