Fenty & Ors v Arcadia Group Brands Ltd (t/a Topshop)

1 At the start of 2011, Topshop sold a T-shirt which carried a picture of the famous pop star Rihanna on it. The image was the subject of a copyright licence from the owner of the copyright in the photograph (not Rihanna), but no permission from Rihanna or from any company deriving rights from her was obtained.

As is common in the music business, Rihanna's trading activities include a substantial merchandising operation selling authorised merchandise, including images of the star herself. Rihanna's full name is Robyn Rihanna Fenty, she is the first claimant. The other claimants are companies through which she carries out her licensing and merchandising business. The defendant runs Topshop.

The claimants sued for passing off and trademark infringement. The trademark claim is settled. The passing off claim is due to come to trial in two weeks' time, floating from 15^th July. The essential question in the claimants' claim in passing off is whether, by virtue of the use of the image on the T-shirt, purchasers will be likely to be deceived into believing that the T-shirt is approved or connected with or authorised by the claimant. I should say that there is no doubt that the image is recognisably Rihanna.

At the case management conference Master Marsh set a timetable for witness statements of witnesses of fact, with statements due in December 2012. The parties were given permission to apply for directions about expert evidence. No directions were applied for, so neither party has permission to rely on expert evidence. Witness statements were exchanged on 13^th June 2013; the shift from December arose as a result of general delays arising from disclosure and two requests for extensions of time from the defendants.

On 26^th June the defendant's solicitors objected to a large part of the claimants' evidence: five witness statements in their entirety and parts of the statement of the claimants' main witness, Ms. Perez. The five witness statements are Mr. Coyle, Mr. Daffner, Mr. Dapron, Mr. Joseph and Mr. Robinson. The evidence objected to is what is often called trade evidence. The five witnesses all describe their experience in their particular businesses, and then describe that field and make various statements which I will come back to. All five witnesses have experience in licensing and merchandising. The focus of Mr. Coyle and Mr. Daffner is in the clothing and fashion sphere, while the focus of Messrs. Dapron, Joseph and Robinson is in the music business. Ms. Perez is the main witness for the claimants, as I have said. In effect she acts as a mouthpiece for Ms. Fenty. She also explains her experience in the merchandising side of the music business and makes statements about that trade.

The main objection is that the evidence is expert evidence which is inadmissible without permission and no permission has been sought. The defendant also contends that the evidence is objectionable because it is expressing an opinion about what consumers would think, is repetitive, and, even if it is admissible, is of negligible value. There are some further points specifically in relation to Ms. Perez in that some of her evidence consists simply of commenting on documents.

The matter came before me on 3^rd July. Mr. Geoffrey Hobbs QC and Mr. Hugo Cuddigan, instructed by Mishcon de Reya, appear for the defendants. Mr. Martin Howe QC and Mr. Andrew Norris, instructed by Reed Smith, appear for the claimants.

Mr. Hobbs' submissions essentially are these. First, he says this is the correct time to take this objection, i.e. in advance of trial. He refers to the Chancery Guide of January 2013, para.4. I will say now that I accept that submission. The clear purpose of the Guide and the paragraph I have referred to is to aim to have disputes like this resolved in advance of trial so that whatever needs to be done about it before trial can be done.

Second, Mr. Hobbs submits the evidence is expert evidence. This involves looking into the cases on the issue, which I will return to, and looking at the statements themselves. Third, submits Mr. Hobbs, if it is expert evidence, then it is inadmissible without permission. That is CPR Rule 35.4(1). Moreover, if it is expert evidence, then, even if it is permitted, the regime in Part 35 applies with various consequences relating to the duties of the witness and the protocol on instructions. Mr. Hobbs also refers to the recent decision of the Court of Appeal in the Force India case. That concerned a different kind of evidence from the evidence before me, but the point was made clearly there, particularly in the judgment of Stanley Burnton LJ, of the dangers of circumventing the requirements of CPR Part 35, albeit, as I say, in different circumstances. Fourth, Mr. Hobbs submits that this evidence should be excluded on case management grounds on any view. There are various problems: it is repetitive, much of it is based in the USA and of no real value. He points to the recent guidance from the Court of Appeal in the Interflora cases about survey evidence in trademark cases. As Mr. Hobbs puts it, the direction of travel and the emphasis is on a consideration of whether evidence to be called in trademark and passing off cases will be of REAL value. He says this evidence is not useful and should be ruled out.

