[2024] EWHC 1727 (IPEC)

The final issue raised by the Claimant is whether Mr McGinley is personally liable as a joint tortfeasor.

At the end of the hearing, it was common ground that Mr McGinley had been in day to day control of the operations and actions of the First Defendant – including the actions said to be infringements. On this basis and on the basis of the law as it then appeared, Mr Malynicz in closing accepted that Mr McGinley was liable to be found to be a joint tortfeasor unless he was saved by the then awaited decision of the Supreme Court in the Lifestyle Equities v Ahmed litigation. Relatively shortly after the end of the hearing, that decision was handed down (see ([2024] UKSC 17). As a result, joint tortfeasance is again in issue and both parties have provided me with further written submissions, although neither has sought to amend their pleaded cases.

As I understand it, the Claimant’s case against Mr McGinley is one of accessory liability – namely that he had authorised or procured the infringements and/or that he had participated in a common design with the First Defendant to commit those infringements.

As a starting point, it is worth noting (as the Supreme Court did in Lifestyle Equities) how the test for accessory liability differs from that for primary liability.

In a trade mark case, where the person who actually does the acts found to infringe did those acts in his or her capacity as a director or employee of a company, then that person cannot be primarily liable for trade mark infringement. This is because, under s.10 of the Trade Marks Act 1994, a person is only primarily liable for actions done in the course of that person’s trade (see Lifestyle Equities v Ahmed ([2024] UKSC 17 per Lord Leggatt at [21]-[26]). The company would be primarily liable as the acts were done in the course of its trade. The liability of the director or employee would only be an accessory liability.

In a copyright case, the position is significantly different. In order to establish an infringement of copyright, there is no requirement that the act be done “in the course of trade” and a person can be liable as a primary infringer either for doing the infringing act or for authorising it (see s.16(2) of the Copyright Designs and Patents Act 1988). Accordingly, if (which seems to have been the case) Mr McGinley was the person who had actually copied the Claimant’s design for the control panel or even if he authorised someone else to do the copying, he could have been liable as a primary infringer (not merely as an accessory). It was somewhat unclear whether this line was open to the Claimant on the pleadings. However, given that, on my findings above, there was no infringement of copyright, the point is academic.

The question, therefore, is whether Mr McGinley is liable as an accessory with regard to the acts which I have found constituted an infringement of the Claimant’s Marks.

As appears from Lifestyle Equities,procuring an infringement and assisting another to commit an infringement pursuant to a common design are separate and distinct bases of accessory liability (see Lord Leggatt at [137]). However, in both cases, for a person to be liable as an accessory, that person must have had the requisite knowledge. This is the case even where, as in trade mark infringement cases, knowledge is not a requirement for establishing primary liability.

In view of the law as clarified in Lifestyle Equities, the Defendants now deny accessory liability on the basis that Mr McGinley did not have the requisite knowledge.

At [126], Lord Leggatt identified three possibilities as to what might constitute knowledge for the purposes of accessory liability:

He concluded that the second possibility (highlighted above) is the correct one. On this basis, it is not necessary to show that the alleged accessory knew that the act in question was wrongful. It is simply necessary to show that that person knew the essential facts that made the act unlawful (see Lifestyle Equities at [108], [131]-[134] and [137].

The issue, therefore, is whether Mr McGinley had knowledge of the essential facts necessary to establish liability under s.10(1), s.10(2) and/or s.10(3) and also, it seems to me, of the essential facts which I have found brought s.12(2) into play so that the exhaustion of rights defence in s.12(1) did not apply.

Of course, a preliminary difficulty for the Claimant is that (unsurprisingly, given the state of the law prior to the decision in Lifestyle Equities) its pleadings (like those in Lifestyle Equities) do not address the issue of Mr McGinley’s knowledge of any of the relevant facts. They assert only that he was the person who was responsible for the day to day management of the affairs of the First Defendant and that he had personally authorised and/or procured and/or together with the First Defendant had participated in a common design in relation to the alleged acts of infringement (see paragraphs [4] and [5] of the Particulars of Claim and paragraphs [1] and [2] of the Reply). There would, no doubt, be an issue as to whether the Claimant should be allowed to amend to plead knowledge at this stage in the action. (Footnote: ²⁰)

The second problem is that, again unsurprisingly given the law as it then stood, Mr McGinley was not asked questions about his knowledge of all the relevant facts. A similar difficulty arose in Lifestyle Equities and led Lord Leggatt (at [138]) to comment that:

Based on the evidence before me, I think that I can legitimately find that Mr McGinley had some of the requisite knowledge - such as, for example, knowledge of the AGA Word Marks and the AGA Badge Marks (but query the 2D and 3D AGA Marks), knowledge that the Defendants were using those marks or marks that were similar to them in relation to identical goods, and knowledge of the Claimant’s reputation and of the distinctive character of its marks. However, it seems to me that there are numerous vital facts which have not been shown to have been known to Mr McGinley, so that the position is similar to that to which Lord Leggatt referred in the passage quoted above. For example, having heard Mr McGinley’s evidence, I cannot find that he knew or had reason to believe that the Defendants’ activities were liable to affect the origin function of the Claimant’s Marks, let alone that they gave rise to a likelihood of confusion, nor that the Defendants’ activities would be detrimental to the reputation or distinctive character of the Claimant’s Marks. On all of these matters, there would (to use Lord Leggatt’s words) be room for argument and honest difference of opinion. On this basis, I find that Mr McGinley did not have the requisite knowledge of the essential facts relating to the Claimant’s infringement case, nor of the facts which meant that there was no exhaustion defence.

I should note that in their submissions on this issue, the Claimant argues that Mr McGinley was alive to the risk of confusion in April 2022 – as evidenced by a transcript of messages he exchanged with a Mr Brian Harkin concerning the addition of a disclaimer to the Defendants’ website. I do not think that this or the other (later) documents referred to by the Claimant establishes the knowledge required and certainly not knowledge at the time of the infringing acts which, as I understand it, started in October 2021 and ended in June 2022.

For these reasons, I reject the Claimant’s claim that Mr McGinley was a joint tortfeasor.