Passing off - The National Guild of Removers & Storers Ltd v Luckes and Others
Intellectual Property Enterprise Court (HH Judge Hacon) The National Guild of Removers & Storers Ltd v Luckes and Others  EWHC 3176 (IPEC) (7 Dec 2017)
Yesterday I discussed Judge Hacon's judgment in The National Guild of Removers & Storers Ltd v Central Moves Ltd and Another  EWHC 3175 (IPEC) (7 Dec 2017) in Damages for Passing off - The National Guild of Removers & Storers Ltd. v Central Moves 7 Jan 2018 NIPC Law. That was an appeal by the National Guild of Removers & Storers Ltd. ("NGRS") from District Judge Vary's judgment awarding £1,275 damages against a former director of a dissolved company for passing off and costs on the small claims track scale. On the same day as he heard the appeal in Central Moves, His Honour heard The National Guild of Removers & Storers Ltd v Luckes and Others  EWHC 3176 (IPEC) (7 Dec 2017) which was another appeal by the NGRS against the judgment of another district judge. In that case District Judge Hart had awarded damages of £2,000 and costs on the small claims track scale against a removals company and its directors for references to the NGRS on the defendant company's website and the company's entry in the Really Moving website. The NGRS contended that the damages and costs were far too low while the removers cross-appealed against the finding of liability.
In Damages for Passing off - The National Guild of Removers & Storers Ltd. v Central Moves I wrote:
"His Honour Judge Hacon described the NGRS as "a trade body which promotes the interests of those trading in the removal and storage industry". On the Removers Membership Benefits page of its website, the NGRS lists some of the benefits of membership, one of which is
"Unlimited use of the Guild and RIOS name and/or logo on your stationery, vehicles, website and advertisements!"
The NGRS charges a fee for membership. Should it not be renewed, the NGRS requires its former member to remove all references to its membership from its website, directory entries, advertisements and other promotional materials forthwith. In a number of instances, the NGRS has sued former members that have failed to do so promptly as well at least one removal and storage businesses that never belonged to the guild at all."
In my article I discussed some of the cases that the NGRS had brought against such defendants. In the first of those cases, National Guild of Removers & Storers Ltd v Silveria (t/a C S Movers)  EWPCC 15 (12 Nov 2010), His Honour Judge Birss QC as he then was awarded pretty hefty damages but his successor Judge Hacon had awarded much smaller amounts in subsequent cases with the apparent approval of the Court of Appeal.
In Luckes' case, the defendants were a small removals company and its directors, Mr and Mrs Luckes. The company had been a member of the NGRS between 2006 and 2009. They advertised the company's services on the company's own and the Really Moving websites mentioning on both sites that the company was a member of the NGRS. They failed to expunge those references to the NGRS when the company ceased to be a member until their failure was pointed out to them by the guild's solicitors. Following that complaint they arranged for the references to be removed from both websites in January 2010. A reference to the NGRS reappeared on the Really Moving website a few months after it had been removed but neither side noticed the error until March 2013 when the NGRS spotted it. Nobody seemed to know how that error had occurred. The NGRS also found a reference to the guild on the company's website which seems to have reappeared when the page that had previously been removed was accidentally reloaded by the company's server. The directors learned about the reloading in 2012 and instructed the company's web designers to "amend" the page but not specifically to remove the reference to the NGRS. The NGRS's solicitors complained of the reappearance of the references to their client on both sites on 12 April 2013 and the defendants removed the references from both on 17 April 2013.
Notwithstanding the prompt removal of the offending reference the NGRS issued proceedings for passing off on 13 June 2013. Those proceedings were allocated to the small claims track and came on for trial before Judge Hart. The learned district judge found that the defendants were not liable for the misrepresentation of continued membership that had appeared on the Really Moving website but that they were liable for the reappearance of the reference on the company's own site. All parties agreed that damages should be awarded on the "user" principle following Judge Hacon's decision in The National Guild of Removers & Storers Ltd v Statham and Others  EWHC 3572 (IPEC) (5 Nov 2014) rather than the contractual licence basis upon which Judge Birss QC had awarded damages in Silveria. As the NGRS would have granted a licence to the defendants for one year for a fee of £2,000 Judge Hart based her award of damages on that sum. She also awarded costs on the small claim scale from the issue of proceedings and not from the date of transfer to the small claims track.
The NGRS appealed against
- Judge Hart's finding that none of the defendants was liable for the reappearance of the reference to the guild on the Really Moving website,
- the amount of damages that had been awarded and
- the award of costs on the small claims track from the issue of proceedings.
Passing off required a positive act on the part of the defendants and there could be no positive act without knowledge of the misrepresentation. He rejected any notion of a duty to monitor the site either by reference to trade mark law, agency or otherwise. Those issues had not been pleaded or developed properly in argument.
He upheld the finding that the company was liable for the misrepresentation of a continuing connection with the NGRS as it had been made aware of the reloading of the old page in 2012 but he could find no basis for holding the directors as jointly liable for the misrepresentation as they did not know that the offending reference had reappeared. To that extent, the cross-appeal succeeded.
As the claimant had agreed to an award of damages on the "user principle" at trial it could not reopen the issue on appeal. Even if it had been allowed to do so, Judge Hacon would have ruled against it for the same reason that he had dismissed the appeal in Central Moves (see Damages for Passing off - The National Guild of Removers & Storers Ltd. v Central Moves 7 Jan 2018 NIPC Law),
Similarly, he found that the award of costs fell within the discretion of the District Judge for the reasons he had set out in Central Moves and that she had exercised her discretion correctly.
Although this appeal raised different issues from those in Central Moves it is convenient to read the two decisions and my commentaries on those cases together. Perhaps the key point to remember is that all IP rights matter and that a misrepresentation or the reproduction of a photo in which copyright subsists comes at a cost. But it is not supposed to be an exorbitant cost. The first of the principles that Judge Hacon listed at paragraph  of his judgment in Statham is that damages are meant to be compensatory. Another point that has occurred to me more than once in reading these NGRS cases over the years is that there are three elements of an action for passing off and the it does not always follow that a misrepresentation leads to confusion or deception and damage. In some of the NGRS cases it has crossed my mind that the tribunals have been a little too ready to find liability.
Anyone who wishes to discuss this case or passing off in general with me is welcome to c all me on +44 (0)20 7404 5252 during office hours or send me a message through my contact page.