Okotoks Limted (Formerly Spicerhaart Ltd) and Another v Fine & Country Ltd and Others

JurisdictionEngland & Wales
JudgeLord Justice Lewison,Lady Justice Gloster,Lord Justice Lloyd
Judgment Date14 June 2013
Neutral Citation[2013] EWCA Civ 672
Docket NumberCase No: A3/2012/2371
CourtCourt of Appeal (Civil Division)
Date14 June 2013
Between:
Okotoks Limted (Formerly Spicerhaart Limited) & Anr
Appellants
and
Fine & Country Limited & Ors
Respondents

[2013] EWCA Civ 672

Before:

Lord Justice Lloyd

Lord Justice Lewison

and

Lady Justice Gloster

Case No: A3/2012/2371

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE, CHANCERY DIVISION

Mr Justice Hildyard

HC10C02726

Royal Courts of Justice

Strand, London, WC2A 2LL

Mr Mark Platts-Mills QC & Ms Jessie Bowhill (instructed by Manches LLP, London) for the Appellants

Mr Michael Hicks (instructed by Hamlins LLP, London) for the Respondents

Lord Justice Lewison

Introduction

1

In a reserved judgment handed down on 31 July 2012 after a ten day trial, and supplemented by a further judgment handed down on 14 September 2012, Hildyard J held that the defendants were liable both for the common law tort of passing off; and also for infringing both a community trade mark (a "CTM") and a national trade mark. The judge's judgments are at [2012] EWHC 2230 (Ch) and [2012] EWHC 2528 (Ch). With the permission of Patten LJ the defendants appeal. For the reasons that follow I have reached the conclusion that the judge's order should be upheld.

2

The dispute arises in the context of estate agency relating to residential property. The rival names are "Fine & Country" on the one hand and "Fine" on the other. The national mark is a device mark, which claims the colours black and gold as an element of the mark. It is registered in class 36 of the Nice classification (real estate services). Registration of this mark was applied for in 2001. The CTM is a figurative mark. It is registered in classes 36, 37 (construction) and 37 (architectural and building design services). Registration of this mark was applied for in July 2009. A representation of the marks relied on is as follows:

3

In the national mark the words are underlined in gold and the ampersand is in black. The CTM is monochrome.

4

The allegedly infringing signs are as follows:

The name depicted in this way is often accompanied by the strap line:

"selling fine homes throughout the country"

5

The "FINE" logo, like the "Fine & Country" logo, is in capitals, with a font with serifs, gold underlining of the word, and a strap line which includes the word "country".

6

The judge found that the use of the signs was liable to confuse potential customers and others with whom the claimants had business relations. The defendants challenge that finding of fact. But they say that even if it was a finding that the judge was entitled to make, the kind of confusion that the sign engendered is confusion that, for reasons of public policy, the law is prepared to tolerate. One such kind of confusion is the confusion that arises where a trader trades under a name that is principally descriptive of the goods or services that he offers, or is laudatory of the quality of those goods or services. The defendants say that in the present case the words "fine" and "country", whether used separately or in combination are words that are either descriptive of the kind of properties on offer or are laudatory of the quality of those properties or both.

7

I begin by setting out the relevant facts as found by the judge (although, as I have said, some of his findings of fact are challenged). I do so, for the most part in the judge's own words.

The claimants and the Fine & Country brand

8

The judge found that the claimants conduct business under and by reference to the "Fine & Country" name and logo; and advertise and promote that name and logo. They are members of the same group of companies of which GPEA Ltd ("GPEA") is the parent company. GPEA wholly owns and controls the first claimant, Fine & Country Limited ("F&CL"). F&CL wholly owns and controls FCEA Limited ("FCEA"). F&CL is the registered proprietor of the trade marks at issue. According to their accounts filed at Companies House both F&CL and FCEA are dormant companies which do not trade. In the case of F&CL, its accounts have been drawn and filed on the basis that it has not traded since May 2006. In its accounts for the year to May 2011 it is stated that "The company did not trade during the year and it is not intended for the company to trade in the foreseeable future." In the case of FCEA, its accounts have presented it as dormant since its incorporation in 2008 (as a subsidiary of F&CL). The only one of the claimants that is presented as actively trading is GPEA. The driving force behind the group is Mr Lindley who founded GPEA with Mr Cooke.

