Neutral Citation Number: [2011] EWCA Civ 618
Case No: A3/2010/1829
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM 
THE HIGH COURT OF JUSTICE, CHANCERY DIVISION
THE HON MR JUSTICE FLOYD
Case No HC08C00448
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 24/05/2011
Before:
THE MASTER OF THE ROLLS
LORD JUSTICE ETHERTON
and
LORD JUSTICE PATTEN
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Between:

	(1) BEST BUY CO. INC
(2) BEST BUY EUROPE DISTRIBUTIONS LIMITED	Appellants	
	- and -		
	WORLDWIDE SALES CORPORATION ESPANA S.L.	Respondent	

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Mr I Purvis QC (instructed by Field Fisher Waterhouse LLP) for the Appellants
Mr P Prescott QC & Mr J Hill (instructed by Kuit Steinart Levy LLP) for the Respondent

Hearing date: 5th May 2011
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Judgment

The Master of the Rolls: 
1.	This is an appeal brought by the first claimant, Best Buy Co. Inc, a US corporation, and the second claimant, its UK subsidiary, Best Buy Europe Distributions Ltd (together “the claimants”) against the dismissal of their claim against Worldwide Sales Corporation España SL (“the defendant”) for threats of proceedings for infringement of a trade mark, pursuant to section 21 of the Trade Marks Act 1994 (“the 1994 Act”). The alleged threats were contained in a letter (“the September letter”) sent by the claimants’ Spanish lawyers, Clifford Chance SL Abogados (“CC”), on 23 September 2008 to the appellants’ lawyers, Field Fisher Waterhouse (“FFW”).
The factual background
2.	The background to the September letter is as follows. The claimants developed plans for the second claimant to open a series of consumer electronics shops in the UK and in other countries in Europe under the Best Buy name, which the first claimant has used extensively for the same purpose in the USA. Indeed, since the alleged threats complained of in these proceedings, they have gone ahead with the opening of these shops, at least in the UK. The defendant is a Spanish corporation which owns a number of national and Community registered trade marks, many of which include the words Best Buy in combination with devices and other matter.
3.	Another subsidiary of the first claimant, Best Buy Enterprise Services Inc. (“BBES”), applied in the European Trade Mark Office (“OHIM”) for a Community trade mark incorporating the words “Best Buy”, and the defendant opposed it. The defendant’s opposition was based on two Community trade mark registrations which it owned, each of which combined the words “Best Buy”, with other wording and a logo including five stars. BBES also filed a revocation action at OHIM, on the grounds of non-use, against one of those marks, CTM 970707, which was registered in respect of products in Class 9. OHIM procedures involve a compulsory “cooling off period”, during which the parties are encouraged to try and settle their differences. The correspondence to which I now turn was exchanged during that period.
4.	On 28 August 2008, on behalf of BBES, FFW sent a letter (“the August letter”) by fax to the trade mark attorney acting for the defendant. The August letter claimed that BBES had a “significant reputation for the retail services that it provides under or by reference to the Best Buy mark”. FFW stated that investigations into the geographical coverage of the defendant's use of its marks had led them to believe that such use was predominantly within Spain. The August letter went on to say this: 
“Notwithstanding the above background, and without prejudice to [BBES’s] rights in the ‘Best Buy’ name, our client believes that there may be scope for co-existence within the European Union between their business of retail services and [the defendant’s] products branded under their Best Buy and Star Device mark. Indeed, there may even be commercial opportunities between our clients’ respective businesses.
In the circumstances, and to avoid any unnecessary expense within the opposition proceedings [BBES] would be prepared to agree to an extension of the cooling-off period to allow further time within which to discuss the terms of a possible co-existence agreement. We enclose an extension request. If you agree to extend this period please have this signed and sent to OHIM by the deadline of 29 August 2008.
We would be grateful if you could confirm that [the defendant] would be interested in discussing this further and look forward to hearing from you at your earliest opportunity.”
5.	The August letter enclosed a signed request as referred to in its penultimate paragraph, but there was no immediate reply. FFW sent a chaser on 9 September 2008, in which they asked again whether the defendant was prepared to discuss possible terms of a co-existence agreement. The reply came from CC in the September letter, which began by saying that it was sent in answer to the August letter “in the context of” the opposition to BBES's CTM application, and that its purpose was to reply to that letter “as well as making the following statements”. The September letter then set out particulars of a number of the defendant’s Spanish trade marks and CTMs. 
