No Luv lost – IPEC rejects passing-off claims in band-name dispute

Background

The claimant, Ian Thomas, and the second defendant, Winston Thomas, are half-brothers and former members (with others) of a group known as “Luv Injection”.  The first line-up performed as a Jamaican sound system (or “sound” for short), which consists of musical equipment and a group of members.  Some members perform a front-of-house role, while others perform more of a backstage role.  The front-of-house roles include a DJ, who selects and plays the records, and an MC, who “toasts” on a microphone, while backstage roles would include maintaining and running the equipment.  Customised recordings, known as “dub plates”, of usually well-known songs are often used, but overlaid with lyrics that have been re-written, often to praise the sound and its members.

Ian performed a front-of-house role, while Winston was more involved in administration and management, although he did perform a front-of-house role on occasions.  There was a dispute over the identities of the other members of the first group, but it was agreed that they included Orville Higgins and Colin Little.  The first group split in October 2016. 

Winston then continued to perform under the group name with a second group.  Ian later formed a third group using the same name, which included Orville Higgins and Colin Little.

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Procedural history

Winston successfully applied to register the group name as a trade mark in February 2017 and made a second trade-mark application in October 2017.  In early 2018, Ian applied to invalidate the first registration and opposed the second application.  The hearing officer at the UK Intellectual Property Office found in favour of Ian on the basis that, at the date of the split, the goodwill in the name had been owned by the members of the first group as a partnership.  Given that, and because there had been no subsequent transfer of that goodwill to Winston, he was not personally entitled to the goodwill in the name and so was not entitled to register the name as his own trade mark.

Ian later brought a claim for passing-off by Winston.  Ian argued that he was personally entitled to bring the claim, and that Winston was estopped from denying that entitlement due to the hearing officer’s decision.  The IPEC agreed with Ian in a decision on 17 June 2020 and struck out most of Winston’s defence.  Yet the Court of Appeal allowed Winston’s appeal in part.[2]  It found that, in view of the decision of the hearing officer, while Winston could not claim that he alone owned the goodwill in the name after the 2016 split, there was nothing in the hearing officer’s decision to stop him relying on alternative arguments.  That included an argument that the goodwill was not owned by Ian, but by the members of the first group as a partnership asset, and that, as Winston was one of those members, it was only the partners as a whole that could sue him for passing-off.

Further orders followed clarifying what points were properly in issue, and what Ian was entitled to assert in light of the earlier decisions.  As a result, Ian’s claim as reformulated was that:

• the first group was a partnership at will that had ended with the 2016 split; and
• although, at the date of the split, the goodwill in the name was a partnership asset owned by the first group’s partnership, that goodwill was now owned either by Ian personally, or by the third group’s partnership, such that Ian could enforce it as a partner of the third group. 

Ian argued that the change in ownership of the goodwill arose because:

• Winston did nothing to obtain his share of the goodwill after the split; and
• Ian, Orville Higgins and Colin Little were the front-of-house and prominent members of the first group and, as such, they had appropriated the goodwill stemming from the first group because the members of the third group that were part of the first group were the individuals seen by the public as the musical members. 

Accordingly, Ian asserted that:

•  Winston was passing off his goods and services as those of Ian by using the name for the second group.
•  Winston was further passing off the second group as being the first group, or alternatively as being connected with Ian, by using dub plates that referred to the first group and Ian and/or Orville Higgins.
• A trade mark registered by Winston for “LUV INJECTION SOUND” should be declared invalid on the basis that its use also constituted passing-off.

Winston denied those claims and counterclaimed for an order that the affairs of the first group’s partnership should be wound up in accordance with section 35 of the Partnership Act 1890, and that its assets (including the goodwill in the name) should be distributed between its partners.

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IPEC decision

Passing-off by use of the name

Nicholas Caddick QC (sitting as a Deputy High Court Judge) considered the relevant law as set out by Laddie J in the Saxon trade-mark case, Byford v Oliver.[3]  In that case, it was found that the former members of the band had operated as a partnership at will and as such, while they all had an interest in the partnership assets (including the goodwill in the name “Saxon”), it was the partnership that owned those assets.  When the partnership dissolved on one member’s departure, the partners’ right was to request that the partnership assets be realised and divided up between them.  Where another band started performing under the same name after the split, the second band would not acquire the goodwill that the first band already had in that name.  The second band might acquire its own separate goodwill in the name, but unless the first band had somehow abandoned its goodwill or acquiesced in the activities of the second band, the second band would always be liable to be sued by or for the partners of the first band for passing-off.  The fact that some (even a majority) of the members of the first band were also members of the second band did not change this position.

In the same way, in the present case, the members of the first group had operated as a partnership at will, that partnership had been dissolved on the 2016 split and, as at that date, the goodwill in the name was owned by the partners of the first group.

Then, as the second group was the first group to start performing using the name following the split, it was vulnerable to being sued by the partners of the first group.  It was not, however, vulnerable to being sued by the partners of the third group, because the third group did not exist when the second group started using the name, and so the third group had no protectable goodwill in the name at that time.  Accordingly, there could not have been any misrepresentation that the second group was connected to the third group.

