Quantum Advisory Ltd v Quantum Actuarial LLP
| Jurisdiction | England & Wales |
| Judge | Lord Justice Newey,Sir Christopher Floyd,Lord Justice Nugee |
| Judgment Date | 14 March 2024 |
| Neutral Citation | [2024] EWCA Civ 247 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case Nos: CA-2023-000480 |
[2024] EWCA Civ 247
Lord Justice Newey
Lord Justice Nugee
and
Sir Christopher Floyd
Case Nos: CA-2023-000480
CA-2023-000484
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN WALES
INTELLECTUAL PROPERTY LIST (ChD)
His Honour Judge Keyser KC (sitting as a Judge of the High Court)
Royal Courts of Justice
Strand, London, WC2A 2LL
Emma Himsworth KC and Guy Adams (instructed by Harrison Clark Rickerbys Limited) for Quantum Advisory Limited
Jonathan Hill (instructed by Acuity Law Limited) for Quantum Actuarial LLP
Hearing dates: 6 and 7 February 2024
Approved Judgment
This judgment was handed down remotely at 10.30am on 14 March 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Lord Justice Newey and
These appeals, from a decision of His Honour Judge Keyser KC (“the Judge”), sitting as a Judge of the High Court, relate to the basis on which the defendant, Quantum Actuarial LLP (“LLP”), is permitted to use the mark QUANTUM ADVISORY (“the Mark”) and also to trade mark registrations that LLP has obtained for the Mark and a number of associated marks.
Basic facts
This section of this judgment is derived principally from the Judge's judgment, given on 18 January 2023 (“the Judgment”).
LLP was formed in 2007 as part of a reorganisation of the businesses carried on by three companies providing pension-related services: a company then called Quantum Advisory Limited (“Old Quad”), Quantum Financial Consulting Limited (“QFC”) and Renaissance Pension Services Limited (“RPS”) (together, the “legacy companies”). Old Quad had been established some seven years earlier by a group of people who had worked at PricewaterhouseCoopers: Martin Coombes, Peter Baldwin, Andrew Reid-Jones and David Deidun. Mr Coombes was the single largest shareholder and the managing director. QFC was set up soon afterwards in order to provide regulated financial services associated with work of Old Quad. Mr Coombes was the majority shareholder, but there was an understanding that his shares were held on trust for Old Quad. RPS was formed in 2004 for the purposes of a joint venture between Old Quad and a team led by former colleagues at Bacon & Woodrow, including Robert Davies. The principal shareholders were Old Quad and Mr Davies.
As the Judge noted in paragraph 8 of the Judgment, by 2007 Old Quad “had built up and acquired a substantial and valuable goodwill and reputation under and by reference to the name and mark Quantum Advisory”. The Judge had explained in paragraph 5:
“Old Quad carried on business as a provider of administrative, actuarial and related services, primarily for defined-benefit pension schemes. It carried on its business in the name Quantum Advisory, or ‘QA’ for short. In March 2000 it procured the registration of the domain name quantumadvisory.co.uk, and shortly afterwards it established a website at the domain, which it used thereafter for the purposes of its business. It also adopted the style for email addresses of name@quantumadvisory.co.uk. Its letterhead showed the company name, with a QA logo, as well as the website and email addresses.”
By 2007, the interests and ambitions of those involved in the legacy companies had begun to diverge. Mr Coombes wanted to diversify, but the other directors and shareholders did not. It was agreed that there would be a reorganisation. A buy-out of Mr Coombes' interest in Old Quad was financially impossible, given its value, and also undesirable for other practical and commercial reasons. An alternative approach was therefore devised. The Judge described it as follows in paragraph 10 of the Judgment:
“In summary, the business of the legacy companies would be continued by a new entity, which would seek to develop and expand it. However, the goodwill of the existing legacy business would be ringfenced: the clients of the legacy companies (‘the legacy clients’) would remain the clients of the legacy companies (or their assigns), but they would be serviced on behalf of the legacy companies by the new entity, which would then receive a fee representing the cost to it of providing the services to the legacy clients. Accordingly, the new entity would not receive any profit element for servicing the legacy clients. Instead, the benefit to the new entity was that it would receive a turnkey business: it would take over all of the staff of the legacy companies and have the full use of their premises and equipment and the Quantum brand, as well as having an established client base on which to build new business. In this way it would be enabled to develop its own business without the usual costs and risks associated with starting a business from scratch.”
