UK: Unlucky ‘13 For Topshop And Sports Direct

Last Updated: 2 January 2014
Article by Jim Dennis and Lucy Howard

Introduction

It is now commonplace for retailers to incorporate brand names and images into their clothing designs. However, in two recent High Court decisions of Mr Justice Birss, high street giants Topshop and Sports Direct have found themselves on the wrong side of the law of passing off whilst seeking to exploit their respective products.

Sports Direct was unable to rely on the use of a mark on a small number of promotional items to establish exclusive rights to sell clothing under the "Queensberry" mark, while Topshop faced a claim of passing off when it sold t-shirts incorporating a famous celebrity's image. In both cases, Mr Justice Birss placed importance on the perception of consumers and whether they would understand the use of the image or brand name as a mark of trade origin for clothing.

Passing Off

The law of passing off may protect a business that suffers damage as a result of another party misrepresenting to the public that its goods or services are made by, associated with or endorsed by that business. To succeed, the business must show that it has generated goodwill or has a reputation in the UK. Such a claim will always turn on the facts of the case as demonstrated below.

Dispute 1: Rihanna v Topshop

In March 2012, Topshop started selling a t-shirt which incorporated a large image of popstar Rihanna. The photograph was taken by an independent photographer during the filming of the "We Found Love" music video in 2011. The photographer, who owned the copyright in the photograph, licensed it to Topshop without Rihanna's permission.

Had these events happened in another jurisdiction, Rihanna could have asserted her right of publicity or "image rights" which allow an individual to control how his or her image is used commercially. No such protection exists under English law. Mr Justice Birss confirmed that traders are free to sell products which bear images of famous people on them as long as they do not commit the tort of passing off (and subject to laws of privacy and copyright which are not discussed here).

Mr Justice Birss found that Rihanna had ample goodwill to succeed in a passing off action, not only as a music artist but also in the world of fashion, as a style leader. This was based on her fame and "cool, edgy image," her substantial merchandising operations and numerous endorsement deals, among other factors.

Mr Justice Birss also viewed that links between Topshop and Rihanna (and other celebrities such as Kate Moss) would enhance the likelihood of a purchaser believing that the t-shirts had been authorised by Rihanna. For example, Topshop ran a competition to meet Rihanna in 2010 for a personal shopping appointment and had publicised Rihanna's purchase of Topshop items on social media. Furthermore Topshop is a leading high street fashion retailer and in contrast to a market stall, purchasers would expect to find goods on sale in Topshop which have been endorsed or approved by celebrities.

Conclusion

This case emphasises the crucial importance of taking legal advice when selecting images for use in product design. It may not be not enough to take a licence of the photograph from the copyright owner where the use of the image amounts to a misrepresentation that the person depicted in the image has endorsed the product.

Dispute 2: Boxing Brands v Sports Direct

This dispute arose between the Sports Direct group of companies and our client Boxing Brands Limited (BBL), a boxing retailer associated with the celebrated boxing promoter Frank Warren. Here, both parties claimed to have an interest in the same mark "Queensberry" and the right to sell clothing under that name.

In November 2012, Sports Direct started selling "Queensberry" branded t-shirts and hooded tops in Lillywhites and online. BBL owned various trade mark registrations for "Queensberry" in class 25 for clothing. Boxing Brands obtained an interim injunction preventing Sports Direct from selling this clothing. The case then proceeded to full trial in July 2013.

One of the key issues before the High Court was the validity of BBL's registrations for its "Queensberry" trade mark applied for in 2008. Sports Direct attacked the trade marks claiming (amongst other things) that it had earlier rights in passing off due to the activities of a Mr La Mura and a Mr Goodwin who founded a boxing gym (in Bedford) under the name Queensberry in 2004 and later transferred their rights to Sports Direct. The test was whether, as at 8th May 2008, Mr La Mura and Mr Goodwin could have prohibited BBL from using the "Queensberry" mark under the law of passing off.

There were few details of the operation of the gym, its advertising and staff and Mr Justice Birss held that the gym "was not being run on a realistic commercial footing" as at May 2008.

However there was evidence that a small number of t-shirts had been produced and sold to gym users which carried the word "Queensberry" on a plain background. Pieces of boxing kit which also carried the "Queensberry" name were worn at televised fights in 2007 and 2008 by boxers and cornermen associated with the gym. Sports Direct argued that this exposure to a wide audience constituted a business to which goodwill was attached.

Mr Justice Birss disagreed and held that the "Queensberry" branded attire worn at boxing matches would not be understood by viewers as a clothing brand and were merely promotional of the Queensberry gym in Bedford. In contrast to the Rihanna case, he found that Mr La Mura and Mr Goodwin had no goodwill in a Queensberry clothing business (and the goodwill in relation to the gym was limited to the ability to prevent someone else opening a "Queensberry" gym in Bedford).

Therefore Sports Direct's attempt to establish rights in passing off failed at the first hurdle and BBL successfully claimed against Sports Direct for trade mark infringement.

Conclusion

Businesses seeking to establish a clothing brand should ensure that consumers recognise the mark as a brand of clothing and not merely as a promotional item for a particular business or location.

Businesses (and large high street retailers who purchase their rights) that seek to rely on unregistered trade marks in small localised areas should be aware of the limits of the legal protection afforded to them. Such rights do not establish a monopoly to use the marks on all products and/or across a wider geographical location.

Davenport Lyons acted for the successful Claimant, Boxing Brands Limited

Full versions of the decisions can be found here and here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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