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Localised goodwill and granting of limited relief in passing off cases


1st Jun 2011

This judgement is confirmation that even very localised businesses can accrue protectable goodwill in service marks but highly localised goodwill may only warrant limited relief, for example a localised injunction. It is also a reminder that either party in a trade mark dispute could have significantly improved its position by registering its mark (assuming that a “Redwood” mark is not descriptive of tree surgery services to UK consumers) rather than relying on the common law action of passing off. It is notable that the existence of other companies with the same or a similar name, the co-existence of the Claimant’s and Defendant’s businesses for a number of years and the lack of evidence of actual confusion did not protect the Defendant.

Details

In Redwood Tree Services Ltd v Apsey t/a Redwood Tree Surgeons ([2011] EWPCC 14, May 13 2011) see here, Justice Birss QC ruled that a small business with goodwill in a highly localised area could still succeed in a claim for passing off against another business with a similar name that traded in the same localised area. However, he found that the localised goodwill only justified limited relief, which included a localised injunction in order to prevent the defendant operating in the specific geographical area in which the claimant had accrued goodwill.

This was an action for passing off before the Patents County Court (PCC) in which the claimant – a tree surgery and forestry business based in Bisley, Surrey – had been trading as “Redwood Tree Services” predominantly in the Guildford area since 1986 and became incorporated as a company in 2004. The Defendant, Mr Apsey, trading as “Redwood Tree Surgeons”, was based in Eversley in Hampshire, 10 miles from Bisley, and had been in the tree surgery business since 2004.

The Claimant contended that their prospective customers would be deceived by the similarity of the names into employing Mr Apsey. Mr Apsey denied this and strongly relied on the fact that the businesses had been trading side-by-side for six and a half years and this had not given rise to any evidence of any significant confusion. He also claimed not to have known about the Claimant when choosing his trading name.

Applying the classical trinity of passing off set out in Reckitt and Colman Products Ltd v Borden Inc [1990] RPC 341, the Judge found that although there were a number of other businesses with names including Redwood, some of which were in the business of tree surgery or a related field, the Claimant had shown sufficient evidence of goodwill in relation to tree surgery services to bring a passing-off action, despite its business being highly localised around the Guildford area. He found misrepresentation where Mr Apsey traded in the Claimant’s home area and found that damage would follow.

In view of the localised goodwill, the judge granted limited relief including an injunction preventing Mr Apsey from providing, advertising or otherwise promoting tree surgery or other arboricultural services under or by reference to the word Redwood, the words Redwood Tree, Redwood Tree Surgeons or the words Redwood Tree Services specifically in the Slough, Guildford or Kingston-Upon-Thames areas, but not further afield.

This judgement is confirmation that even very localised businesses can accrue protectable goodwill in service marks but highly localised goodwill may only warrant limited relief, for example a localised injunction. It is also a reminder that either party in a trade mark dispute could have significantly improved its position by registering its mark.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking before any action in reliance on it.

Author
Tom Sharman
Partner
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