WWF World Wide Fund for Nature (formerly World Wildlife Fund) v World Wrestling Federation Entertainment Inc.
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE PETER SMITH |
| Judgment Date | 16 February 2006 |
| Neutral Citation | [2006] EWHC 184 (Ch) |
| Docket Number | Case No: HC0000030 |
| Court | Chancery Division |
| Date | 16 February 2006 |
[2006] EWHC 184 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr Justice Peter Smith
Case No: HC0000030
Mr Christopher Carr QC and Mr Guy Hollingworth (instructed by Kirkpatrick & Lockhart Nicholson Graham LLP) for the Defendant
Hearing dates: 16th, 17th, 18th and 20th January 2006
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Peter Smith J :
INTRODUCTION
This is a hearing of a preliminary issue directed by an order by Patten J on 23 rd March 2005 as to the basis of the assessment of damages as a result of the order of Jacob J made on 1 st October 2001 when (inter alia) he ordered (paragraph 3) that "there be an inquiry whether the Claimants have sustained any and if so what damages by reason of the Defendant's breaches of the Agreement and the Letter Agreement referred to therein such inquiry to be referred to a Master who shall assess any such damages and the interest (if any) payable thereon (or adjourn such assessment to the judge, as he thinks fit)…"
The Agreement is an agreement ("the Agreement") dated 20 th January 1994 between WWF-World Wide Fund for Nature (formerly World Wildlife Fund) (a Swiss foundation) ("the Fund") and Titan Sports Inc ("Titan") known at the time as World Wrestling Federation Entertainment Inc ("the Federation").
THE PRELIMINARY ISSUE
The preliminary issue to be decided is:-
"in the inquiry as to damages ordered by Jacob J on 1st October 2001 are the Claimants entitled to claim damages in the form of a reasonable payment as a quid pro quo for the Claimants relaxing their right under the Agreement as alleged in paragraphs 6–8 of the amended Claim for Damages?"
By the same order Patten J granted the Claimants permission to amend the Claim for Damages by adding new clauses 8(a-d) setting out the basis for the claim for a reasonable payment.
That amendment was subsequent to correspondence between the parties before the hearing and I accept that the amendment was not opposed on the basis it was without prejudice to any arguments the Federation might raise on this Inquiry which could have been made in opposition to the Application for Amendment.
In addition the Inquiry has not been limited to the question posed by Patten J but has extended to an examination of possible defences that might be used to eliminate or reduce the amount of damages which would otherwise be payable.
Preliminary issues have to be considered very carefully. Too often they are "treacherous shortcuts" and ought to be confined to cases where the facts are complicated and the legal issue short and easily decided with cases outside this guiding principle being exceptional see Tilling v Whiteman [1980] AC 1 per Lord Scarman (page 25) and Lord Wilberforce (page 18) respectively.
That warning is well demonstrated in my view by the present case. First, the preliminary issue was not confined to the identified preliminary issue in the order of Patten J. Second, evidence was led by both parties but both parties in an exchange of correspondence believed they had an understanding which would shorten the preliminary issue and led both sides not to seek to cross examine the other. This led to a difficulty which only really appeared on day 3 of the Preliminary Issue.
The Federation by its evidence (of Mr Kaufman in his sixth witness statement and Ms McMahon in her second witness statement) adduced evidence on behalf of the Federation to show the following:-
That the Federation had never deliberately broken the agreement.
That its profits were derived from their efforts and have nothing to do with acting in breach of the Agreement.
That the Fund had adduced no evidence to show any dilution of its reputation by being directly or indirectly associated with the Federation.
That the Fund ought to be barred from bringing the present claim because of its delay.
