Quantum Advisory Limited v Quantum Actuarial LLP

A contractual outsourcing arrangement may also create fiduciary duties where one party entrusts the other with the entire operation of its business and the authority needed to conduct it. The fiduciary relationship is shaped by the contract, but contractual labels are not decisive.

A licence to use an unregistered trading mark may be limited by its commercial context and duration. Where the licence is coterminous with the underlying arrangement, continued use after termination may support a passing-off claim if the necessary elements are established.

Under Trade Marks Act 1994, an agent or representative cannot justify registration in its own name merely by relying on its own investment or goodwill. Section 10B requires similarity between the earlier mark and the registered mark; association alone is insufficient.

Quantum Advisory Limited claimed that Quantum Actuarial LLP had acted as its agent or representative when using the QUANTUM ADVISORY mark and registering four related trade marks. The parties’ relationship arose from a Services Agreement under which LLP operated Quad’s legacy business while developing its own business using the brand.

The principal issues were whether LLP owed fiduciary duties, the scope and duration of its permission to use the unregistered mark, ownership of associated goodwill and registrations, and whether Quad was entitled to rectification under section 10B of the Trade Marks Act 1994.

1. Fiduciary relationship. LLP was a fiduciary of Quad in respect of Quad’s business. The Services Agreement entrusted LLP with the entire operation of that business, supplied it with the necessary assets and personnel, and conferred the authority required to conduct its outward-facing functions. The relationship was fiduciary in substance, notwithstanding the contractual labels and the absence of authority to conclude contracts on Quad’s behalf.
2. Licence to use the mark. The licence to use QUANTUM ADVISORY was coterminous with the Services Agreement. The agreement itself did not determine ownership of goodwill generated by LLP’s own business, but the surrounding arrangements showed that LLP’s permission to use the mark depended on the continuing association with Quad. After termination, LLP would need to adopt another trading name or risk passing-off liability if its continued use materially misrepresented an association with Quad.
3. Section 10B requirements. The court formulated five requirements: LLP had to be Quad’s agent or representative; Quad had to own an identical or similar earlier mark used for identical or similar goods or services; LLP had to have applied in its own name; the application had to be without Quad’s consent; and LLP had to fail to justify its conduct. The concepts of agent and representative were interpreted broadly to include the parties’ fiduciary commercial relationship.
4. Similarity and justification. Similarity, rather than mere close association, was required. The Word Trade Mark was identical and the Device Trade Mark and Device Series Trade Mark were similar. The Q Device Trade Mark was not similar because the common feature was only the letter Q. LLP’s own goodwill, expenditure and interest in protecting its business did not justify registration in its own name, since that preferred the agent’s interests over Quad’s interests.
5. Relief. Quad was entitled under section 10B to rectification substituting its name for LLP’s as proprietor of the Device Trade Mark, Device Series Trade Mark and Word Trade Mark. It was not entitled to section 10B relief for the Q Device Trade Mark. Equitable relief was unavailable in principle because the statutory scheme harmonised the relevant rights and remedies. The court reserved consequential matters for further hearing.

First-instance judgment after trial. The judgment records earlier related proceedings, including [2020] EWHC 1072 (Comm) and the appeal judgment [2021] EWCA Civ 227, but those proceedings were not the subject of this decision.