6.	The September letter went on to say that the defendant had “learned from several press articles” that BBES was planning to expand into the “European market including the Spanish one” in the near future. It then stated that the use by BBES of the Best Buy trade mark 
“in Europe and in particular in Spain, as well as in advertising and in the media, as at present, represents a conflict with the intellectual property rights duly registered by [the defendant] in Spain and Europe which would entitle it to take the appropriate legal action to defend its interests”.
7.	The September letter then pointed out that the defendant’s various Best Buy trade marks had been used on the Spanish and European markets so that Best Buy had become a distinctive and reputed brand. It then asserted that, in relation to the application to revoke CTM 970707 for non-use, there had been use of the trademark in Spain “and therefore in the European Community”, and that “the use of this trademark covers not only Spain, but also other European Union countries.”
8.	The September letter then stated that the use by BBES of the Best Buy trade mark “on the European market … would cause confusion and lead to an unacceptable association with [the defendant’s] products causing irreparable and irreversible damage which would undoubtedly entail the cessation of its activity”. Examples were given of how the coexistence of Best Buy shops “in Spain and other European countries” with products sold by the defendant under the Best Buy label would lead to confusion in Spain, and the extinction of its business.
9.	The last three paragraphs of the September letter read as follows: 
“If, taking into account the above, [BBES] were to remain interested in using the BEST BUY trademark in Europe my client would be prepared, taking up the proposal made by [BBES] in your fax of 28 August 2008, to reach a negotiated solution which would enable [it] to do so while at the same time compensating [the defendant] for the cessation of its activity that this would undoubtedly entail.
Until a negotiated solution is reached, we hereby request that [BBES] refrain from using the BEST BUY trademark in Europe, issuing any press articles or making any announcements of its imminent activities in Europe (news that has already caused confusion and concern among [the defendant’s] customers).
In order to ensure that [the defendant] is able to protect its rights in a proper fashion, we hereby request that, within a term of fifteen (15) calendar days as of the date of receipt of this letter, you reply to us in writing confirming (i) [BBES’] willingness to start a negotiation process with [the defendant] in order to attempt to find a negotiated solution to the conflict; or (ii) [BBES’s] undertaking to not use the BEST BUY trademark in Europe, or issue any news in the press or make any announcements of any imminent activity in Europe, or indeed use such trademark in any other way.”
10.	FFW replied by a letter dated 8 October 2008 (“the October letter”), stating that BBES was willing to commence a negotiation process in an attempt to resolve the matter amicably. The second paragraph of that letter reads as follows: 
“Notwithstanding the above, for the avoidance of doubt any negotiations are without prejudice to [BBES’s] position that its use of the BEST BUY Mark would not infringe [the defendant’s] rights on the basis that, among other things, [BBES’s] proposed use is not confusingly similar to [the defendant’s] registered marks and the words BEST BUY as depicted in [the defendant’s] logos are not distinctive.”
11.	The October letter requested details of certain matters referred to in the September letter “to enable [BBES] to properly assess the position for the purposes of negotiations”. CC replied on 16 October, providing, among other things, copies of correspondence between the defendant and its customers to support the suggestion that damage was being caused by the rumoured entry of BBES into the Spanish market. The documents were provided solely for the purposes of “these negotiations” and were to be kept confidential. 
12.	Discussions ensued and a meeting was held but did not produce an agreement. So, on 13 February 2009 the claimants issued the present proceedings without any prior warning. 
The statutory background
13.	Much of the 1994 Act reflects the EU Trade Mark Directive. Thus, section 10, which is concerned with infringement, follows the provisions of the Directive, and stipulates that infringement of a trade mark can only occur where a person uses the mark or a similar sign. Section 10(4) of the 1994 Act is in these terms:
“For the purposes of this section, a person uses a sign if, in particular, he –
(a)	affixes it to goods, or the packaging thereof;
(b)	offers or exposes goods for sale, puts them on the market … under the sign, or offers or supplies services under the sign;
(c)	imports or exports goods under the sign;
(d)	uses the sign on business papers or in advertising.”
