Hayman-Joyce Property Limited v Hayman-Joyce Broadway LLP & Anor

Goodwill in a shared business name may be owned jointly, separately by different businesses, or severed geographically, depending on the parties’ agreement and dealings. The court must determine ownership from the contractual arrangements and the commercial reality, rather than assume that use by one business is merely licensed by another. A partnership agreement may make goodwill generated by use of a name a partnership asset and may exclude an implied terminable licence. Shared goodwill does not prevent passing off where one co-owner makes a material new use which suggests exclusion of the other or otherwise misrepresents the business. Local goodwill may also constitute an earlier right preventing registration of a geographically unlimited trade mark. A mark may be invalid only for services sufficiently close to those protected by the earlier goodwill.

The claimant, an estate agency business succeeding to the Moreton business, sued the defendants, an LLP operating from Broadway and its controlling individual, for passing off, trade mark infringement and copyright infringement. The defendants counterclaimed for invalidity of the claimant’s HAYMAN-JOYCE trade mark, registered in 2020.

The central issues were ownership and geographical scope of goodwill in the shared name, whether the Broadway business used the name under an implied licence, whether the defendants’ conduct amounted to misrepresentation, whether the registration was invalid under sections 47(2)(b) and 5(4)(a) of the Trade Marks Act 1994, and whether the individual defendant was jointly liable.

1. Goodwill and the Partnership Agreement. Goodwill is attached to the business to which it relates. Several businesses using one name may acquire separate or shared goodwill. The 1999 Partnership Agreement did not grant the Broadway partnership an express or implied terminable licence. Its provisions, particularly the different consequences under clauses 20(d) and 25, showed that the Hayman-Joyce name was an asset of the partnership and that a continuing partner could use it following retirement or death. The agreement also reflected a severance, or alternatively abandonment or suspension, of James Hayman-Joyce’s prior goodwill relating to the Broadway area.
2. The goodwill generated by the Broadway business accrued to the partnership, passed to the partners in the Broadway LLP structure, and thereafter belonged to the First Defendant. The First Defendant had goodwill in residential sales extending beyond the Broadway Patch into No Man’s Land within a 20-mile radius, but not into the Moreton Patch. Its goodwill in commercial estate agency services was trivial and could not sustain a passing-off claim.
3. Passing off. The First Defendant could use Hayman-Joyce Broadway, related domain names and social-media accounts in areas and for services covered by its own goodwill. Those uses were consistent with honest concurrent use or shared ownership and did not themselves misrepresent the business. Advertising sales throughout a 20-mile radius of Broadway, if including the Moreton Patch, was a misrepresentation. So were use of the claimant’s testimonials as the defendant’s own and distribution of flyers in the Moreton Patch. Damage was not established for those acts.
4. Trade mark validity and infringement. The First Defendant’s local goodwill constituted an earlier right under sections 5(4)(a) and 47(2)(b) of the Trade Marks Act 1994. The geographically unlimited registration covered residential sales and auctioneering services sufficiently connected with that goodwill, so the registration was invalid for the whole specification. The bad-faith allegation failed. The infringement claim therefore fell away. Had the mark been valid, section 11(3) would have protected the First Defendant’s earlier local right within the Broadway area, but not use beyond that area.
5. The copyright claim failed because the defendants’ licence to reproduce the articles continued until complaint, after which the articles were promptly removed. The Second Defendant was jointly liable with the First Defendant for any passing off or infringement because he controlled the First Defendant and authorised or procured the relevant acts.