The plan was implemented with LLP as the new entity. From April 2007, LLP provided the legacy clients with services on behalf of Old Quad, on the basis that Old Quad would retain as profit 43% of the fee income from the clients while the other 57% would be paid to LLP. The 57% that LLP received was designed to cover the cost of providing the services. The arrangement was formalised by an agreement dated 1 November 2007 between Old Quad and LLP (“the Services Agreement”).
Soon after the Services Agreement had been executed, the assets and business, including the goodwill, of Old Quad were transferred to the claimant (“Quad”, which was at that time called “Pascal Company Solutions Limited”) and the Services Agreement was novated between Quad and LLP. Quad and Old Quad then swapped names so that Quad became (as it still is) “Quantum Advisory Limited”.
It is common ground that the legacy companies traded under and by reference to the Mark and that, more recently, Quad and LLP have both done so. The Judge said this in paragraph 15 of the Judgment:
“The style of email addresses and the website have continued to be used by both [Quad and LLP]. LLP adopted a common letterhead, which displayed the Mark and the corporate names of both Quad and LLP. Similarly, all invoices and emails sent by LLP were in common form for both legacy business and LLP business. In 2009 the branding was refreshed, but the letterhead continued to show the Mark, with a modified logo, and the website and email addresses, and the bottom of the page showed both corporate names. There was a further rebranding in 2016, with a new logo, but the information on the letters and invoices remained materially unchanged. (On each occasion the format of the emails was also modified, to similar effect.) All communications sent out by LLP continued to show both corporate names until about May 2018, when the name of Quad began to be omitted from communications with non-legacy clients. Both entities have at all times continued to use the single website, which contains testimonials from both LLP clients and legacy clients and contains a statement that LLP ‘trading as Quantum Advisory’ ‘processes business on behalf of Quantum Advisory Ltd’.”
By 2018, LLP was dissatisfied with the Services Agreement and it raised, among others, the contention that the provisions of the Services Agreement amounted to an unreasonable restraint of trade. Quad responded by issuing proceedings in which it sought a declaration that the Services Agreement remained in full force and effect. Following a trial in February 2020, the Judge gave judgment in Quad's favour on 5 May 2020 ( [2020] EWHC 1072 (Comm)), and his decision was upheld by the Court of Appeal on 24 February 2021 ( [2021] EWCA Civ 227, [2022] 1 All ER (Comm) 473). Further litigation ensued between the parties, as to whether the Services Agreement obliged LLP to provide tendering services for Quad. On this occasion, Quad was unsuccessful, with His Honour Judge Jarman KC, sitting as a Judge of the High Court, deciding the issue in favour of LLP in a judgment dated 10 June 2022 ( [2022] EWHC 1423 (Ch)) and the Court of Appeal dismissing an appeal on 19 January 2023 ( [2023] EWCA Civ 12).
Well before then, however, Quad and LPP were in dispute about trade marks. Between June and November 2018, without Quad's knowledge, LLP applied for, and obtained, registration of the following four marks in its own name:
i) UK trade mark no. UK00003320701 (“the Q Device Trade Mark”):
ii) UK trade mark no. UK00003320706 (“the Device Trade Mark”):
iii) UK trade mark no. UK00003320709 (“the Device Series Trade Mark”):
iv) UK trade mark no. UK00003350849, for the word mark QUANTUM ADVISORY (“the Word Trade Mark”).
LLP applied for the registration of the first three marks on 27 June 2018 and for the last on 5 November 2018. The Q Device Trade Mark was entered in the Register of Trade Marks on 28 September 2018; the Device Trade Mark and the Device Series Trade Mark were entered in the Register on 9 November 2018; and the Word Trade Mark was entered in the Register on 22 March 2019.
In the summer of 2020, LLP alleged that Quad was not entitled to use the four marks. In a letter to Quad's directors dated 9 July 2020, LLP said:
“We note that, without our consent, you use the letterhead of the LLP which contains our logo as well as other registered Trade Marks. The LLP is the owner of four registered marks (UK00003320702, UK00003320706, UK00003320709 and UK00003350849). Please refrain from using the LLP's Trade Marks on your correspondence.”
On 7 August 2020, LLP wrote:
“We refer to our letter dated 9 July 2020, which concerned your use of the LLP's letterhead.
As made clear in our previous letter, the LLP's logo and other parts of the letterhead are protected by registered trade marks. The LLP...
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