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

NC-S had started to sell the Claimants’ Bag wholesale initially from 2009 and then through the Restored Company from 2010. CA was one of her largest wholesale customers. He sold the Claimants’ Bag through his shops and through Organic Hill from May 2013. The Claimants disclosed a number of invoices evidencing sales by the Restored Company to Organic Hill, one of the largest wholesalers, between 2014 and 2017.

Over the years NC-S and CA had become friends. By 2017 NC-S was finding that the combination of running the Restored Company, her other interests and two young children was not sustainable. She discussed this with CA. NC-S and CA say they agreed that he would take on the business of the Restored Company. Despite stepping away NC-S would still have some input particularly on the design side. Both NC-S and CA confirmed her continued involvement.

There was no written agreement setting out what NC-S/the Restored Company was intending to transfer to CA or when or how. The Claimants relied on two emails dated 3 and 7 June 2017 from NC-S to CA. There is no responsive email from CA.

NC-S emailed CA on 3 June 2017, setting out what she considered her options to be:

“ …

I have made the (actually quite hard!) decision to pull out of the bag business and have extended my year end to prepare the business for closure once the stock is sold out and the payments due are collected in.

My options are

1)

To close the business but hold on to the trademark …

2)

For someone such as you to take over the business and grow it in a way that I have never done but you have always told me I should!!

Do you want to have a read of the key facts below and let me know your thoughts.”

She explained that the Restored Company had sold 22,000 tote bags the previous year and similar numbers of bags over the previous couple of years. She had 18 stockists three of whom were not recorded because they dealt in cash (the evidence from all the witnesses was that at least some of their respective business was conducted in cash). NC-S explained that the Restored Company made a profit of between £13K and £21K per annum.

She explained how much stock she was holding:

“I currently have around 800 brown bags and 1800 cotton bags (train and logo both sides) in stock. I currently have no more stock on order. I do not expect this stock to last long but my sales will be limited by lack of variation of designs.”

She told CA that “the logo 'The Notting Hill Shopping Bag' is trademarked”.

After a further meeting on 7 June 2017 NC-S emailed CA recording:

“Hi Jan, good to see you today. Thank you for the 'deal'. I don't know what to do with all this cash!

So next steps

- I am going to package up all the info, organise everything and give it to you in a way that is easy to understand!

- …I have contacted Rahul my long term supplier to update him on what is going on and see if he can pull himself together to be the supplier…

- I will do the deliveries this week and also update everyone on price increase and as I see them all, explain to them that someone else is going to be helping me more. What is the name of your girl again? Then I will take her to meet them all.

- I will also change the address on trademark and direct debit on the storage unit (and remove my rubbish from the storage unit)”

Both NC-S and CA accepted the reference to the cash was to a payment made by CA for NC-S/the Restored Company’s existing stock. Of course, it cannot have been a payment by NHBCL since it was not incorporated until 13 June 2017. CA explained the subsequent steps he took to source a supplier of the Claimants’ Bag including travelling to India. CA and NC-S’s evidence about the process by which CA slowly took over aspects of the business over time was entirely consistent between them and consistent with the limited documentary evidence. The only reference to the Trade Mark was in relation to the change of address.

By 9 June 2017 NC-S and CA had agreed the terms of an email to be sent to the wholesalers in which NC-S referred to a new business partner and a new invoicing system. The wholesalers were not told there was a transfer of the business to CA (NHBCL had not yet been incorporated). Whilst NC-S refers to CA as “owner” and expresses her intention to gradually fade out as between them this does not seem to have been what the wholesalers were told. The overall content was consistent with the gradual transition described by both CA and NC-S in evidence and not with an immediate transfer of the business or an assignment of the business in June 2017 or indeed at all.

NHBCL was incorporated on 13 June 2017. The domain name nottinghillbag.com was registered in the name of CA on 21 June 2017 rather than to the newly incorporated NHBCL. The registrant details were not updated to NHBCL until 2 October 2023. Meanwhile NC-S continued to maintain the domain names nottinghillshoppingbag.com and nottinghillshoppingbag.co.uk with the last renewal in evidence being dated March 2023. The eventual transfer to NHBCL/CA was not until October 2023. This was consistent with CA and NC-S's explanation of a gradual transition rather than any wholesale assignment of the business to CA/NHBCL in June 2017. NC-S’s evidence was that the website was on her server and whilst she had intended to close it down in June 2017, she instead transitioned it. That also does not appear to have happened immediately and there was no reason for it to do so as the Restored Company and NHBCL and indeed Organic Hill were working side by side in this period. She explains that CA took on operational aspects of the business and at some point, CA/NHBCL took over payment for the storage unit used to hold stock.

