Intellectual Property Enterprise Court

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT

		Royal Courts of Justice, Rolls Building Fetter Lane, London, EC4A 1NL
		25/09/2015

Judge Hacon :

Background

1. Since the 1980s a number of organisations across the country have been set up to encourage the development of routes to higher education for adults, other than via 'A' levels. The organisations have become known as 'open college networks'.
2. This promotion of higher education among adults who did not take it up after leaving school is achieved in three ways. First, courses run by adult further education colleges or an employer's training department are accredited by open college networks. The education and/or training offered and the testing required in order to obtain qualifications are vetted by the open college network concerned in conjunction with the Quality Assurance Agency for Higher Education, an independent body entrusted with advising on standards and quality in higher education in the UK. If approved, the courses and qualifications are accredited as having met a published standard. They are then recognised by universities and other providers of higher education as a means of access to those institutions.
3. Secondly, open college networks have developed a system for recognising units of training or education completed by adults. The units may have been provided by different employers or colleges. The system which has been developed, this time in conjunction with another independent body – the Qualification and Curriculum Agency, allows an individual to claim cumulative credit for a number of units, again as a means of access to higher education.
4. Thirdly, open college networks by themselves provide bespoke accreditation to learning programmes unique to one college or employer.
5. All open college networks operate in a particular region of the United Kingdom. In 1987 a national body was set up to co-ordinate the activities of these local organisations. This was the predecessor of the Claimant, which was given the name 'National Open College Network'. The predecessor was formally constituted as the national body for open colleges in 1991 and registered as a charity. Most, though not all open college networks around the country were affiliated to the Claimant's predecessor. The predecessor specified assessment criteria for national qualifications, subject to approval by the government regulator.
6. In February 1999 the Claimant was incorporated and it inherited the functions of its National Open College Network predecessor.
7. The Defendant is an open college network. It is the product of successive amalgamations of four regional open college networks. All four became affiliated to the Claimant's predecessor in the period up to February 1999. After the incorporation of the Claimant in that month all of them entered into a membership agreement with the Claimant. Over a period between September 2001 and July 2005 came the succession of mergers between the Defendant's predecessors. The Defendant itself emerged as the product of one of these mergers in March 2003 and later mergers with it resulted in the Defendant in its present form in July 2005. At this stage it was still a member of the Claimant.
8. In May 2006 following disagreements between the Claimant and Defendant the membership agreement between them came to an end. There followed a series of disputes by correspondence culminating in these proceedings. At the core of the dispute is the question whether the Defendant is entitled to style itself an 'OCN' having relinquished membership of the Claimant's organisation.

The rights in dispute

Trade marks

9. The Claimant is the owner of a number of trade marks ("the Claimant's Trade Marks"):

(1) UK trade mark no. 2,317,870 for the letters 'OCN' ("the OCN Mark");

(2) UK trade mark no. 2,317,869 for the letters 'NOCN' ("the NOCN Mark");

(3) Ten UK registered trade marks (which I need not distinguish), each of which consists either of 'nocn' (in one case) or 'ocn' (in the remaining instances) together with a national or regional designation and a 'swoosh' device ("the Swoosh Marks"). An example is the Eastern Region Swoosh Mark, UK registered trade mark no. 2,578,769 :


10. It was not in dispute that all of the Claimant's Trade Marks are registered in relation to, among other things, services provided by the Defendant.
11. The Claimant complains that the Defendant has traded under the (i) the name OCN, (ii) the name OCN Credit4Learning, (iii) the domain name 'ocncredit4learning.com' ("the Defendant's Domain Name") and (iv) the following logo ("the Defendant's Logo"):

12. The Claimant alleges that the Defendant has thereby infringed each of the Claimant's Trade Marks.
13. The Defendant denies infringement and counterclaims for a declaration that the OCN Mark and the Swoosh Marks be revoked, by the time of the trial on the following grounds:

(1) The Defendant was the proprietor of earlier rights arising from the use of 'OCN' in respect of (a) the name OCN itself and (b) signs similar to the Swoosh Marks ("the Swoosh Signs") at the time the OCN Mark and Swoosh Marks respectively were registered, such that their use was at all times liable to be prevented by the Defendant by virtue of the law of passing off. Those Marks are therefore invalidly registered pursuant to ss.5(4)(a) of the Trade Marks Act 1994 ("the Act").

