Case No. EWHC-1798-(IPEC)

214.Red Bull makes clear it is a serious matter to allege that a trade mark has been registered in bad faith and that any such finding must be solidly grounded, with a presumption that those registering trademarks have acted in good faith. Jacob LJ suggested that the allegation is such that the evidence relied on to establish it must be cogent. He confirmed that the standard of proof is the balance of probabilities.215.In assessing the good faith or otherwise of someone applying for a trade mark (which is to be assessed as at the date of the application), it is permissible to have regard to evidence later than the date of the application if that evidence casts light back on the position at the relevant date.216.In considering the evidence, I also have in mind the well-known comments of Males LJ in Bank St Petersburg PJSC & Anor v Arkhangelsky [2020] EWCA Civ 408:“In general it is legitimate and conventional, and a fair starting point, that fraud and dishonesty are inherently improbable, such that cogent evidence is required for their proof. But that is because, other things being equal, people do not usually act dishonestly, and it can be no more than a starting point. Ultimately, the only question is whether it has been proved that the occurrence of the fact in issue, in this case dishonesty…, was more probable than not.” [117]217.With those principles in mind, the relevant evidence, and the factual findings which flow from it are set out below. This requires a certain amount of reconsideration of issues which have already been considered, in view of the different legal context.Timing and Mr Williams’ knowledge218.There is no dispute that the UK TM was applied for on 24 October 2018.219.Mr Clarke’s written evidence is that the formation of his band began at latest during the summer of 2018. This is corroborated by Mr Etherington’s written evidence that he was asked shortly after July 2018 by Mr Clarke and Mr Richardson if he would join them in a band which was not the Claimants’ band.220.There is some dispute in the evidence whether Mr Clarke (or any of the other Defendants) told Mr Williams about the formation of the new band.221.Mr Williams’ initial evidence was that the Defendants had asked him whether they could continue as ‘their own Rubettes’ and that he had said they could not.222.The Amended Defence denies that the Defendants made any such request, denies that Mr Williams said he would return for future concerts with the band, and asserts that Mr Williams told the Defendants that he was disbanding the band.223.Mr Clarke’s first witness statement says that “At some stage between April and July 2018, it is my understanding that John told Alan that John, Steve and I would continue to perform as the Rubettes without him.” This was not corroborated by the written evidence of Mr Richardson. Mr Richardson’s oral evidence was that he had originally intended to remain with Mr Williams’ band and support him in his future efforts but subsequently changed his mind. Both Mr Richardson and Mr Etherington gave oral evidence that they did not tell Mr Williams about Mr Clarke’s plan to form a new band in the period between July 2018 and October 2018.224.Mr Clarke’s oral evidence was that, during a meeting at Mr Clarke’s house in July, he had told Mr Williams’ about his plans, and that Mr Williams did not say that he was planning to come back to perform in gigs. Mr Clarke acknowledged that this was not in his written evidence.225.The evidence about events during the meeting at Mr Clarke’s house in or around July 2018 is not entirely clear, which is unsurprising given the time that has passed and the various intervening events, including this litigation. However, as discussed further below, it is significantly more likely than not that the focus of that meeting was primarily on financial issues, rather than Mr Williams’ move to Australia.226.Mr Richardson stated that Mr Clarke “did not have Alan’s ear” after July so that discussions between them were not likely.227.Mr Clarke did not claim to have told Mr Williams at any point about the trade mark registration. When asked about it during cross-examination, he reiterated that as far as he was concerned Mr Williams had gone to Australia to retire.228.Mr Williams’ conduct after the spring of 2018 does not suggest that he understood that Mr Clarke (or any of the Defendants) planned to set up an alternative band.229.Weighing up all the evidence, it is unlikely that Mr Clarke told Mr Williams of his plans, or that Mr Williams was aware of them. His evidence that Mr Williams was informed of Mr Clarke’s intention to start a new band by Mr Richardson is not supported by any other evidence, including that of Mr Richardson. In the circumstances, I consider it more likely that there was some discussion during the spring of 2018 of the possibility that the Defendants might perform as the Rubettes without Mr Williams when Mr Williams was in Australia, but that