Evans & Anor (t/a Firecraft) v Focal Point Fires Plc

This is an application by the Claimants by Application Notice dated 27th March 2009 for summary judgment pursuant to CPR 24 on a claim for passing off. It has been exceptionally well argued before me by Counsel for both sides.

The Application Notice and the attached minute of order did not specify the relief sought i.e. whether an injunction was sought or damages alone or some other relief. Ultimately as the case deployed Mr Edenborough who appeared for the Claimants acknowledged that at this stage because of various issues that might arise the only relief he could obtain was a declaration that the Defendant had passed its goods or business off as being the Claimants’ goods or business by the use of the word “Firecraft”.

The Claimants’ claim to be entitled to summary judgment is based on the fact that Mr Allan James sitting as a Hearing Officer (“the Hearing Officer”) of the UK Intellectual Property Office in his Decision (“the Decision”) dated 18th November 2008 determined that the Defendant’s UK Trade mark No 2 223 882 for the mark “Firecraft” registered for inter alia “gas fires; electric fires; fires simulating fuel effect” in class 11 should be declared invalid.

The Claimants contend therefore that the determination which led to a declaration that the Defendant’s registered trade mark was invalid by reason of the Claimants’ goodwill in the business of making and selling stone fireplaces under and by reference to the designation Firecraft is final and conclusive. They therefore contend that any attempt by the Defendant to challenge the Decision has no prospect of success because the decision has been determined against them either on the grounds of issue estoppel or cause of action estoppel. Alternatively if those contentions are not accepted the Claimants submit that it would be an abuse of the process to allow the Defendant to go behind the Decision.

The Defendant did not appeal the Decision.

On 12th December 2008 (i.e. after the Decision) the Claimants’ solicitors wrote to the Defendant threatening to issue passing off proceedings in the High Court. They subsequently issued the present proceedings in March 2009.

In the proceedings on 29th May 2009 Bird & Bird the Defendant’s solicitors wrote to the Claimants’ solicitors informing them of the proposal to re-brand the Defendant’s products (they had marketed their products which are gas fires under Firecraft since 2000).

They have also stated they were prepared to give an undertaking not to use the expression Firecraft in the future. In paragraph 30 of Mr Richards’ witness statement dated 2nd October 2009 on behalf of the Defendant it was stressed that that was a commercial decision.

Following that letter the Defendant ceased to use the word Firecraft in reference to its products and cancelled the Defendant’s registration for the domain names containing the mark Firecraft, and withdrew its trade mark application for Firecraft (trade mark No 2504899). They wrote to all stockists explaining the switch from Firecraft to the new name ekofires and asked them to remove all brochures and documents containing the Firecraft mark from the showrooms and replace all references to Firecraft on their websites and promotional material to Eco Fires. In June/July 2009 in the edition of the trade magazine “Fires and Fireplaces” they again set out the detail of the change of strategy.

As I said above the Claimants accept that the question of relief beyond the declaration will be for further argument.

The Claimants therefore base their application for summary judgment on the Decision. They accept that if the Decision cannot be relied upon as preventing the Defendant from one way or another resisting the present claim the Defendant is entitled to take the matter to trial. The only issue therefore before me in reality is the ambit of the Decision and its legal effect.

The Claimants trade together under a partnership by reference to the name Firecraft in relation to the manufacture, sale and installation of stone fireplaces and the provision and supply of related goods and services. They have been in business as such since 1991 and contend now that the range of the business extends throughout England and Scotland. The business is extensively advertised by website, they are present at numerous exhibitions and they contend therefore they have acquired protectable goodwill associated with the word Firecraft.

The Defendant has manufactured gas and electric fires since 1983. It is now one of the UK’s largest manufacturers of gas fires. Its customers range from major retailers such as B & Q to independent retailers. It does not sell directly to consumers. Until around 2000 all fires were branded “Focal Point Fires”. In around 2000 shortly after starting supplying fires to B & Q it decided to use separate brands and designs for fires that were supplied to B & Q to those supplied to others. The ones supplied to B & Q would continue to be branded Focal Point Fires. A new designation was applied to fires sold to independent retailers and the new brand chosen was “Firecraft”.

Before embarking on the use of that word it instructed trade mark agents to conduct a trade mark search. A clear search was obtained and it applied to register the Firecraft mark on 29th February 2000 in class 11 which covers as I have said “gas fires; electric fires; fires simulating (sic) fuel effect; fire surrounds; fire fronts parts and fittings for all the aforesaid goods”. It was advertised in the trade magazine Fires and Fireplaces in the summer of 2000.

It received objections from a company called Denelight Ltd trading as Firecraft which asserted goodwill under the name of Firecraft since 1992. It also received observations from Options Firecraft Ltd. Ultimately neither observation had any impact and the Firecraft mark was registered on 1st September 2000 under No 2 223 882.

The first Firecraft product sold in May 2001. A website was developed and domain names were registered.

It will be seen therefore that the Claimants’ business in question under the word Firecraft is in relation to fire surrounds whereas the Defendant’s business which was carried on under the name of Firecraft related to fires.

