The plaintiff practised in the pop music industry and claimed to be entitled to the exclusive use in this country of the name or description ‘The Hit Factory’. The defendant proposed a similarly named recording studio in London in a joint venture with a New York company, The Hit Factory Inc, which ran a successful recording studio in New York under that name. He sought an injunction against passing-off.
Held: Recording studios worked internationally, and a studio may well be used in a country other than that in which the artists or the producers live. The New York studio had been used by producers and artists from England for many years past. However, the New York company had never had a place of business in the UK, and had rendered all its services outside the UK. The plaintiff had not shown that the name ‘The Hit Factory’ was distinctive. However he also went on to consider what he called the Crazy Horse issue, on the premise that (a) the plaintiff had established a distinctive goodwill in the name The Hit Factory, but (b) that the Hit Factory Inc also had a trade reputation under that name in this country. The issue was whether the English courts will protect the trade connection with the UK customers of non-UK traders. The problem was particularly acute with service industries. Referring to older cases, he said that the critical questions, until the Crazy Horse case, had always been (a) the use of the name in this country and (b) the presence of customers here. He pointed out that the basis of the Crazy Horse decision, that business activity other than merely advertising was necessary, was not fatal to The Hit Factory Inc, because that company had English customers which placed their business with it and who were invoiced in this country. He expressed the view that the distinction was too narrow. As to Walton’s judgement in Athletes’ Foot Marketing Associates: ‘This is a very important passage for three reasons. First, it shows that the importance of the plaintiff showing he has a business here is essentially linked to the presence of customers here. Secondly, it adverts to the possibility that in some cases the relevant area may not be limited by national boundaries.’ The third reason was that it had been approved in Budweiser. As to Budweiser: ‘A. As a matter of principle, the existence of a severable English goodwill attached to a place of business in this country is not the basis of a right to complain of passing off in this country. What is necessary is for the plaintiffs to show they have a trade connection here which will normally consist of customers forming part of their goodwill, wherever that goodwill is situate, which goodwill is being invaded by the acts of the defendant in this country;
B. The approach which I have set out at A above is not open to me as there is binding authority to the effect that the basis of plaintiffs’ claim must be a goodwill locally situate in England; but
C. The presence of customers in this country is sufficient to constitute the carrying on of business here whether or not there is otherwise a place of business here and whether or not the services are provided here. Once it is found that there are customers, it is open to find that there is a business here to which the local goodwill is attached;
D. To the extent that the Crazy Horse case is authority to the contrary, I prefer not to follow it.’
On that basis he held that the New York company would have been entitled to protect its name against third parties here because it had always had a significant number of customers in this country.
Sir Nicolas Browne-Wilkinson VC
[1993] EMLR 27
England and Wales
Cited by:
Cited – Hotel Cipriani Srl and Others v Cipriani (Grosvenor Street) Ltd and Others CA 24-Feb-2010
The claimants owned Community and UK trade marks in the name ‘Cipriani’. The defendants operated a restaurant in London using, under the licence of another defendant, the same name. The claimant sought an injunction to prevent further use of the . .
Cited – Starbucks (HK) Ltd and Another v British Sky Broadcasting Group Plc and Others SC 13-May-2015
The court was asked whether, as the appellants contended, a claimant who is seeking to maintain an action in passing off need only establish a reputation among a significant section of the public within the jurisdiction, or whether, as the courts . .
Lists of cited by and citing cases may be incomplete.
Intellectual Property
Leading Case
Updated: 02 November 2021; Ref: scu.401812