So any passing-off claim against the second group could only be based on the goodwill of the first group.  Ian’s case was that he had “appropriated” that goodwill on the basis that he (and Orville Higgins) were the public face of the first group and so, by continuing to perform under the name, “the goodwill simply attached itself to them” and they had effectively appropriated it.  The court disagreed: the goodwill of the first group had been owned by the partners of the first group, including Winston.  Any argument that certain members were the public face of the group was irrelevant. 

While Ian (and Orville Higgins) may have remained front of house when they started performing in the third group, that had no bearing on the ownership of the already existing goodwill of the first group.  Goodwill is a form of property, and where someone owns property, another person cannot generally acquire title to it simply by appropriating it.  There would need to be a transfer of title by the owner either by way of an agreement or by operation of law.  That position does not change where the property is goodwill, and where the owner is a partnership and the other person is one of the partners. 

It was argued for Ian that appropriation (or even misappropriation) was a means by which goodwill could pass without a formal transfer and suggested that this was the very basis for a passing-off claim.  Yet the court considered that to be misconceived: the action for passing-off is intended to prevent a person damaging another person’s property (goodwill) by means of a misrepresentation.  There was no basis to suggest that it results in a transfer of that property.

It had been suggested in Ian’s pleadings (but not referred to in submissions) that Winston had abandoned his interest in the goodwill owned by the first group by not actively seeking to realise his share in the assets of that partnership.  In the Saxon case, it was held that the departing member had abandoned his interest in the goodwill in the Saxon name, because he had done nothing to suggest that he had any interest in the name in the 12 years that followed his departure from the group.  Here, however, Winston continued using the name after the split and before the Court of Appeal judgment, Winston’s case had been that he owned the name.  While that was incorrect, it made any argument that he intended to abandon his rights in the name difficult to run. 

On the basis of the above, the judge rejected Ian’s passing-off claim based on Winston’s use of the name since the split.

Trade-mark revocation

Similarly, Ian’s claim to invalidate Winston’s trade mark failed, as it is only the person who is the proprietor of an earlier right (within the meaning of section 5(4)(a) of the Trade Marks Act 1994) that can seek to have a mark declared invalid under section 47(2)(b) and, for the reasons set out above, Ian was not such a person. 

Passing-off by use of dub plates

Ian argued that use of a dub plate by the second group might lead members of the public to believe that the second group was the same group as the first group.  Yet the judge found that, even if such use did constitute a misrepresentation (as to which he made no finding), any such cause of action would lie respectively with the first group’s partnership and Orville Higgins.

There was an alternative claim that the second group’s use of a dub plate referring to the first group before the split would constitute passing-off as involving a misrepresentation that Ian (as a member of the first group) was connected to the second group.  Yet to succeed, Ian would have to show that there was goodwill attaching to his name personally.  The only evidence of Ian’s trading at the relevant time was as a member of the first group, and that did not establish separate goodwill in his name.  Without goodwill in his name, the alternative claim would fail.

Even if there was goodwill in Ian’s name, he would also have to show that Winston’s use of the dub plates would mislead people into believing that Ian was connected with the second group.  There were a number of difficulties with this.

• First, the audience may have been well aware of the first group’s split, and that Ian was not associated with the second group. 
• Further, any confusion could be avoided by publicity material, introductions at the event and the simple fact that Ian was not present on stage at the event.  The only evidence brought before the court of any confusion, were forum posts that questioned where Orville Higgins was in relation to the second group.  But that did not help Ian, as the posts did not refer to him and it was questionable whether the writers of the posts were actually confused, or that, if they were, it was because of the use of a dub plate referring to the first group. 
• Besides, if the second group used a dub plate that had been created before the split and that referred to the name, the judge considered that the audience were more likely to take that as referring to the second group, rather than a representation that any pre-split member of the first group was involved in the second group.  While Ian pointed to the use of a dub plate that expressly referred to him, the court found that it was unclear whether or not Ian had separate goodwill in his own name to support a passing-off claim, and that there was no evidence of confusion anyhow. 
• The judge also noted that it was difficult for Ian to argue that use of a dub plate that was made before the split and that referred to a member of the group by name was a misrepresentation, as Ian’s third group had also used a dub plate that expressly referred to Winston.

Accordingly, the judge rejected Ian’s passing-off claim based on the second group’s use of dub plates.  No findings were made as to the ownership of the dub plates, as that was irrelevant to passing-off. 

Counterclaim

As to Winston’s counterclaim that the first group’s partnership should be wound up and its assets distributed, the parties agreed that it would have to be adjourned, so that third parties who might have an interest in the partnership could be notified and given an opportunity to join the action.

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Comment

This latest ruling serves as another stark reminder of the issues that can arise if a band does not agree what happens to the goodwill in their group name after a split.  Even if lead members of a group may seem to have a stronger claim to the group name in the eyes of the public, who may associate a band’s name more closely with the most prominent member(s), that is not the position under partnership law, where the goodwill in the name is a partnership asset owned by all the partners of the group.  Unless it is agreed otherwise, all partners will have the same interest in the goodwill, regardless of the role that each has played in the group.

Timing is also a key factor where former members of a band want to continue using the same name with competing bands.  In this case, the third group could not rely on any goodwill that it may have separately established in the name, given that the second group had started using the name before it.  Still, even if the third group had used the name first, it might have been difficult to differentiate the goodwill that it separately generated, as compared with the goodwill already established by the first group.  In any event, it would always be liable to be sued in passing-off by or for the partners of the first group.

Written for Entertainment Law Review.

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