Mr. Howe's submissions essentially are these. First, he says that this evidence is not expert evidence at all, it is trade evidence commonly given in passing off and trademark cases. The issues raised by Mr. Hobbs may go to its weight, but that is best dealt with at trial. Second, the evidence complained of is of the very same character as evidence which the defendants themselves have called. They call trade witnesses who describe the trade and express opinions about views of consumers in this business, and refer to their experience in that trade to bolster the value of their views. Third, submits Mr. Howe, it is not fair to take these case management objections in this way at this stage. In effect, this would be a retrospective case management conference conducted far too late for the parties to do anything about it. Although under the new Rule 32.2 of the CPR that rule will give the court power to restrict evidence generally, that does not apply in this case and it is not fair to impose an equivalent in this way.

Finally I should say that Mr. Hobbs accepted that his client’s evidence did contain material which, if his submission was correct, would be expert evidence and only admissible with leave. Mr. Hobbs also submitted that if the evidence was expert evidence, then it is not a matter of discretion, the evidence in inadmissible, without permission, and so the matter needs to be ruled upon.

After I heard the parties, I expressed the following concern. On Mr. Hobbs' case, both sides have submitted inadmissible expert evidence. If that is what has happened, then the consequences need to be applied fairly. Therefore, in order to deal with the issues on this application, I need to rule on that issue first and give the parties time to think about the implications of it for this case. The other case management issues can wait a few days, albeit that the trial is coming up soon. This judgment is my ruling on that question.

I have not found this an easy question to address and, given the potential ramifications for the conduct of trademark and passing off cases, I will try and address all the material which has been cited to me.

Section 2(3) of the 1972 Civil Evidence Act, provides that rules of court can be made to regulate the admission of expert evidence, but it does not define what expert evidence is. The modern regulation of expert evidence is set out in CPR Part 35.4(1) and (2):

At one stage Mr. Hobbs submitted that this was a novelty in the CPR. That is not right. Previously, Rules of the Supreme Court O.38, r.35 was to the same effect as CPR 35.4(1), i.e. expert evidence was not allowed to be admitted without leave. That was in force since at least the 1980s. It is true, however, that the regime governing expert evidence today is much more developed now under the CPR than it was before.

In O2 v. Hutchison [2006] EWHC 601 (Ch) Lewison J (as he then was) was asked to consider evidence about a survey by an employee of a market research company, and rule whether it was expert evidence. He said as follows:

There are three things to note from the passage to which I have just referred. First, it is impossible to formulate an overall test. Second, in addition to opinion evidence, factual evidence given by an expert can also be expert evidence. Third, I note the reference to the reliance on the expertise of the person giving the evidence.

Another general point which I should make is this. The law used to be that experts could not opine on the ultimate question before the court, and that can be seen reflected in some of the older cases in this area. That is no longer the law, and so one needs to take care with the older cases to check that that is not the root of the objection they are dealing with.

It is clear that in trademark and passing off cases for many years, trade witnesses have been called as witnesses, and in doing that have not been subject to an expert witness regime. I will start by reference to the passage from Lord Evershed in George Ballantine & Sons v. Ballantyne Stewart & Co. [1959] RPC 273. In that case he described a common kind of trade evidence. He said this:

I note that the first part of Lord Evershed's statement is a reflection of the principle I have just referred to which used to apply, that experts could not give an opinion about the ultimate question of the court, which is no longer the law. I should say that whether such opinions today are useful in a given case is a different question.

