Aga Rangemaster Group Ltd v UK Innovations Group Ltd & Anor [2025] EWCA Civ 1622

[2025] EWCA Civ 1622Case No CA-2024-002077
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY ENTERPRISE COURT
NICHOLAS CADDICK KC (SITTING AS A DEPUTY HIGH COURT JUDGE)
IP-2023-000036
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 15/12/2025
Before
CHANCELLOR OF THE HIGH COURTLORD JUSTICE ARNOLDLADY JUSTICE FALK
Between
AGA RANGEMASTER GROUP LTDClaimant/(1) UK INNOVATIONS GROUP LTDFirst Defendant /Appellant(2) MICHAEL PATRICK McGINLEYSecond Defendant
Daniel Selmi (instructed by HGF Law) for Claimant/RespondentSimon Malynicz KC, Thomas St Quintin and Kendal Watkinson (instructed by Brandsmiths) for First Defendant/AppellantHearing Hearing dates: 21, 22 October 2025
Approved JudgmentThis judgment was handed down remotely at 10.30am on 15 December 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................

Sir Colin Birss C :

[1]This is an appeal from the decision of Nicholas Caddick KC in a dispute between the claimant, Aga Rangemaster Group Ltd, and the first defendant, UK Innovations Group Ltd (“UKIG”). The claimant makes and sells the well known AGA range of cookers. UKIG’s business involves taking old AGA cookers which ran on fossil fuels and then renovating and converting them in order to run on electricity. This also involves fitting UKIG’s control system – called the eControl System – into the cookers. The claimant brought claims of trade mark infringement and copyright infringement relating to the sale of these converted goods. Also at trial the action against the second defendant, a director of UKIG, was dismissed and there is no appeal.[2]This judgment relates to the trade mark claim. My lord Arnold LJ will deal with the copyright claim. I have had the benefit of reading Arnold LJ’s judgment in draft. I agree with it.[3]In relation to trade marks, the defendants accepted (rightly in my judgment) that save for certain details which no longer matter, the relevant activities fell within s10 of the Trade Marks Act 1994. Essentially the point is that UKIG uses the sign AGA in various ways in relation to the converted cookers. However the defendants contended that there was no infringement because this activity was covered by an exhaustion defence under s12 of the Trade Marks Act 1994. (There was also a point on s11 but it no longer matters either.) The defendants’ case was that since the goods had been previously put on the market by the claimant, its rights were exhausted and there could be no infringement of the claimant’s AGA trade marks by UKIG using the sign “AGA” in relation to the converted AGA cookers.[4]Section 12 of the 1994 Act, which implements art.7(2) of Directive 89/104/EEC (most recently art.15(1) of Directive 2015/2436/EU) provides, at the time of the matters complained of, as follows:(1) A registered trade mark is not infringed by the use of the trade mark in relation to goods which have been put on the market in the United Kingdom or the European Economic Area under that trade mark by the proprietor or with his consent.(2) Subsection (1) does not apply where there exist legitimate reasons for the proprietor to oppose further dealings in the goods (in particular, where the condition of the goods has been changed or impaired after they have been put on the market).[5]The effect of s12(1) is to provide a clear defence to what might otherwise amount to infringement, on the basis that the rights conferred by a trade mark in relation to goods are exhausted once those goods have been sold by the proprietor or with their consent. The sale has put the goods into free circulation in the economy and enabled the proprietor to realise the economic value of the mark (see e.g. Peak Holding AB v Axolin-Elinor AB (Case C-16/03) [2005] ETMR 28 at [40] cited in Viking Gas A/S v Kosan Gas A/S (Case C-46/10) [2011] ETMR 58 at [32]). However, this defence is not absolute and is subject to the derogation in s12(2).[6]Section 12(2) removes the defence when there are legitimate reasons to oppose the further dealings in the goods. Although parts of the claimant’s case on legitimate reasons to oppose failed, one aspect succeeded and in that respect the s12 defence failed. This is the subject of UKIG’s appeal.

