Case No. EWHC-11-(IPEC)

Designs and Patents Act 1988 (the CDPA): ; and iii)Passing off. 3.Specifically, the Claimant complains that use of the following signs (the Signs) constitutes trade mark infringement: i)CORMETON; ii)www.cormeton.co.uk (the Domain Name); iii)the Work; and iv)(the Device). 4.The Claimant also alleges that the First Defendant has used the sign CORMETON ELECTRONICS (the CE Sign) in the course of trade in the supply and sale of mechanical fire protection equipment. The Claimant has no issue with the First Defendant using the CE Sign in relation to the supply and sale of electrical safety equipment, but wishes to prevent the First Defendant from using the CE Sign in relation to mechanical fire protection goods or services. 5.The Second Defendant is alleged to be jointly and severally liable with the First Defendant for the acts complained of, on the basis that he authorised, procured and/or directed those acts. The Defendants have admitted those allegations of joint and several liability, so I say no more about them. 6.7.I should also make clear what the Claimant does not complain about. The Claimant is happy for the First Defendant to continue to trade under the CE Sign, carrying on the supply and sale of electrical safety equipment (alarms etc). However it asks the Court to stop the First Defendant from (i) using CORMETON on its own; (ii) from using the Domain Name; (iii) from using the Work and the Device; and (iv) from using CORMETON (including the CE Sign) in relation to a mechanical fire safety business (extinguishers etc). 8.Therefore, the simply phrased question I have set out above of “who gets to use the word CORMETON and for what goods/services” requires assessment of a significant number of sub-issues. 9.The trial was heard remotely. Mr Thomas St Quintin appeared for the Claimant. Mr Tim Austen appeared for the Defendants. 10.Although this judgment will be handed down following the United Kingdom’s departure from the European Union trade mark regime on 31 December 2020, subject to one issue on estoppel/acquiescence to which I will return below, I was asked by both counsel to decide the case on the basis of the law as it stood at the time of the trial. List of Issues 11.As is usual in the IPEC, the List of Issues was set at the CMC (determined without a hearing). All remained relevant at the start of the trial. “The Work1. Goodwill and Reputation 2.Does the Mark have a reputation in respect of the goods and services for which it is registered and/or an enhanced distinctive character? 3.Have the Claimant and its predecessors generated and does the Claimant own goodwill attached to the Mark and/or the Work in respect of safety monitoring goods or services? Partnership; Separation; Consent 4.Did the Claimant and the First Defendant form and trade as a partnership? 5.If so: 5.1did the Work become a partnership asset? 5.2did any goodwill attached to the Mark and/or the Work become a partnership asset? 6.What was agreed between the parties when they ceased working together in 2003? 7.Has the agreement reached between the parties when they ceased working together been terminated? Copyright Infringement 8. Trade Mark Infringement and Passing Off 9.Does there exist a likelihood of confusion on the part of the public because the Signs and/or the CE Sign are identical or similar to the Mark, and used in respect of goods and services identical with or similar to those for which the Mark is registered? 10.Do the acts complained of affect, or are they liable to affect, one of the functions of the Mark? 11.Does the use of the Signs and the CE Sign take unfair advantage and/or is detrimental to the distinctive character and/or take unfair advantage of the repute of the Mark? 12.Was any such use of the Signs and the CE Sign in the manner set out at paragraph 11 above with due cause? 13.Have members of the public actually been confused as a consequence of the acts complained of? 14.Do the acts complained of cause a misrepresentation that damages the Claimant’s goodwill in the Mark and/or the Work? 15.Is infringement of the Mark and/or passing off avoided because of honest concurrent use? Authorisation 16.Have the acts of which complaint is made, or any of them, been conducted without the Claimant’s authorisation? Acquiescence and estoppel 17.18.Are the Defendants entitled to a defence of estoppel or acquiescence in respect of any acts that would otherwise be acts of passing off? 19.Are the Defendants entitled to a defence of estoppel or acquiescence in respect of any acts that would otherwise be acts of infringement of the Mark? Validity of the Mark 20.Was the Mark, in whole or in part (and if in part, in what part) registered contrary to section 3(3)(b) of the TMA because it was on its filing date of 12 May 2016 of such a nature as to deceive the public? Revocation of the Mark 21.Is the Mark liable to be revoked under section 46(1)(d) of the TMA because it is liable to mislead the public as a consequence of the use made of it by the Claimant or with its consent? 