Lifestyle Equities C.v v. Hornby Street (MCR) Ltd

JurisdictionEngland & Wales
JudgeLord Justice Snowden,Lady Justice Macur,Lord Justice Lewison
Judgment Date28 January 2022
Neutral Citation[2022] EWCA Civ 51
Docket NumberCase No. CA-2021-000460 (formerly A3/2021/0355)
Year2022
CourtCourt of Appeal (Civil Division)
Between:
(1) Lifestyle Equities C.V.
(2) Lifestyle Licensing B.V.
Claimants/Appellants
and
(1) Hornby Street (MCR) Limited
(2) Regency Trading Limited
(3) Santa Barbara Polo Club
(4) SB Members LLC
(5) Toqir Abbas
(6) Arunkumar Devji Pindoria
(7) Joanne Claire Swift
(8) Santa Barbara Polo & Racquet Club
Defendants/Respondents

[2022] EWCA Civ 51

Before:

Lord Justice Lewison

Lady Justice Macur

and

Lord Justice Snowden

Case No. CA-2021-000460 (formerly A3/2021/0355)

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES

INTELLECTUAL PROPERTY ENTERPRISE COURT

HHJ HACON

[2020] EWHC 3320 (IPEC)

Royal Courts of Justice

Strand, London, WC2A 2LL

Thomas St Quintin (instructed by Brandsmiths) for the Appellants

Lindsay Lane QC (instructed by Burges Salmon LLP) for the Third, Fourth and Eighth Respondents

The First, Second, Fifth, Sixth and Seventh Respondents were not represented

Hearing date: 23 November 2021

Approved Judgment

This judgment was handed down remotely by circulation to the parties' representatives by email and released to BAILII. The date and time for hand-down is deemed to be 10 a.m. on Friday 28 January 2022.

Lord Justice Snowden
1

This is an appeal against a decision of HHJ Hacon (the “Judge”) who stayed the Appellants' claim against the Respondents for trade mark infringement and passing off (the “Claim”) pursuant to the power contained in Section 9 of the Arbitration Act 1996 (“Section 9” and the “1996 Act”). The appeal raises a number of issues of conflict of laws in relation to arbitration agreements and the assignment of trade marks.

Background facts

2

At least for the purposes of this appeal, the background facts are not in dispute and can be stated relatively shortly.

3

The Claim relates to the alleged infringement of a UK trade mark (the “UK Mark”) and various EU trade marks (the “EUTMs”) (together the “Trade Marks”) that protect a figurative mark with the following appearance (the “Beverly Hills Logo”) and a word mark for the words “Beverly Hills Polo Club”.

The Trademarks have been registered in the UK and EU for a variety of goods, principally clothing.

4

The First Appellant is the registered proprietor of the Trade Marks and the Second Appellant is the licensee of the First Appellant's rights. Both companies are registered in the Netherlands. Neither has, or ever has had, any business in or connection with the United States of America.

5

The Beverly Hills Logo was originally used by a Californian entity called BHPC Marketing Inc. (“BHPC Marketing”) which was the owner of a number of US registered trade marks protecting the logo.

6

In the mid-1990s, a dispute arose between BHPC Marketing and the Eighth Respondent, the Santa Barbara Polo & Racquet Club (“SBPC”). SBPC is a sports and social club established in 1911 which used the following logo (the “Santa Barbara Logo”) in its business and was the owner of a number of US registered trade marks in respect of the same.

7

To resolve the dispute between BHPC and SBPC, a so-called “co-existence agreement” was entered into between those two parties on 31 June 1997 (the “1997 Agreement”). The 1997 Agreement recited the use by BHPC Marketing and SBPC of their respective logos and their ownership of a number of US trade marks.

8

Clause 1 of the 1997 Agreement provided as follows,

“BHPC consents to use by [SBPC] of the name and marks SBPC, SBP&RC, SANTA BARBARA POLO CLUB, SANTA BARBARA POLO and RACQUET CLUB, and of [the Santa Barbara Logo], worldwide. BHPC further agrees SBPC may register these marks as service marks and/or trademarks in any and all countries in the world, for use in connection with any goods and services. BHPC agrees not to interfere with or oppose such registration and hereby specifically consents to such registration.”

By clause 2, SBPC granted equivalent consent to BHPC to register marks and to use the Beverly Hills Logo and name.

9

Clause 4 was in the following terms,

“The parties agree this Agreement may be used as evidence worldwide to assist with trademark and/or service mark registration, to show consent to the use of the parties' respective … marks and/or registration of those marks”

10

The 1997 Agreement also contained the following supplementary provisions,

7. … Any controversy, dispute or claim with regard to, arising out of, or relating to this Agreement, including but not limited to its scope or meaning, breach, or the existence of a curable breach, shall be resolved by arbitration in Los Angeles, California, in accordance with the rules of the American Arbitration Association. Any judgment upon an arbitration award may be entered in any court having jurisdiction over the parties.

