Lumos Skincare Ltd.v Sweet Squared Ltd & Ors

In a passing-off claim, the relevant public is not confined to the claimant’s direct trade purchasers. It may include end-users who know the claimant’s goods, even where goodwill is modest and the claimant has no direct relationship with them. A substantial number is assessed by reference to the claimant’s actual or potential customers, not the public at large or the absolute size of the claimant’s market. Direct evidence of an actual deceived customer is unnecessary; likelihood may be inferred from sales evidence, market circumstances and contemporaneous communications. Products in distinct sectors may nevertheless be sufficiently proximate where they are sold, promoted or used in common outlets or under the same brands. If a trial judge has made the necessary primary findings but misdirected himself in law, the Court of Appeal may draw its own inference on likelihood of deception.

Lumos Skincare Ltd sold high-end skincare products under the mark LUMOS. The respondents sold nail-care products under the same mark. The Patents County Court accepted that the claimant had goodwill and that damage was likely if there were a misrepresentation, but found no misrepresentation and dismissed the claim. The claimant appealed from the decision reported at [2012] EWPCC 28. The central issue was whether relevant actual or potential customers, including end-users, were likely to believe that the respondents’ nail-care products came from, or were commercially associated with, the claimant.

The appeal was allowed and an injunction was granted to restrain passing off. Lord Justice Lloyd gave the leading judgment. Lord Justice McFarlane agreed. Sir Bernard Rix dissented, but accepted that the appeal had to be allowed by the majority.

1. The three elements of passing off are goodwill or reputation attached to the claimant’s goods by association with the mark, a defendant’s misrepresentation likely to cause belief in common source or business association, and actual or likely damage. Only misrepresentation was in issue on appeal. The defendant’s use of the mark had to be assessed by close analysis of the facts.
2. The relevant public included both direct trade purchasers and end-users reached through salons, clinics, retail outlets or the internet. End-users could be relevant despite the claimant having no direct commercial relationship with them. Sales figures could support a reasonable inference that some end-users associated the goods with the mark; direct evidence from those users was unnecessary.
3. The substantial number requirement concerned a substantial number of the claimant’s actual or potential customers, rather than the public generally or an absolute numerical threshold. A small business with modest goodwill could therefore succeed if the proportionate customer group likely to be deceived was sufficient to affect its trade or goodwill. This reflected the approach in Neutrogena Corporation v Golden Ltd [1996] RPC 473.
4. Skincare and nail-care products were distinct sectors, but not so separate that common origin or business association was impossible. The products could be used, promoted and sold in the same salons, advertised in the same media and sold under the same brand names. The absence of prior side-by-side sales was not decisive.
5. The contemporaneous email from Ms MacMillan showed an assumption that the respondents’ nail-care products were products of, or associated with, the claimant. Oral evidence from her was not required. The fact that two other trade customers were not deceived did not negate the likelihood that less informed end-users would be misled.
6. Where a trial judge had made the necessary primary findings but misdirected himself in law, the Court of Appeal could assess the evidence, use common sense and draw its own inference on the likelihood of deception. On that assessment, a significant number of actual or potential customers were likely to be misled. The second element of passing off was established, and an injunction was granted.
7. Sir Bernard Rix considered that the trial judge’s findings showed distinct markets, no relevant side-by-side trading and only thin, untested evidence. Relying on the appellate restraint principles discussed in Biogen Inc v Medeva Plc [1997] RPC 1 (HL) and Designers Guild Ltd v Russell Williams (Textiles) Ltd [2000] 1 WLR 2416 (HL), he would have dismissed the appeal.

• Court of Appeal (Civil Division) [2013] EWCA Civ 590: appeal allowed and injunction granted.
• Patents County Court [2012] EWPCC 28: goodwill and likely damage accepted, but no misrepresentation found; claim dismissed and costs ordered.