The judgment on s12

[7]The judgment deals with the s12 defence in the passage from [18] to [60]. It summarises the law at [22] to [24] citing s12 itself, the directives from which s12 is derived, and the decisions of the CJEU on this topic. The CJEU cases referred to were Parfums Christian Dior SA v Evora BV (Case C-337/95) [1998] RPC 166, Portakabin Ltd v Primakabin BV (Case C-558/08) [2010] ETMR 52, Viking Gas (above), and Bayerische Motorenwerke AG v Deenik (Case C-63/97) [1999] ETMR 339 (“BMW”). Later the judge also referred to Bristol-Myers Squibb v Paranova (Joined Cases C-427/93, C-429/93 & C-436/93) [2003] Ch 75 andMontres Breguet SA v Samsung Electronics Co Ltd [2023] EWCA Civ 1478. The judgment correctly notes three situations which the authorities have identified in which the proprietor might have legitimate reasons to oppose further dealings. One (based on the words of the statute) would be where the condition of the goods had been changed or impaired after they had been put on the market. Another (based on Dior, Portakabin and Viking Gas) would be where further dealings might seriously damage the reputation of the mark. The third (based on BMW, Portkabin and Viking Gas) would be where the further dealings give the impression that there is a commercial connection between the defendant and the trade mark proprietor (judgment [22]).[8]The judgment then addresses in turn each of the three situations respectively, starting ([26]) with the work done by UKIG and the resulting condition the converted goods are in when UKIG sells them. This passage deals with the work in general up to [31] and then grapples distinctly with the refurbishment ([32]-[37]) and the conversion ([38]–[40]). The conclusion on this first aspect is that the mere fact the refurbishment and conversion work was done did not give the claimant legitimate reasons to object to UKIG’s activities ([37] and [40]). There is no challenge to these conclusions on appeal.[9]Then at [41] to [46] the judge considered the second example situation, whether there were any legitimate reasons to object based on damage to reputation. For example it was said by one of the claimant’s witnesses that the replacement parts used were of inferior quality and in some cases unsafe. However the judge, having gone through the issues in appropriate detail, concluded at [46] that the works done by UKIG did not give rise to a risk of serious damage to the reputation of the claimant’s trade marks so as to give legitimate reason to oppose the defendants’ activities. Again these findings are not challenged on this appeal.[10]The final section of this part of the judgment, from [47] to the overall conclusion at [60], deals with the third situation – whether the dealings create the impression of a commercial connection, and focusses on the way UKIG marketed and sold the goods. The first three paragraphs [47] to [49] address general matters. At [47] there is a suggestion that the question would be whether the way the goods were marketed would give the impression there was some (my emphasis) commercial connection between the defendants or their products and the claimant. Taken in isolation that could be misunderstood, because in cases of this kind there will necessarily always be a connection of some kind between the claimant and the products. After all these cookers started life as AGA cookers, placed on the market by the AGA trade mark proprietor or with their consent, and so connection of that sort cannot be a sufficient basis for legitimate reasons to oppose. However reading the judgment as a whole, to the extent this could be said to be a slip, it does not matter. The judgment does not fall into that trap (see [49], mentioned below).[11]Paragraph [48] is worth setting out in full because it contains a point which is the focus of part of the appeal. The paragraph is as follows:
“[48] In order to establish that there is the requisite commercial connection, the Claimant must show that the Defendants' activities were such that normally informed and reasonably attentive customers would be unable, or would be able only with difficulty, to ascertain whether the goods in question originate from the Claimant (as proprietor of the AGA Marks) or from an undertaking economically linked to it or, on the contrary, originate from a third party, such as the Defendants (see Portakabin at [80]-[81] and Viking at [40]).”
[12]An uncontroversial point here is that the matter is to be approached by considering the reaction of a normally informed and reasonably attentive customer (e.g. Viking Gas at [40]). The point relevant to the appeal is the reference to customers only being able to ascertain “with difficulty” whether the goods originate from the claimant or a third party. That “with difficulty” approach is criticised on appeal and I will return to it below.[13]At [49] the judgment makes an important contextual point, i.e. that if the case was simply about the defendants selling refurbished second hand AGA cookers then it would be unlikely that a customer or potential customer would have gained the impression that this was an activity connected with the claimant. As the judge went on to record, there was an active market in refurbishing and in re-selling AGA cookers and a customer buying a second hand AGA cooker would understand that it may well have been refurbished. They would have no particular reason to think that the claimant was in any way linked to either the refurbishment or the re-sale. The defendants emphasised these passages on appeal and I agree they are important but they are also two edged. The judge here was identifying (rightly as it seems to me) that if all UKIG had been doing was selling refurbished second hand AGA cookers then it would be unlikely that this would create the impression that these sales (or the refurbishment of the cookers) were connected with the claimant. That is relevant but it is not the end of the matter. The point is that this is not all that UKIG is doing. The cookers have not just been refurbished, they have been converted to run on electricity by fitting the “eControl” system. That is the very point made by the judge at the opening of the next paragraph [50] which then goes on to set out passages from UKIG’s website. Then at [51] – [52] the judge makes findings about what the effect of the website is, as follows:
“[51] In effect, the website was offering customers the opportunity to "Buy an eControl AGA" (as pictured, with a warranty and, it seems, available in one of a range of colours) and/or the opportunity to convert an existing AGA Cooker using the eControl System. [52] In my judgment, these statements taken as a whole were likely to give customers the impression that what they were being offered was an AGA product (an eControl AGA, one of a range of AGA products) and this was something about which the Claimant could legitimately object. […]”
[14]In the remainder of [53] the judge continues, concluding further that: i) the reference to the "eControl AGA" was likely to be seen, not as descriptive but as part of the brand for the product being offered for sale and as linked to the "AGA" name; ii) that AGA has a highly distinctive character, thereby increasing the risk of confusion; iii) that the references to the eControl System were likely to be taken as references to a system that was connected with the claimant - certainly in the absence of any statement making clear that what was on offer was not derived from or connected with the claimant.[15]The judge then refers back to a point he had made earlier but expands on it a little, stating that although he did not think that the claimant had legitimate reasons to object to the defendants selling AGA Cookers which they had refurbished and fitted with the eControl System, he found that the claimant did have legitimate reasons to object to the way in which they went about marketing and selling these converted cookers.[16]Next at [53] the judge considered evidence from the second defendant Mr McGinley that customers would know they were being offered a refurbished (second hand) AGA cooker to which the defendants had fitted their own eControl System, bearing in mind they were making a costly and therefore relatively considered purchase and that there would be extensive discussions. However the judge did not accept this conclusion, stating that he had not been shown any document which corrected the impression created by the website and finding that the defendants’ invoices would reinforce the impression of a commercial connection.[17]At [54] the judge held that, if the defendants wished to sell these converted cookers, they needed to ensure that customers were not given the impression that the conversion was somehow connected to the claimant. He went on, by reference to Bristol-Myers Squibb v Paranova A/S at [79(b)] to hold that they needed to take steps to dispel such an impression concluding here that “the website and invoices did the opposite”.[18]Finally at [55] to [59] the judge considered an argument based on post-sale confusion arising from the fact that UKIG puts an “eControl System” badge on the product, so that each cooker has both an “AGA” and an “eControl System” badge. Therefore submitted the claimant, third parties seeing the goods in a customer’s home would assume that the eControl Cookers were "co-branded" AGA Cookers, leading them to believe there was a commercial connection. However the judge ultimately rejected this argument on the facts and it did not play a part in his rejection of the s12 defence.[19]The conclusion of the s12 issue is then at [60].

