Case No. IP-2022-000006

Joint ownership of trade mark registration is incredibly complex and is liable to lead to a stale mate …Rather, we propose it is in both parties’ interests for [Claimant] to be the custodian of the brand and the named owner of the registration … acting in the interests of both parties.We applied on 5 November for a trade mark application for HAYMAN-JOYCE and HAYMAN JOYCE … to be held in the name of [Claimant]." (emphasis added)I do not know whether these comments were drafted by the Claimant or its solicitors, but they do appear to emanate from them directly, given the references to “we.”56.James Hayman-Joyce commented on this point in a covering email to Mr Comber dated 30 November 2018, in which he suggested that the trade mark discussion did not impinge on the terms of the co-existence agreement, “as long as that contains a licence for us to use the brand.” As that email was sent only to Mr Comber, “us” in that context must have meant the First Defendant.57.It seems to me that despite James Hayman-Joyce’s references to a licence for use of the name, the Claimant’s comment on the First Defendant’s proposal for joint ownership of the mark expressly acknowledged the ownership of goodwill by the First Defendant, at least for residential sales within the Broadway area. The comment was not, on its face, predicated on the basis that the prevailing position was that the Claimant owned all of the goodwill and the First Defendant had no more than a licence to use the name. On the contrary. Again, this appears to me to be consistent with the effect of the Partnership Agreement after 1998, and the position following the incorporation of the First Defendant in 2010, being that the goodwill generated by the Broadway business accrued to them, not to the Claimant or its predecessors in title to the Moreton business.58.The Claimant submitted that the existence of a licence was shown by the control which it claimed it had exercised over use of the Hayman-Joyce name. It pointed to a range of activities: the Moreton office’s control of the domain name used for both businesses, the fact that it undertook responsibility for dealing with various contracts, the website and social media, and the drafting of brand guidelines by Thomas Hayman-Joyce in around 2017. Many of these appear to me to have nothing to do with the status of the Defendants’ use of the Hayman-Joyce name, but reflect the long-standing practical co-operation between the businesses. In addition, in some if not all cases, the Broadway business paid half of such costs. More to the point, nothing in the evidence in my view points to unilateral control by the Claimant or its predecessors over the brand or the get up associated with it. Nothing in these activities proves, in my view, that the Claimant or its predecessors had control of the name as its licensor.59.In all of the circumstances, I find that in 1999 when the Partnership Agreement was drafted the understanding was that the partnership would own the goodwill which would be generated by use of the Hayman-Joyce name in the partnership business, and that goodwill passed to the partners in the First Defendant in 2010, and to the First Defendant itself in 2013. Goodwill accrued since 2010 equally belongs to the First Defendant. 60.That leads me to the question of the scope of the First Defendant’s goodwill, in terms of the nature of the services and the geographical area to which such goodwill extends. The Claimant admitted only that any such goodwill covered residential sales services in the Broadway Patch. It said that any commercial sales or lettings, whether in that area or further afield, had always been done by the Claimant or its predecessors. Whilst it was accepted by the Claimant that the parties’ joint advertising appeared to offer the full range of services from both offices, both Thomas Hayman-Joyce and Mr Yarnold’s evidence was that all commercial leads were passed from the Broadway office to the Moreton business. James Hayman-Joyce made the same claim in December 2014, when a dispute had arisen between the two businesses about the fees for commercial work - a long-standing bone of contention. He said that in all but one case up to that date the full fees for commercial work in the Broadway Patch had been passed on to the Moreton business. One point reiterated by the Claimant was that Mr Comber is not a qualified surveyor, and so could not carry out ‘red book’ valuations, so that these were (or should have been) done by James Hayman-Joyce. In addition, the Claimant did not admit that the numbers of residential sales by the Defendants in No Man’s Land sufficed to establish goodwill outside the Broadway Patch.61.Mr Comber accepted that the primary focus of the Broadway business had always been on offering residential sales, and he also accepted that despite the exclusivity terms of the