The Appeal in AGA Rangemaster Group Ltd v UK Innovations Group Ltd

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Jane Lambert

Court of Appeal (Sir Colin Birss, Chancellor, Lord Justice Arnold and Lady Justice Falk) AGA Rangemaster Group Ltd v UK Innovations Group Ltd [2025] EWCA Civ 1622 (15 Dec 2025)

This was an appeal by UK Innovations Group Ltd. ("UKIG") against the judgment of Mr Nicholas Caddick KC in  AGA Rangemaster Group Ltd v UK Innovations Group Ltd and another [2024] EWHC 1727 (IPEC) on 8 July 2024 that UKIG had infringed trade marks held by  AGA Rangemaster Group Ltd ("ARG").  There was also a cross appeal by ARG against the dismissal of its claim for copyright infringement.  I discussed Mr Caddick's judgment in Trade Marks and Copyright - AGA Rangemaster Group Ltd v UK Innovations Group Ltd. on 18 July 2024.  The appeal came on before Sir Colin Birss, Chancellor of the High Court, Lord Justice Arnold and Lady Justice Falk on 21 and 22 Oct 2025.  By their judgment in AGA Rangemaster Group Ltd v UK Innovations Group Ltd [2025] EWCA Civ 1622  which they handed down on 15 Dec 2025, the Court of Appeal dismissed UKIG's appeal and ARG's cross appeal.  The Chancellor considered the trade mark appeal and Lord Justice Arnold the copyright cross-appeal. Sir Colin approved Lord Justice Arnold's judgment and Lord Justice Arnold approved Sir Colin's. Lady Justice Falk agreed with both the Chancellor's and the Lord Justice's judgments.

The Dispute

UKIG renovates and converts AGA fossil fuel cookers to run on electricity. The conversion and renovation involve fitting UKIG's control system (known as the eControl System) into the cookers. ARG complained that such conversion and renovation amounted to trade mark and copyright infringement because it used the AGA sign in various ways in relation to the converted cookers.   

UKIG admitted that its activities fell within s.10 of the Trade Marks Act 1994 but relied on s.12 (1) of the Act which provides that a registered trade mark is not infringed by its use in relation to goods which have been put on the market in the United Kingdom or the European Economic Area under that trade mark by the proprietor or with his or her consent.  S.12 (2), however, disapplies s.12 (1) where there exist legitimate reasons for the proprietor to oppose further dealings in the goods (in particular, where the condition of the goods has been changed or impaired after they have been put on the market).  One of the circumstances in which s.12 (1) does not apply is where further dealings give the impression that there is a commercial connection between the defendant and the trade mark proprietor.

The Trial

Mr Caddick concluded at para [60] of his judgment that the way in which the defendants marketed and sold their eControl Cookers would have given customers and potential customers the impression that there was a commercial connection between the cookers and the eControl system fitted to them and ARG. In these circumstances, ARG had legitimate reasons to object to those activities. For that reason, he rejected the s.12 (1) defence to the infringement claim.

The Appeal

UKIG appealed on the grounds that the learned deputy judge had applied the wrong test concerning a commercial connection under s12 of the 1994 Act and that his findings of fact were rationally unsupportable.  ARG contended in a respondent's notice that it had legitimate reasons to oppose the co-branded cookers which carried an "eControl System" badge as well as an AGA badge.

Exhaustion of Rights

The Chancellor's starting point was s.12 of the Trade Marks Act 1994:

"(1)  A registered trade mark is not infringed by the use of the trade mark in relation to goods which have been put on the market in the United Kingdom or the European Economic Area under that trade mark by the proprietor or with his consent.
(2)  Subsection (1) does not apply where—
(a)  there exist legitimate reasons for the proprietor to oppose further dealings in the goods for the purpose of protecting the proprietor’s property (in particular, where the condition of the goods has been changed or impaired after they have been put on the market), and
(b)  the opposition to those dealings interferes with the rights of any other person no more than is necessary to achieve that purpose."

Legitimate Reasons to Oppose

Sir Colin noted that Mr Caddick had identified three situations in which this issue might arise:

• impairment or change to the condition of the goods, 
• damage to reputation and 
• the impression of a connection. 

His lordship noted that those situations were not exhaustive, but they formed a useful framework to analyse how the law applies.

Dior

He said that the European Court of Justice ("ECJ") had made clear at para [38] of its judgment in Case C-337/95 Parfums Christian Dior SA v Evora BV  [1998] RPC 166 that when trade marked goods were put on the market by the proprietor, a reseller was free not only to resell those goods but also to make use of the trade mark in order to bring to the public's attention the further commercialization of those goods. The Court dealt with exhaustion between [40] and [48].  At para [43], it indicated that damage done to the reputation of a trade mark might, in principle, be a legitimate reason for a proprietor to oppose the reseller's dealings, within art 7 (2) of First Council Directive 89/104/EEC of 21 Dec 1988 to approximate the laws of the Member States relating to trade marks (OJ L 40, 11.2.1989, pp. 1–7).