The appeal

[20]UKIG has two grounds of appeal. The first is that the judge applied the wrong test concerning a commercial connection under s12 of the 1994 Act. Under this ground the appellant criticises the judge’s reference to a “with difficulty” test from Portakabin and submits the judge failed to apply the principles derived from Dior and from BMW. The second ground challenges the judge’s findings of fact, submitting that in any event the conclusions reached were rationally unsupportable. Under the second ground UKIG also repeats the submission that the judge did not carry out the assessment in accordance with the right legal principles, but that will be dealt as part of the first ground.[21]By a respondent’s notice the claimant challenges the judge’s rejection of the point which arose in relation to post-sale confusion, submitting that the claimant had legitimate reasons to oppose the co-branded cookers which carried an “eControl System” badge as well as an AGA badge.

The law

[22]As mentioned already, the appeal relates to s12 of the 1994 Act. It has been set out above.

Legitimate reasons to oppose

[23]Section 12(2) removes the defence provided by s12(1) when there are legitimate reasons to oppose the further dealings. As the judge described, the law so far has identified three situations in which this issue might arise (impairment or change to the condition of the goods, damage to reputation and the impression of a connection). In principle these three situations are not exhaustive but they form a useful framework to analyse how the law applies. There may also be a degree of overlap. In the present case the fact the goods have been converted as well as simply being refurbished is part of the context concerning how they are marketed.[24]The analysis starts with Dior in 1997. This case made clear that when trade marked goods have been put on the market by the proprietor, a reseller, besides being free to resell those goods, is also free to make use of the trade mark in order to bring to the public's attention the further commercialisation of those goods ([38]). Then at [40] to [48] the CJEU dealt with exhaustion and at [43] identified that damage done to the reputation of a trade mark may, in principle, be a legitimate reason for the proprietor to oppose the reseller’s dealings, within Art 7(2) of the directive.[25]The idea of a false impression of a connection in this context arose in BMW in 1999. There the claimant BMW car company had a network of authorised car dealers in the Netherlands. The defendant, Deenik, was not an authorised dealer but sold, repaired and serviced BMW cars. Deenik’s advertising included phrases like “Repairs and maintenance of BMWs” and “Specialist in BMWs”. One of the questions referred to the CJEU by the Dutch courts concerned the relevant exhaustion provisions (then Art 7 of 89/104/EEC). The Court answered the relevant question (question 3) in a manner making clear that unless the defendant used the proprietor’s mark in a way that “may create the impression that there is a commercial connection between the other undertaking and the trade mark proprietor” then the proprietor was not entitled to stop the defendant from using the mark to inform the public about his business. The possible impression the court had in mind in that case was that the defendant was affiliated to the BMW authorised dealer’s network or that there was a special relationship between the two undertakings (CJEU [51]). The fact the reseller might derive an advantage such as an “aura of quality” from the mark does not amount to a legitimate reason to oppose provided there is no risk the public would be led to believe there was a commercial connection ([53]). Whether the advertising may create the impression of a connection is a question of fact ([55]).[26]In 2010 the CJEU decided Google France SARL and others (Joined Cases C-236-08 to C-238/08) [2010] RPC 19. This is not an exhaustion case. It was about internet advertising based on keywords - the so called Google Adwords. In that situation a trader can in effect buy a word – such as a rival proprietor’s trade mark – so that when a customer carries out an internet search using the proprietor’s trade mark, the trader’s advertisement for its website is presented to the customer. The question the Court was concerned with was whether the origin function of the trade mark was adversely affected in that situation. The court decided that this depended on the manner in which that advertisement is presented ([83]) and held at [84] that: “The function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party. […]” [my emphasis]

[my emphasis]

