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

Passing off requires claimant-owned goodwill, a defendant’s misrepresentation and consequential damage. Goodwill may attach to a product and its trade originator, although mere reputation is insufficient. Misrepresentation is assessed factually from the relevant consumer’s perspective; there is no single-meaning rule, and a substantial number of consumers being misled is sufficient. Marketing a reformulated product as the same product previously supplied by the claimant is actionable product-identity misrepresentation. Risk of dissatisfaction being attributed to the claimant’s product may damage goodwill. Continued online availability of copyright material may amount to continuing communication to the public under section 20 of the Copyright, Designs and Patents Act 1988.

The claimant manufactured and sold a skin serum created by Georgina Tang. Kate McIver initially resold the serum under her own branding, then marketed reformulated versions through Kate McIver Skin Limited while representing that the serum was her creation and was the same product. The claimant alleged passing off and infringement of copyright in marketing materials.

His Honour Judge Hacon granted relief in the Intellectual Property Enterprise Court: [2023] EWHC 890 (IPEC). The defendants appealed on goodwill, misrepresentation, damage and copyright infringement. The claimant’s respondent’s notice relied on goodwill in the product and its originator. The central issues were whether the pleaded case established goodwill, whether the statements and reformulations were actionable misrepresentations, whether damage was shown, and whether continued online availability after termination of an implied licence constituted infringement.

Disposition. The appeal was dismissed unanimously.

1. Pleading and goodwill. The court accepted that the judge should not have found goodwill associated with the trade name Elixir, because no such case had been pleaded. The related finding of risk of genericisation of that name could not stand. However, the claimant’s pleaded alternative case was sufficient: goodwill could be associated with the product and with the claimant, as successor to Ms Tang, as its originator.
2. Passing off. The core ingredients were claimant-owned goodwill, defendant misrepresentation and consequential damage. Mere reputation was insufficient. The court considered the formulations in Erven Warnink BV v J. Townend & Sons (Hull) Ltd [1979] AC 731 and Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491, together with the requirement for goodwill stated in Starbucks (UK) Ltd v British Sky Broadcasting Group plc [2015] UKSC 31. Misrepresentation was a question of fact from the relevant consumer’s perspective. There was no single-meaning rule, and a substantial number of consumers being misled was sufficient: Neutrogena Corp v Golden Ltd [1996] RPC 43.
3. Misrepresentation and damage. The statements that Ms McIver had created the serum were actionable misrepresentations. More importantly, representing the First and Second Pelham Reformulations as the same serum previously sold as Elixir deceived customers into believing that they were receiving the same product. This fell within the line of Samuelson v Producers Distributing Co Ltd (1931) 48 RPC 580, Plomien Fuel Economiser Co Ltd v National School of Salesmanship Ltd (1943) 60 RPC 209 and Bristol Conservatories Ltd v Conservatories Custom Built Ltd [1989] RPC 455. Loss of sales was not established because the misrepresentations were not necessary to enable KMS to sell the reformulations. Nevertheless, the risk that customers dissatisfied with the reformulated product would attribute that dissatisfaction to the claimant’s product was sufficient damage to goodwill.
4. Copyright. The pleaded references to sections 17, 18 and 23 of the Copyright, Designs and Patents Act 1988 were considered. Online use did not involve tangible copies for the purposes of section 18, and section 23 was defectively pleaded because knowledge or reason to believe had not been alleged. The defendants had admitted the relevant acts, had not taken the section 20 point, and relied only on an implied licence. That bare licence lasted only while the serum was purchased from Ms Tang and ended on 30 November 2018. Continued public accessibility of the posts would, if pleaded as communication to the public under section 20, constitute continuing infringement. The defendants could not rely on that argument on appeal.

1. Court of Appeal (Civil Division): On 19 December 2023, the court dismissed the defendants’ appeal.
2. High Court of Justice, Intellectual Property Enterprise Court: On 20 April 2023, His Honour Judge Hacon granted the claimant relief for passing off and copyright infringement in the judgment reported at [2023] EWHC 890 (IPEC).