22.If so, from which date did the Mark become liable to revocation on the aforesaid basis?” 12.Issues 4 and 5 were conceded by the Defendant on the morning of the second day of the trial following the cross-examination of the Defendants’ witnesses and all allegations of partnership were withdrawn. 13.As will be apparent, this was a large number of issues to be determined within the ambit of the usual IPEC two day hearing. Much of the trial was taken up by only a few of the issues. Many issues were covered only briefly, and some not at all. To decide the case, it is not necessary for me to examine in detail every controversy that arose. I have therefore, in this judgment, dealt only with the issues that make a difference to the outcome of the case, and have ignored those controversies which, though fiercely argued, are irrelevant to the outcome. Witnesses 14.The Claimant and the Defendants each called two witnesses. All four witnesses were skilfully cross-examined. Michael Warburton Senior 15.Mr Michael Warburton Senior is a director and company secretary of the Claimant, a family business for whom he has worked since 1974. As various male members of the Warburton family are mentioned in the evidence before me, I will use first names to differentiate them: in doing so, I mean no disrespect. Michael Senior gave evidence that the business now operated by the Claimant was started in 1967 by his father, Mr Robert Warburton Senior. Robert Senior named the business CORMETON – a portmanteau word combining elements of CORROSIVE, METAL and the family name, WARBURTON. Michael Senior’s brother, Mr Robert Warburton Junior, took over the business in 1968, and Michael Senior took over day-to-day operations in 1974. In 2014, Michael Senior’s son, Mr Michael Warburton Junior, took over the day-to-day operations of the business. 16.Michael Senior’s first witness statement set out the establishment of the Claimant, the creation of the Work (to which I return below), and the relationship between the Claimant and the Defendants. His second witness statement responded to the Defendants’ written evidence. 17.Counsel for the Defendants criticised Michael Senior’s evidence as being “exceptionally vague”, and contended that his inability to recollect some dates meant that I should treat his evidence with some care. I disagree. First, this criticism was never put to him. Second, Michael Senior was asked to recall events from many years ago, often of doubtful or peripheral relevance to the proceedings – including, for example, what make of vans were used by the Claimant at different times. I accept that the date of creation of the design drawings on which the Claimant relied is of importance to these proceedings, but it is unsurprising that he was unable to recall precise dates for what would have been at the time unimportant events. I found him to be an honest witness, doing his best to assist the Court. This does not mean that I have accepted all of his evidence: I have not. But in my judgment his evidence was honestly given. Anne Warburton 18.Mrs Anne Warburton is married to Michael Senior, and mother of Michael Junior. She is also a director of the Claimant, and began working in the Claimant’s business in 1996. Her first witness statement set out details of what she alleged was confusion between the Claimant and the First Defendant. Her second witness statement responded to the Defendants’ witness statements. 19.Counsel for the Defendant suggested that Mrs Warburton was “less than candid” in her oral evidence. He described her oral evidence as vague and difficult to follow, and urged me to approach it with great caution. Again, I disagree. Whilst there were facts from some years ago that Mrs Warburton could not recall, she was doing her best to assist the Court. She was an honest witness. John Aitchison 20.As noted above, Mr John Aitchison is the Second Defendant and a Director of the First Defendant. In his witness statement he gave his version of the relationship between the two businesses, and the split that occurred in 2003. 