[27]This is the origin of the “with difficulty” test. It is less stringent and widens the scope of the law. As Kitchin LJ explained in Interflora Inc & Anor v Marks and Spencer Plc (Rev 1) [2014] EWCA Civ 1403, [2015] ETMR 5 at [155]-[156], this test was specifically devised to address art.5(1) of Directive 89/104 and the (then) relatively novel practice of internet advertising on the basis of keywords which, while not inherently objectionable, does pose distinctive risks for mark proprietors.[28]Later in 2010 the CJEU gave judgment in Portakabin, which involved both keyword advertising as well as issues of exhaustion. The proprietor’s business sold mobile buildings under the mark Portakabin. The defendant Primakabin was selling its own mobile buildings and also reselling second hand buildings made by Portakabin. Both sides offered their goods via websites. The defendant purchased Adwords from Google including “portakabin”.[29]At [80] the CJEU addressed exhaustion, citing BMW and making the point that if the reseller through its advertising gives the impression that there is a commercial connection between the reseller and the proprietor then that would constitute a legitimate reason to oppose the dealings under Art 7 of the Directive. Then at [81] the CJEU said this:
“81. It follows that the circumstances, referred to in [54] above, in which a trade mark proprietor is, pursuant to art.5(1) of Directive 89/104, entitled to prohibit use by an advertiser of a sign identical with, or similar to, that trade mark as a keyword—that is to say, circumstances in which use of that sign by the advertiser does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of that mark or from an undertaking economically linked to it or, on the contrary, originate from a third party—correspond to a situation in which art.7(2) of that directive applies and in which, accordingly, the advertiser cannot rely on the exhaustion rule laid down in art.7(1) of Directive 89/104.”
[30]The reference back to [54] in the first line is important, because [54] is concerned with keyword advertising and Art 5(1) of the Directive. In other words, what is being said here is that in a keyword advertising case, if the test applicable in that case is satisfied (which includes the idea of enabling a user only with difficulty to ascertain the origin of the goods), then that would also correspond to a situation engaging Art 7(2) of the Directive such that there would likely be legitimate reasons to oppose the internet advertising activity in issue. That is not the same as saying that in a different case, which did not involve the particular issues raised by keyword advertising, the Google France difficult to ascertain origin test would satisfy Art 7(2).[31]When later in the Portakabin judgment (at [92]) the CJEU focussed on exhaustion generally and the test under Art 7(2) for legitimate reasons to oppose, the court referred only to the idea that the use of a sign giving the impression of an economic link and not to a difficulty in ascertainment.[32]The next CJEU judgment in this line is Viking Gas, which involved a trader (Viking Gas) refilling gas bottles sold (with gas) under the trade marks of the proprietor (Kosan Gas) and the trader also relabelling the refilled bottles. The issue was Art 7 of the Directive. Two points relevant to this appeal arise from the judgment.[33]The first is at [31] in which the CJEU made a general point that in the circumstances a balance must be struck between the legitimate interests of the trade mark proprietor and the legitimate interests of purchasers of those bottles. The latter interests include the purchasers’ interest in fully enjoying their property rights in the bottles they have bought, and the general interest in maintaining undistorted competition.[34]The second is at [39] and [40] in which, at [39] the CJEU repeated the now familiar point that the question was whether what Viking Gas did created an impression of a commercial connection and then at [40] the CJEU elaborated on a number of aspects, identifying: i) That the test involved considering the position of the average consumer who is reasonably well informed and reasonably observant and circumspect. ii) The question was whether the circumstances would lead that average consumer to consider “that there is a connection between the two undertakings at issue in the main proceedings or that the gas used to refill those bottles comes from Kosan Gas”. iii) As the CJEU put it “in order to assess whether such an erroneous impression is precluded” it was necessary to take account of trade practices in that sector and whether consumers were accustomed to the gas bottles being filled by other dealers. iv) Finally, the court said that it appears reasonable to assume that a consumer who goes directly to Viking Gas for a refill (etc.) is more readily in a position to be aware that there is no connection.[35]The final CJEU case to mention is Soda-Club (CO2) SA, SodaStream International BV v MySoda Oy (Case C-197/21). This was decided after Brexit and so is not binding. The case emphasises that legitimate reasons to oppose further dealings operates as a derogation from the principle of free movement of goods ([34] and [37]). At [42] the court also makes the point that the conditions set out in Bristol-Myers Squibb v Paranova concerning consideration of pharmaceutical repackaging, are framed in that specific context.

Post-sale confusion

[36]It is convenient at this stage to note that, in general, post-sale confusion can be taken into account (see the judgment of Lord Briggs and Lord Stephens in the Supreme Court in Iconix Luxembourg Holdings SARL v Dream Pairs Europe Inc [2025] UKSC 25; [2025] Bus.L.R. 1391at [86] and Arnold LJ in Montres Breguet SA v Samsung Electronics Co Ltd [2023] EWCA Civ 1478; [2024] FSR 13at [84]-[85]).

Ground 1 – Did the judge apply the wrong test?

[37]On this appeal UKIG submitted that the judge applied the wrong legal test for the presence of legitimate grounds to oppose for three main reasons: i) The judge’s test summarised at [22] and applied at [48] included the element that it would be satisfied if a consumer could ascertain only with difficulty that there was no relevant connection. That is wrong in law and too favourable to the proprietor. ii) The legal test for a connection relates to a connection between undertakings (i.e. the claimant’s and first defendant’s businesses) whereas the connection identified by the judge at [51]-[54] involved the products and was therefore too wide and too favourable to the proprietor. iii) The approach identified was described as if the court itself was carrying out a balancing exercise between the rival interests in order to decide if s12(2) of the 1994 Act (Art 7(2) of the Directive) is engaged. However that is not the right approach. The reference to a balance in the cases such as Viking Gas was one which was struck by the relevant legal tests (impression of a connection etc.) To the extent the judge undertook a balancing exercise that was wrong in law.[38]I will take these in turn.

Ascertain only with difficulty

[39]UKIG is right that the judgment does refer to a test based on whether the average consumer could ascertain no connection only “with difficulty” and, for the reasons I have explained above, UKIG is also right that that question has no place in a case like this, which does not involve internet keyword advertising. However reading the relevant passages as a whole, although this concept was included in a statement of what the law was, when the judge came to decide the issue, he did not make a finding applying that, less stringent, limb of the test. His conclusion (e.g. at [52]) was simply that UKIG’s statements were likely to give customers the impression that what they were being offered was an “eControl AGA” which was itself one of a range of AGA products. Had the judge found customers would have difficulty telling that the product was not one of a range of AGA products, then that would have been an error of law but it is not what happened. The references to this in the judgment were an error but the error does not justify overturning the conclusion.

Type of connection

[40]The connection found to exist was not simply a connection between undertakings but could be said to involve the products in question (see e.g. the same paragraph [52] of the judgment) however this was not an error. The fact that cases like BMW identified the connection in issue there as being a connection between undertakings made sense on the facts of that case, but it does not mean the connection to satisfy the law can only be of that type. The idea that a relevant connection need not necessarily be one at the level of undertakings as in BMW makes sense as a matter of principle, and it is also supported by authority. Viking Gas at [40] identified two connections – one at the level of undertakings themselves but a second concerning the origin of the gas used to refill the bottles. The point was not just about whether customers had the false impression Viking Gas were affiliated in some way to Kosan Gas, it was that if customers had the false impression that the gas itself which was used to refill the bottles had come from Kosan Gas, that would give Kosan Gas legitimate reasons to oppose. Such a link is a link of the same kind as the judge identified here. There is no error on this ground.

