IP-2023-000120 - [2025] EWHC 1793 (IPEC)

The existing goodwill subsisting to the Restored Company (which included any goodwill which had passed from NC-S to it) was abandoned or extinguished as a consequence of the dissolution on 10 April 2018. The dissolution of the Restored Company on 10 April 2018 was more than merely the cessation of a business. It was a voluntary, positive and deliberate choice by NC-S to cease to trade. As set out in NC-S1 at [40] “… I then dissolved [the Restored Company] as it was no longer required…” resumption was not contemplated. There was no intention that it would ever be restored.

The subsequent restoration was intended to be for the limited purpose of enabling the Restored Company to transfer the Trade Mark to NC-S. It was not for the purpose of transferring any residual business or for trading purposes. Indeed, restoration for the purpose of transferring the business to NC-S would have been entirely inconsistent with the position adopted by the Claimants in relation to the business of the Restored Company and would have further undermined NHBCL’s position.

Professor Wadlow explains in Wadlow at §3-460:

“…The better view is that if a business is deliberately abandoned in circumstances which are inconsistent with its ever being recommenced then the goodwill in it is destroyed unless contemporaneously assigned to a new owner.[as approved by Lewison J in Ultraframe (UK) Ltd v Fielding [2005] EWHC 1638 (Ch); … and Arnold J in Maslyukov v Diageo Distilling Ltd [2010]EWHC (Ch) … and W3 Ltd v Easygroup Ltd [2018] EWHC 7 (Ch)…]^”

Consequently, any goodwill subsisting in the Restored Company at the time of its dissolution was destroyed.

The destruction of the goodwill in April 2018 means that it cannot have revested in the Restored Company in October 2023. The starting point therefore is that there was no goodwill to assign in the 2023 Assignments even if the 2023 Assignments were otherwise likely to be effective.

However, Professor Wadlow explains that there may be circumstances in which the goodwill is not destroyed immediately at §3-460:

“Otherwise, the goodwill in a discontinued business may continue to exist and be capable of being protected, provided the claimant intended and still intends that his former business should resume active trading. It is not necessary that the prospect should be imminent, but the mere possibility of resumption if circumstances should ever change in the claimant’s favour is not enough. The claimant’s intention to resume business may be more readily believed where the original cessation was forced on him by external circumstances, although this factor is not conclusive either way.” (my emphasis)

Here the dissolution was no accident and nor was it forced on NC-S by any external circumstances. It was a deliberate and positive decision, a choice, to abandon the Restored Company. The goodwill was immediately abandoned and destroyed on dissolution.

Whilst residual goodwill may continue to subsist for a time after the business has ceased trading if it has not been abandoned in a manner that means that the goodwill has been destroyed that is not the case here. There is a difference between a business that has simply ceased trading for some reason and one that has been voluntarily struck off and dissolved as was the case here.

The extent of any residual goodwill is a question of fact (Starbucks (HK) Ltd v British Sky Broadcasting Group Plc [2012] EWHC 3074 (Ch); [2013] FSR 29 at [138]). But even any residual goodwill would evaporate/dissipate over time.

In 2023 there was no intention to resume active trading on restoration 5½ years later but rather an intention to restore for the limited purpose of assigning the Trade Mark and not to trade at all. If there were residual goodwill in 2018, I am satisfied that it was not protected and would have evaporated/dissipated in the interim in the events that have occurred.

The 2023 Assignments then purport to assign the Renewed Trade Mark and the goodwill amongst other intellectual property rights to NHBCL. But there was no goodwill to assign as it had been destroyed.

Even if the goodwill had not been destroyed, they would have been assignments in gross because (i) the Renewed Trade Mark to which the goodwill was said to attach was a nullity and (ii) the 2023 Assignments do not in fact assign anything to which the goodwill attaches even if the Renewed Trade Mark were not a nullity.

The definition of the Assigned Rights alone makes it clear that it was never the intention that the 2023 Assignments would assign the business and that is not least because the Claimants’ case was that the business had already transitioned to NHBCL between June 2017 and April 2018.

If there was any goodwill which had not been destroyed the 2023 Assignments were assignments in gross and not capable of effectively assigning any goodwill to NHBCL.