The claimant was the holding company and owner and licensor of all intellectual property rights relating to the various “easy” businesses, each of which traded under a brand name consisting of the word “easy” in lower case conjoined with another word which was capitalised. Since 2000 those businesses had operated under licences granted by the claimant which, virtue of the terms of those licences, owned all the goodwill associated with the licensed indicia generated by those businesses. The defendants operated an online platform which enabled subscribing auction houses to advertise and conduct auctions of chattels. The claimant brought a claim, inter alia, for passing off against the defendants in respect of the use of the sign “EASY LIVE AUCTION” and various stylised versions of that sign. The judge, although finding that there had been a relevant misrepresentation of connection between the defendants’ business and those of the claimant such as to mislead a relevant portion of the average consumers, dismissed the claim for passing off on the basis that the claimant had failed to show damage or the likely occurrence of damage. In particular, the judge rejected the contention that the defendants use of the infringing signs without a licence gave rise to damage since it diminished the ability of the claimant to charge others for a licence. The claimant appealed.
On the appeal—
Held, appeal allowed in part. In principle a claimant in a passing off action could claim damages on the footing that it had lost licensing income as a result of the relevant misrepresentation. Although a claimant who had no existing or prospective endorsement or licensing business could not rely solely upon the loss of the fee that it would have charged for consenting to the acts complained of as completing its cause of action, a claimant which did have an existing endorsement or licensing business could in principle rely upon the loss of that fee for that purpose even if the acts complained of were not of precisely the same kind as the claimant had previously endorsed or licensed. The same might be true of a claimant which had a prospective endorsement or licensing business. In the present case, the claimant was on the right side of this line. It had at the material times a well-established business in licensing a wide variety of businesses. It followed that the claimant could have relied upon its loss of the fee which it could have charged the defendants to use the offending signs to complete its cause of action. Evidence was not required to establish that if an unlicensed competitor was permitted to take advantage of its goodwill without paying for that privilege it would have significantly reduced its chances of attracting paying licensees, particularly in the auction field, since the inference was an obvious one given the nature of claimant’s business and the judge’s finding on misrepresentation. Accordingly, the judge should have held that the claimant had suffered damage as a result of the misrepresentation, and should have held that the claim for passing off succeeded (paras 45, 48–51, 54, 60, 61, 62).
Michael Edenborough KC and Stephanie Wickenden (instructed by Edwin Coe LLP) for the claimant.
Chris Aikens (instructed by Hansel Henson Ltd) for the defendants.