Lifestyle Equities CV & Anor v SportsDirect.com Retail Ltd & Ors

Non-registration of a trade mark sub-licence does not prevent a proprietor from recovering, or the court from taking into account, loss suffered by the sub-licensee in infringement proceedings. The statutory loss of protection under section 25(3)(b) of the Trade Marks Act 1994 is personal to the person claiming to be a licensee. It does not restrict the proprietor’s rights under section 30(6).

A sub-licensee cannot ordinarily be joined as a claimant, although it may intervene under section 30(6A), subject to case-management considerations. There is no statutory time limit for applying to register a licence. Late registration may secure the licensee’s statutory protection prospectively, but does not cure lost priority against conflicting interests and may be affected by prejudice caused by late procedural amendments.

The claimants, proprietor and exclusive licensee of trade marks, had substantially succeeded at a 2018 liability trial and elected for an inquiry into damages. In amended Points of Claim they sought to recover losses allegedly suffered by licensees, including sub-licensees of the exclusive licensee.

The defendants applied for summary judgment, contending that unregistered sub-licences prevented recovery under sections 25(3)(b) and 30(6) of the Trade Marks Act 1994, that the sub-licensees had to be joined, and that any defect could not be cured by late registration. The central issues were whether registration and joinder were necessary, and whether late registration could have retrospective effect.

1. Application dismissed. The court proceeded on the assumption that the relevant licensees were non-exclusive sub-licensees of the exclusive licensee. The claimants were required to clarify and plead the relevant licensing arrangements, but those factual uncertainties did not alter the statutory conclusions.
2. A sub-licensee ordinarily has no right to sue a third-party infringer. Section 31 of the Trade Marks Act 1994 provides special rights to an exclusive licensee, but those rights do not extend to a non-exclusive sub-licensee. Accordingly, subject to intervention under section 30(6A), a sub-licensee could not be joined as a claimant.
3. Section 30(6) requires loss suffered or likely to be suffered by licensees to be taken into account in infringement proceedings brought by the proprietor. It addresses the potential gap between the person entitled to sue and the person suffering loss. The court may assess the losses and give directions concerning the holding and apportionment of any pecuniary remedy.
4. Section 25(3)(b) removes the protection of sections 30 and 31 from the person claiming to be a licensee until an application for registration is made. That loss of protection is personal to the licensee. It does not remove the proprietor’s ability to rely on section 30(6), and non-registration is therefore no bar to taking the sub-licensee’s loss into account.
5. There is no time limit for applying to register a licence. Late registration may enable the licensee to obtain the protection of section 30, including the possibility of intervention and directions concerning proceeds. It cannot restore priority lost under section 25(3)(a), and late intervention or amendments may be refused where they prejudice the defendants.
6. Section 25(4) was not engaged on the material before the court. Its application was a matter for the earlier liability proceedings. Costs of the application were reserved for the forthcoming case management conference.

1. High Court (Intellectual Property List): In the liability proceedings, judgment was handed down on 20 April 2018 under [2018] EWHC 728 (Ch). The present court dismissed the defendants’ summary judgment application concerning the subsequent damages inquiry.