|Yes, the cat is woolly , but ...|
Woolley, whose business background was in the watch import and trade sales business, was the founder and managing director of Timesource, a company which since its inception in 2004 developed a successful business and reputation in the sale of watches. These watches were marketed under brand names, the most successful of which was HENLEY -- a brand that Timesource also used for a few other items and which was registered as a Community trade mark in classes 9, 14 and 18.
The second defendant company, Henley's Clothing Ltd (HCL), was a company that sold clothing and accessories wholesale, by mail order and online under the name HENLEYS. Ultimate, the first defendant, imported and sold wholesale some 4,000 different products including, under licence from HCL, watches and jewellery under the HENLEYS name. Initially Ultimate had taken a licence from Woolley but, having "enjoyed notable growth", terminated the licence on the basis that it was no longer necessary. The largest customer for Ultimate's HENLEYS watches was Argos -- which ran a chain of shops and had a substantial online business but which was not a Timesource customer.
Woolley and Timesource sued for trade mark infringement and passing off, seeking injunctive and other relief in respect of the use of a mark which was very similar to its HENLEY mark (the trade mark claims were stayed, the defendants -- who have their own UK application pending -- having applied to remove Woolley's registration; a decision from OHIM is awaited) and the court had to decide whether the passing off claim had been established. According to the claimants, Timesource had substantial goodwill in its HENLEY watches and the name HENLEY was the attractive force which brought in custom. Since there was no material difference between the appearance of the watches of Timesource and Ultimate, it was argued that the damage inflicted by the alleged passing off was the deflection of potential customers for HENLEY watches (thus, for example, Argos would not want to stock HENLEY watches if it already stocked the HENLEYS range). A loss in terms of royalty payments was also sought. It was also maintained that the sale of HENLEYS watches increasingly diluted the value of the exclusivity attached to the HENLEY brand. However, there was no actual evidence of damage.
What was the likely damage? A loss of sales of HENLEY watches, since Timesource would not be able to sell watches under its own brand name to retailers of HENLEYS watches. However, the claimed loss of royalty income was irrecoverable on the facts since it did not flow from the misrepresentation. Finally, Timesource could not complain of dilution of the HENLEY brand in an action for passing off.
The IPKat wishes that Woolley had been persuaded at an early stage, on discovering the existence of an almost identical mark, to do something more decisive than tolerating its existence so long as some licensing revenue was heading his way. Near-identical marks for the same products generally lead to tears, and/or to litigation, if one or other of them is not killed off.
Merpel marvels that a business can take a licence from a brand owner, establish a good trading position, then decide it can do without the licence and expect to get away with it.
A katpat to Simon Malynicz who, the IPKat hears, did a good job on behalf of the successful claimants here ... and the cat clock depicted above can be purchased here.