Background
Warnink was one of the primary market producers of a Dutch liqueur made from a blend of hen egg yolks, aromatic spirits, sugar, and brandy, which it sold under the name "Advocaat". Townsend produced a similar alcoholic drink but using egg and Cyprus wine which it sold as "Keeling's Old English Advocaat".

Holdings
The Court held that Townend was passing off their goods as those of Warnink. In applying the test for passing off, the Court developed what is known as the "extended" tort of passing off which included any situation where goodwill is likely to be injured by a misrepresentation.
Lord Diplock established five criteria for a claim of extended passing off. There must be:
1.misrepresentation
2.by a trader in the course of trade
3.to prospective customers of his or ultimate consumers of goods or services supplied by 4.him, which is calculated to injure the business or goodwill of another trader,
5.and which causes actual damage to the business or goodwill of the trader bringing the action.