14.	The present proceedings are concerned with section 21, which is a domestic provision that has no EU equivalent, and whose origin lies in the field of patents. During the middle of the nineteenth century, persons, often large companies, who claimed to be actual or potential patentees, would threaten, often without any justification, to initiate infringement proceedings against actual or potential customers of rivals in order to deter them from dealing with those rivals. In the absence of a statutory provision to the contrary, it would have been difficult for the rival or the customer to bring any claim based on such a threat, even if it caused them serious loss. Accordingly, section 32 of the Patents, Designs and Trade Marks Act 1883, now, albeit in modified form, section 70 of the Patents Act 1977, was enacted so as to provide an aggrieved person with a remedy for groundless threats of patent infringement proceedings. This remedy was then extended to trade marks.
15.	So far as relevant for the present proceedings, section 21 is in these terms:
“(1)     Where a person threatens another with proceedings for infringement of a registered trade mark other than—
(a)     the application of the mark to goods or their packaging,
(b)     the importation of goods to which, or to the packaging of which, the mark has been applied, or
(c)     the supply of services under the mark,
any person aggrieved may bring proceedings for relief under this section.
(2)     The relief which may be applied for is any of the following—
(a)     a declaration that the threats are unjustifiable,
(b)     an injunction against the continuance of the threats,
(c)     damages in respect of any loss he has sustained by the threats;
and the plaintiff is entitled to such relief unless the defendant shows that the acts in respect of which proceedings were threatened constitute (or if done would constitute) an infringement of the registered trade mark concerned.
(3)     …
(4)     The mere notification that a trade mark is registered, or that an application for registration has been made, does not constitute a threat of proceedings for the purposes of this section.”
The issues on this appeal
16.	The issues raised on this appeal are as follows:
i)	Does the September letter contain a threat of infringement proceedings within section 21(1); if so,
ii)	Does the September letter contain a threat of such proceedings in the English courts; if so,
iii)	Does the threat of proceedings fall outside the exclusions in paras (a) to (c) of section 21(1); if so,
iv)	Is the September letter precluded from being a threat by virtue of containing settlement proposals; if not,
v)	Are the claimants “persons aggrieved” and therefore entitled to relief under section 21?
At trial, Floyd J answered each of the first four questions in the affirmative. Thus, he answered the first three questions in favour of the claimants, but, as he answered the fourth question in favour of the defendant, he was able to dismiss the claim without deciding the fifth question.
17.	All five questions have been debated before us, and I turn to consider them in the same order as that in which they are set out above. Before doing so, it is convenient to deal with one point of principle, namely the proper approach to the interpretation of the September letter. The first four questions substantially turn on the question of what that letter means – does it constitute a threat of infringement proceedings, is the threat of proceedings in the UK, to what acts of alleged infringement does the threat go, and would the letter be understood to be “without prejudice”? 
18.	In my view, in so far as such question turns on the meaning of any particular passage in the September letter, it is to be answered by reference to what a reasonable person, in the position of the recipient of the letter, with its knowledge of all the relevant circumstances as at the date the letter was written, would have understood the writer of the passage to have intended, when read in the context of the letter as a whole. That approach is consistent with principle in the light of the recent authoritative decisions on the interpretation of contracts and unilateral documents - Mannai Investment Co Ltd v Eagle Star Assurance [1997] UKHL 19, [1997] AC 749, 775-780; Investors Compensation Scheme v West Bromwich Building Society [1997] UKHL 28, [1998] 1 WLR 896, 912-913; Kirin-Amgen Ltd v Hoechst Marion Roussel Ltd [2004] UKHL 46, [2005] 1 All ER 667, paras 27-34;  and Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1100, para 14.
19.	I very much doubt that it could be appropriate to take into account subsequent correspondence (e.g. the October letter) when interpreting the September letter. By definition, a later letter, like a later event, could not be known to either the sender or the recipient of the September letter. I suppose that the October letter, which was a reply to the September letter, might be said to be admissible as it shows how the recipient of the September letter understood it, which could in turn be evidence of how a reasonable person would have understood it, but, even if that argument was open in principle, it does not arise on the instant facts. 
Did the September letter contain a relevant threat?
20.	It is well established that it is unnecessary for a claimant in a case such as this “to prove that the defendant has in so many words said: ‘I intend to issue a writ against you for infringement …’. The terms of the Act are satisfied if the defendant in the action is proved to have asserted that he has legal rights in respect of the [intellectual property] and that he intends as against the [claimant] to enforce those rights” – per Romer J in John Summers & Sons Ltd v The Cold Metal Process Company 65 RPC 75, 95, quoting in turn from Bennett J in Wilson & Bates Ltd v Tilley Lamp Company 61 RPC 8, 11. The notion that section 21 does not require an intimation to be highly specific before it can constitute a threat is to my mind supported by the inclusion of subsection (4): if a threat was envisaged as having to be clear and express, there would have been no need for such a provision.