(2) The OCN Mark at the time it was registered consisted exclusively of a sign or indication which had become customary in the current language or in the bona fide and established practices of the trade, contrary to s.3(1)(d) of the Act.

(3) The Swoosh marks were applied for in bad faith contrary to s.3(6) of the Act.

14. In relation to the Defendant's counterclaim under s.3(1)(d) of the Act, aside from denying the allegation the Claimant alleges in the alternative that since registration the OCN Mark has acquired distinctive character.
15. The Claimant also contends that the Defendant is entitled neither to (a) seek revocation of the OCN Mark nor (b) oppose the use of the OCN Mark since, as proprietor of an alleged earlier right (if there was one), the Defendant acquiesced for a continuous period of five years in the use of the OCN Mark in the United Kingdom, being aware of that use. See s.48(1) of the Act.
16. For its part, the Defendant runs three further defences:

(1) The Defendant used in the course of trade, in a particular locality, earlier rights which applied only in that locality, see s.11(3) of the Act. The earlier rights in question were derived from the use of 'OCN' in the regions of the UK in which the Defendant's predecessors operated at the date of registration of the OCN Mark. The Defendant contends that the use of those earlier rights was protected by virtue of the law of passing off.

(2) The Claimant is estopped from enforcing any rights it may have against the Defendant by reason of its delay in doing so and thereby creating an implicit representation that it had no objection to the Defendant's acts complained of. I will refer to this as 'the common law estoppel defence'.

(3) If the Claimant is right in its contention under s.48(1) of the Act, the Claimant may not oppose the Defendant's use of the 'OCN' trade name, see s.48(2) of the Act.

Passing off

17. The Claimant claims ownership of goodwill in its business, which goodwill it says is associated with each of (i) the letters OCN, (ii) the letters NOCN and (iii) the Claimant's Swoosh Mark, which takes the following form:

18. The Claimant alleges that the Defendant is liable for passing off by reason of its trading under (i) the name OCN, (ii) the name OCN Credit4Learning, (iii) the Defendant's Domain Name and (iv) the Defendant's Logo.
19. The Defendant denies passing off and pleads in the Re-Amended Particulars of Claim that it, along with other OCNs, owns the goodwill associated with the name OCN and its Swoosh Marks.
20. The Defendant also advances the following further defences in line with equivalents being relied on in the context of trade mark infringement:

(1) a common law defence of estoppel; and

(2) an entitlement to use the OCN trade name pursuant to s.48(2) of the Act if the Claimant is entitled to rely on s.48(1) of the Act.

The history of the goodwill

21. Central to the issues in this case is how goodwill associated with the name 'OCN' came into being and what happened to its ownership. A number of points need to be clarified to begin with.
22. First, it was not in dispute that goodwill is capable of subsisting in a business which consists of educational and charitable work of the sort carried on by the Claimant, the Defendant and other open college networks – as opposed to trading in the usual way. See British Diabetic Association v The Diabetic Society [1996] FSR 1, for example, in relation to charities. In this judgment I will use the terms 'business' and 'trading' in a loose sense to encompass the activities of the parties in this case.
23. Secondly, it was no part of the Claimant's pleaded case that it sought or had any right to prevent the Defendant styling itself as an 'open college network'. During argument Ms Bowhill, who appeared for the Claimant, said at one point that the Claimant might object if the Defendant traded as an 'open college network' as opposed to using a corporate name which included those words. I take the view that having chosen to take no objection in these proceedings to the Defendant's use of a trade name including 'open college network' the Claimant has no realistic prospect of resiling from that position. Although it makes no real difference, Ms Bowhill told me that the Claimant took a conscious decision to limit its objection to 'OCN'. I will go forward on the basis that the Defendant is free to use a name which includes 'open college network'. As will be seen, its freedom to do so is anyway fully in accordance with the evidence.
24. Thirdly, I have to say that I found that the obvious relationship between the term 'open college network' and its usual abbreviation 'OCN' complicated the important task of trying to trace the emergence and subsequent ownership of goodwill in a business (or businesses) solely associated with the name 'OCN'. Unsurprisingly, the distinction between the descriptor and its abbreviation were at best blurred in the evidence. I will later consider the extent to which there was any real distinction at all.

