England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE PUMFREY)

		Royal Courts of Justice Strand London, WC2 Friday, 22nd November 2002

1. LORD JUSTICE ALDOUS: This is an application by Mr Phillips, on behalf of Models 1 UK Ltd and Studio 4, for permission to appeal and a stay of execution of the judgment of Pumfrey J given Wednesday 9th October 2002. In that judgment he refused Mr Phillips permission for an extension of time to file an acknowledgement of service and ordered summary judgment in favour of the respondents in a trademark infringement and passing off action.
2. The background facts can be shortly stated. There are two modelling agencies, the first is Models One Ltd, which is the claimant. It is an established company, having been formed in, I think, 1987. It has a turnover of about £2 million and has on its books a number of extremely well-known models. The second agency with which I am concerned is Models 1 UK Ltd. That is a company which is owned by Mr Kevin Phillips. He told me today that he acquired the company and registered it at Companies House and there was no complaint made. It has an associated web site -- or had any how at that time -- www.models1UK.com which was established in October 2001.
3. Upon learning of the existence of the web site, the claimants objected to the existence of Models 1 UK Ltd. It appears from the judgment of the judge that Mr Phillips was aware of the existence of the claimants some time in October 2001. His first web site host removed the web site in December 2000. However, that did not prevent Mr Phillips continuing to use that name as a trading name.
4. The result was that proceedings were served on Models 1 UK Ltd on 26th July 2002, and subsequently on Mr Phillips and Studio 4 on 19th August 2002. It follows that the notice of appearance should have been served by the Models 1 UK company on or before 9th August 2002 and by Mr Phillips and Studio 4 by 2nd September 2002. They were not, but an application for an extension of time was completed by Mr Phillips on behalf of all three of the defendants and sent to the court on 9th December 2002.
5. The allegations made in the particulars of claim were of infringement of two registered trademarks. Firstly number 1317884, registered for the words "Models 1". It was registered as of 4th August 1981 in respect of model agency services and employment agency services all relating to models in class 35. It was also registered as a community trademark number 899534 for the same services. It was alleged that those trademarks had been infringed by Mr Phillips and the other defendants by use of the domain name on their web site, the name Models 1 UK and the name Models 1 UK Ltd. It was also alleged that the use constituted passing off, having regard to the extensive reputation which the claimant had built up since the late 1980s.
6. When the matter came before the judge he considered the merits of the case. He held that the sign Models 1 UK Ltd infringed the registrations pursuant to section 10(1) of the Trademarks Act 1994. That section is concerned with where there is identity of mark and identity of goods. The judge said this:

"So far as trade mark infringement is concerned the registered marks are not identical to the mark in its form in which it is predominantly used, that is to say as Models One, two words. It seems to me absolutely plain beyond any shadow of doubt that there has nonetheless been use of this mark over the whole of the relevant period either as a variant or, as Mr Cuddigan put it, by way of oral use where you cannot tell the difference between Models One (word) and Models 1 (digit). Either way there has clearly been use of the mark over all the relevant period. ...

A registered trade mark is infringed by virtue of section 10(1) of the Trade Marks Act 1994 if the defendant 'uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered.' Mr Phillips' company name is Models 1 (digit) UK Limited and the company trades as Models 1 UK. Again the 1 is a digit. This mark is identical to the registered mark subject only to the additional matter consisting of the initials UK. This addition falls to be disregarded on the principles which have been repeatedly stated in the cases and which I summarised in a case called Decon v Fred Baker Scientific Ltd comparatively recently. Mere additions which do nothing to change the identity of the mark are to be disregarded when the identity is to be considered for the purposes of section 10(1). I have no doubt that this mark is infringed by the use of the sign Models 1 UK. It seems to me to be clear beyond peradventure."

7. The judge went on to consider whether there was infringement under section 10(2) of the Act. He held that if he was wrong as to identity of marks, there was clearly infringement under section 10(2). He said there was no conceivable defence. He said this:

"If I should be wrong it changes nothing, since by section 10(2) of the Act a mark is equally infringed if '(b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered.' If I should be wrong on identity surely this mark is similar for all purposes. Either way therefore there is a clear case of infringement. I can see no conceivable defence to the allegation of trade mark infringement."

8. The judge then went on to consider the case of passing off. He said:

"The classical trinity of elements for a passing off action -- goodwill, deception and damage -- seem to me to require answer from Mr Phillips by either demonstrating that the Claimants own no goodwill or that there can be no deception, which I simply do not accept, or that the Claimants suffer no damage, which obviously they will when there is deception."

