England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE PATENTS COUNTY COURT
MR RECORDER DOUGLAS CAMPBELL
[2012] EWPCC 28

		Royal Courts of Justice Strand, London, WC2A 2LL
		6th June 2013

Lord Justice Lloyd:

Introduction and summary

1. The Claimant sells skin care products using the word mark LUMOS. The Defendants sell nail care products using the same mark. The Claimant brought these proceedings alleging passing-off by the Defendants. The judge held that the Claimant had proved that it had established a goodwill for its business to which its mark related as at the critical date, October 2010. He held that, if the Defendants had represented their products as being those of the Claimant, or as being associated with the Claimant in the way of business, then it would have been likely that the Claimant would have suffered damage to its trade reputation. However, he held that the Defendants had not made such a misrepresentation, and he therefore dismissed the claim. The Claimant appeals, with permission to appeal granted by myself. As below, the Claimant was represented on the appeal by Mr Richard Hacon and Mr Chris Hall, and the Defendants by Ms Denise McFarland.
2. The claim came to trial in the Patents County Court on 20 and 21 March 2012, before Mr Recorder Douglas Campbell. He gave judgment on 10 May 2012; his judgment is available as [2012] EWPCC 22. After submissions on consequential matters he made his order on 13 June 2012, dismissing the claim and ordering the Claimant to pay the Defendants' costs, which he assessed summarily.
3. I have come to the conclusion that the judge was wrong to dismiss the claim. I would allow the appeal and grant an injunction to restrain passing off by the Defendants. My reasons follow.

The elements of the tort of passing-off

4. The three elements which a claimant must prove in a passing-off action were summarised by Lord Oliver in the Jif Lemon case, Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491 at page 499, as follows:

"First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get-up" (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff."

5. Only the second of these three elements is at issue on this appeal.

The facts

6. The Claimant is owned and run by Mr Nicholas Brann and his wife Mrs Antonia Brann. The company sells four specialist anti-ageing products which retail at prices between £40 and £100 per bottle. The Claimant has been selling two of these products on the market since 2007, and the others since later dates. The Defendants launched their nail care products under the same mark in October 2010 in the UK, which is why that is the critical date. The Defendants distribute other nail care products under other marks as well. The Defendants use a slightly different version of the LUMOS mark from that of the Claimant, but the judge held that this was not such as to differentiate their products from those of the Claimant.
7. The Defendants' products are much cheaper than those of the Claimant, selling at around £10 per bottle, and are aimed at a mass market. There are two such products: Lumos High Speed Topcoat and Lumos Instant Impact Bottomcoat. The products of both Claimant and Defendants are used in beauty salons in treating the customers attending such salons. The Claimant's products are also used in aesthetic clinics. Thus, each has trade customers, namely those who buy the products for use in such establishments. Sales are also made by the salons to their customers, for use at home. In addition, the Claimant's products are available for sale in at least one retail establishment in London, Wholefoods Market in Kensington, as well as on the internet. It seems that sales of the Defendants' products to retail customers took place through salons, with very few sales made in any other way. In one way or another, the products of both Claimant and Defendants reached both professional and retail customers.
8. There was evidence that products of both the Claimant and the Defendants had been available in the same salon, used and on sale at the same time, but these were products of the Defendants other than those sold under the mark LUMOS. The Claimant's sales were on a relatively small scale, of the order of £2,000 per quarter from early 2008 to September 2009, rising to £10,000 per quarter by September 2010. The vast majority of these sales were to the trade, including salons, clinics and the Wholefoods Market. As at October 2010 the Claimant had sold to 37 outlets and by that date it was still selling to 25 outlets.
9. The judge accepted that there was a degree of overlap in terms of the outlets through which the respective products were sold. In November 2011 the Claimant's products were being used in 20 aesthetic clinics, and in 21 beauty salons that treated nails. In seven of those 21 salons products of the Defendants were also stocked, though, as I say, not the Defendants' LUMOS products.
10. Mrs Brann gave evidence of a visit which she made to a salon in St John's Wood in July 2011, which had recently decided to take some of the Claimant's products. She went in order to educate the staff as to the use of the products and as to how to sell them to customers. She found that the salon had placed advertising material for the Claimant's products in its window, next to other material advertising nail care products or services of the Defendants, though not those sold under the LUMOS mark, but rather under marks CND (short for Creative Nail Design) and Shellac. Another poster in the same window advertised Essie products, which is a nail care product or service of a company in the beauty industry which uses a brand name Essie for its beauty products, of which a director, Mr James Crook, gave evidence for the Defendants. A picture of this shop window is in evidence. This therefore is a clear example of the promotion and sale, in the same salon, of the Claimant's high-end skin care products and of nail care products or services, including those of the Defendants, albeit not those sold under the LUMOS mark.
11. The Defendants' products were launched in the UK by advertisements in magazines aimed at the beauty trade in January 2011 and then at a trade fair in February 2011. The advertisement in Professional Beauty was seen by Ms Sonia McMillan, of Cloud Nine Day Spa, who had been a customer of the Claimant since September 2010. She sent an email to Mr Brann on 18 January 2011, in the following terms:

"Hi Nick

We are hoping to go live with our website to sell you products. My concern is having discussed that you only have 4 products you seem to have a nail product range. (As per Lumos^TM in professional beauty) Is this a different branch of the company? When I spoke to you last year you said you were thinking of including a cleanser and toner as a possibility but even in this climate might prove a waste so it was not something that was in the pipeline. Where do the nail products come in to it? I look forward to hearing from you but please be aware I am on holiday for 3 weeks as from this weekend

Many thanks and kind regards

Sonia"

12. The advertisement that prompted this message does include the word LUMOS in a prominent position, as well as photographs of the Defendants' two LUMOS products. It also features (with photographs and names) Jim and Linda Nordstrom, the individuals behind the Second Defendant company, and it has the name of the Second Defendant and its separate logo which features the letters F and N, and, less prominently, the name and logo of the First Defendant. Despite all this, the advertisement led Ms McMillan, who knew the Claimant's products as a trade customer, to say that the nail care products seem to be part of the Claimant's product range.
13. After the trade fair, Mr Brann received another communication, from Ms Shadi Danin, another customer of the Claimant based in Brighton, as follows:

"Subject: Professional Beauty

Good morning Nicholas

I was very surprise to see Lumos nail products at the beauty exhibition at Excel.

As a Lumos skincare product is a cosmetutical product and quite expensive and the Lumos nail products sold at nine or ten pounds.

Could you please let me know what is going on and I know it got nothing to do with your company because I ask, but I am not very happy to see Lumos products name being use as a nail product. "

14. In turn, in May 2011 Mr and Mrs Brann received another email, this one from Ms Claudia Mendez. She had been approached by or on behalf of the Defendants in relation to product lines including their LUMOS nail products. In the course of her email she said this:

"They are obviously trading off your reputation in a very aggressive way … if this Lumos becomes too big, then our customers will start thinking that Lumos is a range of nail products and not Skincare and this can only be very bad for your image."

15. Neither Ms Danin nor Ms Mendez thought that the Defendants' LUMOS nail care products were products of, or associated with, the Claimant, but they both expressed concern as to the effect of these new products on the Claimant's market, reputation and brand name.
16. By then the Claimant had commenced these proceedings.

