The claimant in this case brought an action for trade mark infringement of its two CTM...
...(one for the mark GRENADE and the other for a device mark that combined the word GRENADE with an image of a grenade) and a parallel action for passing off; in respect of the defendants’ use of its registered company name GRENADE ENERGY LIMITED. Both parties sold energy and sports drinks – although the defendant made no significant use of the words Grenade Energy on its products, which were mainly marketed as EPIC energy drinks. In addition to the claim against the company its sole director was also sued as a joint tortfeasor.
The defendants conceded the issue of trade mark infringement – and the court was satisfied that there was reputational damage to the claimant and that was sufficient “damage” to establish liability in passing off.
The case raises two interesting and important points. First, the defendant company was using a registered company name – but was still liable for TM infringement and passing off. It must be appreciated (and it often is not) that simply registering a company name does not give a right to use that name in the face of earlier TM rights belonging to third parties. The company registrar does not check these TM rights when agreeing to register a company name. Second, it is now becoming commonplace for the sole director of a companies to be found to be jointly liable for TM infringement and passing off: the so-called corporate veil offers no protection in such circumstances. As HHJ Hacon explained – relying on his earlier judgment in Vertical Leisure Ltd v Poleplus Ltd  EWHC 841 (IPEC) , where he said: “….in order to fix an alleged joint tortfeasor with liability, it must be shown both that he actively co-operated to bring about the act of the primary tortfeasor and also that he intended that his co-operation would help to bring about that act (the act found to be tortious).” It is clear from the present case that registering a company name and then allowing that name to be used in the course of trade will make the director personally liable for TM infringement and passing off – and the costs of fighting the claim.
Dr Tim Sampson / 6th May 2016
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