The English Court of Appeal has partially upheld an appeal in a trade mark dispute between two parties that both used the QUANTUM ADVISORY brand.
The case was between Quantum Advisory Limited (Quad) and Quantum Actuarial LLP (LLP), both of which provide pension services. There was a long and complex relationship between the parties, which was formalised in a 2007 agreement. Both parties used the QUANTUM ADVISORY mark.
However, they subsequently fell into dispute over various issues, including four UK trade marks that LLP had registered (including one word mark for QUANTUM ADVISORY) and which it asserted against Quad.
First instance ruling
At first instance, the judge found that LLP was a fiduciary to Quad and could only use the QUANTUM ADVISORY mark until the end of the agreement. Quad was entitled to rectification of the trade mark register in respect of all the marks except the Q device mark (essentially because it was not identical or similar to the QUANTUM ADVISORY mark).
These findings were all upheld on appeal, except for the final one which was reversed.
Endorsing the first instance judge’s finding of fact that the parties agreed in 2007 that LLP would be licensed to use the mark under the service Agreement, Newey LJ and Sir Christopher Floyd said:
“The finding was rooted in the Judge's careful assessment of the relevant evidence and was the subject of a full explanation. It also accords with common sense, since it is very difficult to see how it could be satisfactory (or how the parties could have thought that it could be satisfactory) for LLP and Quad both to trade using the Mark once the Services Agreement had come to an end.”
Q on appeal
The question regarding the Q device mark was essentially whether it was sufficiently similar to the QUANTUM ADVISORY mark, the role of equity, adequate pleading of a claim to proprietorship, whether Quad was the proprietor of an identical mark and what relief if any Quad was entitled to.
Having considered all these issues, the Court of Appeal concluded that by registering the Q device mark, “LLP put itself in control of an asset which was in use in and of value in protecting Quad’s business” enabling it to confer rights on others and restrict Quad’s ability to use the device. The judges said:
“We agree with the Judge that registration of marks which are identical with or similar to the Mark was an obvious breach of fiduciary duty. It is nevertheless a breach of fiduciary duty by an agent who owes an undivided duty of loyalty to seek to register in its own right some part of the branding under which the principal's services are marketed, whether or not that element of the branding is similar to the principal's main trade mark and even where the use of that element cannot support a passing off action on its own. It is precisely because statutory rights are acquired by registration that registration of the mark in LLP's name is in LLP's interests and contrary to those of Quad.”
They also found that the judge was wrong to take into account the fact that LLP had procured the branding. As for the other marks, the register in relation to the Q mark should be rectified.
What does this mean?
This is a meaty decision which addresses the existence of a fiduciary relationship and fiduciary duty, the law on rectification and the role of equity. Although the facts of this case are relatively unusual, the Court’s ruling is likely to be applicable in other cases where two parties with a prior relationship are in dispute over the use of the same or similar branding.
To find out more about the issues raised in this blog contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - rosie.burbidge@gunnercooke.com