Earlier this year, a decision (Lifestyle Equities CV and another v Ahmed and another [2024] UKSC 17 (15 May 2024)) from the Supreme Court found that where a company has been found liable for trade mark infringement, its company directors will only be personally liable as “accessories” to the infringement if they had knowledge of the facts which made the activities in question amount to trade mark infringement.
In the ruling, the Supreme Court confirmed that an accessory can be found liable for procuring the infringements, or on the basis of acting together with the company in a common design, if they possessed “knowledge of… the essential facts which make the act unlawful”. This is the case even where the underlying act (which in this case was trade mark infringement) is based on the concept of strict liability.
In this case, the directors had asserted that they were not aware of the claimant’s registered trade marks until receiving a letter of complaint. In addition, the Court accepted that “there was room for argument and honest difference of opinion about the extent of the similarity and whether it gave rise to a likelihood of confusion or otherwise resulted in infringement”. It will be interesting to see how the courts interpret the requirement for “knowledge of… the essential facts which make the act unlawful”.
A further point clarified that even where a director is found jointly liable with their company for infringement, the director is only required to account for any profits they made personally and not for the profits of the company. This is in contrast to the position where a claimant elects for an award of damages (rather than an account of profits) for which a director would be jointly liable if the Court had found them to be jointly liable for infringement.
The clarification given in this case will no doubt be well received by company directors, but not so much by trade mark owners as it appears to place an obstacle in the way of bringing a claim against a company director. The decision will also have further reach than proceedings based on trade mark infringement concerning company directors.
Get in touch with our Intellectual Property team if you’d like to discuss further.