(1) Lifestyle Equities C.v v (1) Santa Monica Polo Club Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Recorder Douglas Campbell |
| Judgment Date | 21 December 2017 |
| Neutral Citation | [2017] EWHC 3313 (Ch) |
| Docket Number | Case No: HC-2016-002285 |
| Court | Chancery Division |
| Date | 21 December 2017 |
[2017] EWHC 3313 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (CH D)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Recorder Douglas Campbell QC
(sitting as a Judge of the High Court)
Case No: HC-2016-002285
Michael Edenborough QC and Thomas St Quintin (instructed by Brandsmiths) for the Claimants
Michael Hicks and Nick Zweck (instructed by Pannone Corporate LLP) for the Defendants
Hearing dates: 23 th – 25 th October 2017
Judgment Approved
Mr Recorder Douglas Campbell QC:
Introduction
The First Claimant is the owner and the Second Claimant is the exclusive licensee of a number of EU and UK registered trade marks, including EU trade mark no. 005482484 (“the EU mark”) and UK registered trade mark no. 1259226 (“the UK mark”). These trade marks are each registered for a mark with the following appearance: 1
The EU mark is registered inter alia for “Clothing, footwear, and headwear” in class 25, pursuant to an application filed on 17 September 2004. The UK mark is registered for “Articles of clothing; but not including footwear” in class 25, pursuant to an application filed on 30 January 1986. The UK mark has a disclaimer as follows: “Registration of this mark shall give no right to the exclusive use of the words ‘Polo Club’ and ‘Beverly Hills’”.
Nothing turns on the difference between the Claimants and I will simply refer to “the Claimants” generally save where otherwise appears.
The Claimants opened the case, without objection by the Defendants, on the basis that the Defendants fell into 4 categories, as follows:
i) D1, D2, D3, and D11 (“the corporate Juice defendants”). Of these, D1 is a retailer; D2 holds the Defendants' domain name; D3 holds some of the Defendants' trade marks and land; and D11 is the wholesaler of the alleged infringing goods. D11 is much the most important in this group.
ii) D4, D5, and D12 (“the Juice directors”). D4 is the former director of D1 and D2; D5 is the current director of D3 and D11; D12 is another director of D11. D5 (“Mr Ahmed”) is much the most important in this group.
iii) D7, and D13 to D16 inclusive (“the third party retailers”). They were jointly represented along with both sets of Juice Defendants. Nothing turned on their involvement and they played very little role in the trial.
iv) D6, D8, D9, D10, D17, and D18. These Defendants had all settled with the Claimants and played no part in the trial.
After this judgment was circulated in draft the Defendants sought to expand this to 6 categories of Defendants. In particular they sought to divide paragraph (i) into D1 and D2 (“the SMPC Defendants”), and D3 and D11 (“the Juice Defendants”); and to divide paragraph (ii) into D4 (“SMPC Director”) and D5 and D12 (“Juice Directors”). However it became apparent that the only purpose of this exercise was simply to ensure that the liability of D1, D2, and D3 as joint tortfeasors is decided at the separate hearing mentioned in paragraph [11] below. Since that is what is going to happen anyway, there is no need to make this expansion.
I will refer to “the Defendants” generally, meaning those Defendants in the first 3 categories, save where otherwise appears. This is done for convenience and is not to be taken to be a decision on the involvement of any individual Defendant except where the contrary is made clear.
There are six issues in this action, namely:
i) Infringement of the EU and UK marks pursuant to s 10(2) of the Trade Marks Act 1994 (“the Act”)/Art 5(1)(b) of the Trade Mark Directive, 2008/95/EC (“the Directive”); and Article 9(2)(b) of Regulation 207/2009, as amended by Regulation 2015/2424, which since 1 October 2017 has been codified by Regulation 2017/1001 (“the Regulation”) respectively.
ii) Infringement of the EU and UK marks pursuant to s 10(3) of the Act/Art 5(2) of the Directive/Art 9(2)(c) of the Regulation.
iii) Passing off.
iv) Breach of contract by D3 or D11.
v) Procuring of that breach of contract by D5.
vi) D11's counterclaim for unjustified threats of trade mark infringement.
