Bhayani & Anor v Taylor Bracewell LLP

Goodwill generated by a solicitor’s work in the course of employment or partnership ordinarily belongs to the employing firm or partnership, not to the individual solicitor. Personal reputation alone cannot support a passing-off claim. A separate personal goodwill may arise where activities are outside the employee’s or partner’s duties, or where unusual facts show that a distinct business is being conducted.

On a summary-judgment application, the court asks whether the claim has a realistic prospect of success. It must avoid a mini-trial, while addressing clearly unsustainable factual assertions and deciding a short legal or construction point where the evidence is sufficient. A contractual right to use a trade mark does not necessarily prevent revocation under section 46(1)(d) of the Trade Marks Act 1994.

Juthika Bhayani, a solicitor, and Bhayani Law Limited brought claims against Taylor Bracewell LLP concerning the use of the trading name Bhayani Bracewell after Ms Bhayani left the firm. The claims included passing off, revocation of a registered trade mark under section 46(1)(d) of the Trade Marks Act 1994, and surrender of a domain name.

Taylor Bracewell applied for summary judgment, alternatively strike-out. It argued that Ms Bhayani had no relevant goodwill and that the partnership agreement entitled it to use the trading name and trade mark. The central issues were whether Ms Bhayani had a realistic prospect of establishing personal goodwill and whether the contractual arguments disposed of the revocation claim.

1. Summary judgment. The court applied the principles stated in Mellor v Partridge [2013] EWCA Civ 477. The court had to decide which parts of the case were fit for trial, asking whether the claim had a realistic rather than fanciful prospect of success. It had to avoid a mini-trial, but could decide a short point of law or construction where the evidence was sufficient.
2. Goodwill. Goodwill was indivisible from the business with which it was associated, whereas reputation could exist personally. In the ordinary course, goodwill generated by an employee vested in the employer, and goodwill generated by a partner vested in the partnership. An employee or partner could own distinct goodwill where the relevant activities fell outside the employer’s or partnership’s business. The cases concerning writers and performers did not establish that goodwill generated under an individual’s name always belonged personally to that individual.
3. Ms Bhayani’s professional work had been carried out in the businesses of Watson Esam and Taylor Bracewell. No separate business of the kind identified in Irvine v Talksport Ltd had been pleaded or suggested. The goodwill generated by her work as a solicitor therefore vested in the firms. She had no realistic prospect of establishing ownership of relevant goodwill sufficient to maintain passing off. Judgment was entered for Taylor Bracewell on that claim.
4. The combined effect of clauses 4.3 and 11.2 of the 2014 Partnership Agreement also meant that goodwill generated during Ms Bhayani’s time at Taylor Bracewell belonged to the LLP. Clause 21.6.5 did not alter that essential fact, whatever its precise construction.
5. Trade mark revocation. Even if Taylor Bracewell retained a contractual right to use the Bhayani Bracewell name and trade mark, it did not necessarily follow that use could not make the mark liable to mislead the public under section 46(1)(d) of the Trade Marks Act 1994. The revocation claim therefore had a realistic prospect of success and was not summarily determined. The parties were to address the appropriate way forward, as the counterclaim was otherwise to be transferred out of IPEC.