INTELLECTUAL PROPERTY ENTERPRISE COURT
Fetter Lane, London, EC4A 1NL
B e f o r e :
| THE NATIONAL GUILD OF REMOVERS AND STORERS LIMITED
|- and -
|GEORGE ANTHONY STATHAM
CATHERINE ANN STATHAM
(together t/a MARUBBIS REMOVALS & STORAGE)
Thomas St Quintin (instructed by Backhouse Jones Limited) for the Defendants
Hearing dates: 24 September 2014
Crown Copyright ©
Judge Hacon :
The user principle
" … In Force India Arnold J considered Wrotham Park damages, i.e. of the type awarded in Wrotham Park Estate Co Ltd v Parkside Homes Ltd  1 WLR 798. … Arnold J identified the following principles (at ):
'(i) The overriding principle is that the damages are compensatory: see Attorney-General v Blake at 298 (Lord Hobhouse of Woodborough, dissenting but not on this point), Hendrix v PPX at  (Mance L.J., as he then was) and WWF v World Wrestling at  (Chadwick L.J.).
(ii) The primary basis for the assessment is to consider what sum would have [been] arrived at in negotiations between the parties, had each been making reasonable use of their respective bargaining positions, bearing in mind the information available to the parties and the commercial context at the time that notional negotiation should have taken place: see PPX v Hendrix at , WWF v World Wrestling at , Lunn v Liverpool at  and Pell v Bow at –,  (Lord Walker of Gestingthorpe).
(iii) The fact that one or both parties would not in practice have agreed to make a deal is irrelevant: see Pell v Bow at .
(iv) As a general rule, the assessment is to be made as at the date of the breach: see Lunn Poly at  and Pell v Bow at .
(v) Where there has been nothing like an actual negotiation between the parties, it is reasonable for the court to look at the eventual outcome and to consider whether or not that is a useful guide to what the parties would have thought at the time of their hypothetical bargain: see Pell v Bow at .
(vi) The court can take into account other relevant factors, and in particular delay on the part of the claimant in asserting its rights: see Pell v Bow at "
The Court of Appeal in Force India ( EWCA Civ 780;  RPC 36) did not dissent from Arnold J's summary of the law (at ).
 Wrotham Park damages, though they are for breach of contract, are in all relevant respects the same as those I have to consider under this head, so the foregoing principles set out by Arnold J apply. In the inquiry as to damages for infringement of trade marks in 32Red OKC v WHG (International) Limited  EWHC 815 (Ch), Newey J's assessment was by consent also on the basis of willing licensor and willing licensee. Newey J endorsed the principles identified by Arnold J and expanded on them as follows:
(vii) There are limits to the extent to which the court will have regard to the parties' actual attributes when assessing user principle damages. In particular
(a) the parties' financial circumstances are not material;
(b) character traits, such as whether one or other party is easygoing or aggressive, are to be disregarded -.
(viii) In contrast, the court must have regard to the circumstances in which the parties were placed at the time of the hypothetical negotiation. The task of the court is to establish the value of the wrongful use to the defendant, not a hypothetical person. The hypothetical negotiation is between the actual parties, assumed to bargain with their respective strengths and weaknesses -.
(ix) If the defendant, at the time of the hypothetical negotiation, would have had available a non-infringing course of action, this is a matter which the parties can be expected to have taken into account -42].
(x) Such an alternative need not have had all the advantages or other attributes of the infringing course of action for it to be relevant to the hypothetical negotiation .
(xi) The hypothetical licence relates solely to the right infringed -.
(xii) The hypothetical licence is for the period of the defendant's infringement -.
(xiii) Matters such as whether the hypothetical licence is exclusive or whether it would contain quality control provisions will depend on the facts and must accord with the realities of the circumstances under which the parties were hypothetically negotiating -."
The judgments in Jones and Silveria
" On the matter of the annual fee, in my judgment Mr Jones is right to the extent that the guild's annual fee is a relevant factor in assessing the damages but I do not accept that the matter is a simple as saying that the damages are the same as the annual fee. The guild's rules include provisions dealing with use of the marks after membership has ended and these rules therefore provide the starting point for assessing the guild's loss in those circumstances. However the overall exercise ought to take into account the annual fee in assessing the matter. These are damages for trade mark infringement, not for breach of contract, and the terms of the rules are relevant but not determinative. For the sake of argument if the guild were to write in an absurdly high run off fee in the contract that would not suddenly mean they would always be entitled to sums of that magnitude by way of damages for unlicensed trade mark use.
 The 2008 rules (clause 4.1) provide that the annual membership fee is £2,750. Mr Jones contended that he had paid only £1,000 annual membership. Mr Hill and his instructing solicitor were not in a position to challenge this since Mr Jones had made no attempt to file his evidence in good time in accordance with the directions for this inquiry. Mr Hill submitted that to make the assessment I should rely on the figure set out in the rules (£2750). I agree. Mr Hill on instructions informed me that the annual fee remained the same in 2008 and 2009 (£2,750 according to the rules) but in 2010 it rose to £5,200.
 For 2008 and 2009 damages of £200 per week would add up to £10,400 per year — just under four times the annual fee for that period. In my judgment that is too high and I will reduce the figure to £150 per week. Doing the best I can in the circumstances that seems to me to be a fair level. For 2010 the annual fee is £5,200 and so £200 per week gives an annual sum which is double the annual fee. I will not alter the £200 per week figure for 2010. In terms of monthly figures these weekly amounts become £650 per month in 2008/09 and £866.67 for 2010."
" Mr Jones' second point was that the damages figures were out of scale with the value to his business of the use of the guild's marks. He said (see paragraph 21 above) membership of the guild was only worth about £6,000 in annual turnover and £1,500 in profit. I accept the principle that the value of a mark to a business is relevant in assessing what they would have paid for the use, and that that must come into the overall consideration of the rate, but in my judgment on the facts of this case I should not adjust the figures any further. I am not doubting Mr Jones' sincerity in giving the estimate but I do not have sufficient evidence on this to satisfy me that the figures before me need to be adjusted."
• There is a run-off fee of £100 per week for use of the NGRS name and logos, but on certain terms and only in relation to directory websites – not other websites or other media. This fee therefore did not provide a guide to damages in the present case.
• Any unauthorised use of NGRS's name or logos requires a payment of £200 per week. This provided the relevant guide.
The Stathams' case
The nature of the licence
Comparison with the Jones and Silveria cases