Naxon opened a retail computer shop which he called Computer Haven Ltd. He used colours and signs similar to those used by Computerheaven Ltd., a very successful computer store three miles away. After Naxon was in business for about five months, the directors of Computerheaven Ltd. noticed that their sales had dropped. On these facts, which of the following is true?
A) Computerheaven could successfully sue Naxon for the tort of passing off if it can prove that the name, signs, and colours used by Naxon were likely to mislead the public.
B) Computerheaven could successfully sue Naxon for breach of contract.
C) Computerheaven has no cause of action against Naxon because ours is a free society and competition in all forms is encouraged by our political and legal system.
D) Computerheaven could successfully sue Naxon for the tort of innuendo.
E) Computerheaven could successfully sue Naxon for the tort of injurious falsehood.

Question

Quizplus · Accepted Answer

Computerheaven could potentially have a claim for the tort of passing off if they can prove that Naxon's use of similar name, signs, and colours is likely to confuse or mislead the public into thinking that Naxon is affiliated with or endorsed by Computerheaven. Passing off involves a misrepresentation made by a trader to the public, which leads or is likely to lead the public to believe that the goods or services offered by him are the goods or services of another trader, when they are not. This misrepresentation must be made with the intention to deceive or where there is a likelihood of confusion.

Naxon Opened a Retail Computer Shop Which He Called Computer