Both NC-S and CA described the Restored Company, CA and then NHBCL (and Organic Hill) as working in parallel from about June 2017. The Restored Company and NHBCL and Organic Hill were all using the Trade Mark and selling the Claimants’ Bag together.

The Restored Company continued to trade with net assets of approximately £24,000 recorded in its accounts at the end of its extended financial year on 31 August 2017.

Between June 2017 and April 2018 nothing was done to transfer the Trade Mark. That was not surprising given the continuing activity of the Restored Company and NC-S’s continued involvement.

NC-S explained that she had intended to do something with the Trade Mark, but she did not and was not chased. This was inconsistent with the Trade Mark having been transferred or assigned beneficially to CA/NHBCL prior to dissolution and/or with any assignment of the business as a whole. It was, however, consistent with the correspondence with the BVD in January 2023 which rather than asserting that NHBCL were the beneficial owner of the Trade Mark sought to transfer it to NC-S.

Whilst NC-S’s evidence might just about have supported a submission that there had been a future intention to transfer the Trade Mark the evidence was one sided. CA’s evidence simply does not engage with the intention to transfer the Trade Mark in June 2017.CA accepted that his explanation of what he had discussed with NC-S about taking over the business did not refer to the Trade Mark. It was quite striking that CA’s evidence made no reference to the assignment, licence or transfer of the Trade Mark at all when explaining what happened in 2017.

CA1 explained that NC-S continued to work with him after the transition and after the dissolution. His evidence at [33] about the renewal of the Trade Mark referred to NC-S taking steps to restore the Restored Company to get the Trade Mark back consistent with his understanding that the Trade Mark had not in fact been assigned to NHBCL or CA.

Although conceptually it is possible for there to be a separation of the beneficial and legal interest in the Trade Mark there would have to be some evidence of it. Whilst an equitable assignment does not have to follow a particular form to be valid there needs to be something from which one can glean that there was an intention to assign and what is being assigned.

Here it is difficult to discern from the evidence when exactly it is said that any beneficial interest/equitable assignment was said to have arisen. It certainly cannot have been June 2017. Neither is there any clarity about its terms or what the consideration was. The piecemeal transition of aspects of the business over time with not everything in fact being transferred at all – see for example the domain names as well as the Trade Mark do not support any beneficial assignment of the business as a whole. And there is no identification of what the consideration for any transfer of the Trade Mark might have been or when it occurred if it was separate to any submission that the assignment was of the business as a whole.

NC-S explained that she had agreed that CA could use the Trade Mark/Logo. Use is not an assignment of the Trade Mark. And any licence to use it would have to be in writing (s.28 TMA 1994) and of course would have passed bona vacantia on dissolution. And nor would any licence survive the expiry of the Trade Mark.

The precise legal characterisation of the transition period between 2017 and 2018 does not matter in this context but it is clear from the evidence that there was no assignment of the business as a whole or the Trade Mark in June 2017, whether to CA or NHBCL, or at any point before the dissolution.

NHBCL sought to advance an argument that its beneficial interest arose from the continued use of the Trade Mark after dissolution. However, use alone even with the consent of the Restored Company prior to dissolution would not have been sufficient to create a proprietary or beneficial interest without more. Use after the dissolution cannot have accrued a beneficial or proprietary interest in the Trade Mark if it had not already arisen prior to dissolution. Continued use after the dissolution was without the consent or knowledge of the Crown in whom the Trade Mark was vested. And use after the expiry of the Trade Mark does not assist at all.

In any event the claim had been advanced as joint venture between NHBCL and the Restored Company from about June 2017 to 10 April 2018 after which NHBCL carried on the “business”. The terms of the joint venture were not pleaded. At best a joint venture may have provided some basis for applying for a vesting order or directions under s.1032 CA 2006.

Whilst the joint venture was abandoned in closing, a joint venture by its nature would not have been consistent with the submission now advanced that there had been an assignment of either the business of the Restored Company or the Trade Mark to CA (or NHBCL when it was subsequently incorporated) during the period June 2017 to 10 April 2018. However, the abandonment of the joint venture left the Claimants in some difficulties as to the legal basis for the transfer of the Restored Company’s business to NHBCL.

The additional pleaded licence to Organic Hill from the Restored Company was also inconsistent with the transfer or assignment of either the business as a whole and/or the Trade Mark to NHBCL.

NHBCL is not and never was the legal proprietor of either the Trade Mark or the Renewed Trade Mark. It did not have a beneficial interest in the Trade Mark prior to dissolution and its use of the Trade Mark after dissolution could not create one. Had it had a beneficial interest it may have been able to apply for a vesting order. It did not have a beneficial interest in the Trade Mark and it would not have given it the right to apply to renew it without the consent of the Crown. Any beneficial interest could not have survived the expiry and subsequent non-restoration of the Trade Mark.