21.	I also agree with the Judge that the guidance given in L'Oreal (UK) Limited v Johnson & Johnson [2000] FSR 686, para 12, by Lightman J is helpful as to what constitutes a “threat” in this context: 
“The policy represented by the first statutory threats provision … was clearly to stop patentees who were (in Pope's words about Addison) ‘willing to wound but afraid to strike’ from holding the sword of Damocles above another's head: see Simon Brown LJ in Unilever PLC v Procter & Gamble Co. … In summary, the term ‘threat’ covers any information that would convey to a reasonable man that some person has trademark rights and intends to enforce them against another. It matters not that the threat may be veiled or covert, conditional or future. Nor does it matter that the threat is made in response to an enquiry from the party threatened ...”.
22.	In my view, the Judge was right in his view that, by the September letter the defendant did “threaten… another with proceedings for infringement of a registered trade mark”, within the meaning of section 21(1). The defendant stated that its registered marks were “reputed and distinctive”, that BBES’s actions were already “causing irreparable and irreversible damage” to the defendant, and that this would entitle the defendant “to take appropriate legal action to defend its interests”. A reasonable recipient of the September letter would take those statements in particular to indicate not merely that the defendant was asserting its legal rights, but that it was intending to enforce those rights against BBES. 
23.	The proposal of a negotiated settlement at the end of the September letter serves to support, rather than to undermine, the contention that infringement proceedings were threatened, not least because of the ultimatum contained in the last paragraph. The natural implication of that ultimatum is that, if one of the two stated options is not adopted in the next fifteen days, the defendant will “protect its rights in a proper fashion”, namely to take the obvious, indeed the only remaining, option, which would be to issue infringement proceedings. As the Judge said at [2010] EWHC 1666 (Ch), para 32, the fact that the threat can be said to have been “conditional upon BBES declining to negotiate and not ceasing to use the mark … is not an answer”. In terms of both ordinary language and the policy behind section 21, a person “threatens another with proceedings”, if he states or implies he will bring a claim if the other does not agree to proposed terms. 
Was the threat of proceedings in the UK?
24.	The Judge proceeded on the basis that a Community-wide trade mark could found the basis of a claim under section 21, but only if the threat concerned was of proceedings in the United Kingdom – [2010] EWHC 1666 (Ch), para 15. There is no challenge to that conclusion, and I consider that it is right.
25.	For the defendant, Mr Prescott QC contends that it would have been fanciful to think that a reasonable recipient of the September letter would have understood it to be a threat to issue infringement proceedings in the courts of all 27 member states of the EU, and that it would have been appreciated that any threat of proceedings was limited to Spain, where the defendant’s business was based, and which is referred to in many places in the letter.
26.	In my opinion, on a fair reading of the September letter, a reasonable recipient in the position of BBES would have understood it to threaten proceedings in the UK. It is clear from various passages in the letter, as quoted in paras 6-9 above, that the defendant’s claims and concerns extended throughout the EU, and were not limited to Spain. Its trade mark registrations were said to be “in Spain and Europe”, its use of those marks was said to be “in Europe and in particular in Spain”, the complaint of BBES’s use was “on the European market”, and of coexistence “in Spain and other European countries”, and each of the three paragraphs containing the settlement proposals related to use of the “trademark in Europe”. It seems to me, therefore, that, at least unless there is something in the surrounding circumstances to indicate the contrary, the threat was Europe-wide.
27.	Having said that, I accept that the notion that the defendant would have been understood to be intending to bring proceedings in the courts of all 27 EU member states would be fanciful. However, there are two answers to that point. First, if one makes a Europe-wide threat of proceedings, the fact that, when it eventuates, the claim is brought only in one member state does not mean that the threat of proceedings was not in each member state. A threat to do something is not the same as a promise to do it.
28.	Secondly, in this case, while it may arguably be fanciful to interpret the September letter as threatening proceedings in, say, Slovenia or Bulgaria, it is far from fanciful to conclude that it was intended to extend to courts in this country. This is not so much because BBES’s solicitors, FFW, to whom the September letter was addressed, were based in London: it is more that the parties would both have known that the Best Buy group were intending to launch their European business in the UK. 