The Claimants allege that the marks have been infringed by the Defendants' dealings in goods bearing a number of logos, each of which signs contains the name “SANTA MONICA POLO CLUB” and a representation of at least one polo player, with a raised stick, on a pony, which is shown side on and running. The Re-Amended Particulars of Claim showed 6 examples of this.
The Claimants do not complain about the use of the name “SANTA MONICA POLO CLUB” alone. However when I asked the Claimants about this, they made it clear that they made no concession about whether the use of that name alone would infringe. They simply meant what they said, ie that their complaint was about various logos. Moreover they still relied on the use of that name insofar as it formed part of the logos complained of.
The Defendants pointed out that they had used a number of other signs which fell within the scope of the description set out in paragraph [7]. They produced a Schedule thereof, which I reproduce at Annex 1. I infer that this was done by the Defendants in order to demonstrate the full width of what the Defendants perceived the Claimants' case to be. The Defendants asked the Claimants to say whether these signs all infringed the marks in issue, and upon the Claimants saying that in their view all of the Defendants' signs infringed such marks the Defendants then asked me to determine infringement with respect to every sign in their Schedule. The Claimants did not disagree with this approach. I will refer to the Defendants' logos collectively as “the SMPC brand”, save where it is necessary to be more specific.
Since all of these marks are now in issue, albeit somewhat artificially, I will do so. However I made it clear to the Defendants that the amount of individualised attention given to each of the signs in the Schedule would be in proportion to the amount of individualised argument which was advanced in relation to each sign. In the event, most of the argument was focussed on the first 3 signs in the Schedule and only a few of the others were mentioned. Indeed, as the Claimants pointed out, a number of the signs in the Defendants' schedule did not even appear to have been used by the Defendants. They merely appeared in the Defendants' internal records as proposals.
By Order of Arnold J dated 3 April 2017, this is a split trial whereby this trial will determine all issues of liability save in respect of allegations of joint and several liability of the Defendants. This includes the position of D1, D2, and D3 as joint tortfeasors, it being admitted that D1 is liable for the goods which it sold as a retailer. A second trial will deal with any remaining allegations of joint and several liability and with quantum.
The witnesses
The Claimants' witnesses
On behalf of the Claimants I heard oral evidence from Mr Eli Haddad, CEO of the Claimants; Mr Earl Jacobs, who has (via a number of companies) been one of the main licensees under the Claimants' marks since 1993; and Mr Marc Ball, who has been a consultant and sales agent for the Claimants in the UK since 2015.
Mr Haddad gave evidence about the history and development of the Beverly Hills Polo Club brand (“the BHPC brand”). He explained that it is exploited worldwide by 4 groups. The Claimants are the smallest of these 4 groups. The others are BHPC Associates LLC, owned by Mr Haddad's brother, which has rights in the United States; Young Sangyo Co Ltd, which has rights in Japan; and another company called Wah Sing which has rights in China. Mr Haddad drew attention to an entry in License Global magazine for 2017 which estimated that the brand had $1.7 billion of retail sales worldwide. He also exhibited a confidential schedule of retail sales made under the brand in Europe, which had been prepared by his son Daniel.
The Defendants criticised Mr Haddad for putting forward the $1.7 billion global figure, and they did so for two reasons. First, they said it was pure hype. Secondly, they said his evidence was inconsistent as to whether the correct figure was $1.7 billion or “over $100m (USD)” per annum. I do not think that either of these criticisms is a reason to reject Mr Haddad's evidence. The global figure was only ever put forward as an estimate, and Mr Haddad gave an explanation of how the estimate was arrived at. The precise amount does not matter anyway. The second criticism is simply wrong: see paragraph [13] of Mr Haddad's first witness statement. The Defendants also criticised his schedule, but only one very minor error was identified (namely the precise amount of socks sold under the BHPC brand in Belgium in the fourth quarter of 2010) and this makes no difference overall. I found Mr Haddad to be a good witness.
Mr Jacobs was an engaging witness who gave detailed evidence about how the Claimant's marks had been exploited in the UK and EU. For instance he had done so since 2006 via Beverly Hills International Limited, of which he has been sole owner since 2011. He explained that most marketing activity in relation to the brand was carried out by his company's customers, such as Matalan, Jacamo and Morrisons, although some marketing (eg by advertisements placed into...
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