Partnership Agreement he had always allowed the Moreton business to provide residential lettings and commercial sales and lettings services in the Broadway Patch. However, Mr Comber claimed that not all commercial work had been passed to Moreton, but at times the Defendants' business had also offered commercial services. He provided evidence of a handful of such transactions, several of which, he accepted in cross-examination, were actually dealt with by the Winchcome office and so cannot, in my view, be attributed to the First Defendant.62.The Broadway Patch extends to about a 9 mile radius from the office. As to residential sales outside the Patch, Mr Comber’s evidence was that about 10% of the Broadway office’s business was for residential properties in No Man’s Land, almost all of them being within 10 miles of the Broadway office. His second witness statement showed only 26 sales of properties situated more than 10 miles from the office, and all were within 20 miles of it. 63.I bear in mind the point I made above, that the goodwill of an estate agency business is unlikely to be strictly delimited by reference to the area(s) in which properties it has dealt with are situated. Its goodwill is liable to extend further than that, to areas where the business’s reputation for offering such services extends, and may have the all-important effect of bringing in custom for the business. Attributing any geographical limit to such goodwill is in my view necessarily a somewhat artificial process. I also bear in mind that for many years advertising on behalf of the parties, and their website, did not distinguish between the areas covered by the offices. Balancing these factors, I find that as at November 2020, the First Defendant’s goodwill extended beyond the Broadway Patch in relation to residential sales in No Man’s Land in a 20 mile radius from the Broadway office, but (as was common ground) that goodwill did not extend into the Moreton Patch.64.I have found it more difficult to assess whether First Defendant’s goodwill also extended to commercial estate agency services, and I note that the Defence limited its claim to such goodwill only in the Broadway Patch. On the one hand, it seems that the parties’ advertising will have given the impression that the Broadway office offered commercial services, by not distinguishing between the offerings of each “branch.” On the other hand, in almost every case, and especially where valuations were provided, such services were actually supplied by James Hayman-Joyce or the Moreton office, with fees going to the Moreton office, so that the commercial side of the business was that of the Moreton office, not the First Defendant. I think it was common ground at the close of the evidence that only 4 commercial properties had been offered for sale by the Broadway office, and there were no commercial lettings or other commercial services.65.It is of course possible to establish goodwill on the basis of trading on a small scale, so long as it is more than trivial. For example, see Stannard v Reay [1967] FSR 140. In Knight v. Beyond Properties Pty Ltd & Ors [2007] EWHC 1251 (Ch) (24 May 2007) David Richards J said:“A reputation on a relatively small scale will still attract the protection of a claim in passing off, but at some point the reputation may exist among such a small group of people that it will not do so. The minimum size of goodwill required for this purpose is a matter of fact and degree. A claim in passing off cannot be sustained to protect goodwill which any reasonable person would consider to be trivial: Sutherland v V2 Music Ltd [2002] EMLR 568 at para 22 per Laddie J”.Having carefully considered the evidence before me, I find, on balance, that the First Defendant has not shown that it had any more than a trivial level of goodwill extending to commercial estate agency services. Its goodwill in relation to such services, as at November 2020, was not at a level which would have sustained a passing off action.66.My analysis of the legal position leads, unfortunately, to a situation which is commercially artificial. The Claimant and the First Defendant have some areas of exclusivity, and others in which they both own goodwill. They have exclusivity of goodwill for residential sales services in their own Patches, even though the Patches are so close together that it seems to me that offering services for sales in one Patch would in a normal case lead to building up goodwill in part or all of the other Patch. This is underlined by my finding that both sides have goodwill for such services in No Man’s Land, especially as No Man’s Land includes a narrow strip of land between the Patches, as well as the surrounding areas. In addition, the Claimant has goodwill for residential lettings and commercial sales and lettings services in an area which includes the Broadway Patch. However, I am satisfied that this unusual position arises from the history of the parties’ dealings with each other, and the trade which each has undertaken since 1998.Passing off67.The next issue is whether the Defendants’ use of the Hayman-Joyce name, alone or in conjunction with the get up used by both businesses prior to January 2021, constitutes a misrepresentation. 