29.	The September letter referred to BBES’s use of the mark “in advertising and in the media, as at present”, and the evidence before the Judge included newspaper reports about the first claimant’s acquisition of a 50% stake in the well-known retailer Carphone Warehouse, whose main centre of operations is the UK, although it also trades elsewhere in Europe. Those reports included statements on 9 May 2008 that the Best Buy group was using this stake “as its Trojan Horse into Europe” (The Independent), that “[t]he UK will be the launching pad” for “develop[ing] a meaningful business in Europe” (Financial Times), and that “Best Buy plans to roll out its electrical superstore model across Europe with its first site … in the UK” (Daily Telegraph).
30.	In these circumstances, the Europe-wide assertions, claims and threats in the September letter would, in my view, clearly have been understood by a reasonable recipient in the position of BBES to have been a threat (not a promise) of infringement proceedings in the UK.
Was the threat outside the exceptions in paras (a) to (c) of section 21?
31.	The argument of principle between the parties amounts to this: are the exceptions in paras (a) to (c) of section 21 to be interpreted according to their natural import, as Mr Purvis QC argues for the claimants, or relatively widely, as Mr Hill submits for the defendant. Thus, Mr Hill suggests that para (a) is not to be limited to the mere affixing of a mark, and that it extends to the use of the mark when so affixed. More centrally, he argues that para (c) applies to the present case, in that the activities upon which the September letter was focussing on were all concerned with opening shops, and reflects what was in the August letter from FFW, which only referred to BBES as a provider of services.
32.	I do not consider this argument is well founded. This is not the occasion to analyse every aspect of the ambit of the three paragraphs. On any view, they represent a rather disparate collection of exceptions. However, it seems to me that they must be construed by reference to their natural meaning and with the provisions of section 10(4) in mind. So far as their natural meaning is concerned, I can see no policy reason for leaning in favour of either a wide or a narrow approach when interpreting the three paragraphs. All the more so given that there appears to be no obvious policy as to the basis upon which the three categories of exception were selected. As to section 10(4), it is a provision concerned with the same notion – use of a sign or mark – in the same statute. The only reason advanced for not taking section 10(4) into account when interpreting section 21(1) is that the former section derives from the Directive whereas the latter does not. That argument does not hold water: the drafter of section 21 would have known what section 10 would or did contain, and therefore must be presumed to have taken it into account.
33.	 The notion that the words of paras (a) to (c) of section 21 should not be given a particularly wide meaning is supported by what was said in this court in Cavity Trays Ltd v RMC Panel Products Ltd [1996] RPC 361, 372-3 in relation to section 70(4) of the Patents Act 1977 (which has itself been amended by the Patents Act 2004). That case also makes it clear (in so far as it needed to be made clear) that where a threat extends to an excluded act (i.e. one within one of the paragraphs) but also goes wider, it is actionable at the suit of an aggrieved person.
34.	In the present case, while accepting that the threat in the September letter related to the use of the Best Buy mark in connection with services, it appears to me that, at the very least, the complaint about the use of the mark “in advertising and in the media” must bring that threat outside the ambit of para (c) of section 21(1). As a matter of ordinary language, use of the mark for advertising services which are available is not “the supply of services under the mark”, as no services are thereby being supplied. Further, section 10(4) distinguishes between a person who “offers or supplies services under the sign” and a person who “uses the sign on business papers or in advertising.” It therefore appears to me almost fanciful to think that, when the drafter of the 1994 Act, eleven sections later, simply referred to “the supply of services under the mark”, it was intended to extend to advertising. For similar reasons, section 21(1)(a) should, I think, be given a natural meaning, so that it is limited to the physical act of affixing or applying a mark. 
As the September letter referred to settlement, could it be relied on as a threat?  
35.	The Judge concluded that the September letter could not be relied on as a threat under section 21, because it:
“was part of a negotiating process and falls within the protection of the without prejudice rule. Having been invited by BBES to negotiate within the cooling off period, with BBES plainly asserting the strength of its own position, [the defendant’s] response was doing no more than the same thing in relation to its own rights. Parties are to be expected, if invited to negotiate, to start from a position of strength, and then to indicate where concessions might be possible. The [September] letter indicated, for example, that notwithstanding [the defendant’s] monopoly position in Europe under these trade marks, potentially giving it the right to exclude BBES altogether by litigation, it might be prepared to give up those rights in return for money. That is a concession, albeit a limited one, which in accordance with the public policy basis for the rule, attracts the protection of the privilege.” – [2010] EWHC 1666 (Ch), para 41.
