The Appeal - Yours Naturally Naturally Yours Ltd v Kate McIver Skin Ltd
Court of Appeal (Lady Justice King, Lord Justice Arnold and Lord Justice Stuart-Smith) Yours Naturally Naturally Yours Ltd v Kate McVier Skin Ltd and another  EWCA Civ 1493 (19 Dec 2023)
This was an appeal by the defendants, Kate McIver Skin Limited ("KMS") and Christopher McIver (the personal representative and widower of Kate McIver ("Mrs McIver") the founder of KMS), against the order of His Honour Judge Hacon granting relief to the claimant Yours Naturally Naturally Yours Limited ("YNNY") for passing off and copyright infringement. His Honour set out his reasons in his judgment in Yours Naturally Naturally Yours Ltd v Kate McIver Skin Ltd and another  EWHC 890 (IPEC) (20 April 2023) which I discussed in Passing off and Malicious Falsehood - Yours Naturally Naturally Yours Ltd v Kate McIver Skin Ltd on 7 May 2023. The appeal came on before Lady Justice King and Lord Justices Arnold and Stuart-Smith on 30 Nov 2023. By their judgment in Yours Naturally Naturally Yours Ltd v Kate McVier Skin Ltd and another  EWCA Civ 1493 of 19 Dec 2023, they dismissed the appeal.
Lord Justice Arnold who delivered the lead judgment took the facts largely verbatim from Judge Hacon's judgment which I summarized in my previous case note. Helpfully he added the following photographs which trace the development of the defendants' brand.
Lord Justice Arnold's starting point was YNNY's original label which appears in the above photo. That was the label that appeared on the first 5 bottles that YNNY's founder, Georgina Tang ("Mrs Tang") supplied to Mrs McIver in 2017. The next photo shows the label that Mrs Tang allowed Mrs McIver to use in March 2018.
From June 2018, Mrs McIver ceased to refer to Mrs Tang's product as the "Elixir" and called it the "Secret Weapon" instead:
The product that Mrs McIver's company KMS purchased from a third party after December 2018 was supplied in the following packaging:
From March 2019 that product was sold in the following get-up:
The LawLord Justice Arnold said at para  of his judgment that the fundamental principle underlying the law of passing off may be simply stated as follows:
"no person may misrepresent their goods or services to be those of another person."
"My Lords, A. G. Spalding & Bros. v. A. W. Gamage Ltd., 84 L.J.Ch. 449 and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so."
But Lord Justice Arnold noted that Lord Dipkock had warned:
"In seeking to formulate general propositions of English law, however, one must be particularly careful to beware of the logical fallacy of the undistributed middle. It does not follow that because all passing off actions can be shown to present these characteristics, all factual situations which present these characteristics give rise to a cause of action for passing off."
Lord Justice Arnold also referred to Lord Oliver's speech in Reckitt & Colman Products Ltd v Borden Inc  1 All ER 873,  1 WLR 491,  WLR 491,  RPC 341,  UKHL 12:
"Although your Lordships were referred in the course of the argument to a large number of reported cases, this is not a branch of the law in which reference to other cases is of any real assistance except analogically. It has been observed more than once that the questions which arise are, in general, questions of fact. Neither the appellants nor the respondents contend that the principles of law are in any doubt. The law of passing off can be summarised in one short general proposition — no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying 'get-up' (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff."
" A permission to brand goods as one's own entitles the licensee to use the commercial reputation of the goods or services to make sales of that product in its own name. To that extent, it permits the licensee to accrue goodwill generated by the product for its own benefit. But it does not, without more, carry with it the right to trade on the reputation of those goods in order to market a similar product which does not originate from the same source as if it does. Such conduct would be a misrepresentation by that defendant and one not authorised by the Agreement.
 The difficult question is whether the misrepresentation is actionable by the claimant as passing off when, by virtue of the White Label arrangements, it has allowed any goodwill and reputation to be enjoyed by the defendant. It seems to me at least arguable that under the Reseller Agreement, the goodwill in the existing service can be used by ML to boost its trade in that product, but cannot be used to market a product which has a quite different technical origin. The law will notionally attribute to the claimant the reputation built up in the product for the purpose of protecting it from misuse in relation to other products. This is difficult law and it may be that the correct answer is that this is not passing off at all, but a species of injurious falsehood actionable on slightly different principles."
- The judge had been wrong to find at  that YNNY owned goodwill "associated in the public mind with the trade name 'Elixir'" because no such case had been pleaded;
- He had been wrong to find that Ms McIver and KMS had made the misrepresentations set out in the judgment
- The judge had been wrong to find that the misrepresentations were damaging to YNNY's goodwill.
- The judge should not have granted relief from copyright infringement without making a finding of infringement.