68.The Claimant complained of a raft of acts by the Defendants. In addition to an objection to use of the Hayman-Joyce name (and its long-standing red get up) generally in relation to its business and premises, it complained inter alia that:a.The First Defendant started to use the name HAYMAN-JOYCE BROADWAY on its website and on sites like Zoopla, sometimes using get up similar to the original get up, but with Broadway beneath the name, and sometimes with a new logo, using the old red colour and typeface, in a circle with Broadway written around it. b.The First Defendant registered various Hayman-Joyce domain names, including www.haymanjoycebroadway.co.uk, www.haymanjoyceonline.co.uk, and www.haymanjoyceproperty.co.uk, and pages with similar permutations of the name on additional social media platforms, such as Instagram and Facebook;c.Up to 10 December 2021, the First Defendant’s website advertised its business as selling houses in a 20 mile radius of Broadway, and thereafter referred to covering sales in Broadway and 60 surrounding villages, in each case without excluding the Moreton Patch;d.Also up to 10 December 2021, two testimonials by the Claimant’s customers appeared on the First Defendant’s website – these were taken down as soon as the Claimant complained about them; ande.In November 2020, the First Defendant distributed flyers advertising its services in the Moreton Patch. 69.It follows from the findings I have made as to the parties’ shared (or overlapping) ownership of goodwill in the Hayman-Joyce name, that the name may identify either the Claimant or the First Defendant or in some cases both of them (see by analogy Sir Robert McAlpine v Alfred McAlpine [2004] RPC 36). The First Defendant’s ownership of goodwill in the name Hayman-Joyce, means that it is entitled to use the name Hayman-Joyce Broadway in the area and for the services for which I have found it to have such goodwill. 70.The First Defendant’s continuing use of that name in the areas in which it has goodwill (including those where the Claimant also has goodwill) in the manner in which it has historically been used by the First Defendant would not amount to a misrepresentation. Acting in this way would not amount to passing off, whether this is due to an “honest concurrent use” defence (as discussed in e.g. W. S. Foster & Son Ltd v Brooks Brothers UK Ltd (supra) at [56]-[60]) or simply reflects the parties’ joint or perhaps more accurately shared ownership of the goodwill. I do not think that the Claimant contended otherwise.71.However, the Claimant said that the acts of which it complained listed in sub-paragraphs 68(a) to (e) above constituted a new departure, materially different to the past use, and led to misrepresentation and to passing off, as in the McAlpine case, where the Defendant had dropped the distinguishing “Alfred” from its name and style. There Mann J said at [49]:“Just as the sole owner’s rights should not be reduced, blurred or diminished, nor should a joint owner’s, whether at the hands of the other joint owner or a third party. Neither owner has higher rights in the name and reputation than the other. But it seems to me to follow from that that neither is entitled to start to elbow the other aside by using it to describe its own business in a way which suggests the exclusion of the other. This is not to invent the tort of misappropriation of goodwill, which I have disclaimed above. It is to recognise that the shared rights to goodwill can be damaged by the co-owner arrogating to himself the use of the name in circumstances where that amounts to a misrepresentation and a partial ouster of the claimant….”72.First, it seems to me that there is no reason why the First Defendant should not use the name Hayman-Joyce Broadway. This is a material change, but is not in my view not a partial ouster of the Claimant, nor will it affect its rights. It is no more likely to lead to a misrepresentation, in the areas and for the services for which the First Defendant has goodwill, than using just Hayman-Joyce. If anything, it seems to me likely to help avoid confusion. Secondly, in my view, for the same reason the First Defendant was entitled to register the new domain names listed above, and to set up new social media accounts, using either the name Hayman-Joyce or Hayman-Joyce Broadway, and whether or not coupled with descriptive terms such as ‘property.’ These matters all seem to me to fall within the proper scope of honest concurrent use of the First Defendant’s own goodwill.73.On the other hand, I consider that it was a misrepresentation for the First Defendant to have advertised its business on its website as selling houses in a 20 mile radius of Broadway, as that would clearly have purported to include the Moreton Patch, and was not justified as honest concurrent use of the First Defendant’s own goodwill. My view is not affected by the latest Court of Appeal decision on honest concurrent use, delivered last week after circulation of the draft of this judgment: Match Group, Llc and others v Muzmatch Limited and another [2023] EWCA Civ 454 on 27 April 2023 at [62]-[112], especially [91]. Whether any damage flowed from that misrepresentation is unclear; I do not know whether properties within the Moreton Patch were offered for sale by the First Defendant, although the Defence would seem to suggest not. By contrast, subsequently the website was changed to refer to “sales in Broadway and 60 surrounding villages.” The Defendant said that its website identified the areas in which it trades, which did not include the Moreton Patch. Assuming that the site was not actually offering properties in the Moreton Patch, and I was not shown evidence that it did so, it seems to me that the First Defendant was doing no more than reflecting the inclusion of No Man’s Land in the area covered by its goodwill. This was not a misrepresentation. 74.I also accept that it would have been a misrepresentation for the First Defendant to use testimonials relating to the Claimant’s business as if they related to its business, and to have distributed flyers in the Moreton Patch. If either of these acts led to any actual confusion, they would have led to damage and hence to passing off. Whether any damage was actually suffered has not been established. All such acts have ceased.75.If I am wrong in my findings on shared goodwill, then for the sake of completeness I should record that in my view the use by the Defendant of the name Hayman-Joyce Broadway and the domain names etc listed above would constitute a misrepresentation that the business is connected with the Claimant and would lead to confusion, and damage, such that a passing off claim would be made out.Validity and infringement of the trade mark 76.The Claimant claimed infringement of its trade mark, whilst the Defendants challenged the validity of the mark, relying on the First Defendant’s goodwill, and also claimed that the mark was applied for in bad faith. This reflected the points run unsuccessfully by Mr Comber in the trade mark opposition.77.It is logical to start with the validity issues. The Defendants pleaded that as a result of the First Defendant’s goodwill in the Hayman-Joyce name as at the date of the trade mark application on 5 November 2018 the Claimant was not entitled to register its mark without the First Defendant’s consent. They counterclaimed that the registration was liable to be declared invalid, at least for some of the specification, pursuant to s 47(2)(b) of the 1994 Act, on the basis that as at the date of the application, the First Defendant’s goodwill would have entitled it to bring passing off proceedings against the Claimant. The relevant statutory provisions are:Section 47(2)(b):“(2)The registration of a trade mark may be declared invalid on theground—…(b)that there is an earlier right in relation to which the condition set out in section 5(4) is satisfied, unless the proprietor of that earlier trade mark or other earlier right has consented to the registration.”Section 5(4)(a):“A trade mark shall not be registered if, or to the extent that, its use in theUnited Kingdom is liable to be prevented—(a)by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade, or…A person thus entitled to prevent the use of a trade mark is referred to in thisAct as the proprietor of an ‘earlier right’ in relation to the trade mark.”78.In Caspian Pizza Ltd v Shah [2018] F.S.R. 12, Patten LJ held at [14] that prior use for s 5(4)(a) includes use which had generated goodwill in a particular locality. The Court of Appeal upheld the decision of HHJ Hacon below, in which he held that the existence of the Defendant’s goodwill in the Worcester area was sufficient to prevent the registration of the Claimant’s word mark. He cited the earlier decision in Sworders:“18 In SWORDERS Trade Mark dated 28 July 2006 (O-212-06), a decision of the hearing officer (Mr Allan James) in opposition proceedings, a challenge was successfully made to the registration of the SWORDERS mark in relation to real estate agency (Class 36) and land surveying (Class 42) services by another firm (originally part of the same firm as the applicant for registration) which had carriedon and acquired goodwill in the same name in relation to the provision of similar services in the area of Bishop’s Stortford in Hertfordshire. The hearing officer found that the opponent’s use of the mark had generated