Practice - Thomas v Luv One Luv All Promotions

Jane Lambert

Intellectual Property Enterprise Court (Judge Melissa Clarke) Thomas v Luv One Luv All Promotions Ltd and another [2020] EWHC 1565 (IPEC) (17 June 2020)

This was an application to strike out part of the defence to the claimant's action for passing off and transfer or cancellation of the second defendant's trade mark registration on grounds of cause of action estoppel, issue estoppel, the principle in Henderson v Henderson, and abuse of process or, alternatively, summary judgment under Part 24 of the Civil Procedure Rules.  The application was issued on 28 Feb 2010 which was a few days before the case management conference of 6 March 2020 at which several issues were ordered to be tried.  The application came on before Her Honour Judge Melissa Clarke who considered it on paper at the parties' request.

The Facts
Between 1986 and 2016 the claimant and the second defendant had been members of a band called LOVE INJECTION or LUV INJECTION. In 2016 the band broke up.  The claimant continued to play with two other members of the band.  The second defendant recruited other musicians to perform with him. It was hotly disputed whether the second defendant left the band and formed a new one or whether the claimant and the other members deserted the second defendant leaving him the last man standing.

The second defendant registered the words LOVE INJECTION SOUND as a UK trade mark in classes 9 and 41 under registration number 3213529 and applied to register LUV INJECTION SOUND in class 41  The claimant opposed the application and applied for a declaration that the r3egstration was invalid on the Trade Marks Registry on the grounds that the application for the registration of both marks had been made in bad faith and that their use could be prevented by an action for passing off.

The opposition and application for a declaration of invalidity came on before Mr Mark Bryrant who heard oral evidence from both parties. By his decision of 27 June 2019 in Re LOVE INJECTION SOUND, Thomas v Thomas  BL O/359/19, Mr Bryant found for the claimant on grounds of passing off and bad faith, refused the application for the registration of LUV INJECTION SOUND and declared the registration of LOVE INJECTION SOUND to be invalid.

Despite his defeat in the Trade Marks Registry the second defendant and his band continued to perform under the marks LOVE INJECTION and LUV INJECTION. The claimant brought the proceedings mentioned in the first paragraph seeking injunctions to restrain the second defendant and a company that he had formed to promote his interests ("the first defendant") from passing off and the transfer or cancellation of the invalidated trade mark,  The defendants counterclaimed for an injunction to restrain the claimant from passing off and for the sale and distribution of the assets of the original band.  The claimant objected to the second defendant's reliance on any fact or matter that had been determined by the hearing officer.

The Hearing Officer's Findings
At paragraph [17] of her judgment, Judge Melissa Clarke summarized the findings of the hearing officer:

"i) The relevant date for assessing if section 5(4)(a) of the Act applies was the date of application for registration or, if there is a priority date, that date. Accordingly, the relevant date for the contested application was 4 October 2017 and for the contested registration was 17 February 2017 (paragraph 45) ("the Relevant Dates");
ii) There was no claim to a competing goodwill identified by the marks. In the absence of any counterclaim to an earlier or concurrent goodwill on the part of the Second Defendant, the Relevant Dates are the only two dates which are relevant for assessing the issue of passing off in the UKIPO proceedings (paragraph 47);
iii) The Claimant was a person with a proprietorial interest in the goodwill generated by the Group LUV INJECTION by virtue of being one of a number of members of the Group (paragraph 50);
iv) The Group was "an unincorporated association and a partnership at will" (paragraph 57). This is a source of some confusion and I will return to this below;
v) Goodwill was owned by the partnership not the individual members of it (paragraph 57 of the Decision, applying Byford v Oliver and another (SAXON trade mark) [2003] EWHC 295 (Ch) per Lewison J (as he then was) at paragraph 33);
vi) The goodwill in the Name was not transferred solely to the Second Defendant after the Split (paragraph 58);
vii) At the Relevant Dates, the Claimant together with the other members of the Group, owned the goodwill in the Name (paragraph 58);
viii) Use of the marks by the Second Defendant will amount to misrepresentation leading to damage (paragraph 60);
ix) The Second Defendant was not legitimately permitted to obtain the trade mark registrations in his own name unless it was done on behalf of the other members of the Group or with their consent (paragraph 65); and
x) The Second Defendant's registration and attempt to register the marks without the knowledge of the other members of the Group amounts to an act in bad faith (paragraph 65)."

She also considered what the hearing officer had not determined at paragraphs [28] and [28] of her judgment:

"[28] Accordingly, it seems to me that the Hearing Officer left undetermined the issue of what happened to the goodwill after the Split, and so did not, finally, determine that the goodwill "resided with the changing members of the Sound" as he misdirected himself in paragraph 57. To summarise, therefore, I consider that the Hearing Officer:
i) Found that the Group was operated by its members before the Split, including the Claimant and the Second Defendant, as a partnership at will; and
ii) Found that the goodwill in the Name resided in that partnership.
[29] I also note that the Hearing Officer did not determine the identities of the partners at the time of the Split, or determine the dispute of whether the Claimant left the Group which continued with the Second Defendant or the Second Defendant left the Group which continued with the Claimant. In either case, however, as a matter of law, the partnership which existed immediately before the Split would have dissolved as a result of the Split."

Determining the Application

The judge reviewed the authorities on res judicata, issue estoppel and Henderson v Henderson  (1843) 3 Hare 100, 115,   It was common ground that there could be no cause of action or issue estoppel from the opposition proceeding.   Her Honour also decided that there could be no cause of action estoppel from the invalidity proceedings.   However, she was satisfied that there had arisen from the invalidation proceedings issue estoppel such that both parties were estopped from denying the findings of the hearing officer in relation to the opposition and invalidity proceedings. It would be an abuse of process: to relitigate matters that had been fully litigated before the hearing officer.

The only point upon which the hearing officer had not made a finding was the use of the LOVE INJECTION and LUV INJECTION signs but Judge Melissa Clarke held that she could determine that issue under Part 24.

The Decision

Her Honour struck out the defence to the claims for passing off in respect of LOVE INJECTION SOUND and LUV INJECTION SOUND and gave summary judgment on the LOVE INJECTION and LUV INJECTION signs.   She cancelled the registration of the invalidated trade mark on the ground that it remained an instrument of fraud in the hands of the second defendant.  She also struck out the counterclaim.

Further Proceedings

In striking out the defence to passing off and the counterclaim he judge did not dispose of the whole action.   She substituted a new list of issues for the ones for the one annexed to the case management directions of 6 March 2020,  These included: 

• to whom did the goodwill in the name LOVE INJECTION or LUV INJECTION belong after the claimant and second defendant parted company;
• whether the second defendant or the claimant were the successors to the original band and whether the other had formed a new group;
• whether the second defendant's use of recordings of previous performances of the band before separation amounted to passing off;
• whether wither party had suffered damage from misrepresentations by the other;
• whether the affairs of the partnership should be wound up;
• did the second defendant abandon any claim to the name and goodwill of the group when he parted company with the claimant, and
• whether the invalidated trade mark should be transferred to the claimant.

Further Information

Anyone wishing to discuss this article or the issues raised in it should call my clerk Stephen on 07986 948267 or send me a message through my contact page.