Lifestyle Equities CV & Anor v Ahmed & Anor [2024] UKSC 17 (15 May 2024)
Citation: Lifestyle Equities CV & Anor v Ahmed & Anor [2024] UKSC 17 (15 May 2024)
Rule of thumb: If you sell goods as a director through a company which are a ‘rip-off’ of a trade brand, can you be sued personally? If it is a ‘rip-off’ meeting the test of ‘cynical and deliberate’, Yes; if does not meet the test of ‘cynical and deliberate’, no (this case did not meet the test so the directors did not have to pay back the money).
Background facts: This case invoked the subjects of movable property, trademark, & company law.
The basic facts of this case were that Mr & Mrs Ahmed were directors of a company selling Santa Monica Polo Club t-shirts. Lifestyle Equities, who own Beverly Hills Polo Club, successful sued the Ahmeds’ company for breach of trademark with the Santa Monica clothing range. The company also sued the Ahmeds personally.
Court held: The Court held that this was not a sufficiently clear breach of trademark law for the Ahmeds to be sued personally, so separate personality applied. This did not meet the test of deliberate or cynical infringement to justify this. The company also did not actually make profits as such & it was all directors’ salaries rather than dividend distributions.
Ratio-decidendi:
'First, to justify the conclusion the Ahmeds were jointly liable with Hornby Street, the company of which they were directors, for its infringements of Lifestyle's trade marks, either because they procured the infringements or because they participated in a common design, it would have been necessary to show that the Ahmeds had knowledge of (or turned a blind eye to) the facts which made the use of the "Santa Monica Polo Club" signs by Hornby Street infringements of Lifestyle's trade marks. But no such case was advanced and the judge made no such finding. Lifestyle's case on liability was therefore not made out.
Second, the only profits for which the Ahmeds could in any event be liable to account were profits which they themselves (rather than the company) had made as a result of the company's infringements of Lifestyle's trade marks; and the facts found by the judge did not justify the conclusion that the Ahmeds personally made any profits from those infringements. For this reason too, the orders for an account of profits were wrongly made’.
Lord Leggatt
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.