The Claimant's account in relation to goodwill associated with 'OCN'

25. The Claimant's account begins with common ground. The three words 'open', 'college' and 'network' were not used together in that order until the Claimant's predecessor was set up in 1987 under the name 'National Open College Network', commonly abbreviated to 'NOCN'.
26. In 1991 a constitution for the Claimant' predecessor was drawn up. I was not shown this constitution but there was evidence of its existence. I was shown a document entitled 'Constitution of the National Open College Network' which was given the date June 1992. It may or may not be the same thing. I was also shown what appears to have been a revised constitution dated July 1997, which was further revised in May 1998.
27. Local open college networks began to sign up as members of this body. Ms Bowhill submitted that in law the members collectively took the form of an unincorporated association. This was the Claimant's predecessor although Ms Bowhill accepted that as an unincorporated association it had no legal personality.
28. During the 1990s the term 'open college network' became used to identify the organisations of the type that were members of the National Open College Network and to indicate what they did. The first example of the use of that term as part of a name was 'Leicestershire Open College Network', an organisation which adopted the name in 1991. It was also known as 'Leicestershire OCN' or 'LOCN'. The use of 'open college network' as part of a name spread to other regional organisations such as Buckinghamshire Open College Network, Oxfordshire Open College Network and so on. Inevitably, 'open college network' in any context was commonly abbreviated to 'OCN'. Importantly, however, the Claimant contends that the lawful right to use the 'OCN' abbreviation has only ever extended to members of the Claimant or, at this stage of the chronology, the Claimant's predecessor.
29. Ms Bowhill submitted that before February 1999 all goodwills in the regional businesses of the open college networks, associated with 'OCN', were collectively held by the members of the unincorporated association which (though not a legal entity) was the Claimant's predecessor. I was referred to Hanchett-Stamford v Attorney General [2008] EWHC 330 (Ch); [2009] Ch 173 and Williams and Williams v Canaries Seaschool SLU [2010] R.P.C. 32.
30. On 8 September 1998 Teresa Bergin, Chair of the Claimant's predecessor, wrote to all its members:

"As you will be aware, the NOCN Annual General Meeting in July this year agreed to move to a new basis for membership of the NOCN during 1998-9, based on the establishing and operation of a licence for OCNs to offer awards within NOCN's accreditation framework. A timetable for moving towards these licensing arrangements has been established and is enclosed with this letter. My purpose in writing to you now is to invite you on behalf of your OCN to indicate to NOCN whether or not you wish to apply for such a licence.

…

All those OCNs that indicate an intention to apply for a licence will then constitute the membership base of the new organisation that NOCN will establish later this year, and on which your OCN has already been consulted."

31. By the time of the incorporation of the Claimant on 22 February 1999 there were 31 member OCNs. There also existed open college networks which were not members. The members included all four of the Defendant's predecessor OCNs. The Claimant's case is that upon its incorporation, the relevant goodwill of each member OCN, that is to say the goodwill associated with the name 'OCN' alone, was assigned to the Claimant. Ms Bowhill relied on a number of documents in support of this, beginning with the Memorandum and Articles of Association of the Claimant of 22 February 1999 ("The Articles of Association"), to which the members agreed. The following clauses, in which "the Charity" means the Claimant, were drawn to my attention:

"3.3 In furtherance of the Objects, the Charity may exercise the following powers:

…

3.3.4 to acquire, construct, maintain, alter, improve, hire, take on lease or licence and (subject to such consents and such conditions as may be required by law) to change or otherwise dispose of any real or personal property;

…

3.3.14 to issue licences to members of the Charity, to offer awards within the Charity's credit framework and to monitor, withdraw and withhold such licences. Such licences will cover all those actions undertaken by the members which affect the credibility and currency of awards offered in pursuance of the Objects;

…

6. If the Charity is wound up or dissolved and, after all its debts and liabilities have been satisfied, there remains any income and property it shall not be paid to or distributed among the members of the Charity, but shall be given or transferred to some other charity or charities having objects similar to the Objects which prohibits the distribution of its or their income and property to an extent at least as great as is imposed on the Charity by Clause 3.4 of the memorandum, chosen by the members of the Charity at or before the time of dissolution and if that cannot be done then to some other charitable object."