Mr Williams was not in favour of such a plan, and did not take that discussion as a serious proposal to start a new band without his involvement.Mr Clarke’s motivations for registering the trade mark230.Mr Clarke’s evidence was that he registered the UK TM “simply to protect the name of the Rubettes”. During cross-examination he stated that it had been suggested to him (he did not say by whom) that registration of the mark would give his new band protection and that it would be necessary to have it in order to work. Mr Clarke accepted that it had never previously been necessary to have a trade mark and that there was no evidence of any third party threat (i.e. other than from the Claimants).231.Mr Clarke’s written evidence is: “At no time in the summer of 2018 or otherwise have I or any member of TRFJMS attempted to prevent TRFAW from performing any live performance in the UK, Europe or otherwise. This is despite being the registered owner of the UK trademark The Rubettes in Nice classes 9, 35 and 41. A copy of the UK trademark registration can be found at Exhibit MCI page 3.” This evidence is not consistent with subsequent events or with his oral evidence.232.Mr Clarke accepted under cross-examination that letters had been sent by him or on his behalf to venues which were working with the Claimants’ band or advertising future performances. Mr Clarke stated that he and the other Defendants were concerned that the Claimants’ band was using their image to advertise its performances. When Mr Smith asked whether the motivation for writing the letters was to stop the Claimants’ band, Mr Clarke disagreed, saying that the Defendants were happy for Mr Williams to continue to work; were trying to stop him from using their image; were simply trying to find some basis on which the Defendants could work; and would be happy if the Claimants simply changed their advertising.233.Only one such letter was available for review. It was disclosed by the Claimants. That letter is in email form. It is dated 15 May 2019 and appears to have been sent to SMG Europe Holdings Limited (‘SMG’) from an email account [email protected]. It is signed:“The RubettesJohn Richardson - Original member and Founder of the Rubettes/Original DrummerMichael Clarke - Original member / Bass Guitarist and Registered Trademark & Copyright Owner”234.The text of the letter reads:“Subject: Our Conversation : THE RUBETTESDear Mr ,RE: THE RUBETTESFurther to our conversation today, we are writing, as you so advised, with regards to the incorrect and illegal publicity your company is using.We have recently discovered that your business is using the trademark “The Rubettes” in association with the marketing or sale of your products of services, ie ticket sales, in particular for the Plowright Theatre, Scunthorpe, on Thursday October 17, 2019.This letter may well be relevant for other theatres that you represent and we ask that you apply the following to each and every case.Please be advised that “The Rubettes” is a registered trademark and we believe your use infringes on our ownership of the registered trademark.We registered the trademark “The Rubettes” with the European Union and UK Intellectual Property Office [ registration no UK00003348207 and EUO18021990].We refer to Classification no’s 9, 35 and 41.Because you are using the trademark “The Rubettes” in your advertising and marketing material, we believe your use of the mark causes confusion amongst our fans and audiences and dilutes the goodwill and distinctiveness of our trademark and may likely to cause customer confusion in the future for our fans who are coming to see The Rubettes.Your unauthorised use of our registered trademark amounts to an infringement of our trademark rights and therefore, we respectivelrequest [sic] that you immediately cease and desist in any further use of the name “The Rubettes”, or any confusingly similar trademark.We will be in contact with other respected online tickets agents and theatres, to ensure that our registered trademarks will be removed from any other artist or band using “The Rubettes” trademark.We hope that this issue may be amicably resolved so we may avoid any further legal remedies as provided by EUIPO and UK Trademark Act.Attached is the Trademark Registration Certificate.We look forward to hearing from you.”235.As pointed out by Mr Smith, that letter relies heavily on the existence of a registered trade mark. It does not refer to the images used by SMG in its marketing but focusses clearly on the use of the name ‘the Rubettes’ and requests SMG to stop using not only ‘the Rubettes’ but also any confusingly similar ‘trademark’.236.In the light of the fact that there was no objective basis for the reasons given by Mr Clarke for registering the UK TM, I find that Mr Clarke’s incorrect written evidence that there was never any intent or attempt to prevent Mr Williams from working, his evasiveness during cross-examination, his willingness to give new evidence during