The ‘user principle’, which dictates the level of damages that should be paid by a defendant where they have breached the intellectual rights of a claimant, has been a long established rule in cases involving patent or copyright disputes.
However, historically it has been unclear as to whether the ‘user principle’ should be applied in cases of trade mark infringement.
The Evolution of the User Principle in Case Law
The cases of Dormueil Freres v Feraglow [1990] as well as more recent instances in Gerber v Lectra [1995] and Irvine v Talksport [2003] remained indecisive regarding the use of the user principle in assessing damages for trade mark infringement.
However, the decision by Judge Birss QC in National Guild of Removers & Storers Ltd. v Christopher Silveria [2010] appeared to extend the ‘user principle’ to trade mark infringement cases.
National Guild of Removers & Storers Ltd. v Christopher Silveria [2010]
In this case, National Guild owned various trade marks used in advertising and marketing and were claiming against four separate defendants for unauthorised use of their trade mark. There was no evidence to suggest that the defendant profited from using the registered trade mark in an unauthorised manner, nor that the claimant suffered financially as a result of the infringement, though it may have damaged its established reputation.
In spite of this, damages were calculated by relying on National Guild’s membership policy, which provided guidance on fines for unauthorised use of a trade mark that had exceeded the licence duration.
While the court did highlight that an estimation of damages could still made without such information, it nevertheless emphasised the point that these measures were invaluable in the assessment of damages to be awarded.
The Implications of the National Guild Ruling
In light of this ruling, companies or individuals that hold registered trade marks, which they seek to licence to others, may benefit from explicitly stating the licensing costs for both authorised and potential unauthorised use. This may help assess damages should a breach occur regarding the terms of the licence.
This case has shifted the parameters of the damages that may be awarded in cases of trade mark infringement, strengthening the position of trademark holders. Therefore, both trade mark holders and those that use trade marks should be aware of the potential duties and liabilities it has exposed them to.
It is possible that a claimant no longer has to prove that they lost sales or that the defendant profited from a breach; a claimant may be entitled to recover an reasonable royalty – a fee the defendant would have had to pay to legitimately use the trade – under the ‘user principle’.
Comment
This decision potentially opens up avenues for small-claims and less expensive trade mark infringement suits and makes the law more accessible to trade mark disputes.
It is important to note that cases are always judged on their individual merits so specific advice should be sought in any trade mark dispute. For more information please contact James Crichton via e-mail jcrichton@rollingsons.co.uk or by telephone on 0207 611 4848.