An issue which commonly arises in this debate is about what exactly such trade witnesses may say. That has always attracted a degree of controversy. It is a common phenomenon to find trade witnesses who describe the circumstances of the trade but then go on and express opinions about how customers will react. In Sodastream v Thorn Cascade [1982] RPC 459, Kerr LJ dealt with this and said the following at p.468, line 32:

Now, Mr. Hobbs pointed out that this was a case about an interlocutory injunction and also that what Kerr LJ said appears not to have been the subject of argument before the court. Mr. Hobbs submitted that what Kerr LJ had said was not of high weight in terms of legal precedent. That may be, but this statement of Kerr LJ has been followed and applied since. In the Gucci case in 1990 (Guccio Gucci v Paolo Gucci [1991] FSR 89), the Vice-Chancellor, Sir Nicholas Browne-Wilkinson, considered it. There he reconciled a number of conflicting authorities on this point, which pointed the other way, as follows, at p.91:

The words of Kerr LJ in Sodastream were also mentioned by the Court of Appeal in the Taittinger case in 1993 (Taittinger v Allbev [1993] FSR 641). There, Peter Gibson LJ did not have to rule on it but he remarked on what he called the good sense of what Kerr LJ and the Vice-Chancellor in Gucci had said. I also note that Sodastream was applied by Ferris J at the trial of the NAD case in 1997 (NAD Electronics v NAD Computer Systems [1997] FSR 380).

In 1998 the issue came before the Court of Appeal in The European v. The Economist [1998] FSR 283. Millett LJ said the following:

Next Mr. Hobbs relies on the esure case, which is esure Insurance v. Direct Line Insurance [2008] EWCA (Civ) 842. In that judgment, Arden LJ, at paras. 62 and 63, recognised the role for an expert where the market is one which is unfamiliar to judges, referring back to Taittinger and also echoing what Millett LJ had said in The European. She suggested that surveys may be the best way of addressing customer perception but recognised the potential cost and the need for early case management in relation to surveys. Jacob LJ in that case deals with the issues at paras.72 to 76. He explains that the problem was caused by a so-called "branding expert", Mr. Blackett. He was not an expert in the actual field in question, and his evidence consisted of a series of argumentative assertions. Jacob LJ regarded it as empty rhetoric of no value. Maurice Kay LJ agreed with the other judgments and added something about Mr. Blackett. He thought, like Jacob LJ, that Mr. Blackett's evidence was not expert evidence at all. On the definition of expert evidence, he referred to the judgment of Evans-Lombe J in the Barings case as follows, at p.942:

Next Mr. Hobbs relies on Floyd J (as he then was) in the Hasbro case at para.37 (Hasbro v 123 Nahrmittel [2011] EWHC 199(Ch)). However, the passage at para.37 in Hasbro is not the only relevant passage, and I think Floyd J's judgment bears closer consideration.

In Hasbro both sides called expert evidence. Floyd J cited both The European and esure and also GE, and then said this at para.37:

These are all points on which a judge is able to form his or her own view, both as to whether they are established and whether they have relevance. For these reasons I did not think that this was a case in which either side needed to call any expert evidence."

But the experts were not the only witnesses called in Hasbro. The claimant also called trade witnesses. Floyd dealt with those at paras.22 to 29. There is no need to set them out. It is quite clear that the learned judge did not regard that trade evidence as "expert evidence". These witnesses gave evidence about what happened in the trade and expressed opinions about customers' behaviour. In fact Floyd J did not find the evidence of much use, but it is notable that it was not regarded as expert evidence as such.

Finally, I need to refer to Arnold J in Samuel Smith v. Lee [2011] EWHC 1879 (Ch). That evidence included witnesses from the claimant itself describing the claimant's business and its use of trademarks, as well as third parties' use of other trademarks. This is, in effect, evidence from trade witnesses, although it was not necessarily expressing opinions about what customers would do. The claimant also called an expert witness. It was Mr. Blackett again. The defendants submitted it was inadmissible following esure. The claimant replied, arguing that although in esure Mr. Blackett had no expertise in the insurance industry and was just a "branding expert", in relation to the Samuel Smith case Mr. Blackett had actual experience in the brewing industry. Arnold J did not accept that that distinction helped, and at p.276 he said the following:

Pulling all this together, I can state the following.

First, the category identified by Maurice Kay LJ is not the only kind of expert witness evidence covered by CPR Part 35. For example, in patent cases expert evidence is routinely called from persons who are not professional experts and do not necessarily belong to bodies with recognised standards and rules of conduct.

Second, independence is not what takes such evidence into the relevant category. There are numerous examples of evidence from experts who are not in fact independent at all. That may be fine, as long as the nature of any link with either side is identified and taken into account.

