As it had not lost sales by the infringement, the National Guild of Removers and Storers had to persuade the Court to do something close to breaking new legal ground in awarding damages for unauthorised use of its logo. Did it succeed? Tom Harding reports.
Topic: Brands
Who: National Guild of Removers and Storers Ltd v Christopher Silveria (trading as C S Movers) [2010] EWPCC 15, 12 November 2010.
When: 12 November 2010
Where: Patents County Court
Law stated as at: 1 January 2011
What happened:
The Patents County Court ("PCC") has awarded damages to National Guild of Removers & Storers Ltd (the "Guild") for trade mark infringement on a 'user' principle. This particular measure of damages is usually associated with patent cases, but was awarded in this case as no lost sales had been suffered by the Guild (the head of loss typically claimed in trade mark infringement cases).
The Guild is an association representing members of the removals and storers industry. It commenced four trade mark and passing off cases, the broad facts in all them being that the defendants had used one of more of the Guild's trade marks in advertisements, websites and/or directory entries without a licence. The PCC reviewed the same issue in each case, namely what damages, if any, the Guild was entitled to.
The 'user' principle is where damages are based on a "reasonable royalty for the unlawful use of the claimant's property even though there has been no lost sale to the claimant". This was applicable in the Guild's case as it acts as a representative association only, and does not itself make any sales.
HHJ Birss QC held that "[t]he kind of damage suffered by the claimant in these cases in financial terms can be regarded as the loss of the royalty which they should have been paid in return for use of their trade marks by the defendants. This remains so even though the defendants' use did not result in any lost sales of goods to the claimant …. [it] has been submitted that the court can and should award such damages. I agree …"
The Guild was therefore awarded £200 per week from each defendant for their unauthorised use of the marks (which was the licence fee they would otherwise have had to pay to the Guild to use the marks)
Why this matters:
The 'user' principle has previously been applied in patent, copyright and passing off cases, but the only trade mark case to consider its application could be distinguished on the basis that it was applied to an interim payment (Dormueil Freres v Feraglow [1990] RPC 449). Its application here therefore confirms the principle (and applicable damages) can be considered in any trade mark case if relevant. Although this is therefore a new concept, it must also be remembered that it is also an entirely logical one, and the award of such damages was entirely justified and seemingly the only fair conclusion in the circumstances. Nonetheless, marketers must be aware of that unlicensed use of marks in any campaigns may also potentially result in this type of damage being awarded against them.