None of these matters of evidence was expressly challenged by the Fund. Nevertheless its case is that it disputes all of these matters. Faced with this I as a trial judge of the Preliminary Issue was faced with a conflict of testimony which neither side sought to resolve by cross examination (which is the traditional way of enabling the court to determine conflicts of testimony). I did not see how I could do that unless the hearing was substantially lengthened and the parties presented their witnesses for cross examination so that I could then evaluate the evidence. That would have meant in my view that the Preliminary Issue would have virtually become the trial to a substantial extent. I therefore indicated at the third day that I would not resolve any factual matters which were in dispute and all of the above were in dispute.
I did indicate however that if any of the matters was not sustainable for other reasons (by law or as a result of earlier determinations) I would determine them. Equally if I determined that the Fund ought to have challenged the Federation's evidence (especially in relation to profits and the attribution of the same) I would consider whether or not I would accede to an application by the Fund for an adjournment of the inquiry to consider that further.
FACTUAL BACKGROUND LEADING TO THE DISPUTE
The Fund is a well known charity concerned with a broad range of environmental conservation. The name and initials "WWF" were extremely well known worldwide and had enormous recognition. It was founded in 1961 as the World Wildlife Fund. To enhance its image and to raise money it engaged in a number of merchandising activities through gifts, catalogues and licensing. All the goods were consistent it is alleged with the Fund's "image". I should say in that context the Federation disputes that drawing to my attention the fact that the Fund for example is willing to allow its panda logo and the Initials to be associated with the sale of alcohol, Coca Cola and various other matters which "might tarnish" the Fund reputation. These are summarised in paragraphs 73–75 in Mr Kaufman's sixth witness statement.
None of these matters is for determination before me for the reasons already given in this judgment.
The Federation was originally known as Titan Sports Inc and was an American company which was the successor in business to the World Wrestling Federation. That organisation used the initials WWF in about 1979 and until the late 1980s, its activities were broadly confined to the United States. Its core business was organisation and promotion of live wrestling entertainment events. By the 1990s it was engaged in the sale of magazines, videos and associated merchandising.
As part of its business operation the Federation has since at least 1983 adopted and was using a logo being a stylised version of the letters WWF and the use of this logo in connection with title World Wrestling Federation educated a large section of the interested public that it was WWF. It was also using the initials WWF orally and in other ways which involved ordinary type script. By the late 1980s its use had spread to Europe (probably with the expansion of satellite television).
The Fund did not object initially to any of this use but when the Federation made a US trade mark application for the initials WWF it objected. The objection was resolved by a Letter of Agreement of 12 th September 1989 which placed a minor restriction on the Federation's use of the Initials.
Conflict on an international scale began to emerge. The Federation began applying for trade marks outside the United States. In some cases national trade mark offices raised objections based on the Fund's earlier rights; in other countries the Fund opposed or took preliminary steps to oppose. In most cases it was the Fund which was objecting to registrations but in some cases it was the Federation opposing the Fund's application. Proceedings were being threatened by 1993 in a number of countries and the Fund eventually took action and obtained an interim ex parte injunction against the distributor of the Defendant's magazine in Switzerland entitled "WWF-MAGAZIN". Settlement negotiations ensued and they led ultimately to the Agreement.
TERMS OF THE AGREEMENT
It is important to emphasise that the Agreement did not preserve for the Fund an exclusive right to use the initials "WWF" ("the Initials"). It did however contain substantial restrictions under clause 2.1.
By that clause the Federation undertook forthwith to cease and thereafter to refrain from using or causing to be used the Initials whether in printed or written or other visual form in any country of the world in or for the purpose or in connection with its business. It also agreed immediately to cease and thereafter refrain from using or causing to be used the Initials orally in any language in any country of the world in or for the purpose or in connection with the promotional sale or in any other connection with any goods whatsoever; to cease and thereafter to refrain from the encouragement directly or indirectly of support including donations or otherwise for charitable or similar purposes: and to cease and thereafter to refrain from the promotion or sale of or in any other connection with services other than those permitted. Those permitted were the Federation's logo and any other item permitted under 2.1(6). That latter provision permitted occasional use of the Initials but only in the English...
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