The proceedings below

17. The claim was commenced in the High Court, but was later transferred to the Patents County Court. His Honour Judge Birss Q.C. made an order defining the issues to be resolved at the trial. Those that remain relevant on the appeal are as follows:

"(e) Whether or not the Defendants have made misrepresentations to the relevant public, the sub-issues therein being:

(i) The nature of the relevant UK markets in which the Claimant and the Defendants respectively operate, including identification of the relevant consumers therein;

(ii) Similarities and differences between the markets identified in paragraph (i) above;

(iii) The likelihood that the Defendants' actions will cause the relevant consumers to be deceived and/or confused;"

18. The Claimant's witnesses included Mr and Mrs Brann. They did not include any of the authors of the emails quoted above. The Defendants' witnesses included Mr Sweet, a director of the First and Third Defendants, Mr Nordstrom, a director of the Second Defendant, and Mr Crook, whom I have mentioned already. Some other witnesses for the Defendants were not required to attend for cross-examination.

The judgment

19. The judge's finding that the Claimant had protectable goodwill is not challenged. Since this is the starting point for the claim, it is necessary to see what he said on this part of the case.
20. At paragraph 35 he said this:

"I find that there had been only a very modest use of the LUMOS mark by the Claimant and its predecessor in title as at October 2010. The figures are not only very small in absolute terms but are also very small as a proportion of the skincare industry. No precise figures were given for the size of that industry but Mr Sweet exhibited an article from a supplement to The Times newspaper which stated that "sales of women's facial skincare products in Britain are expected to generate about £1 billion this year". The article is undated but refers to, and presumably post-dates, a product which was "launched in 2007"."

21. At first sight the size of a party's business compared to the entire skincare beauty market does not appear to be relevant. The judge came back to this point later, as I will mention.
22. He referred to evidence from Mr and Mrs Brann that they were targeting a small part of the total skincare market, a niche described as "anti-ageing serums". At paragraph 37 he went on as follows:

"Moreover, it seems to me that the Claimant's reputation does not extend very far beyond those who have dealt with it directly. The press articles appear to have had little lasting impact. It also seems likely that such sales as the Claimant had obtained prior to October 2010 were due to the direct approaches made by Mr and Mrs Brann to customers such as Wholefoods Market and Pulse Holdings, and (in the case of repeat purchases) because such customers were satisfied with the inherent quality of the goods, rather than because of any attractive power of the LUMOS mark."

23. His conclusion was that only a very modest goodwill had been generated in the LUMOS mark in relation to skincare products as at October 2010, that this goodwill related to a particular niche within the market, and that the Claimant was the owner of that very modest goodwill. He went on to point out that even a very modest goodwill can support a passing-off action, as in Stannard v Reay [1967] RPC 589.
24. Turning to the issue of the respective parties' markets, he referred to undisputed evidence from independent trade witnesses who said that the beauty industry was structured in such a way that skin care and nail care were distinct market sectors, each with its own specialists, books, trade magazines and so on. The Defendants had sought to differentiate between the professional and consumer markets as regards nail care. Although he accepted that the Defendants did not aim for or encourage retail sales of their products, he found that there were such sales. At paragraph 55 he observed that "the distinction between professional and retail nail care markets is not a hard and fast one". At paragraph 88 he said that he doubted whether the distinction between professional and retail trade would have been enough, from the Defendants' point of view, "if the parties had been operating in the same market".
25. The judge also noted that whereas some of the Defendants' evidence had suggested that you could not have a brand which catered for the needs of both professional and consumer markets, that was belied by evidence that Mr Crook's Essie brand does exactly that.
26. It was also clear from the evidence given before the judge that many well-known brand names in the beauty industry are applied to both skin care and nail care products. Examples given and accepted were L'Oreal, Estée Lauder, Revlon, Chanel and Dior.
27. The judge's conclusion as to the parties' respective markets is set out at paragraphs 56 and 57 as follows:

"The relevant consumers

56. The relevant consumers for the Claimant's goods are likely to be women interested in high-end skincare products. …

57. The relevant consumers for the Defendant's goods are likely to be beauty professionals providing services to women interested in nail care. Such professionals will bear the likes and dislikes of their own customers in mind. …"

28. Despite the evidence as to the distinction between the skin care and nail care sectors of the beauty industry, the judge accepted that there was an overlap, "though not directly", in terms of outlets at which the parties' respective products were used.
29. As regards evidence of deception the judge remarked on the fact that there was no direct evidence from any customer of the Claimant, even though, he said, the Claimant knew its customers well and had close commercial relationships with them (paragraph 64). Instead the Claimant relied primarily on the three emails quoted above, of which the second and third clearly did not show deception or even confusion on the part of the writer. As regards the email from Ms Sonia MacMillan, the judge said that he would have been assisted by evidence from Ms MacMillan herself. The judge was not clear as to whether Ms MacMillan was already a customer of the Claimant. That is not clear from the text of the email, but we were shown evidence from the papers, which had been before the judge, which shows that she was. The email does show that there had been discussion of a future relationship or, as it may be, the development of an existing relationship. The judge then said, in paragraph 69:

"This may have led Ms MacMillan to have asked questions which would not normally have occurred to the average end consumer of the Claimant's products if presented with the same advertisement."

30. He referred to Jacob LJ's words in Phones4U Ltd v Phone4u.co.uk Internet Ltd [2007] RPC 5 and (by internal quotation) in Reed Executive plc v Reed Business Information Ltd [2004] RPC 40, about the distinction between mere confusion and deception:

"Once the position strays into misleading a substantial number of people (going from 'I wonder if there is a connection' to 'I assume there is a connection') there will be passing off, whether the use is as a business name or a trade mark on goods."

31. Applying that to Ms MacMillan's email he said:

"71. Hence the boundary lies between the situation where Ms MacMillan merely wondered if there was a connection between the parties, and where she actually assumed there was such a connection. I incline to the former view. Cross-examination of Ms MacMillan would have shed light on whether this was so and, if so, whether Ms MacMillan's assumption was coloured by plans for potential commercial collaboration."

32. Later, at paragraph 73, he said the other emails were relevant "since they suggest that Ms MacMillan's views were not typical of those held by actual customers." On that basis he said that it was all the less likely that the Defendant's activities were really likely to be damaging to the Claimant's goodwill or to divert trade from the Claimant.
33. From the case of Neutrogena Corporation v Golden Ltd [1996] RPC 473, the judge drew the proposition (based on a quotation from Morritt LJ) that a substantial number of members of the public should be misled, or at risk of being misled, if passing-off is to be made out. In paragraph 86 he observed that in that case "the claimant won by adducing a substantial quantity of evidence drawn from a large number of sources", and he described the case as "a powerful demonstration of the fact that a low percentage share of the overall market does not prevent a claimant from succeeding, providing that a substantial number of members of the public would be misled into purchasing the defendants' product in the belief that it is the claimant's product".
34. The judge set out his reasons for holding that no misrepresentation had been established in his paragraph 87, with ten sub-paragraphs:

"87. I have come to the conclusion that no misrepresentation has been established in the present case, for the following reasons.

(1) As at October 2010 the Claimant's Lumos mark had only a very modest reputation and goodwill, which was limited to high end anti-ageing products in the skin care industry.

(2) In addition the reputation and goodwill of this mark was substantially limited to the Claimant's small customer base and in particular to those with whom the Branns had personally dealt. There is no evidence that the mark had made any significant impact outside this group. The Claimant's promotional activities, such as the Daily Mail article, had had only a modest and temporary effect on sales.

(3) Accordingly the number of people who were in a position to whom the Defendants' activities could even amount to a material misrepresentation was very limited.

(4) There is a clear division between the skincare industry and the nail care industry, although both form part of the beauty industry generally and there are some trade outlets which offer both skincare and nail care products and/or services. This clear division is recognised in the industry's own classification tools, in trade magazines, and in the way in which exhibitions are organised.