9. This Agreement shall be construed and governed in accordance with the applicable laws in the State of California, without reference to its conflicts of law provisions.

11. In the event that any portion of this Agreement is, or is declared, illegal, invalid or unenforceable under present or future laws by a court or governmental entity of competent jurisdiction, such portion is deemed severable from this Agreement and the remainder of this Agreement shall be deemed to be, and will remain, fully valid and enforceable, and the parties shall seek to agree upon and replace the invalid clause with, if possible, an enforceable clause having substantially the same effect as the illegal, invalid or unenforceable clause.

12. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their subsidiaries, representatives, heirs, administrators, successors, assigns, licensees, distributors, wholesalers, customers, subcontractors and others working under the license of a party to manufacture, market or sell goods bearing any of the party's above identified marks, each of whom shall be entitled to enforce the provisions of this agreement.”

11

In 2007 and 2008 the Trademarks were assigned from BHPC Marketing to another US corporation, BHPC Associates LLC, and then on to a further US corporation, BHPC International LLC. In 2009 the Trademarks were assigned to the First Appellant.

12

The application before the Judge and the appeal before this Court proceeded on the basis that neither of the Appellants knew of the existence of the 1997 Agreement when they took their assignments of the Trade Marks.

13

In April 2013 the Appellants became aware that SBPC had applied to register a Community trade mark in respect of the Santa Barbara Logo and stated that they had been informed of the potential existence of the 1997 Agreement. They were then supplied with a copy of the 1997 Agreement by SBPC.

14

Subsequently, in 2015, the First Appellant applied to the Mexican Trade Mark Office to register a trade mark and wished to show the office that the application had the support of SBPC. On 9 June 2015 a person claiming to act on behalf of the First Appellant sent an email to a representative of SBPC as follows,

“Let's not complicate things and I don't want you to spend money unnecessarily.

My only request is that you sign the consent letter for Mexico in accordance with the [1997 Agreement] that you brought to our attention back in 2013. If you don't want to sign we will assume otherwise.

Please let's just keep this simple.”

15

A consent letter was then signed by SBPC. It stated that SBPC recognised the right of the First Appellant to use and register in Mexico the mark Beverly Hills Polo Club and the Beverly Hills Logo. The letter also said:

“Lifestyle Equities, C.V. (through its predecessor entity), and SBPC are parties to a worldwide coexistence agreement dated October 6, 1997, and pursuant to that agreement SBPC consents to this registration.

Attached to this letter is the [1997 Agreement] executed between SBPC and Lifestyle Equities, C.V..”

(underlining in the original)

The consent letter had been drafted by the First Appellant except for the underlined words, which were added by SBPC. As indicated, it attached a copy of the 1997 Agreement.

The Claim and the Stay Application

16

The Claim was issued in June 2020. It complained of infringement of the Trade Marks (and an additional EU trade mark) and passing off by the Respondents having used the Santa Barbara Logo on goods sold in the UK and the EU.

17

The Particulars of Claim asserted that the use by the Respondents of the Santa Barbara Logo had occurred without the authority of the Appellants. In that regard, and following the point having been raised in pre-action correspondence, the Appellants asserted (i) that they are not parties to the 1997 Agreement, (ii) that they did not know of the 1997 Agreement when they took their assignments of the Trade Marks, and (iii) that by reason of Article 27(1) of Regulation 2017/1001 on the EU Trade Mark and equivalent articles in predecessor regulations, and section 25(3)(a) of the Trade Marks Act 1994 (the “ Trade Marks Act”), the 1997 Agreement was not binding on the Appellants when they took their assignment or licence of the Trademarks.

18

The Respondents applied for a stay of the Claim pursuant to Section 9. That section provides in material part,

“9. Stay of legal proceedings.

(1) A party to an arbitration agreement against whom legal proceedings are brought (whether by way of claim or counterclaim) in respect of a matter which under the agreement is to be referred to arbitration may (upon notice to the other parties to the proceedings) apply to the court in which the proceedings have been brought to stay the proceedings so far as they concern that matter.

(4) On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed.”

19

Section 9 applies notwithstanding that the designated seat of an arbitration is outside England & Wales: see ...

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    • United Kingdom
    • King's Bench Division (Technology and Construction Court)
    • 19 October 2023
    ...non-party can be bound by an arbitration agreement pursuant to rules of Brazilian law: Lifestyle Equities CV v Hornby Street (MCR) Ltd [2022] Bus.LR 619 per Snowden LJ at [35]–[38]: “Interpretation is the ascertainment of the meaning of a contract or other document. Identifying what the ter......
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