21.Counsel for the Claimant criticised Mr Aitchison as a dishonest witness. Specifically, it was submitted that Mr Aitchison lied in the closing moments of his oral testimony, when he contradicted his written evidence to claim that conversations which his witness statement stated had occurred with his “staff” were actually had directly with him. It does seem to me, having watched Mr Aitchison give his evidence and having reviewed the transcript, that it is likely that Mr Aitchison’s written testimony is to be preferred on this point, because it seems to me inherently implausible that Mr Aitchison would have used the expression “a number of [the First Defendant’s] staff” when he meant himself. Mr Aitchison was professionally represented, and had assistance in preparing his witness statement. There is very little in the issue itself, as Counsel for the Claimant conceded, but he went further, suggesting that I should therefore treat all of Mr Aitchison’s evidence with care. He submitted that where Mr Aitchison’s evidence is inconsistent with another witness’s evidence, I should prefer that of the other witness. Counsel for the Claimant submitted that this included the evidence of what was agreed in 2003, and submitted that I should prefer Michael Senior’s evidence to that of Mr Aitchison. Counsel for the Defendants submitted that Mr Aitchison had been nervous, but had given his evidence honestly. I accept that Mr Aitchison’s evidence at the end of his crossexamination was not accurate. But I do not consider that that infects the remainder of his testimony to a degree that I should discount it where there is evidence to the contrary. I consider that, overall, Mr Aitchison was doing his best to assist the court. As will be apparent from what follows, there are facts on which his memory has failed him, and I have concluded that I prefer other evidence to the evidence given by Mr Aitchison on some issues. But having had the benefit of the totality of Mr Aitchison’s evidence, and in particular having seen him give his oral testimony in cross-examination, I do not conclude that Mr Aitchison was dishonest in his written testimony or in his crossexamination up to the last moments I have mentioned above. Stephen Rush 22.Mr Stephen Rush is a director of the First Defendant. He started in the First Defendant’s business in 2002, shortly before it moved out of the Claimant’s premises in 2003. He provided a witness statement setting out his views on the relationship between the Claimant and the First Defendant, and what he saw as the changes to that relationship since Michael Junior took over day-to-day management of the Claimant. He also provided some evidence which sought to suggest that the Claimant benefits from the association between the Claimant and the First Defendant. 23.Counsel for the Claimant submitted that Mr Rush’s version of some conversations he had had with Mrs Warburton was a “statement of what he wants to believe rather than a record of what was actually said”. As I have set out below, Mrs Warburton was not asked about those conversations in cross-examination, so I accept what she said about them in her written evidence. That also means that I reject Mr Rush’s version of what Mrs Warburton meant by what she said to the extent that it differs from what Mrs Warburton said in her statements. This does not, however, mean that I consider Mr Rush a dishonest witness – he was trying to assist the court, but I am unable to accept what he said about exchanges with Mrs Warburton because it was not put to her that her version of events was untrue. 24.Each of the witnesses was asked to recall conversations and events from, in some cases, many years ago, in circumstances where there was not a thorough or complete documentary record of all that happened. To the extent that there are documents, the Court can read them, and ascertain their meaning – questions to the witnesses as to what they thought those documents may have meant did not assist me. Neither counsel put to me that I should prefer any of the oral testimony to the written record where it was available. However, given the “defences” to infringement which have been raised by the Defendants, I must piece together the events that have occurred as between the two businesses since 1989, so as to ascertain the legal consequences for the parties. Of course, much of what has happened in that time is irrelevant to the determination of the issues in dispute – and each side sought to put its own spin on various events to assist its case. The Factual Matrix 25.As I understand the parties’ submissions, none of what follows under this heading was seriously contested. 26.The Claimant’s business was started and named by Robert Senior in 1967. Michael Senior was in charge of the business from 1974. The Claimant was incorporated in 1979 under the name CORMETON FIRE PROTECTION LIMITED. That business provided mechanical fire protection goods and services, including fire extinguishing systems. By 1989, the Claimant was trading from premises at the Delaval trading estate in Seaton Delaval. 