(5) The Claimant's case depends upon establishing that a substantial number of members of the public would be misled into purchasing the Defendants' product in the belief that it was the Claimant's product but the Claimant did not show that there was even a single person in this category. There is nothing like the sort of evidence of customer confusion which was obtained in Neutrogena. Nor is there any mass of emails demonstrating customer confusion, such as there was in Phones4U.

(6) Moreover, Neutrogena, Phones4U, and indeed Stacey [Stacey v 2020 Communications [1991] FSR 49] all involved companies which were both in the same industry. It is more difficult to accept that there is a likelihood of deception where the relevant industries are distinct. It is true that they are both part of the overall beauty industry, but this umbrella term covers a number of distinct areas. The Claimant was unable to give any examples of any other skincare brands being successfully transplanted into the nail care industry.

(7) The high point of the evidence of confusion was Ms MacMillan's email. As I have said, the evidential weight of this email is small given the lack of cross-examination and the fact that it is not to be interpreted as strictly as a legal document. It is unclear whether Ms MacMillan herself was deceived, or merely confused, and in any event unclear how far her views were influenced by plans for commercial collaboration. Moreover the emails from Ms Danin and Ms Mendez suggest that Ms MacMillan's view was a minority one even within the Claimant's small number of customers.

(8) The lack of evidence of customer confusion is not in itself surprising bearing in mind the lack of side by side trading. However I noted that the Claimant went out of its way to exhibit hearsay evidence which it said demonstrated confusion among its customers, whilst not calling any direct evidence from its customers.

(9) Certainly if there had been any deception among the Claimant's 25 or so actual customers then it seems likely that the Claimant would have been the first to know about it, and would have been able to clarify the position before any damage was suffered: see Teleworks Ltd v Telework Group plc [2002] RPC 27, a decision of Christopher Floyd QC as he then was.

(10) As it is, the lack of any such evidence suggests to me that the Claimant's customers may have known that the Defendants were not connected with the Claimant. This certainly appears to have been the view of both Ms Danin and Ms Mendez. Their views cannot be ignored since their emails formed part of the very material which Mr Brann had chosen to include in his evidence on confusion."

The arguments on the appeal

35. I do not intend to set out the rival contentions on the appeal in detail. I will address the points made as I discuss the case later, but it is helpful to refer to the summaries which each Counsel offered to us of the essence of the case.
36. For the Claimant, Mr Hacon made this submission. By October 2010, as the judge found, there were members of the public who knew and liked the Claimant's products and associated them with the mark LUMOS. Thereafter the Defendants brought other products on to the market under the same mark. The products of the Claimant and the Defendants are sold in similar and overlapping outlets. The Defendants' LUMOS nail care products might at any time be used and sold in the same salons as the Claimant's products. Generally, skin care and nail care products are promoted in the same sort of media - magazines and trade fairs. Skin care and nail care products are sufficiently close in market terms for the same brand name to be used, in some cases, for each. Given those circumstances, the questions for the judge were, first, would members of the public familiar with the Claimant's products be likely to come across the Defendants' LUMOS nail care products? Secondly, if they did, would they be likely to think that the LUMOS nail care products came from the same source as the Claimant's LUMOS skin care products? He contended that the answer to both of those questions should be yes.
37. Ms McFarland put the Defendant's case in a nutshell as being that the Claimant had failed to prove its case at trial and that the appeal was no more than an attempt to have a re-hearing of a case which had failed for lack of the relevant evidence. In essence she contended that the judge was right for the reasons he gave, and that his findings had been fully justified by the evidence, especially having regard to how limited was the evidence adduced on the Claimant's part.

Discussion

38. I will deal first with a number of particular points arising from the judgment and the submissions made to us, before drawing the points together.

What representation must the Claimant show to be made by the Defendants' use of the mark?

39. The law on this is clear and settled. The Defendant's use of the mark must represent that its goods or services are those of the Claimant, or are associated by way of business with the Claimant. The application of this to any given facts requires closer analysis.
40. At the most basic level, the point of the use of a mark by way of trade is to distinguish products by reference to their trade origin from others whose source is different. Initially, at least, it is not the mark that carries the goodwill or reputation, but the products. If customers are pleased with them, they will buy them again, and they may be more inclined to buy other goods sold under the same mark. Only if a mark is very well established or well promoted is it likely to attract buyers by itself. Mr Hacon pointed to the judge's observation at paragraph 37 that the Claimant's repeat sales were likely to be due to the customers being satisfied with the inherent quality of the goods, "rather than because of any attractive power of the LUMOS mark". He submitted that it is indeed because of the quality of the goods that customers and further sales are likely to be attracted, and that to suggest that it is the mark that should attract custom is to put the cart before the horse. I agree that this is a curious comment. It seems to be reflected in one of the judge's comments in paragraph 87(2), but in that context it may be, in effect, shorthand for a reference to the Claimant's products.
41. As Lord Oliver said in the passage quoted at paragraph [4] above, relevant goodwill is attached to the goods supplied by the claimant in the mind of the purchasing public by association with the mark. I find it difficult to suppose that the judge really thought that it was the mark that had to attract the custom, rather than the goods, at any rate for a product or products relatively new to the market. But the way he puts the point at paragraph 37 is worrying. There is no reason to doubt that end-users of the Claimant's products associated them with the mark LUMOS; that is the brand name under which they were promoted and sold and the only name by which they could or would be known.
42. If the same mark is used in relation to goods of two entirely different natures, of kinds which no ordinary person would suppose could be connected, then the use of the mark by one party is unlikely to be found to amount to a representation that its goods are from the same trade origin as those of the other user. If the Defendants had used the mark LUMOS in relation to, let us say, electric lights or light fittings, then it might be fair to say that no-one would suppose that the use of the same mark suggested that such goods came from the same source as the Claimant's skincare products. (Compare the unsuccessful attempt by Granada Television to prevent Ford from selling a car under the name Granada: Granada Group Ltd v Ford Motor Company Ltd [1973] RPC 49.) The Defendants sought to show that the skin care and nail care sectors of the beauty industry are quite distinct, but they cannot be said to be so distinct and separate that no-one could suppose that the use of the same mark in both sectors carried a representation of common origin or business association. For one thing, that is belied by the evidence that some well-known brand names are used in both sectors, as already mentioned.
43. It seems to me that the Defendants' point may be more subtle. They contend that the products of the Claimant and the Defendants respectively do not reach the same people, so that those people who know about the Claimant's product will not get to know of the Defendants' products sold under the LUMOS mark, and will therefore not be misled into thinking that the LUMOS nail care products are anything to do with the Claimant. Accordingly it is necessary to focus on the identification of the market of each party, and how the respective parties' products are used and sold.

Who must the Claimant show has been or would be misled by the representation made by the Defendants' use of the LUMOS mark?