Carrying out a balance

[41]The appellant is right to observe that the judgment (at [24]) states that in determining whether a case falls within s12(2) “the court” must strike a fair balance between protecting the proprietor’s interests and protecting the interests of others such as dealers with those goods in the aftermarket. The appellant is also right to draw attention to the concluding sentence in [52] in which, having made the relevant findings and grapples with the issues, the judge concluded “In my judgment, in this context, the interests of the Claimant as a trade mark proprietor outweigh the interests of people (such as the Defendants) dealing with the cookers in the aftermarket.”[42]Viking Gas at [31] refers to this idea of a balance being stuck between these interests and that may be the origin of the reference by the judge to a balance. The appellant criticised the judge’s approach to a balance as not being at the appropriate point or not taking into account the appropriate factors. In my judgment there is a more fundamental issue. The balance referred to in Viking Gas is a reference to the purpose of the various components in the legislative scheme. The court was not saying that national courts could or should approach the application of the law by themselves carrying out a balancing exercise. I suppose I should not rule out the possibility that in a case on very different facts, it might be helpful to attempt to consider directly whether the interests of one group – resellers or the initial purchasers of the goods – outweigh the interests of the trade mark proprietor or those acting with its consent. However since this case falls within the framework of the existing decisions, the court’s task to identify if legitimate reasons to oppose exist can and should be undertaken in a simple way by asking whether the dealings by UKIG give the impression of a commercial connection. Moreover, again reading the judgment as a whole, it is clear that the judge did exactly that and did not approach the issue by asking if one interest outweighed another. Having decided by the end of [52] that they were likely to give that impression, the judge’s reference to the claimant’s interest outweighing the interest of UKIG was a statement of the result, not an indication of the way in which the decision had been made. I therefore do not accept this aspect of ground 1 of the appeal either.[43]UKIG also contended that the judge did not apply the whole of the correct test or did not apply the test properly. This contention was based on a group of points, which either lacked substance or are really points of fact relevant to ground 2 and better addressed there. The first submission is that the judge failed to take into account practices in the sector and that there was evidence of others selling refurbished AGAs in exactly the same manner as UKIG. However the judge clearly understood there was an active refurbishment market. The issue is not about refurbishment, which does not help UKIG or undermine the decision. The issue is about conversion and the only material evidence we were shown on appeal to back up a submission concerning conversion was either advertisements by agents of UKIG or advertisements offering different products, neither of which assisted UKIG’s case. The second submission was that if customers were dealing with UKIG rather than the claimant then prima facie they would understand that there was no connection, and the website gave no such impression. That is better addressed under ground 2.[44]The third point consists of matters which are said to be things the judge ought to have taken account but did not. I have organised these into three topics, namely(i) that UKIG had succeeded under s12(2) on the issue about the condition of the goods and the lack of damage to reputation,(ii) the interests of the public in not wanting to throw away old AGAs, in being able to give an old AGA a new lease of life, and in it being good for the environment not to throw away old goods (something mentioned by the AG in Soda Club in his opinion at [1]), and(iii) that the judge should have discounted the presence of the mark AGA in UKIG’s advertisements since it was essential to use the mark to indicate the origin of the goods.[45]None of these points has substance. The fact that parts of UKIG’s case under s12(2) succeeded does not give UKIG a licence to give customers the false impression of a connection. The same applies to the second point. These interests explain and justify why the law operates in the way it does but again they do not justify a different conclusion on the issue of impression. The same goes for the third point. This is better dealt with under ground 2, but the essential problem for UKIG – which on the judge’s finding was one of its own making – is that it did not simply use the AGA mark to indicate that these were refurbished AGAs, rather it used that mark along with UKIG’s other marketing material in a manner which made it likely that customers would be given a false impression, for example, that the conversion itself had been done by AGA.[46]The final two (fourth and fifth) submissions of UKIG are: fourth that the judge failed to consider promoting healthy competition in a flourishing secondary market, and fifth that the tests under s10 and s12 should not be mixed. As to this, the fourth point does not help because it does not undermine the judge’s conclusion and the fifth point is true as far as it goes but does not relate in concrete terms to the judge’s decision.[47]The last topic to cover is the reference at [54] to Bristol-Myers Squibb v Paranova A/S and the holding that UKIG needed to take steps to dispel the false impression. That case, and the principles stated in it, relate to repackaging and relabelling of pharmaceutical products in the context of parallel importation. Even without Soda-Club, I would have doubted whether it was straightforward to apply the detailed guidelines set out in that context in the present, different, circumstances. However again this is no basis for overturning the decision. Having found that UKIG’s marketing was likely to create a false impression, the observation that steps should be taken to dispel it is a natural one.[48]Overall I would dismiss ground 1 of the appeal.

Ground 2 – rationally unsupportable

[49]To recap, the judge’s key finding was about what impression customers were likely to be given by UKIG’s material about their eControl System and their conversion work. The finding in essence was that UKIG’s material (website and invoices) was likely to give customers the impression that the eControl System originated from AGA and/or that the act of conversion to fit that system was an AGA provided service. Relatedly, the judge’s view was the term “eControl AGA” (or similar) would be understood to refer to a product in AGA’s range.[50]At [50] and [51] UKIG’s website was addressed in the following way: [50] What makes the present case different is the way in which the Defendants went about marketing and selling the eControl Cookers - cookers which were not only refurbished but also fitted with the eControl System. In this regard, the Claimant points to the Defendants' website as it existed in October 2022. That website contained the following words:
"The eControl System Why even seasoned Aga lovers are flipping the switch Buy an eControl Aga"
These words were superimposed over a picture of an eControl Cooker on which the AGA badge and a separate "eControl System" badge were clearly visible. Below this were statements referring, inter alia, to a 5 year warranty. Then at the bottom of the page were the words:
"Why the eControl System? With decades of Aga experience and conversions, we've been carefully listening to our loyal customers who wanted a reliable yet more up-to-date conversion than the traditionally utilised 13amp systems."
On the next page, there was a line drawing of what was clearly an AGA Cooker with the caption "Controllable Aga Cookers" followed by a page showing numerous possible "Aga Colours". [there is then a footnote stating: The defendants’ website was subsequently changed to remove references to Aga] [51] In effect, the website was offering customers the opportunity to "Buy an eControl AGA" (as pictured, with a warranty and, it seems, available in one of a range of colours) and/or the opportunity to convert an existing AGA Cooker using the eControl System. Why even seasoned Aga lovers are flipping the switch Buy an eControl Aga"