Third, it seems to me that the nature of the proceedings and the role the evidence is to play in those proceedings is an important element in characterising the evidence in question.

Fourth, sometimes parties do call an expert report identified as such in trademark and passing off cases. An example was the report of Mr. Blackett in the two cases I have referred to already. It is important to note that there was no issue in esure or Samuel Smith that Mr. Blackett's evidence was expert evidence. As I say, it was identified as such. So the difficulty before me did not arise in those cases. I should say that in this judgment I am not expressing a word of disagreement with the decisions I have referred to above, which emphasises the lack of utility of anyone trade witness or a self-identified expert in “branding” -giving an opinion on the likelihood of confusion in a case about a market that the court is likely to be familiar with.

Fifth, for years trademark and passing off cases have routinely included evidence from persons in the relevant trade describing the circumstances of the trade, the nature of customers and so on. Such evidence will always have explained the experience of the witness in order to justify their evidence and add credibility to it. That evidence will always consist of factual statements about the trade. Although it is primarily factual, it will sometimes include statements which are, properly analysed, expressions of opinion. These are not necessarily opinions simply on the likelihood of confusion but are expressions of opinion about how customers behave. However, it is clear, and I refer, for example, to Hasbro, that such evidence has not always been treated as expert evidence as such and has not hitherto been regarded necessarily as subject to the regime in CPR Rule 35. Hasbro is also an example showing that as long as it is kept in its proper place, not characterising it as expert evidence within CPR Part 35 does not matter.

Moreover, to impose the further burden of the duties and responsibilities of expert witnesses on such witnesses is capable of having a chilling effect in trademark and passing off cases. The sort of trade evidence I am talking about is not given by persons who identify themselves as "expert witnesses", and they are different from the self-identified experts such as the individual referred to in esure and Samuel Smith. Mr. Hobbs referred to the recent Interflora cases in the Court of Appeal. Their aim is to seek to ensure that costly survey evidence of little probative value is eliminated from trademark and passing off cases. Of course one of the alternative sources of relevant evidence in trademark and passing off cases is cogent evidence from persons in the trade describing the circumstances of that trade to the court. When properly done, that evidence is much less costly overall than a badly-conducted survey.

There are two different issues in play in this debate. One is the court's ability to regulate the evidence and second is the imposition of the requirements relevant to expert evidence such as the obligations, and so on, referred to in Part 35. It is the impact of that latter issue in trademark and passing off cases which concerns me much more than the former. In fact the problem may have been potentially more significant in the past than it is today because of amendments to the CPR following the Jackson Review. They emphasise that all the evidence before the courts is now to be controlled, and I refer to the new Rule 32.2. Thus, we are moving towards a regime more like the Patents County Court system. The significance of that is that the ability to restrict evidence does not now depend on whether it is characterised as expert evidence or not. It is now clear that evidence can be controlled, however it is characterised.

In future it is clear that trade evidence will be subject to the regulation under Rule 32.2. In the Patents County Court system for the last three years, what has happened is this. At the case management conference the court would ask the litigants what sort of evidence they intended to call. The litigants know that they need to be able to give a rational answer to that question. In a trademark and passing off case, one obvious potential category is trade witnesses. As a judge in the PCC, if a party wanted trade evidence I would generally permit a limited number of trade witnesses. It would all depend on the circumstances, and there is no reason why the same approach cannot be taken in general terms at the CMC under Rule 32.2. Indeed, it seems to me that in order to exercise the power in Rule 32.2, a party will need to be able to say at the case management conference what sort of evidence they intend to call. In a High Court case, a limit on the numbers or the type of evidence may or may not be appropriate, but at least if the question is asked at the case management conference, steps can be taken.