"(i) By reference to the foregoing, the Claimant is the owner of valuable goodwill in the Elixir Serum by reference to the unregistered trade marks 'Kate McIver' and 'Secret Weapon' and the First Label and the Second Label;
(ii) Further or in the alternative, by reference to the foregoing, the Claimant is the owner of valuable goodwill as the originator of the Elixir Serum supplied to the First Defendant and Ms Dyment under the unregistered trade marks 'Kate McIver' and 'Secret Weapon' and the First Label and the Second Label;
(iii) For the avoidance of doubt, the Claimant does not aver … that the Claimant's goodwill is held in the unregistered trademarks per se, but that … the Elixir Serum became associated in the unregistered trade marks, such that there arose goodwill separately to the First Defendants' goodwill (in that respect, the Claimant will rely upon the decisions in Bristol Conservatories Custom Built Ltd [sic] … and ScanSafe Ltd v MessageLabs Ltd …;
(iv) The First Defendant and Ms Dyment have misrepresented that Ms Dyment rather than Ms Tang was the originator of the Elixir Serum as follows:
(a) The First Defendant and Ms Dyment have falsely stated via the website www.katemciverskin.co.uk and the Instagram and Facebook accounts @katemciverskin that Ms Dyment created the Elixir Serum …
(b) The First Defendant and Ms Dyment have falsely stated to the press that Ms Dyment created the Elixir Serum …
(v) The First Defendant and Ms Dyment have by utilising the same/or similar unregistered trade marks mispresented that the origin of the First Imitation and the Second Imitation is the same as the Elixir Serum, namely the Claimant and/or Ms Tang;
(vi) The First Defendant and Ms Dyment by referring to the Second Imitation as 'Secret Weapon Original' have misrepresented that the Second Imitation is the Elixir Serum;
(vii) The misrepresentations of [the] First Defendant and Ms Dyment have caused damage to the Claimant's goodwill as follows:
(b) The First Defendant has been purchasing the First Imitation and the Second Imitation from a third party whilst marketing them so as to indicate the same origin as the Elixir Serum, in circumstances where the Claimant could have supplied the Elixir Serum to the First Defendant;
(c) The First Defendant's customers have been purchasing the First Imitation and the Second Imitation thinking it is the same as the Elixir Serum or thinking that it has the same origin as the Elixir Serum, in circumstances where the Claimant markets the Elixir Serum for sale and could supply to those customers directly;
(d) The change in ingredients and deterioration in quality of (at least) the First Imitation and (potentially) the Second Imitation and the acne and skin problems suffered by The First Defendant's customers are such as to create a negative impression in the mind of the public as regards the originator of the Elixir Serum, namely the Claimant and/or Ms Tang;
(e) The misrepresentations in and of themselves damage the Claimant's goodwill because they create a false impression in the mind of the public that Ms Dyment created the Elixir Serum and that the First Imitation and/or the Second Imitation are the same as the Elixir Serum and/or originate from the Claimant and/or Ms Tang."
The defendants' next point was that they took issue with para  of Judge Hacon's judgment:
"Ms McIver's statement on 6 June 2018 that she had put her life and soul into researching and creating the 'Kate McIver' serum, can only have been taken as meaning that she had created the Elixir serum she was selling. No alternative was suggested. Thus, Ms McIver's express representation was that she was the creator of the Elixir serum. By inevitable implication, she also made the further representation that she was the creator of the Elixir serum sold by anyone else, including Ms Tang. Both the express and the implied representation were false. Ms McIver repeated these representations on 8 June and 1 October 2018. It was repeated by her again in her quoted comments in the Liverpool Echo on 1 December 2018 and in her radio interview the next day."
"To get through this I needed to have a focus, something I loved, something I was obsessed with to take my mind from the pain ... Kate McIver skin was born and I literally put my life and soul it too [sic] researching and training, creating bespoke treatment and tailor making the ingredients for each session meaning treatments that I could be remembered for. …
The Kate McIver serum was designed to turn my skin around to help my cells recover and rejuvenate, it also healed all my scars. Fast forward 7 months and I'm in remission, my skin and hair is healthy and glowing and it's safe to say the business is thriving."
Even if the trial judge had been wrong in his interpretation of Mrs McIver's statement of 6 June 2018 she had made many other misrepresentations. Perhaps most importantly, she had said that the serum that she had purchased from a third party was the same as the serum that had been supplied by Mrs Tang.
Ground 3: The Judge had been wrong to find that the Misrepresentations were damaging to YNNY's Goodwill
Ground 4: The Judge should not have granted Relief from Copyright Infringement without making a Finding of Infringement
"In my judgment this contention is not open to the Defendants given (i) the admission in paragraph 40 of the Defence, (ii) the Defendants' failure to take the point that the acts were only actionable under section 20, not section 18, and (iii) the Defendants' reliance upon implied licence as their sole defence. If the claim had been framed as one of communication to the public contrary to section 20, the availability of the posts after 30 November 2018 would clearly have constituted a continuing infringement."
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