It is the Claimants’ case that they did not become aware of the use by the Defendant of the word Firecraft until May 2006 when the Defendant re-launched apparently the products under the name of Firecraft. That is not accepted by the Defendant. The Claimants accept that is an issue for later evaluation when the question of more specific relief (if any) is sought.

As I have set out above as the argument developed the Claimants accepted the only relief available at this stage was declaratory relief. The reason for that is readily understandable. The Decision did not determine whether or not injunctions could be granted or whether damages should be awarded and if so upon what basis because the Tribunal had no jurisdiction so to do. Its jurisdiction was limited solely to the question of whether or not the Defendant’s trade mark registration was invalid.

Thus the Claimants accept that the following matters are open. First in relation to an injunction there is the question as to whether any future injunctive relief ought to be given. The following factors are relevant to that decision. First the Defendant having commenced the activity in 2000 the question is whether or not the Claimants are debarred by reason of their delay until 2009 in seeking relief whether by injunctions or damages see Shaw v Applegate [1997] 1 WLR 970 C.A. and WWF v World Wrestling Federation Entertainment Inc [2006] EWHC 184 (Ch). Second there is a question as to whether or not that delay disentitles the Claimants to equitable relief see for example Lynch v Lynch Transport [2000] EWCA Civ 67. Third there is the question of the Defendant’s undertaking.

In respect of any claim for damages there are a number of issues which are also live. First the Claimants will seek damages going back to at least February 2000 (the date of application for registration) or possibly earlier. The Defendant will contend there are no damages available earlier than 6 years after the commencement of the proceedings in March 2009. There may then be additional issues under the Latent Damage Act 1986. The Claimants will of course have to prove that any claim for damages is not statute barred. There will also be issues as to the quantification of such damages. Will the damages be assessed on the basis of damage to the Claimants’ goodwill or will they be assessed on the basis of an account of profits made by the Defendant? That is a well known alternative which the Claimant in a passing off action sooner or later will have to elect for. Another possible question is whether or not damages could be awarded in lieu of or in addition to an injunction? All of these issues the Claimants accept are live. Hence the acknowledgment the only present relief available is declaratory.

However the Claimants contend that the primary liability is established by the Decision and it would be quite wrong for them to be required to re-prove and re-establish that which had already been determined by a relevant tribunal on a final basis.

The question of the Claimants’ knowledge will also be severely tested by the Defendant.

Extensive evidence was filed by both parties before the Hearing Officer and some witnesses were cross examined.

The Defendant (through the witness statement of Mr Richards) gave evidence as to what was its stance in respect of the proceedings which led to the Decision. It asserted that as the issue only appeared to relate to the validity of the registration of the trade mark limited evidence was adduced, and a decision made to cross examine Mr Evans only (for 2.5 hrs). Apparently Mr Richards believed that the registration and a small level of costs only were the exposure. The award of costs in the registry is limited. Although the Claimants won, the costs they were awarded were £3,223.25 which I suspect is somewhat short of their actual costs. Apparently Mr Richards had no idea that losing at the registry would potentially result in the Defendant being prevented from using Firecraft in the future and that it would result in it having to pay damages to the Claimants in respect of the past. I cannot comment on that and I do not accept any of it is relevant.

The Claimants based their challenge under section 5(4)(a) Trade Marks Act 1994 (“TMA94”) that section provides as follows:-

“(4)

A trade mark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented:

(a)

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, or

(b)

by virtue of an earlier right other than those referred to in sub-section (1) to (3) or paragraph (a) above, in particular by virtue of the law of copyright, design right or registered designs.

A person thus entitled to prevent the use of a trade mark is referred to in this Act as the proprietor of an “earlier right” in relation to the trade mark.”

The Claimants’ challenge to the registration was based on the fact that they had an earlier right in the word Firecraft and that would have entitled them to bring a claim for passing off proceedings. Thus they fairly and squarely needed to establish that they had a valid claim in passing off before the Hearing Officer in order to establish that the Defendant’s registration was invalid. This was clearly set out and understood.

It was always open to the Claimants to institute a challenge to the validity of the trade mark either before the Registrar or in the Court (section 47(3) TMA94). It is also possible to appeal to the Appointed Person under section 76(2) TMA94, from whom there is no further appeal.

Such proceedings therefore offer a parallel method of determination of the issues. Both sets of proceedings have a right of appeal. In the case of the High Court it is to the Court of Appeal. In the case of an appeal from the Registrar the appeal is to a Judge in the Chancery Division. The powers are governed by CPR 52.11 (1) and are limited to a review see Mastercard International Inc v Hitachi Credit (UK) Plc [2004] EWHC 1623 (Ch). Thus both avenues provided a forum for determination of the validity (according to their respective procedures) and the same right and jurisdiction to appeal albeit of course to a lesser level of judicial authority.

After setting out the background and the evidence before him the Hearing Officer then came to set out the disputed facts. After analysing the cross examination of Mr Evans in particular by the Defendant’s then Counsel in paragraph 30 he rejected the fact that the name Firecraft was used by the Claimants and two other dealers meant that it was descriptive (as per the well known case of Office Cleaning v Westminster [1946] (63) RPC 39) he then concluded “I am satisfied that so far as the manufacturing of stone fireplaces was concerned, the name Firecraft was distinctive of [the Claimants’] business at the relevant date to a significant section of the trade and of the public”.