32. Ms Bowhill also relied on a licence dated 20 December 1999 entered into between the Claimant and its members ("the 1999 Licence"), in particular the following:

"6.1 The holding of a Licence from NOCN confers upon the Licence-holder both the right and the obligation to use the term 'Open College Network' in the title of the organisation.

…

6.4 The name of the OCN must be first approved by NOCN as a condition of holding this Licence. Any change to the name of the organisation must be first agreed with NOCN.

…

6.7 The OCN shall at all times represent itself to third parties as being licensed to provide its services by NOCN.

6.8 The OCN shall not allow any third party to use its name or a similar name to its name and shall notify NOCN immediately if it becomes aware that any third party is using its name or a similar name."

33. Ms Bowhill argued that there was thus acknowledgement by member OCNs that the Claimant owned all the goodwill associated with 'OCN' and that this was consistent with the application for the OCN Mark by the Claimant in 2002. She submitted that by this stage at the latest the member OCNs must have abandoned any claim to ownership of goodwill in their respective businesses insofar as that goodwill was associated with 'OCN'. Otherwise they would have been consenting to the Claimant applying for a trade mark which was necessarily invalid pursuant to s.5(4)(a) of the Act. I was shown the minutes of a board meeting of the Claimant held on 10 October 2002. No representative of any of the Defendant's predecessors was there but those who were present agreed that the Claimant should apply for both OCN and NOCN Marks. The minutes were distributed to all member OCNs, presumably including the Defendant's predecessors, but this was done on 23 December 2002, after the OCN Trade Mark had been applied for on 6 December 2002.
34. The final document relied on was a replacement licence entered into by the Claimant and member OCNs in April 2005 ("the 2005 Licence"). It includes:

"An OCN is required to provide an explicit written statement, which indicates that it will:

1.1 conform with, and abide by, the standards and criteria of the licence, all operational guidance and any other documents relating to OCN provision, as published from time to time by NOCN"

35. Ms Bowhill argued that these documents collectively show that from 1999 member OCNs operated under the licence of the Claimant, that this was made clear to the public and therefore the public became aware that the Claimant was ultimately responsible for the quality of the services provided by the OCNs. Consequently the goodwill in the OCNs' businesses, associated with the name OCN, vested in the Claimant from 1999 and had continued to do so up to the present. Failing that, at the very latest the consent of the OCNs to the Claimant filing for the OCN Trade Mark must be counted as conduct which is solely consistent with those OCNs having recognised that all goodwill associated with the OCN trade name vested in the Claimant. In the case of the Defendant's predecessors and other member OCNs who did not attend the board meeting of 10 October 2002, their failure to raise any objection to the application once they were informed about it likewise counted as conduct only consistent with a recognition that all goodwill associated with 'OCN' vested in the Claimant.
36. By way of a secondary case, Ms Bowhill submitted that even if the member OCNs had retained the relevant goodwill after 1999 or 2002, any that abandoned their membership would have relinquished the goodwill to the Claimant upon leaving.

