The case was brought by Yours Naturally Naturally Yours Limited (YNNY) against Kate McIver Skin Limited and Christopher McIver. Ms McIver was a customer and became a re-seller of YNNY’s serum, subsequently selling it under her own brand name. In 2018, she claimed that she had created the serum and subsequently ordered the serum from a third party, which she promoted in media appearances and with celebrity endorsements.
HHJ Hacon granted YNNY relief for passing off and copyright infringement.
In his judgment on the appeal, Lord Justice Arnold summarised the various attempts by judges to define passing off precisely, in the Advocaat, Jif Lemon, Starbucks, Plomein, Bristol Conservatories and ScanSafe cases.
Based on this analysis, Arnold LJ found that HHJ Hacon was wrong to find that YNNY owned goodwill in the trade name Elixir, because no such case had been pleaded, but accepted that goodwill was associated with YNNY’s product and with YNNY as the originator of that product.
Turning to whether Ms McIver and KMS had made the misrepresentations set out, Arnold LJ noted that misrepresentation in passing off cases is a question of fact: “There is no single meaning rule, and it is sufficient if a substantial number of consumers would be misled.”
Therefore, while some criticisms of the first instance judgment were upheld, he concluded that the judge was entitled to find that there was misrepresentation and it was material insofar as it gave rise to deception of consumers.
Finally, Arnold LJ agreed with the defendants that it was not open to the judge to find damage due to a risk of genericisation of the name Elixir (as no goodwill was claimed in that name). But he said the judge was right to find a risk of damage to the reputation of YNNY’s product and its goodwill, as at least one customer (and possibly five) found the reformulation unsatisfactory: “Consumers who were deceived into thinking that this was the same product as YNNY's product would be liable to regard YNNY's product with the same dissatisfaction.”
The defendants argued that the judge wrongly granted relief for copyright infringement without making a finding of copyright infringement. In response, YNNY said that the judge should have found that there was copyright infringement after 30 November 2018 as a result of use in social media posts, which had not been taken down.
Arnold LJ agreed, saying: “If the claim had been framed as one of communication to the public contrary to section 20 [of the 1988 Act], the availability of the posts after 30 November 2018 would clearly have constituted a continuing infringement.”
What does this mean?
While the Court identified some errors in the first instance judgment, notably the finding that YNNY owned goodwill in the name Elixir, it dismissed the appeal overall.
Moreover, Arnold LJ noted that he had recommended mediation to the parties, stating: “It is regrettable that the parties have not been able to resolve their dispute because it seems likely that the costs of the appeal will have exceeded what is at stake.”
Parties often seek resolution of their disputes in court, and this is especially true when they are emotionally invested in the case. However, other ways to resolve disputes (such as mediation) may ultimately deliver a more ommercial outcome for both sides and should always be considered.