The relevant date was the date of the application 29th February 2000.

There were issues as to the extent of the Defendant’s use of Firecraft between 2000 and 2006 but nothing turns on that for the present purposes.

In a section headed “The Law” the Hearing Officer reviewed the law. As he correctly set out the Claimants based their challenge to the registration on a passing off claim. Thus in order to succeed the Claimants had to persuade the Hearing Officer that they had a valid claim for passing off. He summarised (correctly) the three requirements for a successful passing off claim:-

He drew that from Halsbury’s Laws of England 4th Edition paragraph 165.

He correctly (paragraph 55) determined that each case was essentially fact based and accepted that the Claimants had established use of Firecraft for selling fire surrounds although he equally accepted the Defendant never sold any fire surrounds. He nevertheless concluded “I have no misgivings in concluding that [the Claimants] had sufficient goodwill [by the relevant date] so as to found a passing off action.” In paragraph 77 after acknowledging that the decision was not easy to make he came to the conclusion that the Defendant’s use of Firecraft at the relevant date for fires would have deceived a number of the relevant members of the public and would therefore have amounted to misrepresentation. There was no evidence of actual deception but as he said people might have been deceived without realising it and it is a matter for the Court to infer whether or not there would be a deception.

In paragraph 79 he said a misrepresentation by the Defendant would be liable to cause damage to the Claimants’ goodwill because any dissatisfaction with the Defendant’s fires would rub off on the Claimants’ goodwill and potentially tarnish their good reputation. He therefore concluded that at the relevant date the Claimants would be entitled to an injunction under the law of passing off. He therefore concluded the application for invalidity succeeded as regards all the goods in the Defendant’s trade mark specification including fire surrounds.

He concluded (paragraph 82) “The result of such a misrepresentation would plainly damage the goodwill of [the Claimants’] business most obviously through the possibility of lost sales but also through the potential damage to the goodwill caused by the loss of control of the quality of fire surrounds sold by [the Defendant] under the Firecraft name.

He accordingly declared the registration invalid.

The Defendant did not challenge the decision as regards the validity issue either by appeal or before me. It accepted that the Hearing Officer determined the registration was invalid and was consequently cancelled. However as I have set out above they did not make a decision to stop trading under the name “Firecraft”. In other words they acceded to the removal of the registration and the consequential rights attached to that registration but still remained in the field as regards the offending word. This is despite the fact that as I have set out above the Hearing Officer had satisfied himself that as at 29th February 2000 the Claimants had an actionable claim for passing off. His determination was that the Claimants would be entitled to an injunction as at that date and would “plainly” suffer damage to goodwill whether by lost sales or potential damage arising out of claims for bad quality goods against the Defendant affecting them.

Although that date is more than 9 years before the commencement of the proceedings, it does not follow that the Claimants do not have a sustainable cause of action today for passing off. There is no suggestion that the Claimants’ goodwill has in any way changed since 29th February 2000. The passing off action of course was brought by reference to breaches on a daily basis. Merely because earlier breaches become time barred does not mean that a claim is totally extinguished unless it becomes unconscionable to enforce it; see the Shaw v Applegate case above. Equally although the Hearing Officer determined that the registration was invalid by reason of a cause of action as at 29th February 2000. If there was a sustainable argument that it was no longer maintainable by the time of his hearing, the Defendant would have taken that point and the Hearing Officer would not have declared the mark invalid in December 2008 if he did not believe and in effect find that there was a continuing breach down to the date of his hearing.

Equally there is no basis for suggesting that the 3 factors that are necessary to establish the tort of passing off are not still present.

Even if there was no actual damage at the time the Claimants could have sought quia timet relief. The Court might not grant an injunction but might award damages in lieu of an injunction. I have already observed that the limitation issue is not relevant at this stage because the Claimants will have to establish if they wish to claim earlier than March 2003 that grounds for relying on LDA 1986 are made out.

I accept that for the tort to be complete there must also be damages see Rankin v Garton [1979] 2 All ER 1185. However the Claimants based on the Decision have established prima facie that they would have a claim for damages by reference to their goodwill. It would not be usual in a case like this to postpone the trial merely because the quantum of such damage is not to be ascertained. The normal procedure would be for entering a judgment for damages to be assessed and direct an inquiry. During the course of that inquiry it would be normal for the Claimants to serve a Points of Claim and the Defendant to serve a Points of Defence. In such an enquiry the Claimants would have to prove the damages they claim and the Defendant would be entitled to put in issue all matters such as laches, limitation and causation. There would ordinarily be another early hearing in the light of the evidence summarised above to determine whether or not the Claimants are entitled to an injunction against future use.

The significant point however is that the Hearing Officer determined as at 29th February 2000 that the tort of passing off was made out and it is plain that the Defendant carried on committing tortious actions and only ceased so to act when it stopped marketing the products under Firecraft in June/July of this year. Offering an undertaking might protect the Defendant as regards costs but the Claimants would clearly be entitled to have such an undertaking embodied in a Court Order in lieu of an injunction so as to ensure it is enforceable by committal.

