Byford v Oliver & Anor

This is an appeal from the Decision of Mr Mike Foley for the Registrar of Trade Marks dated 7 November 2002, in which he dismissed an application for a declaration of invalidity in respect of trade mark number 2150052. The appellant applicant is Mr Peter Byford. The respondent proprietors of the mark are Mr Graham Oliver and Mr Steven Dawson. The mark consists of the word SAXON. It is registered in classes 9, 14 and 16 in respect of a wide range of products and services including records, the presentation of live performances, musician services and the production of live shows.

The application by Mr Byford is based on section 3(6) and section 5(4)(a) of the Trade Marks Act 1994 which provide as follows:

by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade,...

The registration of the mark and Mr Byford’s application to have it declared invalid arise out of the ebb and flow of membership of a heavy metal band called SAXON. Although there are some facts in dispute, the following brief history of the band is substantially uncontested.

Mr Byford, Mr Dawson and Mr Oliver were, with others, members of a heavy metal band which was formed in the 1970’s. It originally performed under the name SON OF A BITCH. In the late 1970’s, it changed its name to SAXON. Mr Dawson left the band in 1985, some 12 years before the date of filing of the trade mark application in suit. He was replaced by another musician. In 1995, Mr Oliver left the band. He also was replaced. The band has continued to perform and issue records under the SAXON name. Mr Byford has continued to be a member of the various manifestations of the band throughout its history.

Mr Dawson and Mr Oliver have continued to perform as heavy metal musicians in another band. This has given rise to friction. It appears that Mr Byford and his band accused Mr Dawson and Mr Oliver of passing off by performing in a group which incorporated the word SAXON within its name. That was followed by Mr Oliver and Mr Dawson applying for the current trade mark. Soon after doing so, Mr Oliver, but not Mr Dawson, brought High Court proceedings against Mr Byford and others. He alleged that the original SAXON band had carried on business as a partnership at will and that he had been wrongfully expelled from it in February 1995. He claimed a declaration that the partnership had been dissolved with effect from the date of his dismissal and an account of partnership capital and income. Mr Byford entered a defence and counterclaimed for passing off. Apparently the action was struck out after all the parties’ public funding was withdrawn at the behest of Mr Byford. The counterclaim has proceeded no further. Recently Mr Oliver has asserted that registration of the mark has given him and Mr Dawson exclusive rights in the name SAXON in the entertainment industry which are being infringed by Mr Byford’s continued performance in a heavy metal band bearing that name. I will return to the details of this assertion later.

Ignoring for the moment the allegations made in the court proceedings referred to above and the claims made on the back of the registration, the use of SAXON appears to have been as follows. As has been mentioned already, the name was initially adopted by a band of which Mr Oliver, Mr Dawson, Mr Byford and others were members. The membership has changed from time to time. Each time a member departed the remaining members reformed with replacement musicians. On each occasion, the phoenix band used the name SAXON.

The history of Mr Oliver and Mr Dawson is as follows. Mr Oliver formed a group which performed under the name “GRAHAM OLIVER’s SAXON” although when it was formed, and for how long and how extensively it performed is not disclosed in the evidence. In the late 1990’s Mr Oliver, Mr Dawson and others performed as a group called “SON OF A BITCH”. It will be recalled that this is the name which had been used by the original Byford/Oliver/Dawson heavy metal band in the 1970’s before it adopted the name SAXON.

In paragraph 13 of a supplemental witness statement made in the High Court proceedings and exhibited to a witness statement in the current application, Mr Byford asserted:

That produced a response in a witness statement given by Mr Rupert Withers who describes himself as the manager of “the band OLIVER/DAWSON SAXON”. His is the only evidence filed on behalf of the proprietors. It includes the following:

Perhaps surprisingly, Mr Withers exhibits the letter of advice given to Mr Oliver by his solicitors. Insofar as material, it reads:

It follows that the only bands which have performed under the name SAXON alone are those in which Mr Byford has been a member. Consistent with the advice given in their lawyer’s letter and Mr Withers’ evidence, Mr Oliver and Mr Dawson do not claim to have performed under the name SAXON alone nor, according to that evidence, do they have any intention of doing so. The possibility that confusion would be likely were both their and Mr Byford’s band to perform as SAXON has been and will be addressed by the proprietors’ band distinguishing itself from Mr Byford’s by prominent use of the words GRAHAM OLIVER’s or OLIVER DAWSON with SAXON.