9

None of the claimants is an estate agent. The original idea behind the creation of the "Fine & Country" brand was to enable local estate agents to compete at the upper end of the residential property market with well known national agents. Thus the concept behind the brand is that local estate agencies can pay for a licence which permits them both to trade under the Fine & Country name and logo (often in conjunction with their own) and also to market premium properties, not only through their own offices but also through the claimants' office in Park Lane, London, and on the fineandcountry.com website and in other Fine & Country publications. Thus in return for the licence fee, a local estate agent acquires a high profile image, joins a national network of agencies with a London presence and office, and benefits from a significant investment in national and international advertising. In short the claimants' business is that of providing a marketing umbrella and vehicle for the various independent estate agency businesses that have signed up as licensees.

10

Some licensees trade from stand-alone Fine & Country offices. Other licensees operate the Fine & Country business from within their existing business by, for example, dedicating a window or a specific area in their office to the Fine & Country brand. The judge concluded that the concept had been a considerable success. In the UK alone there are some 79 licensees operating from about 41 stand-alone Fine & Country offices and about 156 dual branded offices; and there are also 57 offices overseas. Fine & Country has won numerous awards, and it consistently ranks at or towards the top of the list of estate agents with the largest number of sales of upper quartile properties, and the largest number of such properties on its books.

11

Thus the judge found that that the Fine & Country name and logo has become and remains well known to members of the public and the trade, especially those interested in the sale and purchase of domestic properties at the upper end of the market. He found that the name and logo plainly had attractive force which brings in custom such as to generate goodwill. This was not seriously in dispute. The defendants' point was that the goodwill did not belong to the claimants.

12

The judge rejected this argument. He held at [200] that the licensing operations conducted by the claimants and the other facilities and products they make available generate goodwill which the claimants as its owners were entitled to protect. Further, he held that the claimants are, if not the only, then the principal generators of goodwill in respect of the business of making available their facilities, umbrella and name, and there is no question of any severance of the goodwill from the ownership of the business to which it relates.

The defendants and the "FINE" brand

13

The first defendant is a wholly owned subsidiary of the second defendant. They are both part of the Spicerhaart Group; which previously trades under the name "haart" (among others), focusing on the lower end of the market. However, from 2007 Mr Smith, the driving force behind the defendants, concentrated on trying to establish a premium end business. This did not work because of the associations of the "haart" trading name. An attempt to launch a brand called " fine Haart" also failed. So in 2009, with the help of Mr Heaviside who had previously worked for a member of the "Fine & Country" network, the defendants adopted new branding under the name and logo "FINE".

14

As part of the rebranding, the font, colour and style of the " finehaart" logo were abandoned and replaced by the "FINE" branding depicted above (capitals, font with serifs, gold underlining and strap line reading "Selling fine homes throughout the country"). This extended not only to advertisements and other sales literature but also to the magazine until then called " fine" (but retaining references associating it with haart): its italicised title was replaced, and all ostensible connection in the text with "haart" eradicated. In addition, the first defendant replaced its domain name. It registered, and thereafter used, the domain name www.fine.co.uk.

15

The judge made the following additional findings about the rebranding exercise at [177]:

"(1) The decision to rebrand and excise any reference to haart or the spicerhaart name was made because (a) the earlier rebranding (to finehaart) which had been based primarily on the success of 'Foxton Rare' simply had not worked in attracting up-market properties to the haart group and (b) Mr Heaviside was convinced, and he convinced Mr Smith, that any overt association with the haart name was counter-productive in terms of attracting such properties because of haart's down-market image;

(2) Mr Heaviside's model was Fine & Country, whom he had worked with successfully at Tops, and which as a brand had been extremely successful in attracting up-market properties to local agencies which otherwise were at an almost insuperable disadvantage compared to the traditional firms with a national presence and London offices;

(3)...

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