The consequence the Claimants contend is that by reason of that decision they are relieved of the obligation of having to re-prove all the 3 essential elements of the tort of passing off; all that is left is for the Court to determine the relief that ought to be granted in the light of the evidence subsequently served. The Hearing Officer had of course no jurisdiction to make any of those determinations.

At first sight this seems to me to be sensible. It saves time both as regards the parties and the courts. It saves costs. Further in my view no one can be said to be prejudiced because the Defendant was in a position fully to deploy the case in order to challenge the Claimants’ contention that there was an existing cause of action for passing off. I do not accept the Defendant (unless authority compels me so to do) ought to have been given a second bite of the cherry. Nor do I accept they can deploy “better” evidence at a later stage.

If it was dissatisfied with the judgment it had a right to appeal. It has chosen not to do that.

It would also obviate the difficulties caused by having identical issues determined by different tribunals. I posed this in argument with Mrs Carboni (who appears for the Defendant). I asked her what would be the position (for example) if the Claimants had brought proceedings for passing off in the High Court and lost them; whether they would be entitled nevertheless to start invalidity proceedings in the Registry. She was unable to provide a convincing answer to that question. It is self-evident in my view that (unless bound by authority so to do) it would be bizarre if an unchallenged decision in the High Court could be re-litigated between the same parties on the same point in the Registry. If she is correct the Claimants could have brought invalidity proceedings in the High Court lost them and then started fresh invalidity proceedings in the Registry. They could equally had they been unsuccessful on her analysis in front of the Hearing Officer have brought proceedings for invalidity in the High Court.

In my view it works both ways. For the present purposes the final nature of the Decision not only prevents the Defendant from raising matters which have already been determined; it would also similarly restrict the Claimants.

Equally I accept the Claimants’ submission on the issue as to “notional and fair use”.

The Claimants base their case as I have said on (1) issue estoppel (2) cause of action estoppel and (3) abuse of process. In the context of the present claim that necessarily involves an analysis of the Court of Appeal decision in Special Effects Ltd v L’Oreal SA [2007] EWCA Civ 1 and the earlier decision of Mr Richard Arnold QC as he then was in Hormel Foods Corp v Antilles Landscape Investments NV [2005] EWHC 13 (Ch). I will deal with those further in this judgment but before I do I should deal with the suggestion (through the witness statement of Ms Stephens (paragraphs 22-28)) that there was something significant in the fact that the proceedings in the Registry are different to those before the High Court. It seems to me with respect to her that she is confusing procedure and the particular characteristics of the tribunal in question from the important question which is whether or not the tribunal is determinative because it is one of a competent jurisdiction. There is no doubt that the Registry has different procedures. The Hearing Officers are not necessarily lawyers, the procedure is governed by the Trade Marks Rules (although the appeal procedure is covered by the CPR) cross examination and disclosure are rare and there are fixed costs. However as I set out above there is a parallel jurisdiction with the High Court. It is therefore plain that when the parallel jurisdiction was set up under TMA94 that the Registry through the medium of the hearing before the Hearing Officer could have precisely the same effect as a judgment in the High Court. I do not accept therefore there is anything significant in the way in which the Hearing Officer came to the decision. It is plain that he was able to come to a decision on the Tribunal rules. It is equally plain that if a party is dissatisfied it has a right of appeal.

The central point for the possibility of an issue estoppel to arise is that the decision of the relevant tribunal must be final. Once the Defendant chose not to appeal, the decision became final. As such in my view (subject to any authorities which I analyse below) the decision ought to be final as regards not merely the matter which it was required to adjudicate on but every other matter which it was necessary for it to decide in order to make the decision. The most important point on that is the fact that for the Hearing Officer to be satisfied that the trade mark was invalid in this case he had to determine that the Claimants not merely had an argument for passing off but had an actual claim for passing off. I reject the Defendant’s submissions that he had no jurisdiction to decide that. In my judgment the position is exactly the opposite. It was essential for him to make that determination in order to determine that the registration was invalid. If the Claimants failed to establish that they had a valid claim for passing off as at the date of registration their application would have been dismissed. What the Defendant is confusing again is the different remedies. Whilst it is true the Hearing Officer had no power to award any relief in respect of the passing off action which he determined was established beyond the indecision as to invalidity he nevertheless had to determine that the cause of action was made out. As I have set out above he did precisely that.

There is therefore to my mind nothing wrong with the Claimants seeking to recover from the Defendant relief in the High Court for passing off. The Defendant does not dispute that either. As I have said the issue is as to what the Claimants are required to prove (or more realistically re-prove according to the Defendant’s stance) in order to establish liability.

I now go on to consider the 3 bases relied upon by the Claimants in their submissions in support of their claim to be entitled to summary judgment.

Cause of action estoppel was defined by Diplock in Thoday v Thoday [1964] P181 at 197-8 as follows:-

“The particular type of estoppel relied upon by the husband is estoppel per rem judicatam. This is a generic term which in modern law includes two species. The first species, which I will call "cause of action estoppel," is that which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties. If the cause of action was determined to exist, i.e., judgment was given upon it, it is said to be merged in the judgment, or, for those who prefer Latin, transit in rem judicatam. If it was determined not to exist, the unsuccessful plaintiff can no longer assert that it does; he is estopped per rem judicatam. This is simply an application of the rule of public policy expressed in the Latin maxim "Nemo debet bis vexari pro una et eadem causa." In this application of the maxim "causa" bears its literal Latin meaning.”

