Yours Naturally Naturally Yours Limited v Kate McIver Skin Limited & Anor

The Court of Appeal dismissed the defendants' appeal from an IPEC judgment granting relief to the claimant for passing off and copyright infringement. The court applied established passing off principles (as summarised in Advocaat and Jif Lemon) and the authorities on so-called reverse or inverse passing off (Samuelson, Plomien and Bristol Conservatories), holding that the defendants had misrepresented the origin of a skin serum and that those misrepresentations risked damage to the claimant's goodwill. On copyright, the court accepted that an implied licence to use the claimant's marketing material existed while the defendants purchased product from the claimant but ended when supply ceased; continuing public availability of social media posts after that date amounted to infringing use.

The judge's finding that goodwill had arisen in the product and that misrepresentations about product origin and identity had caused or risked damage was upheld, subject to the appellate correction that the claimant had not pleaded goodwill in the name "Elixir" specifically. The appeal was dismissed because the essential findings on origin, misrepresentation and continuing copyright infringement were open on the evidence.

Background and parties: The claimant (YNNY) succeeded Mr/Ms Tang's business in manufacturing an anti-ageing serum known in the proceedings by reference to the Tang formulation. The first defendant (KMS) and its predecessor, Ms McIver, marketed a competing serum as "Secret Weapon" and otherwise promoted that Ms McIver had created the serum. Proceedings in IPEC alleged passing off and copyright infringement. The claimant sought relief for passing off and infringement of copyright in marketing materials.

Procedural posture: The action was tried in the Intellectual Property Enterprise Court (His Honour Judge Hacon) and the defendants appealed to the Court of Appeal. Permission to appeal was granted by the Court of Appeal (with a recommendation to mediate).

Nature of claim and relief sought: The claimant sought injunctive and other relief for passing off and copyright infringement arising from the defendants' marketing and sales of reformulated versions of the serum and continued online use of the claimant's marketing text.

Issues framed by the court:

• Whether the claimant owned relevant goodwill in the serum as its originator (and whether that goodwill was pleaded with reference to the trade name "Elixir").
• Whether the defendants had misrepresented the origin or identity of their products (including whether statements and marketing would be understood as the defendants claiming to have created the serum).
• Whether any misrepresentation caused or was likely to cause damage to the claimant's goodwill.
• Whether the defendants infringed the claimant's copyright in marketing material and whether any implied licence permitted the defendants' use.

Reasoning and conclusions: The Court of Appeal accepted that the IPEC judge had erred to the extent that he treated the claimant as having pleaded goodwill in the name "Elixir"; that particular pleaded case was not made. However, the court accepted the respondent's position that the claimant had pleaded and proved goodwill in the serum as an identifiable product and in the claimant as the originator of that product. The court endorsed the judge's reliance on reverse-passing-off authorities (Samuelson, Plomien, Bristol Conservatories and ScanSafe) to sustain a claim based on misrepresentations that one product is the same as another or that the defendant, not the claimant, was the creator. The court held that the defendants' statements and continued marketing implied that the reformulations were the same product as the original Tang formulation and that this was capable of deceiving customers and injuring the claimant's goodwill, particularly given evidence of at least one adverse customer reaction to a reformulation. On copyright, the court accepted the judge's finding that an implied licence existed only while the defendants sourced product from the claimant and that the availability after 30 November 2018 of marketing posts containing the claimant's copyrighted text constituted continuing infringement; accordingly the judge was entitled to grant relief for infringement after that date.

Subsidiary findings: The judge rejected the claimant's pleaded loss of sales on the evidence but found reputational damage and a risk of genericisation or loss of distinctiveness (although the appellate court corrected that the claim had not been pleaded in respect of the name "Elixir").

Appeal dismissed. The Court of Appeal concluded that, while the judge had been wrong to treat the claimant as having pleaded goodwill in the name "Elixir", the claimant had proved goodwill in the serum as its product and had established misrepresentation by the defendants that reformulated products were the same as the claimant's product. That misrepresentation risked damage to the claimant's goodwill. On copyright, an implied licence to use marketing text expired when supply ended and continued public availability of the defendants' social media posts after that date constituted infringing use; the judge was therefore entitled to grant relief limited to infringement after 30 November 2018.

Appeal from High Court (IPEC, Business and Property Courts) His Honour Judge Hacon [2023] EWHC 890 (IPEC) to the Court of Appeal [2023] EWCA Civ 1493. Permission to appeal was granted and the parties were encouraged to mediate; the Court of Appeal dismissed the appeal on 19 December 2023.