sufficient goodwill in thelocality to enable it to restrain any other use of the name for the same services andthat the application to register a national mark was the equivalent of a notional expansion of the applicant’s business into the opponent’s area. Absent an agreement by the applicant under s.13(1)(b) TMA 1994 for a geographical limitation on the registered mark so as to exclude the Bishop’s Stortford area, registration of the mark was refused.”Having considered the decision to the opposite effect in Redd Solicitors LLP v Red Legal Ltd [2012] EWPCC 54; [2013] E.T.M.R. 13, Patten LJ went on:“23 It is, I think, implicit in these provisions that opposition under s.5(4) based on earlier use of the mark does not have to be use throughout the UK or alternatively in a geographical area which overlaps with the place where the applicant for registration actually carries on business using the same or a similar mark. As the Hearing Officer explained in SWORDERS, the application for a national mark operates as a notional extension of the use of the mark over the whole of the country. The only requirement is that the opponent should have established goodwill in the mark over an identifiable geographical area that would qualify for protection in passing off proceedings. Reputation may be enjoyed on such a small scale that it does not generate goodwill at all: see Knight v Beyond Properties Pty Ltd [2007] EWHC 1251 (Ch); [2007] F.S.R. 34. But goodwill which is established in a particular locality will be capable of preventing registration of a countrywide mark.”79.In the light of my findings as to the First Defendant’s goodwill, it follows that it would have been entitled to prevent the registration of the Claimant’s trade mark. Section 5(4)(a) would have applied. The application to register a mark which was geographically unlimited and covered residential sales services was the equivalent of a notional expansion into the First Defendant’s area of goodwill. However, as the Defendants acknowledged, the mark should be declared invalid only in relation to any services in the specification which are close enough to those for which the First Defendant has goodwill for there to have been a potential objection by the First Defendant on the basis of s 5(4)(a). In both the Counterclaim and counsel’s closing submissions, the claim to invalidity was made in general terms in relation to the trade mark, and was not limited to the Class 36 services. However, the Defendants’ skeleton argument addressed only the Class 36 services, on various alternative bases, none of which matches the conclusions I have reached above. It seems to me that offering auctioneering services is a normal adjunct to residential estate agency services, such that use of the name in relation to such services by a third party would have amounted to a misrepresentation and have been actionable as passing off. The inclusion of those services in the Claimant’s specification was therefore a notional expansion into the First Defendant’s area of goodwill. I conclude that the claim for invalidity succeeds for the whole of the Claimant’s specification, and I will make an order invalidating the mark. 80.The First Defendant also claimed that the Claimant’s trade mark application was made in bad faith. The Claimant was said to have registered it with the intention to use it to undermine, in a manner inconsistent with honest practices, the First Defendant's rights and interests in the mark. In case I am wrong on the conclusion I have reached based on s 47, I will deal with the bad faith allegation. There was no dispute between the parties as to the basis of a claim to bad faith. I bear in mind, in particular, the presumption that an application is made in good faith unless the contrary is proved, and the need to make an overall assessment of the facts in order to decide whether the Claimant acted in bad faith (Case C-104/18 Koton Magazacilik Textil Sanayi ve Ticaret AS v EUIPO EU:C:2019:724, paragraph [47]). Even where there are objective indicia pointing towards bad faith, the application may have been made in pursuit of a legitimate objective. Thomas Hayman-Joyce's evidence was that at the time of making the application, he thought that Mr Comber had expressed willingness to take a licence from the Claimant, and there was no suggestion that the Claimant then intended to stop the First Defendant from using the mark. Mr Comber’s request for joint ownership was made after the date of the trade mark application. I do not consider that making the application in those circumstances was contrary to honest practices and I am satisfied that the Claimant did not act in bad faith in making the application.81.Again, in case I am wrong on the conclusions I have reached about the validity of the registration, I move on to consider the question of whether there would have been infringement