BMW

The next case considered by the Chancellor was Case C-63/97 Bayerische Motorenwerke AG v Deenik EU: C:1999:82, ECLI:EU: C:1999:82, [1999] ETMR 339, [1999] ECR I-905, [1999] EUECJ C-63/97. BMW had a network of authorized car dealers in the Netherlands. The defendant, Mr Deenik, was not an authorized dealer but sold, repaired and serviced BMW cars. His advertising included phrases like "Repairs and maintenance of BMWs" and "Specialist in BMWs". One of the questions referred to the ECJ by the Dutch court concerned the relevant exhaustion provisions of art 7 of the First Council Directive. 

The Court answered the relevant question in a manner that made clear that unless Mr Deenik used BMW's mark in a way that "may create the impression that there is a commercial connection between the other undertaking and the trade mark proprietor" then BMW was not entitled to stop him from using the mark to inform the public about his business. 

The Chancellor observed that the possible impression that the Court had in mind in that case was that the defendant was affiliated to the BMW authorized dealer's network or that there was a special relationship between the two undertakings. The fact that a reseller might derive an advantage such as an "aura of quality" from the mark did not amount to a legitimate reason to oppose his use provided that there was no risk that the public would be led to believe there was a commercial connection. Whether or not the advertising might create the impression of a connection was a question of fact.

Google France

Sir Colin noted that Joined Cases C-236-08 to C-238/08 Google France SARL and others v Louis Vuitton Malletier SA and others [2010] RPC 19, [2011] All ER (EC) 411, 3 ALR Int'l 867, [2010] ECR I-2417, ECLI:EU: C:2010:159, EU: C:2010:159, [2010] ETMR 30, [2011] Bus LR 1, [2010] EUECJ C-236/8, [2010] EUECJ C-236/08 was about internet advertising based on keywords and not exhaustion of rights. The question for the Court of Justice of the European Union ("CJEU") was whether the purchase of a competitor's trade mark as a Google Adword that could attract internet users to the Adword purchaser's website affected the origin function of the trade mark.  The Court replied at para [84]:

"The function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party. [...]"

His lordship observed that the Court referred to the above passage in Case C-558/08 Portakabin Ltd v Primakabin BV  [2011] CEC 552, [2010] EUECJ C-558/08, [2010] ECR I-6963, [2010] EUECJ C-558/8, [2011] Bus LR 1339, [2010] ETMR 52.  That case involved both keyword advertising and exhaustion of rights.  It said at para [81] of its judgment that the circumstances in which a trade mark proprietor is entitled to prohibit use by an advertiser of a sign identical with, or similar to, the trade mark as a keyword correspond to a situation in which the advertiser cannot rely on the exhaustion rule.

Viking Gas

The Chancellor considered Case C-46/10 Viking Gas A/S v Kosan Gas A/S  [2011] ETMR 58 where Viking Gas A/S refilled gas bottles under the Kosan Gas trade mark.  The Court held that a balance must be struck between the legitimate interests of the trade mark proprietor to enjoy his property rights and the interests of consumers to maintain unrestricted competition.  It also said that the question of whether Viking Gas had created an impression of a commercial connection could be determined as follows:

"i) That the test involved considering the position of the average consumer who is reasonably well informed and reasonably observant and circumspect.
ii) The question was whether the circumstances would lead that average consumer to consider 'that there is a connection between the two undertakings at issue in the main proceedings or that the gas used to refill those bottles comes from Kosan Gas.'
iii) As the CJEU put it 'in order to assess whether such an erroneous impression is precluded, it was necessary to take account of trade practices in that sector and whether consumers were accustomed to the gas bottles being filled by other dealers.
iv) Finally, the court said that it appears reasonable to assume that a consumer who goes directly to Viking Gas for a refill (etc.) is more readily in a position to be aware that there is no connection."

Soda-Club

Finally, his lordship mentioned Case C-197/21 Soda-Club (CO2) SA, SodaStream International BV v MySoda Oy ECLI:EU: C:2022:834, EU: C:2022:834, [2022] EUECJ C-197/21 in which the Court emphasised that legitimate reasons to oppose further dealings operated as a derogation from the principle of the free movement of goods.

