Damages for passing off

Carry on Camping

The Intellectual Property Enterprise Court (“IPEC”) recently handed down a judgment in relation to the assessment of damages in a passing off case. The Claimant in this matter purchased a camping business called “Doone Valley Holidays” (“DVH”) from the Defendant. As part of the purchase the Claimant bought the business, the remainder of the lease on the campsite (known as Cloud Farm) and the DVH website. However, without the Claimant’s knowledge, the Defendant remained the registered owner of the website and retained a level of control over it.

The Claimant ran the Cloud Farm campsite happily for a number of years and during that time invested heavily in the website whilst generating a great deal of business through it. In June 2010 as the lease on the campsite was coming to the end, the Claimant wrote on the DVH website to say that the business would be relocating. Soon after this the Defendant restricted access to the website and uploaded his own message. The effect of this was that anyone trying to access the website could only see the statement:

“Doone Valley Holidays. Announcement: Doone Valley Holidays at Cloud Farm look forward to seeing you in 2010”.

The announcement then said that the Claimant would be moving to new campsite which “will only have limited facilities and availability for this season from mid July 2010”.

The Claimant moved his business to a new campsite and sued the Defendant for passing off and unlawful interference with trade. Soon after the Claimant then moved his business to another campsite.

The Defendant admitted liability and the Court was asked to decide what damages were actually due. The damages claimed fell under three headers:

Loss of profit, as a result of lost turnover caused by the disruption to the website.

Mitigation costs. These were the costs of new links to directories and listing sites, the cost of a Google AdWords campaign to recover the profile of the website and the fees paid to an IT specialist who assisted with this work.

The wasted cost of cancelled listings and subscriptions. These were promotions for the DVH business on other websites. The links to the website had been rerouted to the Defendant’s ‘Announcement’ page, so the listings and advertisements had to be cancelled, even though the Claimant had already paid for them.

The Decision

The Court decided to award lost profits to the Claimant to account for the damage caused to the website over the years. However, because the business itself had moved twice, the lost profits award was reduced by half for the second year and then removed altogether for any of the years after that.

With regards to the Claimant’s Google AdWords, the Court found that the Claimant stopped the using the AdWords service in October 2010 not because it was too expensive, as the Claimant alleged, but instead because it had achieved its goal of re-establishing the website’s Google listings positioning, as a result the effects of the hi-jack had been overcome.

On the other hand the Court did decide to award mitigation costs made up of the costs of new links to various directories and listing websites plus the AdWords cost and the fees of the IT specialist who was employed to take back control of the DVH website.

However the Claimant didn’t manage to produce enough evidence to convince the Court that he had paid for the website listings and advertising (which had to be rerouted when the Defendant took it over). As the burden was on the Claimant to prove this loss, no damages were awarded under this header.

All in, the Defendant was ordered to pay the Claimant £39,701 in damages and interest.

Briffa Comment

This judgment, and the case as a whole, is a reminder to litigants that proving liability is only half the battle and whilst a Defendant may be passing off, to be a truly happy camper you still need to prove your damages.