Why even seasoned Aga lovers are flipping the switch

[51]UKIG makes the point that this way of presenting the words on the website does not show that some of the text is very small. This is true as far as it goes but there was ample evidence, for example, that the terms “eControl AGA” and “AGA eControl” were used by UKIG and it was right for the judge to take them into account.[52]A point made by UKIG was that the judge held that the name eControl was itself distinctive. That was indeed a finding the judge made but it does not follow from this that the judge was also not entitled to conclude that composite terms like “eControl AGA” or “AGA eControl” were likely to indicate to customers that the cooker was a product in AGA’s range. Such a conclusion was, in my judgment, manifestly open to the judge in this case, particularly since, as the judge explicitly took into account (in [52]) some AGA products have a model named in a similar way like the AGA eR7 model.[53]Also relevant is the submission made under ground 1, that the AGA mark had to be used to indicate the original origin of the cookers themselves That is a relevant point but it does not undermine the judge’s approach. The conclusion was not arrived at merely because the word AGA appears in UKIG’s material, as no doubt it would always need to. The conclusion arises from the manner in which that term is used along with all the other material and the impression created.[54]UKIG also submitted that AGA is not known for electrically converting existing AGA cookers, but there was no evidence that customers or potential customers thought that AGA did not or would not do this, and so the judgment here cannot be criticised for not taking a state of mind of that kind into account. Equally UKIG submitted that the reference to “decades of Aga experience and conversions” could not be understood as a reference to AGA because AGA would not boast of having decades of experience, but this does not follow and is no basis for a criticism of the judge’s reasoning.[55]Another submission is that these are relatively expensive items which would not be bought on a whim, which is no doubt correct but does not help because the judge clearly had that in mind, e.g. at [53], where he noted that that was Mr McGinley’s evidence, but also noted that there was nothing to support Mr McGinley’s assertion that discussions which showed that customers did know they were being offered a second hand cooker to which UKIG had fitted their own eControl System, was supported by documents. It was not. This also showed the relevance of the judge’s next point in that paragraph, that in fact the invoices, which were often sent prior to delivery, would have reinforced the impression of a commercial connection.[56]A theme of UKIG’s submissions on appeal seemed to be that there was no other way in which UKIG could refer to the converted products – which it was entitled to sell given the judge’s other findings on s12(2) – aside from the manner in which it did do. However that is obviously wrong. There is nothing necessary or inevitable about the use by the defendant of a single composite label “eControl AGA” (or “AGA eControl”). The fact “eControl” is the name UKIG has given their system does not mean there is an unfettered right to use that word alongside AGA in that way.[57]Recognising the difficulty in overturning a finding of fact of this kind on appeal, UKIG’s submission was put as being that the conclusion was rationally unsupportable. It is no such thing. The judge considered the relevant material, came to a conclusion which was open to him on the evidence and gave cogent reasons for it. Indeed from the material in this case I would have come to the same conclusion as the judge. In my judgment, based on the marketing material, there is every reason for a customer to think an “eControl AGA” or “AGA eControl” is a product in AGA’s own range of cookers, that the eControl System is in all likelihood an AGA system, and that the conversion operation carried out by UKIG is in all likelihood an AGA service. Having chosen to market their goods this way, UKIG could dispel the second and third false impressions by making clear statements dispelling any false impressions. The compound signs “eControl AGA” and “AGA eControl” should simply not be used. I would dismiss ground 2.[58]Having dismissed the appeal, there is no need to consider the respondent’s notice on the post-sale confusion issue ([55]-[59]). I will simply say that I am not convinced there are grounds to overturn this conclusion. The post-sale confusion argument was based entirely on the presence on the physical cookers of an AGA badge and of another separate “eControl System” badge. The judge himself recognised that the issue was finely balanced (describing it as not easy at [57]). It is true that Mr McGinley accepted in cross-examination that customers could be confused, but that sort of evidence does not preclude the judge reaching the conclusion he did. Nor is the result inconsistent with the conclusion reached in [50] to [54], given the differences between the two scenarios. The conclusion was also open to the judge on the evidence and did not involve any error of law. I would dismiss the respondent’s notice. Arnold LJ: Introduction

Arnold LJ:

[59]I agree that UKIG’s appeal should be dismissed for the reasons given by the Chancellor. In this judgment I will address AGA’s cross-appeal concerning its claim for copyright infringement.[60]AGA’s pleaded case is that it is, and has at all material times been, the owner of the copyright subsisting in the “control panel graphics” for electric AGA cookers reproduced below (defined as “AGA Panel Work 1”) on the basis that it is an original artistic work created by its employee Martin Johnson.[61]The judge held that AGA Panel Work 1 was indeed an original artistic work, and more specifically that it was an original drawing. The judge also held that UKIG had indirectly copied AGA Panel Work 1 and that UKIG’s control panel reproduced a substantial part of it. There is no challenge by UKIG to those conclusions. The judge nevertheless held that UKIG had not infringed AGA’s copyright in AGA Panel Work 1 because it had a defence under section 51 of the Copyright, Designs and Patents Act 1988.