44. On this aspect of the case it seems to me, with respect, that there are inconsistencies within the judge's judgment. It is clear that both the Claimant and the Defendants sell their products to salons and (in the case of the Claimant) also to clinics, where they are used for treatments of some of the female customers of the salon or clinic. The Claimant also sells via at least one significant retail outlet (Kensington Wholefoods) as well as direct via the internet. The Defendants do not sell to retail outlets or directly to end-users themselves. However, some of the products of both Claimant and Defendants are sold by salons to their customers, for home use. So far as salons are concerned, whether the products are successful will depend on how well they are liked by the salon staff, on the one hand, and by the customers on the other hand, and on whether they are regarded as successful in achieving what they purport to do, and no doubt also on whether their price is regarded as reasonable or worth paying in this context.
45. The Claimant aims to achieve sales to end-users via the salons and clinics as well as directly, and there was evidence of some such sales. That is consistent with the judge's identification of the Claimant's market in paragraph 56, quoted at paragraph [27] above, as the end users: "women interested in high-end skincare products". On the other hand, at paragraph 64 the judge commented on the absence of evidence from the Claimant's customers, whom he said the Claimant knew well. That can only be a reference to direct trade purchasers from the Claimant – those who own or run the salons or clinics, or (if different) those who do their buying, and also those who run the major retail outlets. The Claimant would not be likely to know its end-users except by chance. Then again, at paragraph 69 (quoted at paragraph [29] above) the judge directed himself towards the sort of questions that would occur to an average end consumer of the Claimant's products, that is to say not the trade purchaser but the retail customer. Then in sub-paragraph (2) of his paragraph 87 the judge referred to the Claimant's reputation and goodwill being "substantially" limited to "the Claimant's small customer base and in particular to those with whom the Branns had personally dealt". That therefore means again the direct customers, i.e. the salon or clinic owners and the owners of Kensington Wholefoods, to the exclusion of the end users, whether in receipt only of treatments at a salon or clinic, or buying the products for use at home, and if so whether from the salon or clinic or from a retail source or via the internet. This is significant because of the judge's comment that the number of people to whom the Defendants' activities could amount to a misrepresentation would be very limited. He does not seem to take end users into account as people as to whom it is even relevant whether they were or would be misled. Consistently with that, in sub-paragraph (9) of paragraph 87 he spoke of the Claimant's 25 or so actual customers, as if they were the only relevant people.
46. Conversely, the judge's definition of the Defendants' market as being only professionals providing services in salons, in his paragraph 57 (see paragraph [27] above), may be less important, but it seems likely that salons where the Defendants' LUMOS products are used do promote them to their customers, even if only, for example, in the way that the salon in St John's Wood, mentioned at paragraph [10] above, did so with nail care products including those of the Defendants, by posters in its window, alongside those promoting the Claimant's products. As the judge himself said, a professional in a salon will bear in mind what his or her customers like and dislike. In that way, even if in no other, the salon's purchasing policy is likely to be influenced by what the customers like to have used on their nails or, as the case may be, on their skin, and are prepared to pay for.
47. With respect to the judge, it seems to me that the customers for the Claimant's products, upon whom any misrepresentation might have an adverse effect, must be both the direct purchasers, by way of trade (whether the salons and clinics or retail outlets such as Kensington Wholefoods), and also the end users, whether these pay for the use of the product by way of a treatment at a salon or clinic or whether they also buy supplies themselves, and if so whether from a salon or clinic, from a retail outlet or via the internet. In practice, the end users are more likely to be misled by a misrepresentation, because the trade purchasers will know more about the market and about the Claimant and its product range. That seems to fit with what the judge said at the end of his paragraph 69 (see paragraph [29] above).
48. I would agree with the judge that the most important part of the Claimant's market, for this purpose, is the group of persons defined in his paragraph 56, though not to the exclusion of trade customers. However, with respect, it does not seem to me that he followed this conclusion through consistently when he considered the issues: see what he said at paragraph 64, and sub-paragraphs (2), (3) and (9) of paragraph 87.
49. In paragraph 87(2) he said that there was no evidence that the mark had made any significant impact outside the group which he defined as the Claimant's "small customer base", above all those who had had direct dealings with Mr and Mrs Brann. It is probably not correct to approach the question by reference to the impact of the mark, as opposed to the impact of the Claimant's products, but this may not be a true misdirection. It seems to me that, here, the judge's reference to the mark is in substance a reference to the reputation of the Claimant's products sold under the mark.
50. However, even viewed in that way, the question is whether this is too narrow a view on the judge's part. His proposition is that the Claimant's products have made no significant impact on customers other than those who dealt directly with Mr and Mrs Brann. This excludes all those who bought products via the internet, or as retail customers of Kensington Wholefoods, and all the customers of the salons and clinics on whom the Claimant's products are used by way of treatments, even those who bought supplies from the salon or clinic for use at home. Ms McFarland submitted that it amounts, in effect, to a holding that, although the relevant, or the most relevant, group are the Claimant's end-users (see paragraph 56), in fact there is no evidence to show that anyone, or more than a minimal number of people, knew of the Claimant's products and associated the LUMOS mark with those products. If that were so, it would be hard to explain the evidence of the Claimant's sales, relatively small as they were, though growing over several years.
51. At paragraph 37 the judge put it differently: "the Claimant's reputation does not extend very far beyond those who have dealt with it directly". That is a proposition to which no exception could be taken, on the evidence of the Claimant's limited sales. However, it does recognise that the reputation is not only known to those with direct dealings, i.e. the trade purchasers.
52. That is reinforced by the fact that, given the sales which were made of the Claimant's products, as described by the judge, there must have been some repeat purchases. Otherwise sales through retail outlets or over the internet can hardly be explained. The judge observed that the Claimant's press campaign had had very little impact (see his paragraph 29) so it seems that the principal explanation for these retail sales must be that purchasers had come across the product at a salon or clinic, and had liked it sufficiently to want to buy the product for use at home or, in the judge's own words at paragraph 37, "(in the case of repeat purchases) because such customers were satisfied with the inherent quality of the goods". If that is right, I cannot see why the judge, at paragraph 87, treated the trade purchasers as the only people with whom the Claimant had any goodwill.
53. For the Defendants Ms McFarland argued that, in effect, the judge had found that the Claimant had no reputation or goodwill outside its direct trade customers, and that he was right to ignore the effect of the Defendants' use of the LUMOS mark on end users of the Claimant's products, because the evidence did not show that any such end-users associated the mark with the Claimant's products at all. In support of that she relied on the absence of evidence from any such end-user. She pointed to the judge's comment in the second sentence of paragraph 56 that there had been no evidence from anyone in the category that he identified, other than Mrs Brann herself.
54. If the judge had come to the conclusion that no end-user associated the LUMOS mark with the Claimant's products, then I would expect him to have said so in terms. It would be a critically important finding for the purpose of deciding the case. It is difficult to see, if that were his view, how he could have identified the relevant consumers for the Claimant's products in the way that he did at his paragraph 56 (see paragraph [27] above). Also, in that case, I would expect him to have said, at paragraph 37, that the Claimant's reputation was limited to those who have dealt with it directly, rather than saying that it did not extend very far beyond such people. In turn at paragraph 87(2) he would have said in terms that the reputation and goodwill was exclusive to those with whom Mr and Mrs Brann had dealt personally. It would also be difficult to explain his reference to the average end consumer of the Claimant's goods in paragraph 69. On the view contended for by Ms McFarland of the judge's conclusions, there was no such end consumer who had heard of the Claimant's mark or associated it with the Claimant's products.
55. With respect, it seems to me that, on the one hand, this is not a proper reading of the judge's judgment, despite the inconsistencies that I have mentioned, and, on the other hand, it makes no sense on the evidence adduced and accepted by the judge. His references to end users or end consumers, particularly at paragraph 56, show that he did have such people in mind. His words at paragraphs 37 and 87(2) show that he found the extent of the Claimant's goodwill, beyond trade purchasers, to be small, even very small, but not that it did not exist at all. Moreover, if no retail consumer associated the mark LUMOS with the Claimant's products, it would be very difficult to explain the Claimant's continued and increasing sales, modest as they were overall.
56. Accordingly I conclude that the end-users of the Claimant's products are relevant as people who may be affected by any representation made by the Defendants, and I would reject Ms McFarland's argument that there was no evidence on which it could be found that there were such people. Direct evidence from users is not needed if sales figures show as a reasonable inference that there were some. On that basis, then even though there were few such customers, it seems to me that the judge did not address the question correctly. End-users are not people who the Claimant would know, except by chance. It would therefore be inherently difficult for the Claimant to identify any such person so as to be able to address a questionnaire to her or to consider calling her as a witness.
57. For these reasons, it seems to me that the judge identified the Claimant's market correctly as including end-users, but he did not apply the relevant principles correctly in the light of that finding. He ought to have accepted that the Claimant's products and its LUMOS mark were known to such people, even though there were not many of them. What he said at paragraph 37 supports that finding. However, his comment at paragraph 64 does not seem to me to be justified. By and large the Claimant's trade customers would not be likely to be misled. I will deal with the case of Ms MacMillan below, but Ms Danin and Ms Mendez, as trade customers, clearly knew the true position and were not misled by the Defendant's advertising. On the other hand, end-users, who are more likely to be misled, are not people who the Claimant would know and be able to identify, and the Claimant would certainly not enjoy "close commercial relationships" with them.
58. Correspondingly, it seems to me that what the judge said at paragraph 87(2) is to be read in such a way that the words "substantially limited" and "any significant impact" show his acceptance that there was some, even though small, reputation and goodwill with end-users. If they are not to be read in this way, then, as I have said already, it seems to me that this element of the judge's reasoning is inconsistent with what he had said before, and with probability. There was evidence that the Claimant's products, sold under the mark, had made an impact on retail customers, even though not a very big impact. If there had not been, the repeat purchases from, for example, Wholefoods Market would have been inexplicable: see the judge's paragraph 37.