Applying that to the Decision the Defendant accepts that the Hearing Officer had determined whether the trade mark was validly registered.

The Defendant submits that the Hearing Officer did not determine the Claimants had an action for passing off but determined that the trade mark was invalid. I do not accept that. With respect to the Defendant it is confusing the relief sought from the nature of the claim adjudicated upon. As I have said above the trade mark could not have been declared invalid without the Claimants establishing that they had a subsisting cause of action for passing off at the relevant date. In establishing that they would have to adduce evidence and satisfy the Hearing Officer on the 3 requirements for a passing off action. They did that. Given that I do not see how it can be said there is not a cause of action estoppel in relation to passing off. It is true that no relief that is applicable to a claim in passing off was granted. However that arises from the decision of the Claimants to establish the cause of action in a tribunal which whilst it could determine that issue as a final decision could not give any relief other than cancel the registration. That of course is significant. Whilst the Claimants would still need a separate action in the High Court to recover damages or an injunction for passing off; it removes from the Defendant the right to assert its trade mark. Thus by reason of the Decision the Defendant admits it could no longer bring proceedings for example against the Claimants for infringement of its trade mark by the Claimants. Conversely of course if the Claimants had failed to establish their passing off entitlement their application for a declaration as to invalidity would have failed and they would then be open to a claim (as long as they were selling products under the Firecraft name) for infringement of the Defendant’s still subsisting trade mark. The key to the result therefore is the issue as to passing off. That as I have said is not an academic decision because it has a real impact on the parties depending on the result.

In the Thoday case Diplock LJ defined his second species of estoppel per rem judicatam as issue estoppel as follows:-

“The second species, which I will call "issue estoppel," is an extension of the same rule of public policy. There are many causes of action which can only be established by proving that two or more different conditions are fulfilled. Such causes of action involve as many separate issues between the parties as there are conditions to be fulfilled by the plaintiff in order to establish his cause of action; and there may be cases where the fulfilment of an identical condition is a requirement common to two or more different causes of action. If in litigation upon one such cause of action any of such separate issues as to whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either upon evidence or upon admission by a party to the litigation, neither party can, in subsequent litigation between one another upon any cause of action which depends upon the fulfilment of the identical condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court in the first litigation determined that it was.”

As can be seen the doctrine of issue estoppel is more flexible. In essence it involves analysing the various conditions that are required to be fulfilled in order to establish a cause of action. As Diplock LJ said if in litigation upon a cause of action any of such separate issues as to whether a particular condition has been fulfilled is determined neither party can then in subsequent litigation upon any cause of action which depends upon fulfilment of an identical condition assert that the condition was fulfilled or not as the case may be.

The Defendant contended that requirement was not satisfied for 2 reasons. First it is submitted that the Registrar was not a Court of competent jurisdiction in relation to any of the identified issues. It is said that his role was limited for the purpose of managing and maintaining the register and administering disputes that concern the state of the register. This is simply not correct. The decision to declare the mark invalid had significant consequences for both the Claimants and the Defendant as set out above. Second in making his decision he is not administering matters; he is determining whether or not a registration is invalid. As such in the present case it was an essential requirement to his determination that the registration was invalid that the Claimants had a subsisting cause of action for passing off as at the application date. I do not accept that these findings are collateral or incidental questions. If he had not decided that issue in favour of the Claimants their application would have been dismissed. It is difficult to see how the determination could be anything other.

The second is in relation to timing. It is said that there can be no res judicata in a changing situation (Res Judicata Spencer Bower 3rd Edition paragraph 383).

I accept the Registrar had to decide whether damage was likely to be caused to the Claimants by virtue of passing off. That in my view is simply a quia timet test. It is equally the test of course for an injunction to stop existing damage being continued for the future. As set out above the Hearing Officer was satisfied as to that section. He in my judgment has not merely determined quia timet relief but in his judgment determined that there was also damage to the Claimants’ goodwill as at the relevant date. Of course if in the subsequent action circumstances have changed that would be relevant. For example if the Claimants had gone into liquidation or had ceased trading by the time of the action they would not be able to obtain an injunction. However they would have been able to maintain a claim for any damages that had already accrued before they lost their goodwill. As I have said above the Defendant has not shown any basis for suggesting that the circumstances have changed as regards the Decision that the Claimants had a valid cause of action in passing off. I do not accept that the Hearing Officer has decided different issues for the same reason.

Equally the determination of misrepresentation is final in my judgment. I do not accept the Defendant’s contention that the Registrar’s decision is irrelevant to the period 2000-2006. Whilst it is not necessary to arrive at that for the purpose of determining the Claimants’ rights as at the date of registration there is no evidence made out as I have said to show that there is any change. There are as I have said arguments as to relief but that is for stage 2.

