Other Creative Ltd v Mother Family Ltd

Hearing date: 17 November 2021

Approved (Redacted) Judgment

I direct that this approved judgment, sent to the parties by email on 26 November 2021, shall deemed to be handed down on that date, and copies of this version as handed down may be treated as authentic.

Application

This is the defendant's application dated 11 June 2021 to transfer this passing off claim to the Intellectual Property and Enterprise Court (“IPEC”).

Parties and claim

The claimant, Other Creative Limited, claims to have traded since 1996 providing creative consultancy services in the UK (and abroad) by reference to the sign “Other”; and, as a result of those activities, to own substantial goodwill in the UK.

The defendant, Mother Family Limited, is the intermediate parent company for a group of companies which include Mother London Limited, which claims to have provided advertising and marketing services under the name Mother, also since about 1996.

On 18th October 2020, the defendant launched an independent creative agency under the name “Other” and an associated figurative sign. From that date it has offered and promoted its services under that name from a website https://other.london and from Twitter, LinkedIn and Instagram accounts.

The claimant alleges that that use gives rise to actionable misrepresentations that the defendant is, or is connected or associated with, the claimant; and that this has caused damage by way, among other things, of diversion of sales and swamping.

On the face of the Defence, the defendant puts the claimant to proof on virtually every allegation in the particulars of claim:

(1) whether the claimant is the operator of/responsible for the website other.co.uk and the various social media pages and accounts it relies on in the particulars of claim;

(2) the nature of the claimant's use of the word “Other”;

(3) the nature of the business said to have been carried on under “Other”;

(4) the length of time that business has been carried on;

(5) the existence and scope of goodwill associated with “Other”.

The defendant also denies that it has made the misrepresentations alleged by the claimant, and denies that the claimant has suffered any loss or damage.

The defendant has served an extensive request for further information as to all aspects of the pleaded case, to which the claimant has replied. The defendant does not suggest the replies are inadequate. In addition, the Reply sets out 6 instances as examples of deception or likelihood of deception arising from the defendant's acts. However, the defendant's pleaded position remains that all issues are live.

The claim was issued on 8 March 2021. The defendant, without any admission of liability, has offered a contractual undertaking to re-brand so as to not use the sign OTHER by 12 November 2021; and in the course of the hearing this was fortified to an undertaking to the court. Provided that undertaking given is permanent, the claimant will no longer need to seek injunctive relief. The defendant in fact completed its re-brand on 8 November 2021.

Legal principles

CPR PD 30 para 9 provides:

“9.1 When deciding whether to order a transfer of proceedings to or from [the IPEC] the court will consider whether—

(1) a party can only afford to bring or defend the claim in [the IPEC]; and

(2) the claim is appropriate to be determined by [the IPEC] having regard in particular to—

(a) the value of the claim (including the value of an injunction);

(b) the complexity of the issues; and

(c) the estimated length of the trial.

9.2 Where the court orders proceedings to be transferred to or from [the IPEC] it may—

(1) specify terms for such a transfer; and—

(2) award reduced or no costs where it allows the claimant to withdraw the claim.”

In Kwikbolt v Airbus [2019] EWHC 2450 (IPEC), HHJ Hacon made the following general observations as to the approach to be taken:

“4. … First, I must take into account the complexity of the issues and the estimated length of trial. As these two issues are related, it will usually be the case that if a trial can be heard in two or at the most three days it will be of a complexity that makes it suitable for hearing in IPEC.

5. … In assessing the time that the trial is likely to take, the court must take into account the extent to which the proceedings can fairly be case-managed to focus the issues between the parties, which will include preventing a proliferation of issues which are marginal at best and may even have been raised to improve the chances of having the case transferred out of IPEC or to resist it being transferred into IPEC.

6. Secondly, if the proceedings are of a nature such that they can be heard fairly within two or three days, possibly following some focussing of the issues, by far the most important factor is to ensure that parties with limited financial means are afforded access to justice. …Where access to justice is likely to be possible only if the proceedings are in IPEC, that is a very powerful factor in favour of having the case heard in IPEC.

7. Thirdly, the value of the claim should not be confused with the cap on damages which applies in the IPEC. To take an example, it is possible that an injunction would cut the defendant's market share and increase the claimant's share such that the value of the injunction is well in excess of £500,000. However, it does not follow that the high value of a claim by itself means that it cannot be heard in IPEC. It would make no sense at all if an impecunious claimant could never seek to enforce his right in IPEC solely because the claimant can show that the injunction could have a large financial impact. Access to justice always remains important.

8. That said, the value of the claim, including the likely financial impact of the injunction, is of course relevant, and sometimes will be a matter of significance. Generally, that will be the case because a defendant who is facing the possibility of an injunction which could have high financial consequences will have a proportionately greater entitlement to ensure that all these reasonable arguments in their defence are taken…..

9. Fourthly, the approach to the litigation taken by the parties seeking to have the case heard in IPEC is relevant. As Judge Birss said in Comic Enterprises, the claimant that pleads and otherwise approaches a case in a manner more appropriate for a case in a list outside IPEC: that case is liable to be transferred out of IPEC.”

Issues in the application

In this claim, it is common ground that both parties can afford to litigate in the High Court. Indeed, the defendant is the financially stronger party. The primary issues in the application were therefore:

(1) the value of the claim;

(2) the complexity of the claim and the likely length of the trial.

Value of the claim

Claimant's evidence

Since, in the usual way in IP claims, there will be separate trials of liability and quantum, the particulars of claim do not seek to quantify the value of the claim. As noted in the IPEC Guide at para 3.2:

“the value of the claim, though relevant, is generally not a major factor in the evaluation of whether a case is suitable for the IPEC. This is in part because it is often difficult to give an accurate estimate of the overall value.”

The claimant relied upon the witness statement dated 10 November 2021 of its solicitor, David Pountney, to which is exhibited a draft witness statement of Jonathan Dobinson, the founder and managing director of the claimant. That draft statement derives from a previous statement made in EU trade mark opposition proceedings to which the defendant was a party.

This evidence can be summarised as follows. The claimant's turnover in the previous 6 years (ending September) has been:

2014–15: £3,658,420

2015–16: £2,522,790

2016–17: £1,572,647

2017–18: £1,125,314

2018–19: £1,307,200

2019–20: £980,489

2020–21: £1,050,000 (estimated)

Mr Dobinson's evidence is that the average value to the claimant of a new client's instruction is £99,483. This figure is, he says, the average value per client over a 5 year period. Before the defendant launched its agency, he says, the claimant won 6 new clients on average in a 10 month period. This equates to 7. 2 (or 7 to 8) clients in a 12 month period, or £712,000 in revenue.

His evidence is that in the 10 months from October 2020 to June 2021, the claimant has had one new business win, via a personal referral where no confusion could occur. He discusses whether the impact of Covid-19 could have had a significant effect on new business. His evidence is that in the critical period when lockdowns and restrictions made their biggest impact (March — October 2020), there was no impact on any measure of performance. All the impact is seen in the period following the launch of the defendant's agency. Since that launch, the claimant has seen no new clients via online contact, which was the previous most common path.

Mr Dobinson also provides a specific example of a high value contract, which he says the claimant lost as a result of the marketing consultant of a potential client contacting the defendant's agency in the mistaken belief that it was the claimant. The potential client, Cignposts, is a Covid test provider. Mr Dobinson's evidence is that in June 2021, it was intending “to run a major consumer facing campaign over the Summer aimed at those intending to go on holiday this year” and...