Before turning to consider the two grounds advanced in support of the attack on the registrations, there is one other matter which should be noted. Mr Saunders, who appears on behalf of the proprietors, reasserts the point made in Mr Oliver’s High Court pleadings, namely that while his clients and Mr Byford were members of the original SAXON it was a partnership at will. That partnership was dissolved when Mr Dawson left 18 years ago. The group that then performed under the SAXON name was a new partnership at will until it also was dissolved by Mr Oliver’s departure in early 1995. Whether the members of the post-1995 band called SAXON were members of a new partnership or were performing as sole traders is not a matter which was addressed by Mr Saunders or Mr Norris, who appears for Mr Byford.

Consistent with the stance adopted in the High Court proceedings and by Mr Saunders on this appeal, in the evidence given on behalf of the proprietors it is said that the mark was registered “in good faith on behalf of the original partnership”. What is meant by that claim can be gauged by the use made of the mark once registered. In his supplementary witness statement, Mr Byford complains of various threats made against him and his band by and on behalf of the registered proprietors. Only two examples of this need be referred to. On 27 March 2001 a letter, purporting to have been written by Mr Oliver was sent to a Mr Palling who was selling merchandise relating to Mr Byford’s band bearing the word SAXON. It is in the following terms:

Mr Oliver’s and Mr Dawson’s new band employed a firm called Total Concept Management (“TCM”) as its agent. Besides sending out warning missives which reproduce most of the above letter, it also sent an e-mail to someone promoting Mr Byford’s band which reads as follows:

Mr Withers’ explanation for these communications is as follows:

Although Mr Withers refers to the letter of 27 March as being “attributed” to Graham Oliver, it is not in dispute that that letter was written and sent by Mr Oliver. Although not elegantly expressed, these communications suggest that Mr Oliver, and presumably Mr Dawson, were exercising the rights given by registration for their own benefit.

At the centre of the dispute between the parties is the extent to which, if at all, each is entitled to continue to performed under the name SAXON and to what extent, if at all, each is entitled to the exclusive rights given by registration of a trademark. The proprietors’ position in relation to this issue is put forward in Mr Withers’ witness statement:

Mr Withers is not a lawyer and it is not the normal function of evidence to advance legal arguments, but these passages appear to encapsulate the way the case was argued by Mr Withers, who appeared on behalf of the proprietors, in the Trade Mark Registry. In substance, this legal analysis appears to have been accepted by Mr Foley.

In my view, Mr Foley’s views as to ownership of the name SAXON and the goodwill associated with it are not correct. There is no dispute that the group was a partnership at will in the 1980’s. The name and goodwill were assets of the partnership. All the partners have or had an interest in those and all other assets of the partnership, but that does not mean that they owned the assets themselves. Absent a special provision in the partnership agreement, the partners had an interest in the realised value of the partnership assets. On dissolution of the original partnership, which is what happened when Mr Dawson departed in 1985, he and all the other partners were entitled to ask for the partnership assets to be realised and divided between them in accordance with their respective partnership shares. But none of them “owned” the partnership assets. In particular, none of them owned the name SAXON or the goodwill built up under it. The position would be very different if all the members of the original group had been performing together, not as partners, but as independent traders. In such a case, each may well have acquired a discreet interest in the name and reputation which he could use against third parties but not against the other owners. An example of this is Dent v Turpin(1861)2 J&H 139. Similarly, when Mr Oliver left in 1995, the then partnership dissolved. He had an interest in the realisation of that partnership’s assets, but he did not own in whole or in part the partnership name and goodwill.

On this analysis, Mr Foley was wrong to conclude, as he did in paragraph 49 of the decision, that it made no difference whether the musicians were performing as sole traders or as a partnership because in either case the name and accrued goodwill “would be owned by each individual member of the group”.

Mr Saunders argues that Mr Foley was right. He relies for this on the following passage in “The Law of Passing Off” by Wadlow in a passage bearing the rubric “Severance of Goodwill”:

Mr Saunders relied in particular upon the underlined passage and Burchell v Wilde[1900] 1 Ch 551.

If, in the above-quoted passage, the author was suggesting that the Court of Appeal had laid down a rule of general application, in my view he is wrong. Burchell was a case concerning the dissolution of a solicitors’ practice. The decision of the court is encapsulated in the following passage from the judgment of Lindley MR:

It seems tolerably clear that, absent the special circumstances in that case, the goodwill and name of the partnership would have been an asset of the partnership which, on dissolution, would have had to have been sold so that its value could be realised for distribution among the former partners. None would have owned the goodwill or name. What prevented that from happening in Burchell was the existence of the award which had the effect of creating an agreement between the partners to the effect that they would not sell the goodwill and distribute the proceeds on dissolution but would share it as tenants in common. Once that term existed, it followed that the name of the firm under which the goodwill had been generated had to be owned by the former partners as tenants in common also. This case does not provide support for the wider proposition advanced by Mr Saunders.