The Defendant's account

37. Mr St Ville argued that in the period up to the incorporation of the Claimant in 1999 the member OCNs were a class, not a club. They were in this sense akin to champagne houses or producers of advocaat: the members of the class were not bound by any contractual duties. They therefore lacked the contractual underpinning necessary to form an unincorporated association (see Bollinger and others v Costa Brava Wine Company Ltd [1960] R.P.C. 16 and Erven Warnink BV v J. Townend & Sons (Hull) Ltd [1980] R.P.C. 31). Consequently each member OCN was the owner of its own separate goodwill, as opposed to there being collective ownership.
38. Moreover such goodwill arose in each case from trading in educational services under names including 'OCN'. The Claimant's predecessor did not so trade and therefore acquired no equivalent goodwill, see Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd [1999] R.P.C. 826, in particular the judgment of Chadwick LJ at 842-844.
39. Mr St Ville also submitted that the term 'open college network' and its abbreviation 'OCN' was being used to describe open colleges of the type which I have referred to above a good deal before Leicestershire Open College Network adopted that name in 1991. I was shown a document called 'UDACE Open College Networks, Current Development and Practice' published in June 1989 ("the 1989 UDACE Paper"). UDACE is the acronym for Unit for the Development of Adult Continuing Education. Chapter 1 begins with this:

"This Development Paper presents together for the first time, a review of past achievements and current developments of Open College Networks (OCNs) in England and Wales."

Chapter 2 is headed "The Nature of Open College Networks" and starts as follows:

"Open College Networks are collaborative and representative bodies which bring together organisations involved in the provision of learning opportunities for adults, and in providing information and guidance about them. These groupings are commonly termed Networks or Federations.

While Open College Networks have developed in different ways they now all offer flexible, accessible and rigorous accreditation systems which are locally based and controlled but which have wider recognition."

This document, along with other documents I was shown, used 'Open College Network' interchangeably with 'OCN' and used both descriptively as a means to identify the type of body described in the passage above. Neither Mr St Ville nor Ms Bowhill directed my attention to the 'Glossary of Terms' at the end of the 1989 UDACE Paper, but one of the definitions is particularly relevant, which I quote along with the next for completeness:

"Open College Network: A generic term referring to Open Colleges which may or may not be called 'Open College Federation'. (For example, the Open College Network in North and East London is called Access to Learning for Adults – ALFA).

Open College Federation: A specific title taken by many Open Colleges, dating back to the mid 1970s."

40. UDACE produced at least one other paper about open college networks, entitled 'Developing Open College Networks', published in about 1991 ("the 1991 UDACE Paper").
41. Mr St Ville argued that contrary to the Claimant's case, when the Claimant was incorporated in 1999 it did not acquire its members' goodwill associated with 'OCN'. His position was that although such goodwill subsisted in the case of each member OCN, it was separately owned by each member immediately prior to the Claimant's incorporation and has remained so up to the present.
42. Mr St Ville took me back to the letter of 8 September 1998 from the Chair of the then NOCN, the subsequent Articles of Association and the 1999 Licence. He submitted that none of these documents, whether by reason of the clauses relied on by Ms Bowhill or otherwise, reflected an assignment of goodwill from member OCNs to the newly formed company. He paid particular attention to clauses 6.1 and 6.4 of the 1999 Licence. Clause 6.1 was concerned with the term 'Open College Network', which the Claimant did not object to in these proceedings. It did not in any event prevent a member from continuing to use that term if membership ceased. It purported to confer upon the member the right to use the term but this was empty: in fact members had every right to call themselves an 'Open College Network' or an 'OCN' and clause 6.1 could not change that. Clause 6.4 did no more than give the right to the Claimant to approve the name of the member but that did not serve to assign goodwill to the Claimant any more than did clause 6.1.
43. With regard to the Claimant's application for the OCN Mark, Mr St Ville pointed out that none of the Defendant's predecessors had consented to that application. By the time they could have been aware of it the application had been made, so it was too late to consent. The subsequent absence of an objection could not constitute retrospective consent. Nor was it subsequent consent: a restraint from complaining about the application was equally consistent with the belief on the part of each of the Defendant's predecessors that because they were owners of goodwill associated with 'OCN', the OCN Mark could not successfully be used against them since it could be challenged as an invalidly registered trade mark.
44. In summary, the Defendant's position was that its predecessors each owned goodwill associated with 'OCN' before February 1999 as members of a class that identified themselves by that term. Although they were all members of the Claimant's predecessor and later members of the Claimant, nothing had changed with regard to ownership of the relevant goodwill by 6 December 2002, the date on which the Claimant applied for the OCN Mark.