By what evidence must the Claimant show that relevant people have been or would be misled by the Defendants' representation?

59. The judge said at paragraph 87(5) that the Claimant needed to show that a substantial number of members of the public would be misled, and he commented that the Claimant produced no-one who gave evidence of this – not "even a single person in this category". He contrasted this with the sort of evidence of customer confusion obtained in Neutrogena and the mass of emails showing confusion in Phones4U. Given the small scale of the Claimant's trading, and the absence of side by side trading, it seems to me that it is not surprising that there would not be evidence of actual deception of customers.
60. The Neutrogena case was concerned with rival products which competed directly. Both Neutrogena and the Defendants' mark Neutralia were used on shampoos, shower gels, facial wash and other related products and (in the Claimant's case) also for a wider range of skin products, all of them aimed at those with sensitive skin who wanted a hypo-allergenic product. Jacob J said that the two brands were in "head-on conflict": [1996] RPC 473 at 481. As he said later on the same page, what matters is the effect of the defendants' use of the mark on the goodwill of the claimant.

"It is not a defence to passing-off that many of a defendant's sales do not cause deception or confusion. There is passing-off even if most of the people are not fooled most of the time but enough are for enough of the time. By "enough" I mean a substantial number of the plaintiff's customers or potential customers deceived for there to be a real effect on the plaintiff's trade or goodwill."

61. Neutrogena had a very small share of the shampoo market in the UK – some 0.25% - but it was entitled to have the goodwill that resulted from that market share protected against deception by the Defendants, who were part of the Garnier group. The two marks had been used side by side and in direct competition for some 15 months by the date of the trial. It is true that a significant body of evidence about confusion was put before the court in the course of the six day hearing, some of it arising fortuitously because members of the public had objected to the Independent Television Commission about an advertisement shown on television for Neutralia, but the objections of a significant number of them showed that they thought that the advertisement had been for Neutrogena.
62. In a passage approved by the Court of Appeal (at [1996] RPC 496) (of which part was quoted by the judge in the present case at paragraph 82) Jacob J said this about the court's approach in passing-off cases, at [1996] RPC 492:

"The proper approach of the court to the question was not in dispute. The judge must consider the evidence adduced and use his own common sense and his own opinion as to the likelihood of deception. It is an overall "jury" assessment involving a combination of all these factors, see "GE" Trade Mark [1973] RPC 297 at 321. Ultimately the question is one for the court, not for the witnesses. It follows that if the judge's own opinion is that the case is marginal, one where he cannot be sure whether there is a likelihood of sufficient deception, the case will fail in the absence of enough evidence of the likelihood of deception. But if that opinion of the judge is supplemented by such evidence then it will succeed. And even if one's own opinion is that deception is unlikely though possible, convincing evidence of deception will carry the day."

63. Having referred to this passage it is also appropriate to mention here what Morritt LJ said in the Court of Appeal in a passage relied on by Ms McFarland for the Defendants, at [1996] RPC 493-4, about a proposition advanced by the Defendants in that case that the judge had wrongly treated "a substantial number" of the Claimant's customers or potential customers as being equivalent to "more than de minimis" or "above a trivial level". The passage follows one cited by the judge in the present case at paragraph 83. It is as follows:

"In reality this issue is inseparable from the second. Did the evidence before the judge when properly evaluated demonstrate on a balance of probabilities that if Garnier are not restrained a substantial number of members of the public will be misled into buying Garnier's products in the belief that they are the products of the plaintiffs? If it did then that will also demonstrate that in his references to "de minimis" and "trivial" the judge posed a genuine antithesis. If it did not then that will suggest that the test adopted by the judge had been reduced below that required by the law. But such reduction will then be irrelevant as the appeal will have succeeded on the second ground.

Nevertheless, for my part, I think that references, in this context, to "more than de minimis" and "above a trivial level" are best avoided notwithstanding this court's reference to the former in University of London v. American University of London (unreported 12 November 1993). It seems to me that such expressions are open to misinterpretation for they do not necessarily connote the opposite of substantial and their use may be thought to reverse the proper emphasis and concentrate on the quantitative to the exclusion of the qualitative aspect of confusion."

64. One point which emerges clearly from what was said in that case, both by Jacob J and by the Court of Appeal, is that the "substantial number" of people who have been or would be misled by the Defendant's use of the mark, if the Claimant is to succeed, is not to be assessed in absolute numbers, nor is it applied to the public in general. It is a substantial number of the Claimant's actual or potential customers. If those customers, actual or potential, are small in number, because of the nature or extent of the Claimant's business, then the substantial number will also be proportionately small. That is another reason why the judge's reference to the Claimant's share of the overall UK skincare beauty market seems not only inapposite but also potentially misleading.

Was Ms MacMillan misled by the Defendants' representation?

