Quantum Advisory Limited v Quantum Actuarial LLP

An agent entrusted with the whole operation of another’s business may owe fiduciary duties even without general authority to bind the principal by contract. The scope of those duties is shaped by the parties’ contract, but the contract does not displace loyalty unless it does so in substance.

Goodwill generated through licensed use of a mark ordinarily accrues to the licensor unless the parties agree otherwise. Section 10 B of the Trade Marks Act 1994 concerns an agent’s registration of an identical or similar mark owned by the principal. It does not prevent equitable relief for a fiduciary breach concerning a different mark outside that harmonised field.

Following a 2007 reorganisation, Quantum Actuarial LLP operated the legacy pension-services business of Quantum Advisory Ltd under a services agreement and used the trading name QUANTUM ADVISORY. The LLP also conducted its own business under the same branding. Without Quantum Advisory’s knowledge, it registered four associated trade marks in its own name, including a stylised Q device.

At first instance, the High Court held that the LLP was Quantum Advisory’s fiduciary, that its licence to use the mark ended with the services agreement, and ordered rectification for three marks but not the Q-device mark: [2023] EWHC 47 (Ch). The LLP appealed the fiduciary, licence and rectification findings. Quantum Advisory appealed the refusal of rectification for the Q-device mark.

1. Quantum Advisory’s appeal was allowed and the LLP’s appeal was dismissed. The LLP was a fiduciary in relation to Quantum Advisory’s legacy business. The services agreement entrusted the entire operation of that business to the LLP, while Quantum Advisory had no staff and had placed the relevant assets at the LLP’s disposal. The absence of a general power to contract in Quantum Advisory’s name did not prevent the relationship from being fiduciary.

2. The duties of care and skill in the services agreement were compatible with the fiduciary duty of loyalty. Contractual terms define the scope of fiduciary duties, but neither the agreement nor the collateral licence entitled the LLP to acquire goodwill in the QUANTUM ADVISORY mark for itself. The LLP’s use of the mark, for both the legacy and its own business, was licensed only while the services agreement subsisted. Goodwill generated by that licensed use accrued to Quantum Advisory.

3. The Court would not disturb the trial judge’s factual finding that the collateral licence was coterminous with the services agreement. That finding was supported by the evidence and commercial context, and could not properly be impugned under the appellate standard in Henderson v Foxworth Investments Ltd [2014] UKSC 41.

4. Section 10 B of the Trade Marks Act 1994 applied to the Word, Device and Device Series marks. The Q Device Trade Mark, however, was not identical or similar to the QUANTUM ADVISORY mark. A shared letter of the alphabet did not establish similarity, and use of the Q device alongside the word mark could not create similarity where none existed.

5. Article 13 of the Trade Marks Directive excludes alternative national remedies only where an agent has registered an identical or similar mark owned by the principal. National law still determines proprietorship, and equitable relief remains available for a fiduciary breach concerning a mark outside Article 13’s scope.

6. The LLP breached its fiduciary duty by registering the Q Device Trade Mark. The device was an integral part of the branding used to market services entrusted to the LLP. Registration gave the LLP valuable exclusive statutory rights and control over an asset used in Quantum Advisory’s business, without informed consent. The register was therefore to be rectified by substituting Quantum Advisory as proprietor of that mark.

• Court of Appeal (Civil Division) — Quantum Advisory’s appeal against refusal of relief for the Q Device Trade Mark was allowed. The LLP’s cross-appeal was dismissed: [2024] EWCA Civ 247.
• High Court (Chancery Division) — Held that the LLP was a fiduciary and that its licence to use the mark ended with the services agreement. Ordered rectification for three marks, but refused rectification for the Q Device Trade Mark: [2023] EWHC 47 (Ch).