easyGroup Limited v Easy Live (Services) Limited & Ors

Passing off does not require an intentional misrepresentation. However, a defendant’s deliberate attempt to create a commercial connection with the claimant may strongly support a factual finding that consumers will be misled, provided the allegation has been fairly raised and proved.

A claimant with an established, or potentially available, endorsement or licensing business may establish the damage element by loss of the fee it could have charged for the impugned use. That principle reflects the proprietary protection given to goodwill. A claimant without such a business cannot complete its cause of action solely by asserting a hypothetical consent fee.

A declaration of non-infringement granted to qualify an injunction must define the permitted use with sufficient precision.

easyGroup, owner and licensor of the “easy” brands, sued Easy Live (Services) Ltd and its directors over use of EASY LIVE AUCTION signs for an online auction platform. At trial, Sir Anthony Mann held that Signs 2 and 3 infringed certain trade marks and made an actionable passing-off misrepresentation, but dismissed the passing-off claim because no damage was shown. He also granted a declaration of non-infringement for specified signs and uses: [2022] EWHC 3327 (Ch).

easyGroup appealed the dismissal of passing off and parts of the declaration. By respondents’ notice, the defendants challenged the finding of misrepresentation. The central issues were whether the defendants’ intention could support that finding, whether lost licensing income constituted passing-off damage, and whether the declaration was sufficiently certain.

1. Appeal allowed in part. The respondents’ challenge to the finding of misrepresentation failed. The judge was entitled to find that the deliberate redesign of Signs 2 and 3 was intended to create an association with the easyJet brand and its family. That intention was adequately raised in the pleaded case and at trial. It was not inconsistent with the finding that Mr Burnside did not intend to divert trade.

2. Intent is not an ingredient of passing off, and an actionable misrepresentation may be innocent. Nevertheless, the defendant’s state of mind can be evidence bearing on the likelihood of deception. The judge treated the intention to suggest a trade connection as supportive, rather than determinative, evidence. Misrepresentation was a factual issue, assessed globally. The conclusion that a relevant proportion of consumers would be misled was rationally open to the judge.

3. The judge erred in rejecting damage. Passing off protects the claimant’s property in its goodwill. A claimant with an actual endorsement or licensing business may rely on the loss of the fee it could have charged for the unauthorised use, even where there is no diverted trade, reputational harm, common field of activity, or previous licence of precisely that kind. A claimant with no existing or prospective endorsement or licensing business cannot rely on that fee alone.

4. easyGroup had a well-established business licensing the “easy” branding. It could therefore rely both on the lost opportunity to license the defendants and on the obvious inference that unpaid exploitation of its goodwill would diminish its ability to attract paying licensees. The passing-off claim succeeded.

5. The judge had discretion to grant a declaration of non-infringement as part of the remedial arrangement, despite no counterclaim. However, the permission for plain-text use was insufficiently precise. It was varied to cover only a non-stylised, non-logo form used by the first defendant before 13 October 2022. This preserved protection for historical permitted uses without authorising use in the claimant’s distinctive font or colour, or in new fields of trade.

• Court of Appeal (Civil Division): Allowed easyGroup’s appeal to the stated extent. It upheld the finding of misrepresentation, held that the passing-off claim succeeded because damage was established, and varied the declaration of non-infringement: [2023] EWCA Civ 1508.

• High Court, Intellectual Property List (Chancery Division): Held that Signs 2 and 3 infringed specified trade marks and amounted to a passing-off misrepresentation, but dismissed passing off for want of damage. It also granted a declaration of non-infringement for specified signs and uses: [2022] EWHC 3327 (Ch).