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Passing off: Inquiry as to damages

Name of parties: The National Guild of Removers and Storers Limited v George Anthony Statham and Catherine Ann Statham (together t/a Marubbis Removals & Storage)

Before: His Honour Judge Hacon on 5/11/2014 in the High Court of Justice, Chancery Division, Intellectual Property Enterprise Court

Neutral citation: [2014] EWHC 3572 (IPEC)

Primary issues presented: The claimant is seeking damages of £28,866.77 following judgment in their favour in November 2013, based on the ‘user principle’ to claim back payment of membership dues from the defendants. Defendants had previously made a verbal and written settlement offer of £10,000 which was refused in September 2013.

Background / Facts: The defendants, who run a removals and storage business, were members of the NGRS until October 2010 at which point their membership ceased. References to their membership of the NGRS were removed from company property, marketing and advertising materials with the exception of two references on a directory website, which Judge Hacon agrees was most likely an oversight on their part given that all other references to the membership had been removed. The defendants were made aware of the directory listings on 15 April 2013 and ensured that the references were removed the next day. NGRS commenced proceedings for passing off in August 2013. Birss J found in favour of NGRS on 28 November 2013 and NGRS now seek damages of £28,866.77 based on the user principle (claiming the licence fees that the defendants would have had to pay to make the infringing acts lawful).

Discussion: NGRS relied on two previous judgments concerning the claimant and inquiries as to damages, NGRS v Silveria and NGRS v Jones. In both Jones and Silveria, NGRS relied on post-termination obligations within the NGRS’s membership rules as a guide to damages. In Silveria, the rules stated a penalty of £200 for each week that the NGRS’s name or logos continued to be used post-termination (in addition to other run-on fees for advertising and damages if the post-termination obligations were breached). In Jones, the defendant argued that the annual fee was the right basis on which to assess damages but Judge Birss noted the guild’s specific provision in the rules for dealing with the use of registered marks after the termination of membership and reminded the parties that the primary issue in the case concerned damages for infringement of trade mark, not breach of contract. NGRS argued that Judge Hacon should follow the same approach in deciding the present case.

Decision or Judgment: Judge Hacon’s decision turned on the fact that in two previous cases heard by Judge Birss, there was no evidence that either Jones or Silveria had intended or been willing to take membership of NGRS covering the period of infringement, whereas there was express evidence that the Stathams had been willing to negotiate a limited membership that would have covered the infringing period. Also, NGRS’s headline membership of £5,200 was more often, in practice, reduced to £1,500 and £1,800. Hacon J: “I am left with the strong impression that members of NGRS in the period 2010 to 2013 were by no means universally required to pay the headline membership fee of £5,200.” Judge Hacon found that the relevant annual fee which would have been more likely applied to the Stathams for membership would have been £1,800 per annum, concluding that the Stathams would pay NGRS damages of £5,400 plus interest and not the £28,866.77 originally sought by the claimants.

Humphreys & Co. 20.11.14