cross-examination, and his incomplete oral evidence makes Mr Clarke an unsatisfactory witness on this issue and casts significant doubt on Mr Clarke’s evidence as to his motivations for registering the trade mark.237.While the presumption is that those who register marks do so in good faith, Mr Clarke’s evidence as to his motivations is implausible in the light of the surrounding facts and is unsupported. The evidence of his conduct shortly after the trade mark was registered persuades me that, on the balance of probabilities, Mr Clarke’s motivation was not to acquire the trade mark so as to enable himself to work, nor was it to protect his band from unlawful use: it was to enable him to interfere with the efforts of AWEL and Mr Williams to continue their business.Mr Clarke’s belief that Mr Williams was retiring and disbanding the band238.Mr Clarke’s oral evidence was that he read the 1 July email as meaning that Mr Williams intended to disband the band entirely. The relevant sentence reads: “I am disbanding my present band line up as of now and as a result I must inform you that your services will no longer be required.” During cross-examination, Mr Clarke said that he had reached his view in the light of Mr Williams having told the band members that he would be moving to Australia once he received his residents’ permit. Mr Clarke said that when he received the email he thought that the band would be coming to an end. He also explained that he continued to perform with the band until September 2018, although he noted that AWEL had also employed additional musicians for the performances in August and September 2018.239.Mr Clarke’s written evidence did not address his understanding of the 1 July email in great detail. The paragraph dealing with it states:“The band The Rubettes featuring John, Mick and Steve (“TRFJMS”) began following the disbanding of the second Claimant’s band The Rubettes featuring Alan Williams (“TRFAW”) in the summer of 2018. Alan Williams wrote to me by email on 1 June 2018 stating that he was disbanding his present band line up and as a result my services would no longer be required.”240.Mr Williams’ written evidence was that the 1 July email was sent in the context of a dispute with Mr Clarke (in particular) about money and not in the context of his forthcoming change of residence to Australia (which according to both Mr Clarke and Mr Etherington had already been discussed with the others in the spring of 2018). Mr Williams’ evidence was that he had offered an increased session fee, which was not accepted by Mr Clarke and that, as a result of this, he sent the email to Mr Clarke. He did not send it to either of the others (both of whom had accepted the increased session fee). Mr Williams notes that Mr Clarke in fact performed at the band’s remaining shows in 2018 at the fee previously agreed.241.During cross-examination, Mr Williams testified that his email to Mr Clarke was intended to be a polite way of saying that Mr Clarke was no longer needed. He explained that he had not explicitly said that he would be carrying on with others as Mr Clarke would have understood that to be the case given that it had happened many times before. When asked whether the email was sufficient to have led Mr Clarke to believe that Mr Williams and AWEL had given up any claim to ‘the Rubettes’ and were disbanding the band, Mr Williams said that was most unlikely as the others were continuing to perform and Mr Clarke was very aware that the band was carrying on and that Mr Williams was intending to change the line-up.242.Mr Richardson’s written evidence was that:“At paragraph 108 AWAS, Alan sets out that he was forced to replace Mick Clarke effectively due to financial demands from him for more money. This is not what actually happened, as I have previously set out in my second Witness Statement there were a number of arguments between various persons with regard to costs and payments. Alan told me that it was intention to sack Mick from the band due to his “sticking up” for himself and other band members (in light of Alan’s treatment of others) and his questioning of Alan with regard to finances. This was something that I tried to talk Alan out of. It was following his refusal of my efforts to keep this version of the band together that Alan wrote to Mick stating that he was disbanding the band and no longer required his services.”243.In the light of the above, I do not accept Mr Clarke’s evidence that he understood the events of 2018 and, in particular, the 1 July email as meaning that Mr Williams was disbanding the Claimants’ band and retiring. While all of the evidence about this period lacks precision (in particular as to exact dates, which is unsurprising given the time that has passed), Mr Clarke’s version of events in his oral evidence, which was subsequently relied on by Mr Colbey in submissions, expands significantly on his written evidence and is not supported by the evidence of the other