I do not accept the Defendant’s contention that the Hearing Officer’s Decision (paragraphs 77-82) properly read does not amount to finding a misrepresentation. Even if it were not it plainly shows the Defendant’s action might amount to a determination that its use of Firecraft if not restrained would amount to a misrepresentation in the future. I do not think the Decision properly read has that effect. It must be appreciated that the determination was made in 2008 in respect of events existing at 29th February 2000. It is difficult to see how his decision can be analysed 8 years after the relevant event as not amounting to a finding that as at the relevant date there was already an existing misrepresentation. In my judgment one has to look at what he has to decide. He does not have to decide evidence of actual misrepresentation. In effect he is rejecting the evidence of actual misrepresentation adduced by the Claimants but saying that it is clear that the use at the relevant date would have deceived a substantial number of relevant members of the public and would have amounted to misrepresentation but that the Claimants have not actually proved that at that stage. Nevertheless his decision is in effect that there must have been misrepresentation but on the evidence before him the Claimants have not made it out. It is not necessary for his decision to decide there was actual misrepresentation as the determination under section 54(a) TMA94 is that the trade mark’s use is liable to be prevented…..by virtue of …. the law of passing off. Thus he determines the Claimants at the very least in my view would in the appropriate tribunal (not his) have a right to seek an injunction. That also of course given the fact that the Claimants did not issue until March 2009 means that the Claimants might not obtain injunctive relief as regards events that were established by the Hearing Officer as at 29th February 2000. However that would not preclude a claim for damages in lieu of an injunction as at that date. Thus on that analysis the Hearing Officer has in my view determined that the Claimants have a valid cause of action in passing off which is sufficient to prevent the use of the mark. That in my view would be the same requirement for the Claimants to establish passing off in this Court.

Equally I do not accept that there is no reference to damage. In paragraph 82 he identifies 2 potential bases for damage namely damage to the Claimants goodwill through lost sales and also potential damage to goodwill caused by the loss of quality of the fire surrounds sold by the Defendant under the Firecraft name. He does not have to attempt to quantify that because that is not a matter for him. He clearly, when one looks at paragraphs 77-82, is saying that common sense dictates that the use of the word Firecraft by the Defendant is almost inevitably going to cause damage. First the Claimants have established that there is a reasonable prospect of damage to goodwill on the 2 bases he suggested. That would lead again inexorably to a claim to injunctive relief. The Claimants therefore have been determined as having a valid cause of action in passing off in my judgment. Damages can be claimed in the action in the High Court if they are properly established at the inquiry stage; there is no need in my view for the Claimants to have to establish again the primary liability.

The most authoritive modern day statement of the relevant principle is that of Lord Bingham in Johnson v Gore Wood [2002] 2 AC 1 at 31:-

“But  Henderson v Henderson  abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice.”

I accept that whether or not the attempt to re-raise a matter already determined in a competent tribunal is an abuse is a fact based decision on each case. Equally it is too dogmatic an approach to assume that raising the matter again in later proceedings is necessarily abusive.

A good example would be if the circumstances had changed between the time from the earlier determination and the later hearing.

Various possible forms of abuse are identified by Lord Bingham. They are not (as he accepts) exhaustive but it seems to me that a number of them are made out in the present case. First in the context of a lengthy hearing before the Hearing Officer there should be finality on the matters which he has determined (subject of course to any appeal) and they should not have to be re-determined again. Second that leads to economy and efficiency in the conduct of litigation. Third the Defendant was not restricted in raising any matter it wished to do so as to challenge the Claimants’ case that the registration was invalid based on passing off. Although Mr Richards in his witness statement (paragraphs 16-19) set out what apparently was a decision to deploy limited evidence that in my view really demonstrates why it would be quite wrong for the Defendant to have a second “better evidence” attack on the Claimants’ passing off allegations.

I cannot comment on what Mr Richards did or did not know about the consequences of losing the registration point. As I have set out above the consequences are significant but apparently not necessarily as limited as he would suggest. I can see no reason why the Defendant did not deploy all of its evidence and there is no convincing justification for not so doing. This is precisely the kind of situation which the Courts in my view should categorise as an abuse. Bearing in mind the fact that the costs recovery folloeing success in the Registry are limited it means that the Claimants have incurred substantial costs which they will never recover in establishing a passing off claim. To require them to expend further money re-proving it is a classic abuse. The figures provided for me for the purpose of the present application show the parties’ costs on each side are already in excess of £100,000. To allow the Defendant to force the Claimants to re-establish the passing off claim as a matter of principle is harassment.

There is in my view a disproportionate strength as between the Claimants and the Defendant as the evidence before the Hearing Officer demonstrated. I do not accept that the failure of the Claimants to warn the Defendant that they intended to sue for passing off can be said to have lulled the Defendant into a false sense of security. The Defendant knew the Claimants needed to establish their claim to challenge the registration on the basis of passing off. Whether or not the Claimants held their powder as regards a High Court action for damages and injunction is neither here nor there. I do not see how that can lull the Defendant into leading some evidence only. It seems to me to be a self- imposed fetter on the way in which it challenged the Claimants’ case. Without any further explanation I conclude the Defendant fought the hearing in the Registry and now wishes to put up more obstacles in the hope that the Claimants will be inhibited in their desire to recover recompense and other relief for the Defendant’s wrongful passing off actions. It should be noted in this context that the Claimants notified them very speedily after the Decision. It would have been open to the Defendant (albeit with some difficulty I accept) if they wished to adduce further evidence to have appealed the Decision and sought to put fresh evidence in. It chose not to do so.