Section 51

[62]Section 51 provides, so far as relevant:
“(1) It is not an infringement of any copyright in a design document or model recording or embodying a design for anything other than an artistic work or a typeface to make an article to the design or to copy an article made to the design. (2) ... (3) In this section— ‘design’ means the design of the shape or configuration (whether external or internal) of the whole or part of an article, other than surface decoration; and ‘design document’ means any record of a design, whether in the form of a drawing, a written description, a photograph, data stored in a computer or otherwise.” ‘design’ means the design of the shape or configuration (whether external or internal) of the whole or part of an article, other than surface decoration; and ‘design document’ means any record of a design, whether in the form of a drawing, a written description, a photograph, data stored in a computer or otherwise.”

Grounds of appeal

[63]AGA challenges the judge’s conclusion with respect to section 51 on two grounds. Ground 1 is that AGA Panel Work 1 is a design document for an artistic work, and therefore section 51 does not apply. Ground 2 is that, if section 51 does apply, it is incompatible with assimilated EU law. For the reasons explained below, ground 2 turns out to raise an academic question.

Ground 1: is AGA Panel Work 1 a design document for an artistic work?

[64]The judge held at [98] that AGA Panel Work 1 was a design document for a control panel, but that the control panel was not an artistic work “at least as that term is understood in English law and as it is defined in s.4 of the CDPA 1988”. He did not consider that assimilated EU law enabled section 4 or section 51 of the 1988 Act to be construed in a manner that would permit the control panel to be treated as an artistic work. AGA contends that the control panel is an artistic work, and specifically a graphic work. A control panel is shown below.[65]Section 1(1) of the 1988 Act provides that copyright “subsists in accordance with this Part in the following descriptions of work – (a) original literary, dramatic, musical or artistic works”. It is common ground that this is a closed list. Section 4(1) defines “artistic work” as meaning one of three sub-categories of work set out in paragraphs (a), (b) and (c). Again, it is common ground that this is a closed list. Paragraph (a) includes “a graphic work”. Section 4(2) provides, so far as relevant:
“In this Part— … ‘graphic work’ includes— (a) any painting, drawing, diagram, map, chart or plan, and (b) any engraving, etching, lithograph, woodcut or similar work; …”
[66]In Response ClothingLtd v Edinburgh Woollen Mill Ltd [2020] EWHC 148 (IPEC), [2020] FSR 25 HHJ Haconsaid at [16]:
“It is true … that the statute defines ‘graphic work’ to include the types of work listed and the list is therefore not exhaustive. It does not follow that the definition is endlessly flexible. All the examples of a graphic work set out in the subsection are created by the author making marks on a substrate to generate an image. I do not think that the definition of a graphic work can be stretched to include a fabric, whether made on a loom or a knitting machine.”
[67]AGA relies upon a passage from the judgment of Jacob J in Anacon Corporation Ltd v Environmental Research Technology Ltd [1994] FSR 659. In that case Jacob J held that a circuit diagram was an artistic work, but that the defendants had not infringed the copyright in the artistic work by making a “net list” (a list of the components in a circuit and their interconnections). This did not matter, because he held that the circuit diagram was also a literary work, and the defendants had infringed the copyright in the literary work. It is pertinent to note that subsistence of copyright fell to be determined by reference to the Copyright Act 1956, whereas infringement was governed by the 1988 Act.[68]Jacob J explained his reasons for holding that the artistic copyright had not been infringed at 662:
“… the essential nature of a graphic work, as the present Act calls it, is that it is a thing to be looked at in some manner or other. It is to be looked at in itself. I believe that the essence of the reasoning in Interlego AG v. Tyco Industries Ltd [1988] R.P.C. 343 at 373 is that what matters in relation to artistic works, particularly drawings, is that which is ‘visually significant’, a phrase originally used by Whitford J. in Rose Plastics GmbH v. William Beckett & Co (Plastics) Ltd [1989] F.S.R. 113. In the context of that case it was that which was visually significant by way of changes from earlier drawings which was being considered, the issue being whether there was originality. But the phrase ‘visually significant’, as used by Whitford J. and approved by the Privy Council arose in an infringement case. I cannot see why that which matters from the point of view of originality does not matter equally from the point of view of infringement. So [the claimant’s] argument on the basis that the circuit diagram is an artistic work fails because the alleged infringement simply does not look like the artistic work.Yes, it was made using information contained in the artistic work, but that is not enough.”
[69]It can be seen from this passage that it is concerned with infringement, not subsistence of copyright. More specifically, it is concerned with the ambit of copyright in an artistic work. The core of the reasoning is contained in the last two sentences: it is not an infringement of the copyright in an artistic work to take information contained in that work if the alleged infringement does not look like the work. It is different in the case of a literary work.[70]AGA contends that the control panel depicted in AGA Panel Work 1 is a graphic work because it is “a thing to be looked at”. UKIG accepts that being “a thing to be looked at” is necessary for a work to qualify as a “graphic work”, but submits that this is not sufficient. I agree with this. As UKIG points out, many things are “to be looked at”, but are not graphic works, including a photograph, a sculpture and a collage (all of which are separately listed in section 4(1)(a)), a work of architecture (covered by section 4(1)(b)) and a work of artistic craftmanship (covered by section 4(1)(c)). Counsel for AGA accepted that the effect of AGA’s interpretation was that all artistic works would constitute graphic works. In my judgment that would be wholly contrary to the statutory scheme, which pre-supposes that there are a number of different categories of artistic work. Moreover, the problem would not stop with artistic works, because a film (section 5(1)) is also a thing to be looked at.[71]In my judgment HHJ Hacon correctly stated the nature of a “graphic work” in Response Clothing. His interpretation is supported not only by the examples given in section 4(2), but also by the meaning of the word “graphic”. The relevant definition in the Oxford English Dictionary is as follows:
“Of or relating to drawing or painting. graphic arts: the fine arts of drawing, painting, engraving, etching, etc.; also, the techniques of production and design involved in printing and publishing; graphic design: graphics (sense B.2); so graphic designer.”
AGA’s interpretation involves stretching the word “graphic” far beyond its dictionary meaning. Indeed, it comes close to disregarding the word “graphic” altogether.[72]It can be seen from AGA Panel Work 1 that the control panel consists of a 4mm thick toughened glass sheet with a foreground screen and a background screen. The glass sheet is rectangular with rounded corners. It has six chamfered holes cut through it, the largest two of which are to accommodate rotary switches. The foreground screen has an oval, a circle, a line, an AGA logo and switch positions printed on it. The background screen is printed black save for some spaces aligned with the six holes in the glass and an additional space.[73]Although the judge held that the AGA Panel Work 1 was an intellectual creation of Mr Johnson’s, his reasoning was focused on the elements which comprise the foreground screen. Viewed as a whole, the control panel is primarily a functional object, although it incorporates artistic elements, and in particular graphic elements. In my judgment the judge was correct to decide that the control panel as a whole is not a graphic work. AGA does not contend that it is any other form of artistic work.