Wrong Test

UKIG's submissions that the deputy judge had applied he wrong legal test for the presence of legitimate grounds to disapply s.12 (1) appeared as follows at para [37] of Sir Colin's judgment: 

"i) The judge's test summarised at [22] and applied at [48] included the element that it would be satisfied if a consumer could ascertain only with difficulty that there was no relevant connection. That is wrong in law and too favourable to the proprietor.
ii) The legal test for a connection relates to a connection between undertakings (i.e. the claimant's and first defendant's businesses) whereas the connection identified by the judge at [51]-[54] involved the products and was therefore too wide and too favourable to the proprietor.
iii) The approach identified was described as if the court itself was carrying out a balancing exercise between the rival interests in order to decide if s12 (2) of the 1994 Act (Art 7 (2) of the Directive) is engaged. However that is not the right approach. The reference to a balance in the cases such as Viking Gas was one which was struck by the relevant legal tests (impression of a connection etc.). To the extent the judge undertook a balancing exercise that was wrong in law."

"Only with Difficulty"

The Chancellor agreed with UKIG that Mr Caddick had misstated the law but he had not misapplied it.  He explained at [39]:

"However, reading the relevant passages as a whole, although this concept was included in a statement of what the law was, when the judge came to decide the issue, he did not make a finding applying that, less stringent, limb of the test. His conclusion (e.g. at [52]) was simply that UKIG's statements were likely to give customers the impression that what they were being offered was an "eControl AGA" which was itself one of a range of AGA products. Had the judge found customers would have difficulty telling that the product was not one of a range of AGA products, then that would have been an error of law but it is not what happened."

Type of Connection

His lordship replied as follows at [40]:

"The connection found to exist was not simply a connection between undertakings but could be said to involve the products in question (see e.g. the same paragraph [52] of the judgment) however this was not an error. The fact that cases like BMW identified the connection in issue there as being a connection between undertakings made sense on the facts of that case, but it does not mean the connection to satisfy the law can only be of that type. The idea that a relevant connection need not necessarily be one at the level of undertakings as in BMW makes sense as a matter of principle, and it is also supported by authority. Viking Gas at [40] identified two connections - one at the level of undertakings themselves but a second concerning the origin of the gas used to refill the bottles. The point was not just about whether customers had the false impression Viking Gas were affiliated in some way to Kosan Gas, it was that if customers had the false impression that the gas itself which was used to refill the bottles had come from Kosan Gas, that would give Kosan Gas legitimate reasons to oppose. Such a link is a link of the same kind as the judge identified here. There is no error on this ground."

Striking a Balance

Sir Colin rejected UKIG's criticism of Mr Caddick's finding that the interests of the claimant as a trade mark owner outweighed the interests of people such as the defendants who dealt with cookers in the aftermarket.  After reading the judgment as a whole, it was clear that the deputy judge did not approach the issue by asking whether one interest outweighed the other.  He considered whether UKIG's dealings gave the impression of a commercial connection which was in line with previous decisions, just as he was supposed to do.   

UKIG made several other submissions in support of its contention that Mr Caddick had applied the wrong test.  Sir Colin considered these between [43] and [48] and dismissed them.

Findings of Fact were Rationally Unsupportable

His lordship addressed UKIG's second ground of appeal between [49] and [57].   He disposed of that ground as follows at para [57]:

"Recognising the difficulty in overturning a finding of fact of this kind on appeal, UKIG's submission was put as being that the conclusion was rationally unsupportable. It is no such thing. The judge considered the relevant material, came to a conclusion which was open to him on the evidence and gave cogent reasons for it. Indeed from the material in this case I would have come to the same conclusion as the judge. In my judgment, based on the marketing material, there is every reason for a customer to think an "eControl AGA" or "AGA eControl" is a product in AGA's own range of cookers, that the eControl System is in all likelihood an AGA system, and that the conversion operation carried out by UKIG is in all likelihood an AGA service. Having chosen to market their goods this way, UKIG could dispel the second and third false impressions by making clear statements dispelling any false impressions. The compound signs "eControl AGA" and "AGA eControl" should simply not be used. I would dismiss ground 2."

Respondent's Notice

Having dismissed UKIG's appeal, it was unnecessary to consider ARG's notice on post-sale confusion.  Nevertheless, the Chancellor observed that there was nothing in the evidence that would have precluded the deputy judge's conclusion.  Sir Colin would have upheld Mr Caddick's judgment.

Copyright

 ARG challenged Mr Caddick's findings that the CAD drawing showin in my case note on his judgment and referred to as "AGA Panel Work 1" was not a design document for an "artistic work" but, even if it was, any copyright subsisting in the drawing would not have been infringed because of s.51 of the Copyright, Designs and Patents Act ("CDPA").  ARG argued that AGA Panel Work 1 was a design document for an artistic work, and therefore s.51 did not apply.  Alternatively, if s.51 did apply, the section was incompatible with assimilated EU law.

