The National Guild of Removers and Storers Ltd v George Anthony Statham and Another

JurisdictionEngland & Wales
JudgeJudge Hacon
Judgment Date05 November 2014
Neutral Citation[2014] EWHC 3572 (IPEC)
Docket NumberCase No: CC13P03435
CourtIntellectual Property Enterprise Court
Date05 November 2014

[2014] EWHC 3572 (IPEC)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

INTELLECTUAL PROPERTY ENTERPRISE COURT

Royal Courts of Justice, Rolls Building

Fetter Lane, London, EC4A 1NL

Before:

His Honour Judge Hacon

Case No: CC13P03435

Between:
The National Guild of Removers and Storers Limited
Claimant
and
(1) George Anthony Statham
(2) Catherine Ann Statham (together t/a Marubbis Removals & Storage)
Defendants

Ashton Chantrielle (instructed by Coyle White Devine) for the Claimant

Thomas St Quintin (instructed by Backhouse Jones Limited) for the Defendants

Hearing dates: 24 September 2014

Judge Hacon

Introduction

1

This is an inquiry as to damages following the order of Birss J dated 28 November 2013 in which he entered summary judgment in favour of the Claimant ("NGRS").

2

The claimant is a trade body which both represents and provides services to its members, firms and individuals in the removal and storage business. The defendants ("the Stathams"), who are husband and wife, run a removal and storage business in Wrexham, North Wales.

3

NGRS's claim against the Stathams was for passing off by reason of two representations by the defendants that they were members of NGRS after they had ceased to be so.

4

NGRS claims by way of damages the fee that it says it would have charged had the defendants been licensed over the period of the unauthorised representation: £26,866.77.

5

The Stathams say (a) the two representations complained of were in a listing on a trade website overlooked until receipt of the letter before action, (b) the relevant pages of the website were only ever viewed by four unique users, all on the same day (25 March 2013), and these users and thus the only people who ever saw the pages were NGRS's employees and its lawyers and (c) the Stathams arranged for the removal of the representations on the same day they received the letter before action, 15 April 2013. The Stathams argue that a payment of nearly £27,000 in those circumstances is wholly unjustified.

6

NGRS does not accept that the only people who ever saw the representations complained of were its lawyers and employees. In any event, NGRS argues, it makes no difference: the Stathams must pay the going rate.

7

The trial was conducted on written evidence.

Background facts

8

The Stathams' business was a member of NGRS from 2001 until 13 October 2010. The fact of their membership was indicated on their business papers, their vehicles, their own website and in other advertising. When the membership ceased, references to membership of NGRS were all removed save for the two complained of.

9

There is a website operated by a company based in St Albans ("Really Moving") which allows those moving home or business to search for providers of conveyancing, survey or removal services. The address of the website is www.reallymoving. com ("the Really Moving website"). The Stathams had a listing on the Really Moving website which incorporated two references to their business, in each case identifying the business as a member of NGRS. The Stathams say that they overlooked this listing when their membership came to an end. Given that they removed all other references to NGRS I have no reason to doubt that this is true.

10

On 15 April 2013 the Stathams received a letter before action. On the same day the Stathams contacted Really Moving and by the next day both references to NGRS in the Stathams' listing had been removed.

11

On 5 August 2013 NGRS issued proceedings. The Defence was filed on 3 September 2013, although NGRS says that it was not served until 3 October 2013. On 10 September 2013 the Stathams made an open oral offer of £10,000 to settle the matter which was repeated in writing on 24 September 2013. The offer was refused. NGRS applied for summary judgment. This was not resisted and Birss J made an order for judgment in favour of NGRS on 28 November 2013.

The user principle

12

NGRS relies on the 'user principle' for calculating damages, that is to say it claims the licence royalty that the Stathams would have had to pay in order to make the infringing acts lawful. It was common ground that this was a legitimate basis on which to assess damages in this case. The relevant principles for assessment were considered by Arnold J in Force India Formula One Team Limited v 1 Malaysia Racing Team Sdn Bhd [2012] EWHC 606 (Ch); [2012] RPC 29 and by Newey J in 32Red OKC v WHG (International) Limited [2013] EWHC 815 (Ch), which I attempted to summarise in Henderson v All Around the World Recordings Limited [2014] EWHC 3087 (IPEC). For convenience I will repeat the relevant part of that judgment here:

"[18] … In Force India Arnold J considered Wrotham Park damages, i.e. of the type awarded in Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798. … Arnold J identified the following principles (at [386]):

'(i) The overriding principle is that the damages are compensatory: see Attorney-General v Blake at 298 (Lord Hobhouse of Woodborough, dissenting but not on this point), Hendrix v PPX at [26] (Mance L.J., as he then was) and WWF v World Wrestling at [56] (Chadwick L.J.).