65. I find it surprising that the judge should have commented adversely on the Claimant's failure to call Ms MacMillan to give evidence about her email and her response to the Defendants' advertisement. The email speaks for itself as her immediate reaction to the advertisement. I doubt that for her to have made a witness statement, perhaps a year after the date of the email, and to be cross-examined fourteen months after sending the email, would be likely to have cast any more light on the nature of her reaction than can be obtained by reading the email in its context.
66. That context included the details of the Defendants' advertisement, which provoked it, and the fact that Ms MacMillan was a customer, albeit a trade customer, of the Claimant.
67. The email says: this advertisement seems to show that you (the Claimant) have a nail product range; it asks if this is a different branch of the company. That seems to me to show fairly plainly that Ms MacMillan thought that the advertised LUMOS nail care product was a product of the Claimant or of a company associated with the Claimant. In terms of Jacob J's antithesis, her email demonstrates her state of mind as being "I assume there is a connection". It is not necessary to indulge in meticulous textual analysis in order to reach that conclusion.
68. The email does not itself show whether Ms MacMillan was already a customer of the Claimant but there was evidence before the judge which showed that she was, and had been for some months. No doubt it was the fact that she was already a customer and had had discussions of some kind with a view to extending their commercial relationship that led her to ask the question that she did. What matters, as it seems to me, is not that she asked the question, but that she had had the response to the Defendants' advertisement which led to her to ask that question. A retail end-user of the Claimant's products who had not had any direct dealings with the Claimant would not be likely to address such a question to the Claimant. However, if, as the email shows, the Defendant's advertisement led Ms MacMillan to think that the Defendant's LUMOS nail care products were products of, or associated with, the Claimant, then an end-user, with much less knowledge of the underlying position, might well also be misled into thinking the same.
69. I therefore respectfully disagree with the judge in what he said in the latter part of paragraph 71. The email seems to me to show that Ms MacMillan did assume that there was a connection, and I do not accept that cross-examination of Ms MacMillan was needed for the judge to be able to decide what the true nature of her reaction to the Defendant's advertisement had been at the time. Moreover, given the proper case management constraints of a trial in the Patents County Court for which two days was allowed by the relevant case management order, it seems to me that to have called Ms MacMillan as a witness would by no means necessarily have been a good use of the limited court time that was available.
70. As for the judge's reliance, by way of contrast, on the lack of confusion on the part of Ms Danin and Ms Mendez, his comment at paragraph 73 that Ms MacMillan's views were not "typical of those held by actual customers" shows, first, that he wrongly considered that Ms MacMillan was not a customer but also, secondly, that he treated trade customers as the most relevant. With respect to that position, trade customers would be less likely to be confused or misled. In a sense the force of Ms MacMillan's comment is that, even though she was a trade customer, she had been misled, and this shows that non-trade customers might well be misled as well. The fact that two other trade customers were not misled does not detract from this.
71. What Ms Danin and Ms Mendez did demonstrate, as the judge said at paragraph 76, was a worry that their own customers – that is to say end-users of the Claimant's products - would be confused or misled into thinking that the Defendant's LUMOS nail care products were products of the Claimant. That does not prove much by itself but it is at least relevant from the point of view of someone active in the market.
72. Moreover, the judge's comments at paragraph 87(9) and (10) are limited to trade customers. That being so, the fact that such people "may have known that the Defendants were not connected with the Claimant" proves nothing of relevance. Nor does the fact that the Claimant would have got to know of any deception or confusion on the part of trade customers (as it did from the three emails quoted) prove that other customers within the scope of the Claimant's reputation and goodwill, that is to say retail end-user customers, the people identified by the judge at paragraph 56, would not have been misled.

Were the parties active in distinct markets?

73. Part of the judge's reasoning is that the Claimant and the Defendants did not operate in the same market. That is apparent from his contrast with other cases of competition within the same industry at paragraph 87(6), and from what he said at paragraphs 47 and 63 about the structure of the beauty industry.
74. I do not question what he said about the structure of the industry, but the issue for him was whether people with whom the Claimant had proved that it had a reputation and goodwill, including retail end-users of its products, would have been misled, on seeing a nail care product sold under the LUMOS mark, into thinking that it was a product of the Claimant, or was associated by way of business with the Claimant, whose products sold under the same mark they knew. If skin care and nail care products were never sold or promoted in the same outlets, or never sold under the same brand names, then there might be a stronger case for saying either that the Claimant's customers would not come into contact with the Defendant's use of the same mark, or that if they did they would not assume that there was any association between the two.
75. Incidentally, it appears from Mr Sweet's evidence that he was aware of the Claimant and its products from its website before the LUMOS nail care products were launched, but he took the view that the Claimant's trading would not conflict with the marketplace at which the Defendants would aim. He said that according to the Claimant's website at that time its products were aimed at health care professionals and at retail consumers, not at beauty salons or similar outlets, whereas the Defendants intended to aim their products specifically at beauty salons. Mrs Brann gave evidence that originally the Claimant did not aim to sell to beauty salons, but that in 2009 she and her husband decided to market their products to such salons and to aesthetic clinics, which they did. By the critical date in October 2010 they had established the level of custom with such outlets that the judge described. It may be that if at the time of the Defendants' launch in October 2010 the Claimant had not started selling to beauty salons, then at that time the markets of the two ranges of products would in fact have been sufficiently distinct for there to be no conflict and no misrepresentation by the Defendant's use of the mark which the Claimant was already using. However, by then the Claimant had begun to market its products to beauty salons, such that there was a clear overlap, and with that a likelihood of the Claimant's customers becoming aware of the Defendants' use of the same mark.
76. Moreover, as the evidence showed, the two types of products, that is to say skin care and nail care products, different as they may be, are not far apart in market terms. Thus they are sometimes sold under the same brand names, they are used and sold in the same outlets, and they are advertised in the same media, such as magazines. That being so, it seems to me that the Defendants cannot make out the proposition that none of the Claimant's customers would ever see the Defendants' LUMOS products promoted or sold, and therefore would not be exposed to whatever representation is involved in the Defendants' use of the LUMOS mark. Furthermore, it could not be said that a customer in a relevant salon, faced with a skin care and a nail care product both marketed under the same LUMOS mark, could not suppose that one had something to do with the other, and that there was some association between the two. As I postulated earlier, if the comparison had been between LUMOS skincare products and LUMOS light fittings, then it might have been easy to conclude that no-one would suppose there was a connection. The same cannot be said as between skin care and nail care products, of kinds which could well be used, promoted and sold in the same outlets. The fact that the Defendants' LUMOS nail care products had not yet been sold in the same outlets as the Claimant's skincare products does not show that this would never happen or that it was not likely to happen.

The criticisms of the judgment: are they justified?