witnesses.244.The surrounding circumstances include the fact that the email was written only to Mr Clarke, and is agreed by Mr Williams and Mr Richardson to have followed a disagreement about financial matters. There is some dispute as to the exact nature of the financial dispute, with Mr Williams focussing on session fees, and Messrs Richardson and Etherington focussing on the fees charged by AWEL to promotors, about which it is said that there was a significant disagreement.245.Notwithstanding the differing accounts of the issues discussed, the evidence on balance suggests strongly that the principal topic of the meeting was financial. In the light of this evidence, I conclude that Mr Clarke’s most recent evidence as to his understanding of the 1 July email is, at best, significantly tainted by hindsight. I do not accept, on the balance of probabilities, that Mr Clarke believed that Mr Williams was abandoning the Rubettes, disbanding the band and retiring to Australia.Assessment246.A court considering whether an application to register a trade mark is made in bad faith is concerned to avoid two main potential types of abuse: the first against the registry; and the second against third parties. The abuse alleged here is against the Claimants. The allegation is that Mr Clarke applied for the UK TM to interfere with the lawful activities of Mr Williams and AWEL. In determining whether Mr Clarke acted in bad faith, it is necessary to assess the situation in the round and consider whether the evidence establishes on the balance of probabilities that Mr Clarke sought to do what has been alleged and, if so, whether his conduct falls short of the standards of acceptable commercial behaviour in the music industry.247.As mentioned above, I have carefully considered Mr Clarke’s evidence, both written and oral, as to what he knew and what he intended. I regret that I have found that evidence to be unsatisfactory. Mr Clarke’s evidence was internally contradictory and undermined by the evidence of the other Defendants. Mr Clarke’s evidence shifted over time, and his version of events was not supported by any contemporaneous documentary evidence, or by the overall context. Finally, the credibility of his account of his motivations was undermined by his own subsequent conduct. With that overall assessment of the evidence in mind, I find that:•Mr Clarke was well aware of the activities over many years of AWEL and Mr Williams;•Mr Clarke did not have a genuine belief that AWEL and Mr Williams were abandoning their business in the UK;•Mr Clarke did not tell either AWEL nor Alan Williams of his plans to set up a further competing band or to register the UK TM;•Mr Clarke had no reasonable grounds to believe that the UK TM was necessary to enable him to work, or that there was any unconnected third party use against which the mark might be legitimate protection;•once obtained, the mark was used to interfere with the activities of AWEL and Mr Williams by writing to venues working with AWEL and Mr Williams, relying on the UK TM and raising the prospect of litigation;•Mr Clarke’s explanations of that correspondence during cross-examination were completely new evidence; and•the combination of that correspondence and Mr Clarke’s unconvincing evidence, combined with his failure to mention that correspondence in his written evidence, cast light on his intentions at the date of application.248.It follows that I do not accept Mr Colbey’s submission that the Defendants never sought to interfere with the Claimants’ business, nor that Mr Clarke’s motive in registering the mark was to protect his interest from unlawful usage.249.I also conclude that it is irrelevant that there is a contractual arrangement under which the Claimants have agreed to trade only as ‘the Rubettes featuring Alan Williams’. Mr Colbey acknowledged in his skeleton that this was not something that Mr Clarke purports to have had in mind when registering the UK TM. That acknowledgment was wise and is amply demonstrated to have been accurate by the later evidence of Mr Clarke’s use of the UK TM in his correspondence with SMG. The email from SMG to Alan Williams sending him the copy of the email which was later disclosed by the Claimants states: “On your advice we are advertising the show as ‘The Rubettes featuring Alan Williams.’ You can see for yourself at our website”. It is clear that it made no difference to Mr Clarke that the Claimants’ band was using the style it had agreed with Mr Hurd.250.In short, the facts which I have found support Mr Smith’s position. Mr Clarke’s application was not motivated by an interest in protecting against unlawful use. It was motivated by an intent to interfere with the Claimants’ legitimate conduct in a context where there was no reasonable basis to believe that those interests were being abandoned, and the UK TM was subsequently exercised so as to interfere with the Claimants’ business. Mr Clarke’s conduct in applying for the UK TM falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the music business.Flagrancy251.Mr Smith submitted that it would be efficient when considering the evidence as a whole in order to make findings as to liability to consider whether certain facts which are pleaded as the factual basis for an award of additional damages pursuant to Regulation 3 of the Intellectual Property (Enforcement etc.) Regulations 2006 are made out in the evidence. I agreed to do so, and my conclusions are below. However, this is an issue which goes to remedies and I make no finding as to whether or not the conduct of the Defendants or any of them meets the appropriate legal test.252.The facts asserted by the Claimants to be relevant are:(i)Up until early March 2018, Mr Clarke did not know or care how much AWEL was charging for gigs.253.As mentioned above, the evidence establishes that the business of the Claimants’ band was run by AWEL, who negotiated with promotors, bore all the expenses and received any profits or were responsible for any losses.254.Mr Clarke’s written evidence is that “In 2018 I began to believe that Alan was not being entirely straight with the band over actual concert pricing”. He refers to discussions with other members of the band and to a meeting at his house in March 2018 at which the issue was discussed. During cross-examination, Mr Clarke was asked about expenditure during 2016 and my note is that his response was along the following lines and that he was not reviewing expenditure: “I was interested in the band but not in shows were people weren’t turning up. I did not ask to see any invoices or what he was getting. I suspected that he was losing money but I was concerned about damage to the band.”255.This is broadly in line with the evidence of Mr Richardson who also refers to the March 2018 meeting. However, Mr Richardson’s written evidence is that at the time of the 2018 meeting “Mick … had insisted for a year or so that the Claimants had been charging more for our gigs than we were being told.” and “[s]ome weeks before the meeting described above the four of us … were together to [sic] Belgium. Mick had been telling me confidentially that he was sure the band were getting lots more money than we were told …”. Mr Richardson gave no further evidence on the timing of Mr Clarke’s knowledge during cross-examination.256.Mr Etherington gave no evidence on this issue.257.Mr Williams’ written evidence makes no reference to any dispute with the Defendants about how much was being charged to promotors. His evidence is that there was a dispute about session fees. During cross-examination, Mr Colbey asked him whether there had been an argument about money which had led to the 1 July email. Mr Williams made no comment about the precise nature of the disagreement.258.In the light of the evidence discussed above, I do not accept that the fact as stated by the Claimants has been proved. The evidence suggests that Mr Clarke was concerned about the amount AWEL was charging for gigs before March 2018, certainly during 2017 and possibly beforehand.(ii)Mr Clarke found out in about March 2018 that some of the European gigs were more lucrative than he previously believed.259.Mr Richardson’s written evidence, which has not been challenged on this point, is that Mr Williams confirmed in March 2018 that AWEL had been charging more for performances than he had previously told Mr Clarke or Mr Richardson. However, Mr Richardson is clear that Mr Clarke had been in discussions with agents and promotors about the costs of booking the Claimants’ band and had been insisting for around a year that the fees being charged were higher than he had been told.260.Mr Clarke’s evidence is that before the meeting in March 2018:“I had taken the time to speak to a number of promoters and venues who had told me that the prices for TRFAW were not what I had originally believed.”261.In the light of the evidence, I do not accept that the fact as stated by the Claimants has been proved.(iii)Mr Clarke asked for more money. Mr Williams agreed to pay a higher appearance fee. Mr Clarke wanted more.262.As mentioned above, the evidence relating to the financial discussions between the band members from the spring of 2018 onwards is not satisfactory. There are various accounts of what was discussed and when. The only evidence relating specifically to the changed appearance fee is given by Mr Williams. The Amended Particulars of Claim suggest that there were discussions relating to an increased performance fee in around September or October 2018 and Mr Williams’ written evidence (as mentioned above) states that these discussions took place in or around July.263.The Amended Defence admits only that there were discussions (at an unspecified time) about the division of the band’s profits.264.In the light of the evidence discussed here, and also in the context of the assessment of bad faith above, I find that there were financial tensions within the band and that Mr Clarke was perceived by Mr Williams to be a source of such tensions.