36.	The Judge was correct in his approach in the sense that the court should “as a general rule” be ready to hold that a communication is to be treated as privileged from use in court, where “it is clear from the surrounding circumstances that the parties were seeking to compromise the action” – per Lord Griffiths in Rush & Tompkins Ltd v Greater London Council [1989] AC 1280, 1300. As Lord Griffiths made clear, this principle is based on the public policy of encouraging parties to settle their differences, which they are much more likely to do if they can negotiate without fear of any admission or concession being subsequently used against them in court. 
37.	The question in the present case is whether the September letter, or at least the last three paragraphs of that letter, would reasonably have been understood to have been intended to have this privileged status. It may seem at first sight that this is an over-simplification of the issue, given the significance of public policy in this field, but, on analysis, I do no think that it is. That is because the question I have suggested really incorporates the public policy issue, as it involves considering whether the parties would reasonably have thought that their negotiations in the correspondence in issue were sufficiently advanced to have moved into the “without prejudice” zone.
38.	In my view, the Judge reached the wrong conclusion on this issue. In addressing this question, I think that he may have concentrated on the last three paragraphs, without properly considering the September letter as a whole: in that sense, he let the tail wag the dog. The letter was concerned to set out, in some detail, the defendant’s objections to BBES’s actual and proposed use of the Best Buy mark, and the extent of the defendant’s interest in and rights over the use of that mark, as well as threatening BBES with infringement proceedings. The proposals at the end of the letter were, as I see it, a generally and unexceptionally expressed offer to negotiate a settlement of the issues, with two possible routes being raised.
39.	I accept that it may be that parts of a letter can be excluded from use in court by the “without prejudice” rule - see in particular per Hoffmann LJ in Muller v Linsley & Mortimer [1996] PNLR 74, 79 (although the correctness of his reasoning is open to some doubt as is demonstrated by some observations in Bradford & Bingley plc v Rashid [2006] UKHL 37, [2006] 1 WLR 2066 and Ofulue v Bossert [2009] UKHL 16, [2009] 1 AC 990). However, it appears to me that, if the main and earlier part of the September letter would not have struck a reasonable recipient as anything other than open, that rather undermines the view that the proposals at the end of the letter would have been understood to have been intended to be privileged from use in court, especially as there was no signal in the letter that the last three paragraphs were somehow intended to be treated differently. 
40.	As the Judge very fairly acknowledged, it could be said that “the real purpose of the [September] letter was to serve as a letter before action” – [2010] EWHC 1666 (Ch), para 42. And it is by no means unusual for such a letter to seek to initiate settlement discussions. Indeed, parties are often anxious both try, and to show the court that they have tried, from the start to settle their differences, as that is sensible commercially and it can be highly relevant when it comes to costs. (The absence of any “without prejudice” label on a letter from a solicitor would also normally be significant in itself - per Sir Andrew Morritt C in Prudential Assurance v The Prudential Assurance Company [2002] EWHC 2809 (Ch), para 18. However, that point may be somewhat weaker here given that the September letter was written by a Spanish law firm.)
41.	Quite apart from this, I do not consider that it is realistic to treat the last three paragraphs of the September letter as amounting to the sort of settlement proposal which should, on the grounds of the public policy principle described above, be treated as privileged from use in court. Rather than constituting an offer of proposals they amount to an invitation to treat, picking up on BBES’s similar invitation at the end of the August letter. Rather than constituting or including any sort of concession or admission, the three paragraphs merely underlined the defendant’s belief in its case and its determination to pursue it. As Mr Purvis QC points out, in Unilever plc v Procter & Gamble Co [2000] 1 WLR 2436, 2448-9, Robert Walker LJ described the “protection of admissions against interest” as “the most important practical effect of the [‘without prejudice’] rule.”  The defendant plainly has no need of such protection in relation to anything stated in the last three paragraphs of the September letter.
42.	In these circumstances, I think the Judge was wrong to hold that the September letter was privileged from use in court. I should add that, even if I had agreed with his conclusion that the last three paragraphs of the September letter brought the “without prejudice” rule into play, I would, at least as at present advised, nonetheless have held that the letter could be relied on to support the claimants’ threat claim. Because it is unnecessary to my conclusion, and because it is a provisional view, I shall give my reasons for this very shortly.