In paragraph 69 of her skeleton argument Mrs Carboni identifies the different consequences arising from proceedings in front of the Registry and the High Court. I do not accept the premise in paragraph 70 of her skeleton argument that it is not surprising that there are additional matters which the Defendant wishes to bring to the court to defend the passing off claim. All of that would have been material for the Decision in the Registry. Although the Registrar had no powers to prohibit its use of the mark or make orders for payment of damages or other relief the declaration as to invalidity means the Defendant no longer has a mark which it can use to (for example) bring proceedings against the Claimants or any other person for alleged infringement of the mark which no longer exists. She therefore underplays in my view the significance of the Decision. It is an attempt to give the impression that the Defendant embarked on a half-hearted defence to the proceedings in the Registry. On reading the Hearing Officer’s decision that does not appear to be the position. However this is precisely the kind of thing which the Courts deplore. The Courts are anxious to ensure that all matters as far as possible are determined expeditiously and with one hearing. It would be quite wrong for example to allow the Defendant to adduce more evidence in an attempt to reverse the Hearing Officer’s un-appealed Decision in respect of events as at 29th February 2000. That is the kind of thing that brings the Courts and the law in to disrepute. In my view it would be quite wrong therefore and an abuse of the process of the Courts to allow the Defendant to re-litigate all these matters.

The principles for summary judgment under CPR 24 are well known see Three Rivers District Council v Bank of England (No 3) [2001] 2 All ER 523 at [94] and Swain v Hillman [2001] All ER 91 at [92].

The question is whether or not there is a real prospect of the Defendant successfully defending this claim. The Claimants accept that if there is an argument over the evidence there must be a trial. The question to be answered is that if the Decision is final and binding and conclusive is there any real prospect of the Defendant defending the claim. The short answer to that is no. If the Defendant cannot challenge the findings set out in the Decision as examined by me or above, it cannot re-litigate the issue as to liability and there is no point in allowing the action to proceed.

For completeness this summary judgment application does not depend in my view on anything other than a question of law. The need therefore to beware cocky Claimants and rubbishy defences: see Doncaster Pharmaceuticals v The Bolton Pharmaceutical Co Ltd [2007] FSR3 at page 68 does not arise. The suggestions by the Defendant that there is more material to deploy is in my view pure Micawberism. If there was material it could and should have been deployed before the Hearing Officer.

Had the position not been covered by authority I would have concluded the Defendant had no prospect of success and further that any attempt to re-litigate the matters identified above would have been an abuse of the process of the Court. There are however 2 authorities on this area which require specific consideration.

The first of those is Hormel a decision as I have said of Mr Richard Arnold QC (as he then was). In that decision (after a wide ranging review of authorities both in respect of Patents and Trade Marks) he concluded that an issue estoppel arose from a decision in invalidity proceedings in the Trade Mark Registry and that would operate in any subsequent High Court proceedings in which the validity of the trade mark that had formed the subject matter of the invalidation matter was put in issue.

Apparently the decision was appealed successfully although by consent without any argument. In that case the Claimant prior to the proceedings before Mr Arnold QC had brought proceedings in the Registry which were dismissed with an agreed contribution of £1000 toward the Defendant’s costs. The Claimant did not (like the Defendant in this case) appeal that decision. The Defendant objected to the proceedings as being oppressive and vexatious in that the Claimant was seeking to ignore the adverse ruling made against it in the Registry proceedings. Mr Arnold QC analysed the complaint (the Defendant was a litigant in person) as being contentions that the action should not proceed by reason of either (1) cause of action estoppel or (2) abuse of process. He analysed the principles (to which I have made brief reference) of cause of action estoppel and abuse of process. He referred to a significant number of authorities where a party that had unsuccessfully challenged the validity of a patent or registered design created a cause of action estoppel which prevented the matter being re-litigated even on different grounds in subsequent proceedings.

After reviewing those authorities he then considered their applicability to trade marks. He concluded that the Claimant before him could not attack the validity of the Defendant’s Trade Mark having unsuccessfully attacked the validity of the Defendant’s mark in the Registry proceedings. However he held that it did not extend so far as to prevent a subsequent claim for revocation (paragraph 97). He did not exclude the possibility that issue estoppel or abuse could arise to bar a later claim for revocation following an unsuccessful attack on the validity of a registration. He then went on to hold that to allow the Claimant to challenge the Defendant’s mark in the High Court in the circumstances of the case was an abuse of the process (paragraphs 103-108). That led him to conclude that all actions were barred as being an abuse of the process.

The question of issue estoppel in the context of Trade Marks was considered by the Court of Appeal in Special Effects [2007] RPC 15 at 381.

