Caspian Pizza Ltd & Ors v Shah & Anor

A local goodwill established before registration of a trade mark may constitute an earlier right capable of defending use in that locality and, on the approach preferred in this judgment, may also support invalidity under Trade Marks Act 1994, s.5(4)(a). Where domestic wording elaborates on a harmonised EU provision, the Directive’s language controls. Statutory acquiescence requires knowledge both of the later mark’s use and of its registration. Joint tortfeasance requires active cooperation in the relevant acts, together with an intention that the cooperation assist those acts. Mere ownership or leasing of premises is insufficient.

The claimants owned or licensed two registered trade marks incorporating CASPIAN and alleged that the defendants’ Worcester pizza restaurant infringed those marks and passed off its business. The defendants denied any franchise agreement, relied on local goodwill generated by the Worcester business, and counterclaimed for invalidity.

The court found that the Worcester business had generated or shared local goodwill from 2002 or 2004, while the claimants’ Birmingham goodwill had not extended to Worcester. The issues included the locality defence, exhaustion, acquiescence, validity of the marks, joint tortfeasance and passing off.

1. Outcome. The Caspian word mark was declared invalid under Trade Marks Act 1994, s.5(4)(a) and art.4(4)(b) of the Trade Mark Directive. The device mark remained valid. Neither mark was infringed by the defendants, and the passing-off claim failed.
2. For joint tortfeasance, the claimant had to prove that the alleged joint tortfeasor actively cooperated in the relevant acts and intended that the cooperation would help bring them about. Mr Shah’s ownership of the premises, and the leasing and sub-leasing arrangements, did not establish active cooperation.
3. Article 6(2) of the Trade Mark Directive governed the locality defence. The defendants’ businesses had generated local goodwill in Worcester sufficient to restrain others from using CASPIAN for a pizza business there. The claimants’ earlier Birmingham use did not defeat that defence. The court therefore preferred the Directive’s language over the more elaborate wording of s.11(3), applying British Sugar plc v James Robertson & Sons Ltd and Budějovický Budvar NP v Anheuser-Busch Inc..
4. For invalidity under s.5(4)(a), the court preferred the territorial approach in SWORDERS Trade Mark to that in Redd Solicitors LLP v Red Legal Ltd. The local goodwill existing before each application date was an earlier right capable of preventing registration in the relevant locality. The word mark was consequently invalid. The device-mark sign, however, had been taken from generic pizza boxes and had not been shown to generate an earlier right.
5. Statutory acquiescence under s.48 and art.9(1) requires inactivity while in a position to oppose, with knowledge of both use and registration. The defendants knew of use but did not know of registration until the dispute began, so the five-year period had not run.
6. The claimants failed to prove that their goodwill extended to Worcester. There was therefore no relevant misrepresentation or passing off.