77. I therefore find that most of Mr Hacon's criticisms of the judgment are made out. The judge identified the Claimant's market correctly (at least in part) as including end-users, at paragraph 56, and his findings and comments show that the Claimant did enjoy goodwill with such persons. Although there were few of them, they were enough to entitle the Claimant to protection as regards that goodwill. However, the judge did not apply that conclusion correctly at other places in his judgment. He commented adversely, but unfairly in the circumstances, on the Claimant's failure to call witnesses who had been misled, when the people most likely to have been misled would be end-users, whose identities the Claimant could not be expected to know. I do not accept the aptness of his comment that, if there were deception, the Claimant would be likely to have got to know of it. As regards trade buyers that is a fair comment, and the Claimant did hear of it. But as regards end-users, how is it to be supposed that the Claimant would hear of it? The Claimant would have no direct contact with such people, and no means of identifying them, and the deceived end-user might have no sufficient reason or incentive to inform the Claimant, or anyone else, of the position if and when she discovered the truth.
78. It also seems to me that the judge's reading of Ms MacMillan's email is incorrect, and that this does show that she thought the LUMOS nail care products advertised by the Defendants were products of or associated with the Claimant. I disagree with him as to whether that email can be considered on its own without the benefit of oral evidence from Ms MacMillan.
79. His reference to the Claimant's share of the whole UK skincare beauty market seems to me irrelevant. It may perhaps not have led him astray, but it is not helpful in itself. It might have encouraged the thought that there needed to be a lot of evidence of deception, though his reference to Stannard v Reay shows that he did accept that a person with a limited business and therefore limited goodwill (in that case, the business was a single fish and chip van in the Isle of Wight) could protect that business and goodwill by a passing-off claim.
80. As against that, while Ms McFarland accepted that the relevant public could include both trade and retail users, and she also accepted that sales would be driven by the retail consumers, i.e. the customer in the chair in the salon, she argued that the judge did not exclude end-users in principle but that he proceeded on the basis of the evidence, which did not include evidence from either a beautician in a salon (who might have spoken of the attitude of customers in the salon, or as to what information was given to customers in the salon about products) or any end-user. It was therefore a matter of speculation as to what an end-user might know or think about relevant products.
81. It is a fair comment that, leaving aside Ms MacMillan, there was no evidence of actual deception. On the other hand, since there had not been any instances of side-by-side sales, as the judge recognised at his paragraph 86, it was not surprising that there should not be any such direct evidence, and the absence of such evidence is not determinative. In that situation, apart from whatever force Ms MacMillan's email might have, the question whether the Defendant's use of the mark would be likely to mislead someone who is an actual or potential customer of the Claimant is a matter of inference, as was explained in the Neutrogena case, quoted at paragraph [62] above.
82. Since the judge's reasoning is set out in the ten sub-paragraphs of his paragraph 87, I will address the points which he makes there in order to bring the various relevant points together.
83. He found that the Claimant had a very modest reputation and goodwill for its skincare products sold under the LUMOS mark, limited to high end anti-ageing products. That is not in dispute as such.
84. At sub-paragraph (2) he said that the goodwill was substantially limited to those of the Claimant's customers who dealt personally with Mr and Mrs Brann. If that is to be taken as a finding that there was no goodwill with retail customers, end-users of the product, it seems to me that it is inconsistent with what the judge had said elsewhere, in particular at paragraph 37. The same can be said of his next sentence, that the LUMOS mark had made no significant impact outside the Claimant's direct customers. Since there had been repeat retail sales, through Kensington Wholefoods, through salons and on the internet, it seems to me that there must have been some goodwill in respect of the Claimant's products, with which the LUMOS mark was associated, even though the number of customers was small, or, as the judge put it at sub-paragraph (3), "very limited". But it was not limited to trade customers, as the judge implied in other passages in his judgment. If that is what he meant at sub-paragraphs (2) and (3) it does not seem to me that that observation can stand together with what he had said elsewhere and with the evidence of the Claimant's retail sales.
85. The distinction between nail care and skin care in the beauty industry as a whole exists but, from the point of view of the Claimant's actual and potential customers, what matters more is that nail care products, including those of the Defendants, are used, promoted and sold in the same salons in which the Claimant's skin care products are used, promoted and sold. In each of sub-paragraphs (4) and (6) it seems to me that the judge failed to have regard to this factor. In sub-paragraph (6) he ignored the evidence that in some cases, admittedly of very well known brands, the same brand is used for both skincare and nail care products, which belies his last sentence.
86. As to sub-paragraph (5), the Claimant has to show that a substantial number of its actual or potential customers would or might be misled into purchasing the Defendant's products sold under the LUMOS mark in the belief that they were the Claimant's products. Given the small size of the Claimant's market, this substantial number would not be large overall in absolute terms. It is not essential that the Claimant should adduce evidence of any individual person who was deceived, and it is not likely that it would be able to do so, in the given circumstances, as the judge recognised at paragraph 86 and in paragraph 87(8). The absence of such witnesses and of the sort of evidence that was adduced in Neutrogena or in Phones4U is not, as it seems to me, either fatal to the Claimant's case or even particularly telling.
87. For reasons given at paragraphs [65] to [69] above, I respectfully disagree with the judge's reading of Ms MacMillan's email, and with his assessment of its significance in the absence of oral evidence from her. To me the email shows that she did think that the nail care products advertised by the Defendants were products of, or associated with, the Claimant, so that she was deceived, and this happened even though she was already a customer of the Claimant, and a trade customer who had had direct dealings with the Claimant, and therefore might be expected to know more about the correct position. Ms Danin and Ms Mendez were not deceived, but a trade customer is less likely to be deceived. The fact that Ms MacMillan was misled seems to me to show that it is likely that a retail customer, with less in the way of means of knowledge of the true position, might well be misled by the Defendants' use of the mark.
88. The judge's comments at sub-paragraphs (9) and (10) show him as, to my mind wrongly, regarding the Claimant's trade customers as the only relevant people. Those comments could not sensibly have been made if the judge had in mind the Claimant's retail customers as persons who might potentially be misled. The Claimant would not be likely to get to know about a retail customer being misled, unless by chance, and retail customers would not know that there was no connection between the two product ranges, as Ms Danin and Ms Mendez did know.
89. In the end it seems to me that the judge's comment at paragraph 88 may be particularly revealing, with his phrase "if the parties had been operating in the same market" (see paragraph [24] above). In a situation in which nail care products of the Defendants were used, promoted and sold in the same salons where the Claimant's skin care products were used, promoted and sold, where in some instances skin care and nail care products are sold under the same brand, and where the end-users of the Claimant's products are within the scope of the Claimant's reputation and goodwill, then it seems to me to be wrong to treat the two rival ranges of products as being within different and distinct markets.

Conclusion and disposition

90. For the reasons which I have set out above, at laborious length which I regret (as I do the time that it has taken for us to be able to deliver judgment), it seems to me that the defence to the claim which depends on showing that there would or could be no misrepresentation because the two products are found in different markets should not have been accepted by the judge. I accept the judge's finding that the Claimant's goodwill was, in absolute terms, small, but he did not find that it was limited to trade customers; that is apparent from his paragraph 37. His references to the Claimant's customers as limited to the trade customers, particularly in sub-paragraphs (7), (9) and (10) of paragraph 87, and paragraph 64 as well, show that, although he was applying the correct legal test, he wrongly applied it by reference to a view of the facts, as to the relevant class of people to whom the representation made by the Defendants' use of the mark would be addressed, which was inconsistent with the evidence and with his own findings elsewhere in the judgment.
91. It seems to me that Ms MacMillan's email shows that even someone who was in a better position than an end-user to realise the correct position was misled by the Defendants' use of the mark, and therefore that end-users might well also be so misled.
92. Taken with the judge's acceptance that there was goodwill and that it would be likely to be damaged if there was a misrepresentation, it seems to me that the judge should have accepted that the Claimant had made out its case. In my judgment, the judge's contrary finding was reached as a result of misdirection. He had found that there were end-users of the Claimant's products who associated the mark LUMOS with the Claimant's skincare products (even though not many) and with whom the Claimant had a reputation and goodwill. However, he misdirected himself, when asking the question whether relevant persons would be deceived by the Defendants' use of the same mark, by treating only the Claimant's trade customers as the relevant people. In concluding that no-one would think that the Defendants' nail care products were associated with the Claimant's skincare products, despite the use of the same mark, he wrongly ignored the evidence that in some well known instances the same brand name was used for both kinds of product: see the last sentence of his paragraph 87(6). It is possible that this sentence is literally correct, but it ignores the existence of well-known brand names which are applied to both skincare and nail care products. He also wrongly concluded that Ms MacMillan's email did not show that she assumed that the Defendants' LUMOS products came from or were associated with the Claimant, and that the court could not come to this conclusion without having seen Ms MacMillan give oral evidence. Even apart from that, he was wrong not to draw the inference, from the fact that a person in the trade could express herself in the way she did in the email, that an end-user familiar with the Claimant's product who came across the Defendants' LUMOS products might well think that they came from or were associated with the Claimant. Given the lack of side-by-side trading, it seems to me that he was wrong to conclude that the Claimant could not succeed without evidence from a witness who had been deceived. It was sufficient for the Claimant to show the likelihood of deception by inference.
93. I am conscious of the constraints on an appellate court which is invited to depart from a conclusion of the judge below which is one of fact, or is based on findings of fact, even though (as here) not findings of primary fact based on an assessment of the credibility of witnesses. It seems to me, with respect, that the judge's conclusions adverse to the Claimant are vitiated by his inconsistent treatment as between the Claimant's trade customers and the end-users of the Claimant's products, and by other errors to which I have referred, including his failure to take account of the use of the same brand name for skincare and for nail care products.
94. For reasons which are entirely understandable we were discouraged from sending the case back for a re-trial if we found that the judge had misdirected himself. In any event it seems to me that, when the evidence is considered closely and with the benefit of the submissions made to us, there is sufficient material before the court to enable us to come to our own conclusion as to the correct inference, the judge having failed to do so because of his misdirection of himself as to, among other things, the relevant market, the significance of Ms MacMillan's email and the identity of the Claimant's actual and potential customers upon whom the likely effect of the Defendant's representation ought to be judged.
95. If a trial judge has misdirected himself in law, but has made whatever findings of fact are necessary as regards primary findings of fact, then it seems to me that it is open to the Court of Appeal to undertake the process which Jacob J described for the trial judge in Neutrogena, as quoted at paragraph [62] above: to consider the evidence adduced and use his own common sense and his own opinion as to the likelihood of deception.
96. In my judgment, the evidence does justify the inference that a significant number of the Claimant's actual and potential customers would be likely to be misled by the Defendants' use of the LUMOS mark into thinking that the Defendants' nail care products are products of or associated with the Claimant. I base that conclusion on the following points. The evidence of the Claimant's sales justified the conclusion which, as it seems to me, the judge did come to that the Claimant had some, albeit limited, goodwill with end-users, who would associate the Claimant's products with the word LUMOS. The Claimant's products are used, promoted and sold in outlets including beauty salons, including some where nail care products are also used, promoted and sold, among them nail care products distributed by the Defendants. There is no reason to suppose that the Defendants' LUMOS nail care products might not be used and sold in the same salons as the Claimant's skin care products. Even though skin care and nail care represent different sectors of the beauty industry, they are not entirely distinct. Not only may skin care and nail care products be used and sold in the same salons, they may also be sold under the same brand name. In those circumstances, it seems to me that, if a woman who knows the Claimant's product were to see the Defendants' LUMOS nail care products advertised, promoted, sold or used in a beauty salon, she would be likely to think that the nail care product came from the same source as the skin care product which she knows, or from an associated source. Nor would that be likely to be an isolated or exceptional instance. On that basis, it seems to me that the Claimant should be held to have made out the second element of the tort of passing-off, as well as the other two which the judge held had been proved.
97. Accordingly, it seems to me that the judge ought to have granted an injunction as sought by the Claimant, and that this court ought to do so now. I would allow the appeal on that basis.