Analysis of the rival claims to goodwill associated with 'OCN'

45. It seems to me that this aspect of the Claimant's case falls at first hurdle. I do not accept that goodwill ever subsisted which was associated with the letters 'OCN' standing alone. Those letters became adopted as an inevitable abbreviation of 'open college network' and both were terms which emerged in the 1980s to describe a new type of educational body. It seems to me that they were and remain entirely descriptive. I do not doubt for a moment that since its incorporation in February 1999 the Claimant has acquired goodwill in its business. But that goodwill cannot be attached to a purely descriptive term. The goodwill is probably associated with 'NOCN' and there may be other distinctive badges of origin with which such goodwill is associated. It is not associated with 'OCN'.
46. Equally I do not doubt that each individual open college network has always owned goodwill in its business. Each was held responsible for the character and quality of its services. But that goodwill will always have been associated with a regional name such as 'Buckinghamshire Open College Network' or with some other name or logo specific to the open college network in question, not with 'OCN' alone.
47. I recognise that this is not a result that either party contended for, although the Defendant came close in relation to its argument on s.3(1)(d) of the Act. My impression was that the Defendant preferred, if possible, to arrive at a result whereby it owned goodwill associated with 'OCN' and the Claimant did not. This could in the future give the Defendant the possibility of preventing third parties from using that term. But I do not accept this account of events either.
48. Since neither party pressed for the result that 'OCN' has at all times been descriptive I am cautious about arriving at this conclusion. I do so for two reasons. The first is the Claimant's failure to attempt any restraint on the Defendant using the term 'open college network'. It seems to me unreal to suppose that 'open college network' could be a legitimate way of describing the Defendant yet the right to use its obvious acronym is solely the preserve of the Claimant. If one is descriptive, so must the other be.
49. Secondly, the documents I was shown all seem to me to use 'OCN' as a descriptive term fully interchangeably with 'open college network'. This is hardly surprising. I have referred above to the two UDACE papers but they are just examples. By way of a further example, even the revised constitution of the Claimant's predecessor, dated May 1998, uses both 'open college network' and 'OCN' as terms to refer to open colleges – bodies like the Defendant – irrespective of whether they were members of the NOCN.
50. Further, I do not agree with the Defendant's contention that OCNs have at any time formed a class, equivalent to champagne houses, makers of advocaat or manufacturers of Swiss chocolate, such as to give rise to goodwill associated with 'OCN' which in turn afforded any member of that class a cause of action in passing off. 'OCN' is a description of a type of organisation which did not exist before the 1980s. An equivalent example I suggested in argument was 'disc jockey' or its acronym 'DJ', terms which did not exist before the 1930s. There is also 'IT consultant' which dates I imagine from the 1950s or 60s. There will be other and no doubt better examples. When new expressions like these emerge for the first time to identify a type of individual or organisation who or which carry out novel forms of activity, it does not follow that each of them as a matter of course acquires goodwill associated with that term and thereby a cause of action in passing off to prevent others from using it to identify what they do.
51. On the evidence I was shown, 'OCN' is not a term which has ever identified a sufficiently defined class of organisations to have given rise to goodwill associated with that term. It is, and always has been, purely descriptive of a type of educational body.
52. If I were wrong about that – if goodwill associated with 'OCN' did arise in the 1980s – I would still not accept the Claimant's account of events. I should say first that on this assumption the argument between the parties as to whether the OCNs affiliated to the Claimant's predecessor before February 1999 formed an unincorporated association or alternatively a class – like champagne houses – seems to me to go nowhere on this part of the case. Either way, the Claimant's predecessor owned no part of the relevant goodwill. Ms Bowhill accepted this because unincorporated associations lack legal personality. Mr St Ville said it was because the predecessor did not trade as an OCN. What would matter, it seems to me, is whether the goodwill associated with 'OCN', whether jointly or individually owned by the OCN members, was assigned to the Claimant either at the time of its incorporation or later when its applied for the OCN Mark.
53. Ms Bowhill originally put her case on the basis that there was an implied term in the written agreements entered into by the Claimant and the Defendant's predecessors that the relevant goodwill was assigned to the Claimant. This was modified to an assignment by reason of the conduct of the parties. With regard to the latter, I accept that an assignment of goodwill requires no particular formalities and there can be assignment by conduct. But the conduct in question was entering into one or more of the agreements. There is no express assignment and therefore an assignment could only implied into one of those of agreements if any other course were unambiguously inconsistent with its express terms.
54. In my view the Claimant has not satisfied that burden of proof. It seems to me that in each case the agreement was workable even if – this was really the point – the member could continue calling itself an 'OCN' once it had relinquished membership. That being so, the member cannot have transferred the relevant goodwill to the Claimant. To do so would have left no contractual or other right on the part of the member to use 'OCN' as part of its trade name once membership ended. Thus, even if the relevant goodwills had existed in the hands of the Defendant's predecessors in 1999, they would not have been assigned to the Claimant.
55. As to what happened in 2002 when the Claimant applied for the OCN Mark, I accept that Mr St Ville's analysis would follow on the assumption that the OCN Members collectively or individually retained the relevant goodwill up to that point. If that had been the case, those goodwills would not have been transferred to the Claimant by the Defendant's predecessors in 2002.
56. I turn to the consequences of my findings to the rights in dispute.