of the trade mark, if valid. There has plainly been use of a sign identical to the trade mark, as well as of similar signs in the various permutations discussed above, in relation to services which are in part identical to the services for which it was registered and in part similar to them. There could, therefore, have been infringement pursuant to sub-section 10(1) or (2) of the 1994 Act, assuming in the latter case that the use of those signs would lead to a likelihood of confusion.82.However, the Defendants relied upon estoppel and sub-section 11(3) of the Act. As I understand their case, they did not rely upon honest concurrent use as a defence to trade mark infringement, although it had been raised as an issue in the passing off claim. They did not pursue the estoppel argument, but did rely on s 11(3), which provides:“A registered trade mark is not infringed by the use in the course of trade in a particular locality of an earlier right which applies only in that locality.For this purpose an ‘earlier right’ means an unregistered trade mark or other sign continuously used in relation to goods or services by a person or a predecessor in title of his from a date prior to whichever is the earlier of—(a)the use of the first-mentioned trade mark in relation to those goods or services by the proprietor or a predecessor in title of his, or(b)the registration of the first-mentioned trade mark in respect of those goods or services in the name of the proprietor or a predecessor in title of his;and an earlier right shall be regarded as applying in a locality if, or to the extent that, its use in that locality is protected by virtue of any rule of law (in particular, the law of passing off).”83.The Claimant said that the s 11(3) defence could not apply, because the First Defendant and the partnership before it had not used the name continuously in relation to its services from a date prior to the Claimant or its predecessors’ use of the trade mark in relation to those services. It is correct that the partnership did not make use of the name prior to James Hayman-Joyce’s first use of it, but in the light of my conclusion about the abandonment or severance of James Hayman-Joyce’s earlier goodwill in the Broadway Patch, it does not seem to me that the Claimant can claim that its use in the Broadway Patch pre-dated that of the partnership. I consider that the requirements of s 11(3) would (if needed) be met, to the extent that the First Defendant has goodwill (as I have found above) and has been trading in the Broadway Patch. To that extent, I would have dismissed the claim to trade mark infringement. On the other hand, the Claimant was the senior user of the name in areas outside the Broadway Patch as to which there was never any abandonment etc of James Hayman-Joyce’s goodwill. The s 11(3) defence would therefore not have applied in relation to any trade mark infringements by the Defendants beyond the Broadway Patch.84.There is one further point on infringement. If I am wrong in rejecting the alleged implied licence to use the name, such that the First Defendant had no rights of its own, then that licence would, in my judgment, have included an implied term requiring the licensor to give reasonable notice of its intention to determine it. Setting a deadline of 31 January in the Claimant’s letter of 25 January 2021 was patently not a sufficient period of notice, and in my judgment the minimum period of notice would have been the period needed to rebrand. In the same letter the Claimant indicated that it would allow 3 months to rebrand. The Defendants did not suggest that a longer period would have been needed. On that basis there would have been no infringement prior to 26 April 2021. From that date, the First Defendant would have infringed the trade mark by its continuing use of the Hayman-Joyce name.85.86.Joint tortfeasorship87.Lastly, there is the issue of the alleged joint tortfeasorship of Mr Comber. He was alleged to be the controlling mind of the First Defendant, and to have authorised or procured all of the acts by the First Defendant complained of in the proceedings. This was admitted from the time that James Hayman-Joyce left the business, in February 2022, but denied for the time when he remained a partner in the LLP. 88.The relevant principles were not in dispute, see e.g. Sea Shepherd UK v Fish & Fish Ltd [2015] UKSC 10.89.Conclusion90.My conclusions are therefore:a.The claim to passing off fails, save in relation to the matters described at paragraphs 73-4 above;b.The counterclaim to invalidate the trade mark succeeds, and the claim to trade mark infringement therefore falls away;c.d.The Second Defendant is jointly liable with the First Defendant.91.This judgment will be handed down remotely, and I will hear argument about the form of Order (if it is not possible for the parties to agree it) at a date to be fixed.