Lord Justice McFarlane

98. I have had the advantage of reading in draft the judgments of my Lords, Lord Justice Lloyd and Sir Bernard Rix. Despite being conscious of the proper limitations upon the role of an appellate court as described in both judgments, I am of like mind with Lord Justice Lloyd that on this occasion, for the reasons that my Lord gives in paragraphs 90 to 96, the judge fell into error to such a degree that this court is justified in reversing the first instance decision. In consequence, I too would allow the appeal on the basis described by Lord Justice Lloyd.

Sir Bernard Rix

99. I confess I am not attracted by the solution which has appealed to my Lords. It seems to me that the matter has in effect been retried in this court after a careful enquiry in the court of trial.
100. Among the critical findings of that trial is that the claimant's anti-ageing products (a much narrower, niche, field than skin care products generally, see paragraph 36 of the judgment below) on the one hand, and the defendants' nail care products under the same mark of LUMOS on the other hand, have never been sold to or in the same establishments (ibid at paragraph 59). It seems to me to be irrelevant that there may have been some side by side use of the defendants' other nail products in beauty salons which also stock the claimant's products.
101. The judge also found that there was no direct overlap in the way the products were marketed (at paragraph 61, and see also paragraph 63).
102. The judge further concluded that there was "only a very modest goodwill" generated in the claimant's niche market as at October 2010 (paragraph 38). Of course it is true, as a matter of law, that even a very modest goodwill can support an action for passing off: the judge cited Stannard v. Reay [1967] RPC 589 and was well aware of that legal possibility. However, Stannard v. Reay was a special case in which two competitors both traded from fish and chip vans in a small locality, the Isle of Wight, and each van operated under the same name, viz MR CHIPPY. Despite the brevity of the period in which the first MR CHIPPY van had been trading before the arrival of the rival van, there was evidence that (i) there were no other fish and chip vans trading in the Isle of Wight, (ii) there had been (relatively speaking) substantial takings in that brief period, and (iii) those takings fell when the defendant's van began its operations. This was sufficient evidence to support a pre-trial injunction. The case goes no further than that. Commercially speaking, these were two rivals competing head to head in what was, so to speak, a fish bowl. I see that authority as having no practical relevance to our case.
103. The judge further found, on the basis of independent trade witnesses whose evidence he accepted, that the beauty industry was structured in such a way that skin care (and I remind myself that the claimant's products were in a niche market within the skin care market) and nail care markets were "distinct market sectors" (at paragraph 47). He added, "None of this evidence was seriously disputed."
104. The judge also found, for the reasons which Lloyd LJ has already set out, that no misrepresentation had been established. Whatever criticisms might be made of the expression of some of that reasoning, it was essentially a factual conclusion, based on the factual findings which the judge had been developing throughout his judgment.
105. The judge, in my view rightly, said that "the high point of the evidence of confusion was Ms MacMillan's email". This appeal has been conducted on essentially the same basis. The judge said (at paragraph 87(7)):

"the evidential weight of this email is small given the lack of cross-examination and the fact that it is not to be interpreted as strictly as a legal document. It is unclear whether Ms MacMillan herself was deceived, or merely confused, and in any event unclear how far her views were influenced by plans for commercial collaboration."

106. As far as they go, those remarks seem to me to be well justified in the context of the judge's understanding of the case as a whole. It seems to me that the evidential weight of this single email is small. Ms MacMillan was plainly not deceived. She did not base any decision on her erroneous assumption (some business common sense would have shown her that the nail products came from an entirely separate source). In effect, she raised a question with the claimant, and was no doubt set straight.
107. The judge went on to remark that lack of evidence of customer confusion was not surprising "bearing in mind the lack of side by side trading" (paragraph 87(8)) and that if there had been any deception it seems likely that the claimant would have been the first to know of it (paragraph 87(9)). Those seem to me to be entirely reasonable and understandable conclusions. I do not myself accept that lack of evidence of customer confusion is of little weight because it would have been difficult for the claimant to track down consumers for their evidence. On the contrary, given the small number of outlets and the fact that most sales were to professional salons, I consider that it would have been more than usually easy for the claimant to have obtained evidence of customer confusion from the clients of the professional purchasers of its products, who were small in number and all or most of whom were well known to the claimant. In turn, the purchasers' clients would have been well known to the operators of the salons. However, there was no such evidence.
108. All in all, the judge was asking himself an essentially jury question, and he was best of all placed to answer it. As Jacob J said in Neutrogena Corporation v. Golden Limited [1996] RPC 473 at 481 and 482:

"By "enough" I mean a substantial number of the plaintiff's customers or potential customers deceived for there to be a real effect on the plaintiff's trade or goodwill … The proper approach of the court to the question was not in dispute. The judge must consider the evidence adduced and use his own common sense and his own opinion as to the likelihood of deception. It is an overall "jury" assessment involving a combination of all these factors …"

109. Jacob J's approach was upheld by this court. We are familiar in this context of the warnings of the highest authority that it is not for an appeal court to interfere in such jury questions save on good and plain legal grounds: see, for instance, the well known passages in Lord Hoffmann's speeches in Biogen Inc v. Medeva Plc [1997] RPC 1 (HL) at 45 and Designers Guild Ltd v. Russell Williams (Textiles) Ltd [2000] 1 WLR 2416 (HL) at 2423. I do not think it would be right, against the background of the judge's findings, for this court to find for itself a case of passing off on what is after all the thinnest of evidence, untested in cross-examination because the claimant chose not to call the witness in question or even to obtain a witness statement from her.
110. For myself, I would therefore have dismissed this appeal. As it is, the appeal will be allowed and an injunction will be granted.