In conclusion on the principles, just as Lewison J (as he then was) in O2 found, it seems to me that to provide a definition of expert evidence is impossible. Plainly trade evidence can be presented as an expert's report, such as the branding expert evidence of Mr. Blackett. The cases show that that evidence can have little value. But, in my judgment, in a trademark and passing off case, evidence of the factual circumstances of a trade by a person in that trade, even when they deploy their experience in that trade to bolster what they are saying, is not necessarily "expert evidence" within CPR Part 35. Apart from anything else, there is no reason to treat it as such. However, the fact that evidence is not labelled as an expert's report does not mean it is not in truth expert evidence. The evidence which was the subject of the criticisms in esure was obviously expert evidence, whether it had been labelled as such or not. A witness who expresses an opinion on the ultimate question before the court -for example, will the relevant public think due to the presence of the photograph of Rihanna on a T-shirt that the Rihanna T-shirt is in fact licensed by or authorised by Rihanna? -is expressing an expert opinion. A witness called to say that would need to comply with CPR Part 35.

To decide whether the trade evidence called by both sides in this case is in fact expert evidence cannot be done without a closer examination of those statements. I will apply what I have said to this case. I start with the following:

First, Mr. Coyle. He gives evidence about licensing in the clothing trade worldwide and in the United Kingdom. He addresses the impact of unauthorised goods in the market. His evidence is not focused on the specifics of the T-shirt in question but on the general nature of the trade.

Second, Mr. Daffner, he is similar to Mr. Coyle and potentially duplicative. He deals with fashion and celebrity licensing in the same area. He states:

Third, Mr. Dapron. He is similar to the previous two but is focused on music and merchandising in that trade. He says:

Pausing there, in my judgment, these three witness statements are not expert evidence within CPR Part 35. They are rather duplicative, and Mr. Daffner and Mr. Dapron are very US-centric and I query their relevance, but those are case management questions.

Next, Mr. Robinson. He is a music industry consultant. His job has been to study fans. He says that fans expect High Street retailers with the stature of Topshop to sell official merchandise. He also refers to research he has done but cannot now find, and cross-refers to a colleague who is also involved in research, and says his colleague shares the same view. In my judgment, this is expert evidence and is subject to CPR Part 35. The determinants in the case of Mr. Robinson are the reference to and reliance on research, and also the nature of his role as a researcher generally. As he puts it, his job has been to study fans. I might also add that, having read the statement, I am not impressed with the utility and probative value of the references to unidentified research and to the views of Mr. Robinson's friend in any event. If the claimants wish to rely on Mr. Robinson, they will need leave, and CPR 35 will need to be complied with.

Next Mr. Joseph. He is also in the music merchandising business. He discusses the control of the image of artists. His company took a licence from the claimant to promote her current worldwide tour. He explains in general terms the value of that licence and discusses the impact of unauthorised goods. I think this is relevant evidence. I do not think it is expert evidence within Part 35 at all. It is basically factual trade evidence.

Next the segments from Ms. Perez's statement. Ms. Perez is the main witness for the claimants. Most of it is not objected to. Some of Ms. Perez's evidence which is objected to is duplicative of what I have dealt with already. It relates to the licensing business in the music and fashion area. The high point of Ms. Perez's evidence on the question of whether it is expert evidence is paras.81 to 83. Here effectively Ms. Perez articulates the claimant's case why the T-shirt in this case is said to create a misrepresentation that it is authorised and why the claimant is concerned about it. I think this is natural evidence for the claimant to give. It is not expert evidence. It is difficult to see how this case could be articulated otherwise.

A different problem with relation to Ms. Perez's evidence is the way in which she comments on documents, which I must say seems rather pointless, and I query whether it is useful on case management grounds.

I will now turn to consider the defendants' evidence. First, Sheena Sauvaire. She is the head of marketing at Topshop. She explains her experience in the trade and describes the licensing at Topshop. She says at para.44:

Finally, I need to deal with Mr. Chatalos' evidence. He is the source of the T-shirt in this case. He describes his business and the application of images to T-shirts. In my judgment, this is useful evidence too, just like the trade evidence from the claimants. It is not expert evidence either, and I will admit it.

In conclusion, I find that Mr. Robinson's evidence is expert evidence; it requires permission under Rule 35. Otherwise I reject the defendants' arguments that the rest of this evidence is formally inadmissible as a matter of principle under Rule 35. There are some serious case management questions which bear consideration and there will be a further hearing next week to address the consequences. In particular, the claimants need to consider the duplicative nature of some of their evidence, and Ms. Perez's approach to the documents. That is my judgment.