9. The judge considered the evidence and concluded that there was passing off. He then considered whether it would be appropriate, in those circumstances, to grant an extension of time for Mr Phillips to put in an acknowledgement of service. He said:

"In those circumstances what is to be gained by permitting this action to proceed? It is a basic requirement of the law that a defendant has an opportunity to put his case in answer to a claim of this description provided that he has an answer. Any civilised legal system has a system for filtering out hopeless claims and hopeless defences. Everything which has been said to me by Mr Phillips has gone, I have to say, to confirm the impression that the only defence which he wishes to advance is hopeless, and in those circumstances I am going to grant summary judgment both for the trade mark infringement and for passing off against him and his company. I should add that the final Defendant, Studio 4, is in fact a trading name of Mr Phillips and is the same Defendant."

10. Mr Phillips contends in his application for permission that, firstly, he was given inadequate time to prepare his defence, on the ground that he was given a huge bundle of documents when he arrived at the court. He also contends that he was denied the opportunity to call any witnesses in respect of the allegations made against him, and in particular the allegations of impropriety that were made. He also contends in his application that the name Models 1 UK Ltd is not substantially similar to Models One Ltd and that he does not infringe the trademarks or passing off.
11. It is difficult from the papers to decide as to whether Mr Phillips had an opportunity to prepare his defence. However, it is relevant -- he has had by now plenty of time to consider his position -- to consider whether he in fact does have a defence. He has come before me today and has told me that he can accept that he could have infringed the trademarks. He says that he was an innocent party. He purchased the domain name in good faith, and obtained registration of the company without objection by the Registrar of Companies. He has told me that he believes the law should be changed to protect people like him who did not know the law.
12. He may be right as to that, but it is of no importance to this application. If in fact he has infringed the trademarks, then he has no defence to the trademark action.
13. In my view it is quite clear, as the judge held, that there has been use of the sign and infringement under the Trademarks Act 1994. The judge was an extremely experienced judge on trademarks and passing off. It was his particular speciality, and in fact it is mine as well. I have no doubt that Mr Phillips and the other defendants have no defence to the trademark action. In those circumstances it would not be right to allow this action to continue.
14. I come next to the allegation of passing off. Mr Phillips is not prepared and does not accept that there has been passing off. He has put before me further evidence to establish, firstly, that he is running a reputable business and, secondly, that he has made it clear at all stages that his company, Models 1 UK Ltd, has no connection with the claimant. That of course would not be a defence under the Trademarks Act 1994, which gives to the proprietor the exclusive rights to the trademarks: see section 9. Thus the use of the mark in circumstances set out in section 10 amount to an infringement, whether or not there is a statement that the two are not connected.
15. Further, such a statement does not avoid passing off in a business such as this, where recommendations are made by word of mouth, because it does not control the way others refer to the three defendants. A disclaimer such as this does not get through to people who are making verbal recommendations. Further, it does not distinguish Mr Phillips' company from the company of the long-established reputation. Anybody reading it may not know which is the long-established company. Mr Phillips tells me that he puts into his web site that it is only a recently formed company. Again, that has the difficulty because the reputation of the claimants is sometimes imperfect in the minds of other people.
16. In my view, no defence to the action for infringement of registered trademark and passing off has been established, even as of today. In those circumstances, it would not be appropriate to give permission to appeal.
17. I just mention this. Mr Phillips is very concerned about the allegations of impropriety that have been made in the evidence. I think at the heart of his application is the wish to be able to refute them in a court of law, and he believes that the summary judgment which has been given against him has precluded him from doing so. It is true that summary judgment has prevented him in this action from refuting the allegations that have been made. However, this action is not a vehicle in which it would be appropriate for Mr Phillips to seek to establish his reputation. This is an action for infringement of registered trademark and passing off. It is not an action in which allegations of impropriety are essential to the cause of action. In those circumstances, his concern does not give grounds for permission to appeal.
18. Mr Phillips tells me he is about to start an action for libel and that may be the vehicle in which he can refute the allegations that have been made against him. In my view the further evidence that he has put before me and the evidence that was before the judge are such that they do not establish a defence to this claim. In those circumstances, he does not stand a real prospect of succeeding on appeal and the application must be refused.
ORDER: Application for permission to appeal refused. (Order not part of approved judgment)