Absent special facts such as existed in Burchell, the rights and obligations which arise when a group of musicians, performing in a band as a partnership, split up can be explained as follows. It is convenient to start by considering the position when two, entirely unrelated bands perform under the same name. The first performs from, say, 1990 to 1995 and the second performs from 2000 onwards. Each will generate its own goodwill in the name under which it performs. If, at the time that the second band starts to perform, the reputation and goodwill of the first band still exists and has not evaporated with the passage of time (see Ad-Lib Club v Granville[1972] RPC 673) or been abandoned (see Star Industrial Co v Yap Kwee Kor[1976] FSR 256) it is likely to be able to sue in passing off to prevent the second group from performing under the same name (see Sutherland v V2 Music[2002] EWHC 14 (Ch), [2002] EMLR 28). On the other hand, if the goodwill has disappeared or been abandoned or if the first band acquiesces in the second band’s activities, the latter band will be able to continue to perform without interference. Furthermore, whatever the relationship between the first and second bands, the latter will acquire separate rights in the goodwill it generates which can be used against third parties (see Dent v Turpin and Parker & Son (Reading) Ltd v Parker[1965] RPC 323). If the first band is a partnership, the goodwill and rights in the name are owned by the partnership, not the individual members, and if the second band were to be sued, such proceedings would have to be brought by or on behalf of the partnership.

The position is no different if the two bands contain common members. If, as here, they are partnerships at will which are dissolved when one or more partners leave, they are two separate legal entities. This is not affected by the fact that some, even a majority, of the partners in the first band become members of the second. A properly advised band could avoid the problem that this might cause by entering into a partnership agreement which expressly provides for the partnership to continue on the departure of one or more members and which expressly confirms the rights of the continuing and expressly limits the rights of departing partners to make use of the partnership name and goodwill. This is now commonplace in the partnership deed for solicitors’ practices.

How do these principles apply here? Consider the position of Mr Dawson first. By the time of the application to register, his claims to any share or interest in the original partnership assets was 12 years old. During that period he had never performed in a band which used the name SAXON alone. When Mr Oliver made a claim for an account in his High Court proceedings, Mr Dawson did not. Indeed, it is not suggested that Mr Dawson had claimed to own any interest in the use of SAXON alone at any time prior to the application to register the mark. As far as his own connection with the name is concerned, Mr Foley said:

This starts from the premise that Mr Dawson owned some rights generated by the first band in the name SAXON from the 1980’s. For reasons already given, I do not accept that. Furthermore, Mr Norris for Mr Byford argues that Mr Foley was overstating the position when he referred to the evidence as “scant”. In truth there was no evidence showing that any significant part of the public associated Mr Dawson with the name SAXON alone. I agree. Not only did Mr Dawson not own the name or the goodwill, but on the evidence, he had abandoned any interest in the original partnership’s trading style SAXON alone and the goodwill generated in it. But, as I have said, even had he not abandoned his interest, he is not an owner of the name and goodwill generated by the first band. Furthermore, whatever may have been the position in the 1980’s, the recent reputation and goodwill in the name SAXON has been built up by the other partnerships which had performed under that name up to the present time. Mr Dawson had no interest in that.

As far as Mr Oliver is concerned, Mr Foley summarised the evidence relating to his continued interest in SAXON as follows:

In my view, Mr Oliver’s position is much the same as Mr Dawson’s, save that it is less easy to say that he abandoned his interest in SAXON alone in the three years between his departure from the group and his application to register SAXON as his trade mark. For reasons given above, Mr Foley was in error to conclude that Mr Oliver had every right to claim to be a proprietor of the mark. The only connection he had with the use of SAXON alone was through his membership of the original partnership. Furthermore, on the proprietors’ evidence, there is no suggestion that Mr Oliver has, since his departure from the band, used or asserted a right to be entitled to use SAXON alone.

