Lifestyle Equities CV & Anor v Frasers Group Trading Ltd (formerly called Sportsdirect.com Retail Ltd) & Ors

Factual and Procedural Background

Company A is the registered proprietor of certain trade marks (the "Marks"). Company B is the exclusive licensee of the Marks. Various sub-licences were granted, most of whose details were kept confidential; only one (to an entity recorded in the judgment) had been registered. The appellants (a group of trading companies) were sued for infringement based on acts in 2014–2015. The claim form was issued on 11 September 2015. Following a trial of liability, judgment for the respondents was given and an inquiry as to damages or an account was directed. The respondents elected for an inquiry and, in points of claim served in 2023 (amended 2024), sought recovery of losses said to have been suffered by them and by various sub-licensees relying on s.30(6) Trade Marks Act 1994 ("TMA 1994"). The appellants applied for summary judgment dismissing the claim to recover sub-licensee losses; that application was dismissed by Judge Marcus Smith. The appellants appealed to the Court of Appeal.

Legal Issues Presented

1. Whether, under s.25(3)(b) and s.30(6) TMA 1994, a proprietor may recover losses suffered by licensees (including sub-licensees) in infringement proceedings where the licences are not registered.
2. Whether there is any time limit within which an application to register a licence must be made to allow a licensee (or a proprietor claiming on a licensee's behalf) to obtain the protection of s.30(6), in particular whether late (retrospective) registration can revive claims where limitation periods have expired.

Arguments of the Parties

Appellants' Arguments

• Under s.25(3)(b) TMA 1994 registration of a licence is a pre-condition to the protections in s.30 and s.31; therefore the proprietor cannot recover losses of unregistered sub-licensees.
• S.30 should be read as a comprehensive set of protections for licensees; the parts of s.30 (including s.30(6)) are protections for licensees and thus disapplied until registration.
• An application to register must be made within the relevant limitation period for a proprietor to recover losses referable to licensees; late registration does not avoid limitation.

Respondents' Arguments

• The judge's construction was that the first half of s.30(6) operates to require a court, in proprietor-led proceedings, to take licensees' losses into account (a protection operating through the proprietor), and so s.25(3)(b) does not preclude a proprietor recovering licensees' losses where licences are unregistered.
• Registration can operate retrospectively; therefore, so long as registration is made before the court's order on damages is drawn, the protection of s.30(6) should be available to licensees (and to proprietor-led claims for their benefit).
• The respondents also relied on the fact that they alone were claimants and commenced proceedings within the limitation period; they contended they were not required to identify in 2015 the full content of any later s.30(6) claim on behalf of sub-licensees.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began from statutory text and context (Cadent Gas approach). It examined s.25(3)(b) (which disapplies "the protection of section 30 or 31" until prescribed particulars are registered) and s.30(6) (which provides that "in infringement proceedings brought by the proprietor any loss suffered or likely to be suffered by licensees shall be taken into account" and allows directions as to holding proceeds for licensees). The court rejected the judge's partitioning of s.30(6) into a part applying to proprietors and a part applying to licensees. The court held s.30 as a whole is a statutory scheme providing protections for licensees (either by enabling licensee-led proceedings or by ensuring proprietor-led proceedings account for licensee loss). Accordingly s.25(3)(b) disapplies those protections until registration; s.30(6] is therefore dependent on registration for the benefit of licensees.

On the second issue the court accepted there is no time-limit in s.25(3) itself and accepted that registration may have retrospective effect in principle (as reflected by the 2006 amendment to s.25(4)). However, the court held that limitation law applies: the cause of action for trade mark infringement accrues when the infringing act occurs (Sevcon and Coburn principles), so the ability to recover losses referable to licensees requires an application to register to have been made within the applicable limitation period (or otherwise the claim will be time-barred). The court concluded that a proprietor cannot validly claim losses on behalf of licensees if the applicable limitation period has expired before any application to register the licence was made.

The court further observed practical unfairness in the respondents' proposed approach (allowing registration and assertion of licensee claims up to the point of drawing an order on damages), and favoured an approach promoting litigation transparency and fairness.

Holding and Implications

HOLDING: The appeal was allowed on both grounds and the Court granted summary judgment dismissing the claims for damages in respect of losses suffered by sub-licensees.

Implications: The direct effect is that the proprietor and exclusive licensee cannot recover losses said to have been suffered by unregistered sub-licensees where the claims are statute-barred because no application to register the relevant licences was made within the period required to preserve those claims under the Limitation Acts. The court required registration (as contemplated by s.25(3)(b)) as a pre-condition for licensees to obtain the protection of s.30(6), and confirmed limitation runs from the date of the infringing acts; no further relief for those sub-licensee claims was granted in this case.