Whether AGA Panel Work 1 was a Design Document for an Artistic Work

ARG contended that the control panel (a photo of which appears at para [64]  of the transcript of the Court of Appeal's judgment) was an "artistic work" within the meaning of s.4 (1) of the CDPA and more specifically a "graphic work" as defined by s.4 (2).  Lord Justice Arnold referred to the subsection which provides examples of graphic works and also to para [16] of HH Judge Hacon's judgment in Response Clothing Ltd v Edinburgh Woollen Mill Ltd [2020] WLR(D) 88, [2020] EWHC 148 (IPEC).  His Honour said that although the statute defined 'graphic work' to include the types of work listed and that the list was therefore not exhaustive, it did not follow that the definition was endlessly flexible. All the examples of a graphic work set out in the subsection were created by an author making marks on a substrate to generate an image. He did not think that the definition of a graphic work could be stretched to include a fabric, whether made on a loom or a knitting machine.

Relying on Mr Justice Jacob's remark in Anacon Corporation Ltd v Environmental Research Technology Ltd [1994] FSR 659 "the essential nature of a graphic work ......... is that it is a thing to be looked at in some manner or other" ARG submitted that the control panel depicted in AGA Panel Work 1 is a graphic work because it was "a thing to be looked at".  UKIG replied that being "a thing to be looked at" was necessary for a work to qualify as a "graphic work" but it was not sufficient.   Lord Justice Arnold agreed with UKIG at para [70]:

"As UKIG points out, many things are "to be looked at", but are not graphic works, including a photograph, a sculpture and a collage (all of which are separately listed in section 4 (1) (a)), a work of architecture (covered by section 4 (1) (b)) and a work of artistic craftmanship (covered by section 4 (1) (c)). Counsel for AGA accepted that the effect of AGA's interpretation was that all artistic works would constitute graphic works. In my judgment that would be wholly contrary to the statutory scheme, which pre-supposes that there are a number of different categories of artistic work. Moreover, the problem would not stop with artistic works, because a film (section 5 (1)) is also a thing to be looked at."

Judge Hacon said in Response Clothing that all the examples of a graphic work set out in s.4 (2) were created by an author making marks on a substrate to generate an image.  Lord Justice Arnold agreed with Judge Hacon.  ARG's interpretation stretched the word "graphic" far beyond its dictionary meaning and  came close to disregarding the word "graphic" altogether.   Viewed as a whole, the control panel was primarily a functional object even though it incorporated artistic elements, and in particular, graphic elements. In Lord Justice Arnold's judgment Mr Caddick had been correct to decide that the control panel as a whole was not a graphic work.

Whether S.51 CDPA is Incompatible with Assimilated EU Law

ARG contended that s.51 was incompatible with assimilated EU law, particularly the CJEU's decision in Case C-683/17 Cofemel - Sociedade de Vestuario SA v G-Star Raw CV EU:C:2019:721, [2020] ECDR 9, [2019] EUECJ C-683/17, ECLI:EU:C:2019:721 interpreting art 2 (a) of European Parliament and Council Directive 2001/29/EC of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society ("the Information Society Directive").  UKIG replied that 51 was not incompatible with assimilated EU law, and in particular Cofemel. Even if it was, it was no longer possible to give s.51 a conforming interpretation and therefore it must be applied according to its terms. Finally, the Court of Appeal should exercise its power to depart from Cofemel if necessary.  Lord Justice Arnold held at [81] that no purpose would be served by deciding this issue of law. It would be a wholly academic question since it would neither affect the parties' rights nor require the Government to take any action to rectify the alleged inconsistency.

For the reasons stated above, Lord Justice Arnold dismissed ARG's cross-appeal.

Comment

This case raises two issues on the extent to which EU law continues to apply to this country.  One was on exhaustion of rights and the other was on the interpretation of the Information Society Directive.  The involvement of both Sir Colin Birss, Chancellor of the High Court and Lord Justice Arnold on this appeal indicates the importance of those issues.  The Chancellor's analysis of the authorities on s.12 (2) of the Trade Marks Act 1994 is helpful.  A decision on the compatibility of s.51 of the CDPA would have been interesting had it served a useful purpose.   Anyone wishing to discuss this article is welcome to call me on +44 (0)20 7404 5252 during office hours or send me a message through my contct form at any other time. 

Further Reading

Jane Lambert  Trade Marks and Copyright - AGA Rangemaster Group Ltd v UK Innovations Group Ltd 18 Juky 2024