The above facts must now be applied to the two subsections in issue. As far as s. 5(4) of the Act is concerned, the question to be asked is whether any normal use by the proprietors or either of them of the mark as registered for any of the goods or services in respect of which it is registered would be liable to be prevented by passing off proceedings brought by any other person. Since the mark as registered is SAXON, normal use would include use of that word alone by the proprietors in relation to records and live performances. Mr Foley answered this question as follows:

Mr Foley appears to have construed the section as if it is only concerned with cases where the use of the mark by the proprietor starts after use of the same or a similar mark by someone else. I do not think that this is what the section says. For the prohibition to bite, all that needs to be shown is that, at the time of the application to register, the normal use of the mark by the proprietor would be liable to be prevented by passing off proceedings brought by someone else. It may well be that in most cases this will only arise when the other party had commenced using his mark before the proprietor, but it is not inevitably so and the section does not require it to be so. The fact that the convenient title “proprietor of an earlier mark” is used to designate the other party does not limit the scope of the section. Consider, for example, a case in which one proprietor uses a mark on a retail clothing business in Manchester and the other uses it on a similar business in Plymouth. They commence trade at the same time. Their trades do not compete because of the geographical separation. Assume the Manchester trader registers the mark. Normal use of it would include use in Plymouth. That would be liable to give rise to a cause of action in passing off (see Levey (A.A.) v Henderson-Kenton (Holdings)[1974] RPC 617 and Evans v Eradicure[1972] RPC 808). For that reason the registration by the Manchester trader would fall foul of s 5(4)(a) even though the Plymouth trader commenced use of the mark at the same time. For the same reason the Plymouth trader could not register the mark.

Whether s 5(4) applies in this case can be answered by considering whether the use of the word SAXON alone by Mr Dawson as a trade mark for use on a heavy metal band or on records relating to such a band would be liable to be prevented by passing off proceedings. In my view the answer is in the affirmative. First, the current band operating under that name could bring proceedings. Recent goodwill is its alone. Were Mr Dawson to perform as SAXON now, he could be sued for passing off by Mr Byford’s band in respect of its most recent use of that name and the goodwill attached to it. Mr Dawson’s historical connection with the original band in the 1980’s would be no defence. Second, if and to the extent that there is any residual goodwill in the original band, as Mr Dawson and Mr Oliver allege, that is owned by the partnership, not the individual members of it. Any administrator appointed by the former partnership members could bring proceedings against use of the name by Mr Dawson. Whether such an administrator could bring passing off proceedings against Mr Byford’s band is irrelevant and does not need to be determined in these proceedings. What counts is whether Mr Dawson could be sued for passing off if he used SAXON alone, nor whether Mr Byford could be sued. The same points can be made in respect of Mr Oliver.

The proprietors also fall foul of s. 3(6). As Mr Foley said in his decision, the leading guidance on the application of this section is Growmax Plasticulture v Don & Low Nonwovens Ltd [1999] RPC 367 in Lindsay J said:

Mr Foley dealt with this in two parts. First he addressed the facts:

In my view that is too generous to the proprietors. They applied for registration in their own names. At no stage prior to these proceedings did they assert that they were applying for and on behalf of a partnership. What is clear from the evidence is that the application to register the mark was made without the knowledge or consent of at least one member of the original partnership, namely Mr Byford. The first he knew of it was after registration when Mr Oliver threatened to use it against him and retailers of his band’s goods. There is no material to support the suggestion that Mr Oliver or Mr Dawson had sought or obtained authority to apply for registration on behalf of the old partnership. All the documents demonstrate that it was applied for for and behalf of those two gentlemen themselves. Mr Oliver’s letter of 27 March asserts that permission to use SAXON must be obtained from him and Mr Dawson, not from the partnership. It also asserts that they, not the partnership, are entitled to compensation for trade mark infringement.

Mr Foley then says as follows:

As indicated above, I disagree with Mr Foley’s conclusion that Mr Oliver and Mr Dawson had a right to claim to be owners of the mark. Furthermore, inherent in the statement that Mr Oliver “got there first”, is the recognition that ownership of the mark gave the proprietors the right to interfere with the use of the same mark by others in relation to the same goods and services. That Mr Oliver and Mr Dawson could use it to interfere, not just with other former partners in the original band, but also with the current band. As a result of the letter of March 2001 and email referred to above, it can be seen that the ability to interfere is not a hypothetical possibility.

As Lindsay J said, each case must be decided on its own facts. Here the proprietors have obtained registration of SAXON simpliciter even though they have no existing title to it and have done so for the purpose of interfering with the rights of others who do and have consistently used the mark. In my view this is bad faith within the meaning of the section.

For these reasons I will allow the appeal.