(ii) The primary basis for the assessment is to consider what sum would have [been] arrived at in negotiations between the parties, had each been making reasonable use of their respective bargaining positions, bearing in mind the information available to the parties and the commercial context at the time that notional negotiation should have taken place: see PPX v Hendrix at [45], WWF v World Wrestling at [55], Lunn v Liverpool at [25] and Pell v Bow at [48]–[49], [51] (Lord Walker of Gestingthorpe).

(iii) The fact that one or both parties would not in practice have agreed to make a deal is irrelevant: see Pell v Bow at [49].

(iv) As a general rule, the assessment is to be made as at the date of the breach: see Lunn Poly at [29] and Pell v Bow at [50].

(v) Where there has been nothing like an actual negotiation between the parties, it is reasonable for the court to look at the eventual outcome and to consider whether or not that is a useful guide to what the parties would have thought at the time of their hypothetical bargain: see Pell v Bow at [51].

(vi) The court can take into account other relevant factors, and in particular delay on the part of the claimant in asserting its rights: see Pell v Bow at [54]"

The Court of Appeal in ( Force India [2013] EWCA Civ 780; [2013] RPC 36) did not dissent from Arnold J's summary of the law (at [97]).

[19] Wrotham Park damages, though they are for breach of contract, are in all relevant respects the same as those I have to consider under this head, so the foregoing principles set out by Arnold J apply. In the inquiry as to damages for infringement of trade marks in 32Red OKC v WHG (International) Limited [2013] EWHC 815 (Ch), Newey J's assessment was by consent also on the basis of willing licensor and willing licensee. Newey J endorsed the principles identified by Arnold J and expanded on them as follows:

(vii) There are limits to the extent to which the court will have regard to the parties' actual attributes when assessing user principle damages. In particular

(a) the parties' financial circumstances are not material;

(b) character traits, such as whether one or other party is easygoing or aggressive, are to be disregarded [29]–[31].

(viii) In contrast, the court must have regard to the circumstances in which the parties were placed at the time of the hypothetical negotiation. The task of the court is to establish the value of the wrongful use to the defendant, not a hypothetical person. The hypothetical negotiation is between the actual parties, assumed to bargain with their respective strengths and weaknesses [32]–[33].

(ix) If the defendant, at the time of the hypothetical negotiation, would have had available a non-infringing course of action, this is a matter which the parties can be expected to have taken into account [34]-42].

(x) Such an alternative need not have had all the advantages or other attributes of the infringing course of action for it to be relevant to the hypothetical negotiation [42].

(xi) The hypothetical licence relates solely to the right infringed [47]–[50].

(xii) The hypothetical licence is for the period of the defendant's infringement [51]–[52].

(xiii) Matters such as whether the hypothetical licence is exclusive or whether it would contain quality control provisions will depend on the facts and must accord with the realities of the circumstances under which the parties were hypothetically negotiating [56]–[58]."

The judgments in Jones and Silveria

13

Ms Chantrielle, who appeared for NGRS, also relied on two judgments of HH Judge Birss QC in the Patents County Court concerning inquiries as to damages in which NGRS was claimant, namely National Guild of Removers & Storers Ltd v Silveria & ors [2010] EWPCC 15; [2011] FSR 9 and National Guild of Removers & Storers Ltd v Jones & ors [2011] EWPCC 4.

14

The Silveria judgment was in relation to four inquires; the defendants were not represented in any of them and did not appear. The Jones judgment was in relation to two inquiries. Mr Jones, one of the defendants, represented himself; none of the other defendants either appeared or were represented.

15

At both trials NGRS relied on the rules of membership and in particular the post-termination obligations on members as a guide to appropriate damages. In Silveria the relevant (2008) rules included (i) a 'run-off' advertising licence fee for £100 per week following termination of membership for advertisements appearing in the Yellow Pages and other similar public directories; (ii) in the event that a former member continued to use NGRS's name or logos after that period it was liable to pay a penalty of £200 per week; and (iii) if the former member was in breach of its post-termination...

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2 cases
  • Reformation Publishing Company Ltd v Cruiseco Ltd
    • United Kingdom
    • Chancery Division
    • 22 October 2018
    ...strand of Mr Richards' argument was based on the decision of HHJ Hacon in The National Guild of Removers and Storers Ltd v Statham [2014] EWHC 3572 (IPEC). Here Mr and Mrs Statham carried on a removals business and were members of the claimant, NGRS, until October 2010. When they ceased to......
  • The National Guild of Removers & Storers Ltd v (1) Central Moves Ltd
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    ...paid by Mr Rust on the user principle. He referred to and followed my judgment in National Guild of Removers & Storers Ltd v Statham [2014] EWHC 3572 (IPEC) in which I found that a typical member of NGRS paid annual fees of between £1,600 and £1,800 per annum. In that case the defendant bus......

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