MHCS Societe En Commandite Simple & Anor v Polistas Ltd & Ors

Trade mark consent must be proved by the alleged user and must be unequivocally demonstrated. Silence or delay by the proprietor does not establish consent.

Where commercial permission is granted without an agreed termination procedure or sell-off period, it may be terminated on reasonable notice, and the right to sell existing stock ends on termination. Contractual permissions are construed by their natural and ordinary meaning, read in context. A director is personally liable as a joint tortfeasor where he assists the company’s tort pursuant to a common design and is its controlling mind.

The claim concerned passing off and infringement of UK and EU trade marks used for Veuve Clicquot champagne and polo-related branding. The defendants had supplied branded clothing for the Veuve Clicquot Gold Cup between 2007 and 2010 and disputed the scope and duration of the claimants’ consent.

The court determined the terms of the annual agreements, whether and when they terminated, the extent of permission given for Gaucho-branded garments, the liability of the corporate defendants and Mr Moreland-Lynn, and damages.

1. Consent. The defendants bore the burden of proving unequivocal consent. The principles in Zino Davidoff SA v AG Import Ltd and Honda Motor Co Ltd v Neesam meant that consent was actual consent, not deemed consent. It could not be inferred from silence or failure to object.
2. Annual agreements. The arrangements for 2007–2010 were annually negotiated agreements. The 2007 agreement permitted production, promotion and sale of specified approved branded merchandise through the defendants’ retail channels without a “during the VCGC” limitation. The 2008 agreement limited sale and promotion of branded merchandise to the six-week period ending with the VCGC final. The 2009 and 2010 agreements contained equivalent limits and did not authorise the long-sleeved snow polos.
3. No agreement contained a termination procedure or sell-off period. Each could therefore be terminated at will on reasonable notice. The September 2011 email was insufficiently certain, but the letter of 11 June 2012 effectively terminated the agreements on 11 December 2012. Existing stock could not be promoted or sold after termination.
4. Interpretation. Applying the approach in Rainy Sky SA v Kookmin Bank and Arnold v Britton, the natural and ordinary meaning of the 2008 wording, read with the relevant background, confined official-supplier promotion to the VCGC period.
5. Liability. The test stated by Lord Neuberger in Sea Shepherd UK v Fish & Fish was satisfied. Mr Lynn assisted the companies’ torts, acted pursuant to their common design, and was their controlling mind. The defendants were jointly and severally liable for infringement and passing off.
6. The unauthorised sales, manufacture, importation, Gaucho garments, snow polos and out-of-period promotion constituted infringement and/or passing off. The claimants were awarded £125,000 damages and were entitled to an injunction.