The OCN Mark

Validity

57. On the findings above the Defendant's counterclaim pursuant to s.5(4)(a) of the Act fails but it succeeds pursuant to s.3(1)(d).

Infringement

58. As indicated above, it is common ground that acts of the Defendant fall within the specification of each of the trade marks relied on by the Claimant.
59. Had the OCN Mark been valid and therefore distinctive I would have found that, subject to any defences, the distinctive and dominant part of the Defendant's sign 'OCN Credit4Learning', the domain name and the Defendant's Logo are the letters 'OCN' and that the OCN Mark had been infringed. Self-evidently, to the extent that the Defendant has traded under the sign 'OCN', such trading would have infringed the OCN Mark.

The NOCN Mark

60. There was no challenge to the validity of the NOCN Mark. With regard to infringement, the only element which is common to 'OCN', 'OCN Credit4Learning', the Defendant's Domain Name or the Defendant's Logo on the one hand and the NOCN Mark on the other, is the descriptive acronym 'OCN'. Consequently I find that neither infringe, see Starbucks (HK) Ltd v British Sky Broadcasting Group plc [2012] EWHC 3074 (Ch); [2013] FSR 29, at [120], approved by the Court of Appeal [2013] EWCA Civ 1465; [2014] F.S.R. 20.

The Swoosh Marks

Validity

61. The Swoosh Marks were not invalidly registered pursuant to s.5(4)(a) because the Defendant was not the owner of any relevant earlier right.
62. The pleaded case in relation to s.3(6) of the Act was that the Swoosh Signs had been created and used by OCNs about 8 years before the Claimant applied for the Swoosh Marks. The applications were in bad faith because the Claimant thereby sought to shut out OCNs from using signs they had created.
63. This was not given a great deal of attention by the Defendant, whether in writing or orally. However, it was put in cross-examination to Graham Hastings-Evans, managing director of the Claimant, that OCN South East Region, one of the OCNs from which the Defendant was derived, worked on the design of the Swoosh Marks in November 2003. Mr Hastings-Evans freely accepted this but stated that the work was passed by OCN South East Region to the Claimant for the Claimant to manage, control and pay for. Mr Hastings-Evans said that this was the work which gave rise to the Swoosh Marks later applied for by the Claimant in 2011.
64. In Hearst Holdings plc v AVELA Inc, [2014] EWHC 1553 (Ch); [2014] E.T.M.R. 39, Birss J considered Red Bull [2012] EWHC 1929 (Ch), Club Sail Trade Marks [2010] R.P.C. 32 and Ian Adam Trade Mark [2011] RPC 21 and said this:

"[58] A number of particular points are worth highlighting. First, bad faith is a serious allegation which must be distinctly proved. Secondly, it includes not only dishonesty but also some dealings which fall short of the standards of acceptable commercial behaviour observed by reasonable experienced men in the particular area being examined. Thirdly, it is intended to prevent abuse of the trade mark system; for example where the applicant knowingly supplies untrue or misleading information in support of his application or abuse vis-à-vis third parties. Fourthly, the invalidity of the application is not conditional on the trade mark itself being either registrable or unregistrable in relation to any goods or services of the kind specified. The objection is absolute in the sense that it is intended to prevent abuse of the system for requiring title to a trade mark by registration. Finally, in order to determine whether an applicant is in bad faith the court will make an overall assessment."

On the limited evidence I have, and particularly bearing in mind the evidence of Mr Hastings-Evans, I am not satisfied that the Defendant has distinctly proved that the dealings of the Claimant in relation to the Swoosh Marks fell short of the standards of acceptable commercial behaviour observed by reasonable experienced individuals in OCN activities. I conclude that the Swoosh Marks are not liable for revocation on the ground of bad faith.

Infringement

65. I take the view that the Swoosh Marks are not infringed by the OCN sign, the name 'OCN Credit4Learning' or the Defendant's Domain Name for the reason discussed in relation to the NOCN Mark. There was some evidence of confusion that was not much explored and it is not possible to say that this was related to the Swoosh Marks. On the other hand, having in mind (a) that there is an overlap between services provided by the Defendant under the Defendant's Logo and the services for which the Swoosh Marks are registered and (b) the visual similarities between the Defendant's Logo and the Swoosh Marks, I find that the Defendant's Logo infringes the Swoosh Marks pursuant to s.10(2) of the Act. No question of either aural or conceptual similarity arises. In my view there exists a likelihood of confusion on the part of the public. I should add that such infringement in no way inhibits the Defendant from trading by reference to the sign 'OCN' (or, for the avoidance of doubt, 'ocn').

Further defences

66. There would have been no defence to trade mark infringement under s.11(3) of the Act because no earlier right in the form of a cause of action for passing off ever subsisted in relation to the trade name 'OCN'.
67. Mr St Ville gave the defence of common law estoppel almost no attention either in writing or orally, so that I am not fully clear how it is put, in particular with regard to the necessary ingredient of unconscionable conduct on the part of the Claimant. I would not have accepted this defence.
68. There is no defence under s.48(2) of the Act because s.48(1) does not apply. Section 48(1) does not apply because the Defendant had no earlier right.

Passing Off

69. It follows from what I have said earlier that the goodwill in the Claimant's business was associated with the trade name 'NOCN' and the Claimant's Swoosh Mark, but not 'OCN'. The Claimant is entitled to rely only on the goodwill in its business associated with 'NOCN' and the Claimant's Swoosh Mark.
70. Any confusion with 'NOCN' could have arisen only because of the Defendant's use of the descriptor 'OCN'. Such use cannot have given rise to an actionable misrepresentation. On the other hand, for the reasons I have given for finding that use of the Defendant's Logo gave rise to infringement of the various Swoosh Marks pursuant to s.10(2) of the Act, including the Claimant's Swoosh Mark, I find that use of the Defendant's Logo constituted a misrepresentation that the Defendant was associated in the course of trade with the Claimant. The common law defence of estoppel was not made out and a defence under s.48(2) of the Act does not arise.
71. The Claimant's case in passing off succeeds in relation to the Defendant trading under the Defendant's Logo.

Conclusion

72. The claim for trade mark infringement fails save that the Swoosh Marks are infringed by use of the Defendant's Logo. The OCN Mark stands to be revoked. The claim for passing off succeeds but only in relation to the Defendant's Logo.

Post Script

73. I have one final observation which I think should be expressed even though it is self-evident. I now know that between them the parties, both charities, have incurred well over £400,000 on fees in this litigation. A very strong recommendation to settle at the case management conference was not taken up. The laudable cause of encouraging adult education will presumably have to endure an equivalent cut in funding solely because this dispute was not resolved at an early stage. Such an outcome is much to be regretted.