Court of Appeal rules that easyGroup suffered damage in Easy Live Auction dispute

This article first appeared in WTR Daily, part of World Trade mark Review, in February 2024. For further information, please go to www.worldtrade markreview.com.

• easyGroup brought proceedings for trade mark infringement and passing off against the defendants over their use of the name Easy Live Auction
• At the High Court, the passing off claim was dismissed due to an absence of damage
• The Court of Appeal found that easyGroup had suffered damage in the fee that it could have charged Easy Live (Services) Limited

On 20 December 2023 the Court of Appeal issued its decision in easyGroup Ltd v Easy Live (Services) Ltd ([2023] EWCA Civ 1508).

Background

easyGroup, known for its EASY brands, brought proceedings for trade mark infringement and passing off against the defendant, Easy Live (Services) Limited (‘ELSA’), as well as its shareholders and directors, who operated an online auction platform under the name Easy Live Auction.

easyGroup alleged infringement of five EASY-formative trade marks, including EASYJET and EASYGROUP, as well as passing off, due to ELSA's use of variations of the name Easy Live Auction.

In the High Court, the judge dismissed the infringement claim under Section 10(2) of the Trade marks Act 1994 due to the lack of similarity between services, and the passing-off claim due to an absence of damage. However, the claim under Section 10(3) of the act succeeded.

Court of Appeal decision

easyGroup successfully appealed the High Court decision on passing off. The Court of Appeal reiterated that the three core ingredients of the tort of passing off are:

1. goodwill owned by the claimant;

2. a misrepresentation by the defendant; and

3. consequent damage to the claimant.

The High Court judge had held that, while easyGroup did hold goodwill, and ELSA's use of two variants of Easy Live Auction amounted to misrepresentation, this had not caused easyGroup any damage because there was no realistic suggestion that there had been any diversion of trade due to the absence of any overlap between the businesses of easyGroup's licensees, and no real likelihood of damage to the repute of easyGroup's brand. easyGroup appealed this finding, while ELSA challenged the finding of misrepresentation.

The Court of Appeal considered the weight placed on the defendant's state of mind by the High Court in establishing a misrepresentation. The High Court had found that, while ELSA's director and shareholder Mr Burnside had not intended to divert any trade from any of easyGroup's licensees, he had deliberately altered the visual presentation of ELSA's sign to make an allusion to easyJet. The Court of Appeal concluded that the High Court had been justified in treating Mr Burnside's state of mind as relevant evidence which was supportive of easyGroup's case that there was a misrepresentation.

The Court of Appeal overturned the High Court's finding that easyGroup had not suffered any damage, holding that easyGroup had suffered damage in the fee it could have charged to ELSA. The Court of Appeal explained that this was a real loss because easyGroup did have a business in licensing its brand to third parties. The Court of Appeal summarised the law as follows:

"[A] claimant who has no existing or prospective endorsement or licensing business cannot rely solely upon the loss of the fee that it would have charged for consenting to the acts complained of as completing its cause of action; but a claimant which does have an existing endorsement or licensing business can in principle rely upon the loss of that fee for that purpose even if the acts complained of are not of precisely the same kind as the claimant has previously endorsed or licensed; and the same may be true of a claimant which has a prospective endorsement or licensing business (eg, a celebrity who has not yet started such a business but is at the point where they could do so)."

Comment

This case confirms that a defendant's state of mind can be a relevant factor taken into account by courts in assessing the ‘misrepresentation’ limb of the passing off test. It also highlights that the ‘damage’ limb of the passing off test can be satisfied where the claimant has an existing or prospective licensing business, even where there has been no loss of business and the defendant does not compete with either the claimant or its existing licensees.

With thanks to Charlotte Budd, Solicitor Apprentice, for co-authoring this article.