Byford v Oliver & Anor

A partnership owns its business name and goodwill as partnership assets. Individual partners do not own those assets merely because they helped create the reputation. On dissolution, the assets ordinarily fall to be realised and distributed, unless a special agreement provides otherwise.

For Trade Marks Act 1994, section 5(4)(a) asks whether normal use of the mark at the application date would be liable to be prevented by passing off. The provision is not confined to cases where the other trader began using the sign earlier. Registration may also be made in bad faith where applicants obtain a mark without title for the purpose of interfering with persons who have consistently used the sign.

Peter Byford appealed against the Registrar of Trade Marks’ decision dated 7 November 2002 dismissing his application to invalidate trade mark no 2,150,052 for SAXON. The mark was registered in the names of Graham Oliver and Steven Dawson for goods and services including records and live performances.

The parties had been members of successive heavy-metal bands using the name SAXON. Byford remained involved in the current band, while Oliver and Dawson had left and later applied to register SAXON. The application for invalidity relied on sections 3(6) and 5(4)(a) of the Trade Marks Act 1994. The central issues were ownership of the name and goodwill, liability to passing off, and whether the registration had been made in bad faith.

1. Appeal allowed. The Registrar had erred in treating the name and goodwill as owned individually by the members of the band.
2. Where musicians perform as a partnership, the partnership owns the name and goodwill as partnership assets. The partners have interests in the realised value of those assets, but do not thereby own the assets themselves. On dissolution, the assets ordinarily have to be realised and distributed. A different result may follow where special contractual arrangements provide for the goodwill and name to be shared, as in Burchell v Wilde [1900] 1 Ch 551.
3. Successive bands are separate legal entities even where they contain common members. Each may acquire goodwill enforceable against third parties. Where the relevant band is a partnership, proceedings concerning its goodwill must be brought by or on behalf of the partnership. The principles were illustrated by Dent v Turpin (1861) 2 J&H 139 and the authorities on persistence, abandonment and acquisition of goodwill.
4. Section 5(4)(a) requires consideration of whether normal use of the mark by the applicant at the application date would be liable to be prevented by passing off. The reference to an earlier right does not require the other trader to have commenced use earlier. Here, use of SAXON alone by Oliver or Dawson could be restrained by the current band’s rights, or, so far as residual goodwill remained, by the former partnership. The ground therefore succeeded.
5. The registration also contravened section 3(6). The applicants had no existing title to SAXON, applied in their own names without authority from the former partnership, and used the registration to threaten Byford and traders dealing with his band. Obtaining registration in those circumstances for the purpose of interfering with established users amounted to bad faith under the guidance in Growmax Plasticulture v Don & Low Nonwovens Ltd [1999] RPC 367.

• Trade Marks Registry: Mr Mike Foley dismissed the application for invalidity on 7 November 2002.
• High Court (Chancery Division): The appeal was allowed by Laddie J.