43.	It is plain that, even a letter which is bona fide marked “without prejudice” can be relied on in court in some circumstances. Thus, in Re Daintrey [1893] 2 QB 116, it was held that an undoubtedly “without prejudice” letter could be relied on in court to establish an act of bankruptcy on the part of the writer. Albeit that Vaughan Williams J’s reasoning appears to me to amount to little more than assertion, the decision itself has been cited with express or implied approval in Unilever [2000] 1 WLR 2436 and in Ofulue [2009] 1 AC 990.
44.	It may be that the decision in Daintrey [1893] 2 QB 116 rests on the notion that the “without prejudice” rule can only be asserted to prevent a communication being relied on as an admission or a concession as I think Hoffmann LJ in Muller [1996] PNLR 74, 79 would support. However, as mentioned, that is a difficult and controversial area, in which it is unnecessary to tread further in this judgment. In my view, at least one reason Daintrey [1893] 2 QB 116 was rightly decided is that, given that the “without prejudice” rule is based on public policy, it has to yield on occasions to another rule or principle which may apply. 
45.	In Daintrey [1893] 2 QB 116 the “without prejudice” rule could not prevail over the statutory bankruptcy principles. In this case, by the same token, I incline to the view that the rule would not have prevailed over the clear statutory policy of the threats jurisdiction contained in section 21. If, by writing a genuinely “without prejudice” letter, one could with impunity make threats which otherwise would clearly fall within the ambit of section 21, it would render that section close to being a dead letter, except for the poorly advised.
Are the claimants “person[s] aggrieved”? 
46.	The argument raised by the defendant below was that there was no evidence of any real damage having been suffered by the claimants as a result of the threats in the September letter. Subject to a fresh point taken by the defendant for the first time on this appeal, there is a short answer to this argument. The claimants were the direct recipients (albeit through their solicitors, FFW) of the threat, and therefore they do not need to show any damage, in order to establish that they are “aggrieved”: see Brain v Ingledew Brown Bennison and Garrett (No 3) [1997] FSR 511, 520-1. 
47.	That should be enough to dispose of this argument, but the defendant now says that it is necessary for the claimants to establish that they have suffered some damage is that they were not the primary target of the threat in this case, as the September letter was sent to FFW as solicitors to BBES, not to the claimants. Accordingly, it is said, the reasoning of this court in Brain v Ingledew Brown Bennison and Garrett (No 2) [1996] FSR 341 requires the claimants to show they suffered damage. 
48.	It appears that the fact that the September letter was written to a different member of the Best Buy group was not taken below. Indeed, in the Defence, the defendant pleaded that the September letter was “sent in response to [the August letter] sent on behalf of the claimants”. If the point had been pleaded or argued below, further evidence may have been adduced or BBES may have been added. Accordingly, I would be disinclined to permit the defendant to take this point. 
49.	However, even if it were open to the defendant, I doubt that there would have been anything in it. On the evidence known to the defendant and the companies in the Best Buy group, it appears to me that BBES was, in practice, being treated as the agent of any company in the group which was proposing to use the mark in Europe. If for instance, the second claimant had been sued by the defendant for infringement, it would be hopeless for the second claimant to say that it had received no warning from the defendant. Both parties would have treated the correspondence as sent or received by BBES on behalf of the companies in the Best Buy group intending to trade in Europe. 
50.	Quite apart from that, there was evidence given to the Judge by Mr Nelsen, a senior vice-president of the claimants, that the defendant’s threats were causing the claimants “considerable concerns and uncertainties … in making any decisions in respect of the second claimant’s [UK] business operations”, which operations he described in some detail. He also explained that the threats had caused the claimants to consider more carefully “the contents of their press releases”, and “any activities or proposed activities in the [UK] and elsewhere in Europe that may involve the deployment of the BEST BUY mark”.   
51.	I accept that this evidence is somewhat exiguous, but it is not hard to accept that a company with ambitious plans, which had already been started, to expand into the UK and elsewhere in Europe using a particular mark will be affected by a threat that the use would infringe a potential competitor’s established trade mark rights and goodwill. In my view, if it is necessary for the claimants to establish a prima facie case for having suffered some damage as a result of the threat in this case, then they have done so.
Conclusion
52.	In these circumstances, I would allow the appeal. Counsel can no doubt agree an appropriate form of order.
Lord Justice Etherton:
53.	I agree.
Lord Justice Patten:
54.	I also agree.