Ground 2: is section 51 incompatible with assimilated EU law?

[74]It is common ground that the purpose of section 51 is to limit the role of copyright protection in what are usually referred to as “industrial designs” i.e. designs for industrially-produced articles. As the judge noted, section 51 was the result of extensive consultations leading up to the enactment of the 1988 Act: see Copinger & Skone James on Copyright (18th ed) at 13-538 and 13-539.[75]AGA contends that section 51 is incompatible with assimilated EU law, and in particular the decision of the Court of Justice of the European Union in Case C-683/17 Cofemel - Sociedade de Vestuario SA v G-Star Raw CV [EU:C:2019:721] interpreting Article 2(a) of European Parliament and Council Directive 2001/29/EC of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (“the Information Society Directive”). While the United Kingdom was an EU Member State, the Information Society Directive was implemented by the relevant provisions of the 1988 Act.[76]It is common ground that

the judge concisely and accurately summarised the reasoning of the CJEU in Cofemel at [100]:

“(a) Where something satisfies the conditions for the subsistence of copyright (i.e. where it is original in the sense that it is the expression of its author's own intellectual creation and is identifiable with sufficient precision and objectivity), then that thing is a work that is entitled to copyright protection - see [30], [32] and [35]. (b) This applies equally to a work which is a design (see [48]). However, in design cases, particular care must be exercised in assessing whether the design really does satisfy the above test and whether it merits being classified as a work for the purposes of copyright (see [49]-[52]). In this regard, the fact that the design generates an aesthetic effect is not enough. Its author must have exercised creative choices (see [53]-[55]). (c) Where a design satisfies this test, it is entitled to a cumulation of protection under both design law and copyright law (see [45], [47] and [52]) and member states are precluded from enacting a provision under which that design would only qualify for copyright if it generated a specific, aesthetically significant visual effect (see [56]).”
[77]AGA contends that it is clear from this that, once it is found that a work qualifies for copyright protection, no limitation on the scope of such protection such as that contained in section 51 is allowed unless it falls within the list of permitted exceptions and limitations contained in Article 5 of the Information Society Directive. It is common ground that section 51 does not fall within any of those permitted exceptions and limitations.[78]UKIG advances three answers to this contention. First, that section 51 is not incompatible with assimilated EU law, and in particular Cofemel. Secondly, that, even if it is, it is not possible to give section 51 a conforming interpretation and therefore it must be applied according to its terms. Thirdly, that, if necessary, this Court should exercise its power to depart from Cofemel. Counsel for UKIG put the second answer first in their skeleton argument on the basis that it was the clearest answer to AGA’s case.[79]It is well established that EU law requires domestic legislation to be construed so far as possible in accordance with EU law: see Case C-106/89 Marleasing SA v La Comercial Internacional de Alimentación SA [1990] ECR I-4135. This is a strong duty of interpretation: see Litster v Forth Dry Dock and Engineering Co Ltd [1990] 1 AC 546, 558C-H (Lord Templeman) and 576E-577D (Lord Oliver of Aylmerton); R (IDT Card Services Ireland Ltd) v Commissioners for Her Majesty’s Revenue and Customs [2006] EWCA Civ 29, [2006] STC 1252, at [73]-[92] (Arden LJ); and Vodafone 2 v Revenue and Customers Commissioners (No 2) [2009] EWCA Civ 446, [2009] STC 1480, at [37]-[38] (Sir Andrew Morritt C). Nevertheless, it has limits. It does not permit or require a court to construe legislation in a manner which is either directly inconsistent with, or goes against the grain of, the legislation.[80]UKIG contends that, if section 51 is incompatible with assimilated EU law as AGA contends, then it is impossible to interpret it in a manner which would make it compatible. In his oral submissions counsel for AGA accepted this. Although he initially suggested that this Court should make a declaration of incompatibility, he later accepted that it was not open to AGA to advance that request for procedural reasons. He nevertheless submitted that the Court should decide whether section 51 is inconsistent with assimilated EU law.[81]In my judgment no purpose would be served by deciding this issue of law. It would be a wholly academic question since it would neither affect the parties’ rights nor require the Government to take any action to rectify the alleged inconsistency.

Conclusion

[82]For the reasons given above I would dismiss the cross-appeal.

Falk LJ:

[83]I agree with both judgments.