The Court of Appeal held that it was doubtful that cause of action estoppel could apply to opposition proceedings in the Registry (paragraphs 49-51). In so deciding Lloyd LJ sidestepped an analysis of the Hormel case. In paragraph 50 he acknowledged that the same point did not arise in the Hormel proceedings as the appeal before him because there was no prior opposition proceedings in the Hormel case; the proceedings were revocation in both the Tribunal and before Mr Arnold QC. Lloyd LJ came to the same conclusion in respect of issue estoppel (see paragraph 71). He expressed the view that:-

“opposition proceedings are inherently not final. They exist at the first stage of the process, before registration. By itself that would not be conclusive, but it seems to us that the fact that, at least, any unconnected third party could challenge the validity of the registration despite an unsuccessful opposition by another, and that, if that challenge were unsuccessful, there would be nothing which would bind the unsuccessful opponent (in contrast with the position of a party which has unsuccessfully applied at any rate to the Court; for a declaration of invalidity), shows that the decision of the Registry in opposition proceedings, or more generally a decision to register despite opposition, is not a final decision so as to be capable of being the basis for an issue estoppel. This is true both as regards the grounds of invalidity and as regards the issue of prior use more generally, as relevant to a passing off claim. The same wouldl be true of cause of action estoppel if, contrary to our views expressed above, there was a cause of action at that stage” (paragraph 71).

On the facts they held that it was not an abuse of the process to raise the validity of the trade mark either (paragraph 78).

When faced with a consideration of the Hormel case the position appears to have been left open. Lloyd LJ said this (paragraph 79):-

“We do not decide the position as regards the effect of an unsuccessful application for a declaration for invalidity to the Registry, which was the subject of the Hormel case. But proceedings in Court clearly do give rise to res judicata, in one form or another, and it seems likely that at the very least, an unsuccessful application for a declaration of invalidity in the Registry would preclude a later attempt to the same effect in the Registry, unless presented in reliance on new grounds not available on the first occasion.”

It is a little difficult to see what is meant by that paragraph. It does not clearly address the decision of Hormel and express an opinion on it. However the last sentence appears to suggest that it is “likely” that an attempt to re-run an unsuccessful application for a declaration of invalidity would be capable of being barred either by issue estoppel or abuse of process.

None of the exceptions identified by Lloyd LJ applies i.e. there are no new grounds and no new evidence put forward before me. In that context of course I disregard the unspecified suggestions that the Defendant might have called more evidence. It has not been deployed. Nor of course has any explanation been given as to why it was not available before the Hearing Officer.

The decision of Hormel is addressed in the last 2 paragraphs by Lloyd LJ:-

“83 Counsel addressed to us various submissions based on the decision of Mr Arnold QC in Hormel, referred to above. That case was concerned with successive attempts by the same party to obtain a declaration of invalidity as to a trade mark under s.47, first from the Registry and then, based on different grounds, from the court. The Judge expressly distinguished a case involving prior opposition proceedings.

84 It seems to us that this is a crucial distinction. It does not seem to us to be necessary to decide whether Hormel was right. We can see more scope for arguing that it was, at least, an abuse of process to start two successive proceedings for a declaration of invalidity, one in the Registry and the other in the Court. But even if that decision was correct, it does not seem to us to follow that the same applies in the case of prior opposition proceedings. We are therefore not persuaded that the decision in Hormel, if right, requires that the appeal be dismissed, so that it is necessary to decide the correctness of that decision in order to allow this appeal.”

It is clear from those paragraphs that the Court of Appeal declined to offer any guidance in respect of the Hormel decision. It therefore remains only challenged by virtue of a consent appeal. At best it seems to me the conclusion I draw from paragraph 84 is that the Court of Appeal accepted that a forceful argument can be made as to abuse of process (and possibly issue estoppel) in relation to successive proceedings involving a declaration to invalidity. It is quite clear that opposition proceedings were held by the Court of Appeal generally not to create an issue estoppel or abuse of process situation. They appear to be reluctant to provide guidance in respect of the Hormel decision (as the last sentence of paragraph 84 shows).

However the issue is plainly before me for decision. I find Mr Arnold QC’s judgment compelling as regards invalidity proceedings. The Special Effects case has made the position clear as regards opposition proceedings but that does not arise before me.

I see nothing in the Court of Appeal judgment which says that Mr Arnold QC’s judgment in respect of invalidity proceedings is wrong. To the contrary in so far as it is possible to define what the judgment means it suggests at least a modicum of support for his decision.

I would go further than that. Not only do I find his judgment reasoned and compelling it seems to me that as regards invalidity proceedings it is a matter of public policy clearly the correct approach. It is not efficient as regards Court procedure and parties to require issues which have been clearly determined by an appropriate tribunal finally to be re-litigated. That is the difference in my view between invalidity and opposition proceedings as highlighted by the Court of Appeal.

I would therefore conclude that there is nothing in those decisions which compels or leads me to conclude that my earlier analysis is incorrect. I am quite satisfied and so determine if necessary that the principles of cause of action, issue estoppel and abuse of process can apply to a second attempt to challenge the validity of a Trade Mark after invalidity proceedings. Although the Hormel case dealt with an unsuccessful challenge to validity; the converse is equally true. It cannot be right to allow the Defendant to seek to re-run a successful adverse decision on validity against it.

For all of those reasons I conclude that the Defendant has no prospect of success in defending this case certainly as regards the determination of the liability for passing off. I have already dealt with the form of order and the remedies earlier in this judgment.

I am grateful to Counsel for their carefully marshalled written submissions which were supported by compelling oral submissions on both sides.