(iv)On 1 July 2018, Mr Williams sent an email to Mr Clarke sacking him from the band.265.I have dealt with this email above. I have found that Mr Williams did send an email to Mr Clarke saying that his services were no longer required and that the then-current line up was being disbanded. I have also found that Mr Clarke continued to play with the Claimants’ band until mid-September 2018.(v)Shortly after the 1 July email, Mr Clarke began a clandestine course of conduct to put together a “Rubettes” band without Mr Williams and invited Mr Richardson and Mr Etherington to join. They accepted.266.I have dealt with this issue above and have found that there were discussions between the Defendants about working together without Mr Williams. I have found that those discussions began before July 2018. The evidence is that, while these discussions were proceeding, at least Mr Etherington and Mr Richardson were also considering continuing to work with Mr Williams for at least some of the period after July and that Mr Etherington at least hoped that the dispute would blow over and continued in discussions with Mr Williams about dates until early 2019.267.I do not find that the facts are as stated by the Claimants.(vi)The Defendants continued to play with Mr Williams until September. They did not tell him what they were planning. As soon as he was out of the country, they started putting their plans into action.268.I have dealt with this evidence above. I find that the position stated by the Claimants is correct.(vii)The Defendants have gained increased opportunities from their passing off which they would not have had if they had started off under a new name, such as connections with promotors and venues they wouldn’t otherwise have got.269.This is not a matter on which I can reach a view without further assistance from counsel as to the evidence.The position of Mr Etherington270.Mr Colbey submitted that Mr Etherington should not be liable given his limited involvement in the conduct complained of and on the basis that he had only ever played in a band called a variation on ‘the Rubettes featuring …’. Had that been the case, the submissions of Mr Colbey would have been more powerful. However, as I have found above, it is accepted that the band in which he played, and in relation to which he made his services available, was presented and performed as ‘the Rubettes’.271.Mr Colbey also relied on Mr Etherington’s statement in his evidence that he had now withdrawn from the band. Mr Colbey stated in his skeleton that Mr Etherington “currently has no intention of performing with the Rubettes in any form”. No undertaking to that (or any other) effect has been offered, so far as I am aware.272.In the circumstances, I do not accept Mr Colbey’s submissions and Mr Etherington’s final position will be considered when remedies and the final order are being resolved.CONCLUSIONS AND SUMMARY273.In summary, my findings on each of the issues for trial is set out below.Passing off(i)When did the Defendants commence the acts complained of (‘the relevant date’)?The relevant date is Autumn 2018.(ii)At the relevant date, was AWEL (or AWEL and Mr Williams together) the owner(s) of goodwill associated with the Rubettes Names or any of them?At the relevant date, the Claimants were the owners of relevant goodwill.(iii)At the relevant date, were the Defendants or any of them the owners of any goodwill associated with the Defendants’ Signs or any of them.At the relevant date, the Defendants did not own any relevant goodwill.(iv)In the light of the above, does the use by the Defendants of the Defendants’ Signs or any of them amount to a misrepresentation that the Defendants’ live music events, merchandising, music sales and associated goods and services are the goods and services of the First Claimant (alternatively the Claimants together) or are otherwise associated or connected with or authorised by the First Claimant (alternatively the Claimants together)?The Defendants’ conduct amounts to a misrepresentation sufficient to engage the tort of passing off.(v)Has any misrepresentation made by the Defendants damaged or is it likely to damage any goodwill found owned by the AWEL (alternatively AWEL and Mr Williams together)?The misrepresentation has caused damage to the Claimants’ goodwill.Trade mark invalidity(vi)Was the application for the UK TM made in bad faith?Yes.(vii)In light of the findings on passing off and bad faith, is the UK TM invalid?Yes.General(viii)If passing off is shown, were the acts of passing off flagrant and/or calculated to benefit the Defendants in excess of the likely damages?Not yet determined.274.In conclusion, the Claimants have succeeded and the only remaining issue is as to the consequences of that success.275.I shall dealt separately with submissions from counsel on remedies and issues relating to the final order.1 Rahbarpoor & Anor v Suliman & Ors [2022] EWHC 1093 (Ch)