27.Prior to 1989, Mr Aitchison worked in a different business, principally concerned with fire and safety electronics, including fire alarms, lighting, access control keypads and CCTV. 28.Mr Aitchison and Michael Senior met through their then work in 1989 and, shortly thereafter, decided to work together. The First Defendant was established under the name CORMETON ELECTRONICS LIMITED to carry on the supply and sale of electrical safety equipment in which Mr Aitchison had expertise. Michael Senior owned 60% of the shares in the First Defendant, and Mr Aitchison owned the remaining 40%. The First Defendant operated from the Claimant’s existing premises at Seaton Delaval. It was common ground that Michael Senior made most of the management decisions in relation to the Claimant, and Mr Aitchison made most of the management decisions in relation to the First Defendant. It was also common ground that staff and various business systems were shared between the Claimant and the First Defendant. 29.This situation continued for over 14 years. 30.The Domain Name was registered in 1998. Until 2003, the website at the Domain Name referred to both the Claimant and the First Defendant. 31.In 2003, needing more space, the First Defendant moved out of the premises at Seaton Delaval and Michael Senior was paid £240,000 for his shares in the First Defendant. The full terms on which the businesses separated were hotly contested. The Claimant asserted that the terms were orally agreed, and that they imposed on the First Defendant obligations (1) only to use CORMETON as part of the full name CORMETON ELECTRONICS LIMITED and (2) only to supply and sell under that name electrical safety equipment (and not mechanical fire safety equipment). The Defendants asserted that a formal separation agreement was negotiated by solicitors on behalf of the parties, but no such document has been found. The Defendants asserted that, under the written agreement, both businesses were permitted to use CORMETON, with the Claimant operating in mechanical fire protection and the First Defendant operating in the supply and sale of electrical safety equipment. 32.Since 2003, both businesses have continued to trade. Initially, they were on friendly terms, and co-operated. The businesses referred work to each other, and subcontracted to each other. Since 2003, the website at the Domain Name has referred only to the First Defendant. The Claimant registered its own domain name, and set up its own website at www.cormetonfireltd.co.uk in 2010. 33.In 2014, Michael Junior took over the day-to-day running of the Claimant. Relations with the Defendants soured shortly thereafter. The First Defendant made some changes to how it marketed itself, including dropping the references to ELECTRONICS LIMITED on the sides of its vans. There were also changes to the First Defendant’s website. It stopped subcontracting mechanical fire protection work to the Claimant, and instead subcontracted such work to third parties. 34.The Mark was filed in 2016. These proceedings were commenced in 2019. 35.I mention for completeness that from about 2014, the Claimant kept logs of what it said were instances of consumer confusion. The Defendants did not accept that all those instances were reliable, but did accept that there was some evidence of confusion between the Claimant and the First Defendant (indeed, they positively relied on that confusion as establishing, among other things, the invalidity of the Mark under section 3(3)(b) of the TMA). Copyright 36.The Particulars of Claim state: 5.The Work was created in or around 1982 by Michael Warburton senior, who was a British Citizen and/or was ordinarily resident in the UK and was an employee of the Claimant acting in the course of his employment in the creation of the Work. 6.In the creation of the Work, Mr Warburton senior expended a significant original and artistic effort. The Work is the expression of Mr Warburton senior’s own intellectual creation. That intellectual creation was expressed in particular through the creation of the appearance of the flame effect element of the Work, the shape, size and position of the white nearlycircular element, the selection of the colours of the Work, and the selection of the font and colour and position of the word “Cormeton” within the Work.” 37.Michael Senior was asked in cross-examination about the creation of the Work: Q: I am asking you to focus specifically on the red badge with the flame and the word Cormeton underneath it, that picture or logo was not created by you, was it? A: No. Q: It is more likely than not that at some point, perhaps shortly before 2013, the First Defendant created the Work, did they not? A: I would assume so, yes. 38.It became apparent during his cross-examination that whilst Michael Senior may have created what was referred to at the