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Tuesday, 14 August 2012

Brief from the AdvoKat: Court of Appeal calls time on Henleys Appeal

The AdvoKat
The AdvoKat is often confused when looking at his watch: where has the time gone?  So he was glad to read the judgment of the England and Wales Court of Appeal, right at the end of term, in Woolley & anor v. Ultimate Products Ltd & anor [2012] EWCA Civ 1038, which was all about other people who were confused when looking at watches.

The claim was one in passing off: a sort of  English tort of unfair competition, based on rights in an unregistered name.  The Claimant, Mr Woolley, sells watches under the name HENLEY.  The Defendant sold clothing, bags and watches under the name HENLEYS.  Back in March, Robert Engelhart QC (sitting as a Deputy High Court judge) found that the Defendant had passed off watches as those belonging to the Claimant, but dismissed the claim insofar as it related to jewellery and bags.  The IPKat reported on that judgment at the time, and laid out the background facts.  The latest judgment relates to the Defendants’ appeal of the trial judge’s decision.

Lady Justice Arden gave the leading judgment, and began by laying out the structure of a passing off claim.  A successful claimant must show that he has goodwill in the sign or “get-up” (packaging and physical appearance to you and me) associated with his goods; he must then show that there has been a misrepresentation by the Defendant that his goods are in fact the Claimant’s.  Finally, he must show damage, and/or the likelihood of future damage, being caused by the misrepresentation.

The defendants appealed on the bases that:  (i) the trial judge has misinterpreted the evidence about misrepresentation, much of which was said to be about confusion that was “the wrong way round” (i.e. people thinking the Claimant’s watches were the Defendant’s); (ii) the judge had wrongly not taken into account a licence that the Defendant had previously taken from the Claimant to use the name HENLEYS; (iii) that the significance of the concurrent goodwill held by the Defendant in HENLEYS had been wrongly overlooked; (iv) that the judge had not properly considered whether the number of people subject to any misrepresentation was “substantial”, as it must be; and (v) that damage had not properly been shown.

Like the AdvoKat, the tort
of passing off is considerably
flexible
At a lecture once attended by this Kat, a retired judge (who shall remain nameless – apparently it’s less confusing that way) declared that there were but two rules of passing off:  (1) every case turns on its own facts; and (2) s***s always lose.  Never one to cast aspersions, this Kat thinks that the Court of Appeal’s judgment in Henleys is a robust endorsement of that Rule No (1).

Passing off is a common-law right, without a statutory basis, whose shape has evolved through case law.  This Kat thinks that its virtue as a cause of action lies in its flexibility, and its adaptability.  Such a view isn’t compatible with too prescriptive a framework – hence our Rule No (1).  This is the main thread running through the judgment of the Court of Appeal.

In respect of the first basis for the appeal (“wrong-way-round” misrepresentation), the Court found that whilst “there was little direct evidence from the witnesses of operative, non-transitory misrepresentation”, the judge was not bound to find against the Claimant, but was entitled to form his own judgment in the round.  In the result, unless the judge’s conclusion was plainly erroneous, the Court would not set it aside, and in this case there was no basis for doing so.

The prior licence between the parties cut both ways: on the one hand, it could be said that Mr Woolley had been not just able but willing to deal with having other people using HENLEYS on watches; on the other, it suggests the Appellants knew that a licence was necessary to use HENLEYS, in light of Mr Woolley’s intellectual property rights.  The trial judge had said that considering all this, overall the licence did not help him, and so he didn’t consider it further; the appellants now said he couldn't simply choose to set it aside from consideration.  Lady Justice Arden reached for Rule No (1): the significance of the licence was a finely balanced factual matter which was the territory of a trial judge; the Court of Appeal could not hold that the judge had been wrong to choose to leave it out of further consideration.
The AdvoKat mourns the passing of a simpler time when one would only tell time by
sun dial (except on cloudy days)

On concurrent goodwill, and on substantiality, again, the message came back that it’s the facts that matter, and those are the purview of the trial judge.  The judge was entitled to reach the views he did, and the Court of Appeal would not displace his assessment in favour of their own.

Finally, a similar view was taken in relation to the overall weighing-up of the various evidence by the trial judge, as well as to his findings on damage: his view was not plainly erroneous, and so would not be set aside.  In relation to the weight attached to the different pieces of evidence, Arden LJ said this:

The situation, in which a judge is faced with limited evidence of misrepresentation and clear evidence of confusion, is exactly the sort of situation in which the judge is justified in giving more weight to his own experience and to the other evidence, especially the "real" evidence, as I have called it, than to the evidence of the witnesses. As I see it, that is what happened here.

This Kat thinks this a succinct expression of an important point.  There are all sorts of reasons why witness evidence of actual confusion may be limited or absent.  Not least among those is that the more effectively a member of the public is confused, the less likely he is ever to realise it.  The judge is the one with all of the facts at his disposal, and different considerations will accord differing weights to pieces of evidence.
  
Rule No (1) may not make for tidy law, but the slightly non-rigid nature of passing off is what makes it so useful (and – dare the AdvoKat say it – interesting).

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