Dalsouple Societe Saumuroise Du Caoutchouc v Dalsouple Direct Ltd & Anor [2014] EWHC 3963 (Ch)

[2014] EWHC 3963 (Ch)Case No CH/2014/0354
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 1 December 2014
Before
THE HON MR JUSTICE ARNOLD
Between
DALSOUPLE SOCIETE SAUMUROISE DU CAOUTCHOUCAppellantDALSOUPLE DIRECT LIMITEDRespondentsDALHAUS LIMITEDRespondent
Ian Bartlett of Beck Greener for AppellantGuy Tritton instructed by Carpmaels & Ransford (Trade Marks) LLP for RespondentsHearing Hearing date: 21 November 2014
JudgmentMR JUSTICE ARNOLD :Introduction
[1]On 23 March 2011 Dalsouple Société Saumuroise du Caoutchouc (“Dalsouple France”) requested that International Trade Mark Registration No. 1074946 for the word DALSOUPLE in respect of goods in Classes 17, 19 and 27 (“IR946”) be protected in the United Kingdom.[2]On 30 April 2012 Timothy Gaukroger opposed the granting of protection to IR946 in the UK. On 27 May 2012 Dalsouple Direct Ltd (“DDL”) and Dalhaus Ltd (“Dalhaus”) (together “the Respondents”) were joined as additional opponents. Mr Gaukroger, DDL and Dalhaus (collectively “the Opponents”) opposed the request for protection on grounds raised under sections 5(1), 5(2)(a), 5(3) and 5(4)(a) of the Trade Marks Act 1994.[3]The Opponents’ objections under sections 5(1), 5(2)(a) and 5(3) were based on the following earlier registrations: i) United Kingdom Registered Trade Mark No. 2183458 for the word DALSOUPLE registered as of 26 November 1998 in respect of goods in Classes 17 and 27 (“UK458”) in the name of Mr Gaukroger. ii) Community Trade Mark No. 3692175 for the word DALSOUPLE registered as of 26 February 2004 in respect of goods in Classes 17, 19 and 27 (“CTM175”) in the name of Dalhaus.[4]The Opponents’ objection under sections 5(4)(a) was based on the allegation that DDL was the owner of goodwill in the sign DALSOUPLE in respect of rubber flooring products as a result of use since 1986.[5]On 24 July 2014 Mr Gaukroger assigned UK458 to his wife Julie Gaukroger and himself and they assigned it to Dalhaus. As a result, Mr Gaukroger ceased to be an Opponent.[6]On 30 August 2012 Dalsouple France filed an application for a declaration of invalidity of UK458 on grounds raised under section 3(6), 5(4)(a) and 60(3)(a) of the 1994 Act. Dalsouple France’s objections under section 3(6) and 60(3)(a) were based on the allegation that Mr Gaukroger had applied to register UK458 when his company DDL was Dalsouple France’s agent in the UK and had done so without the knowledge or consent of Dalsouple France. Dalsouple France’s objection under section 5(4)(a) was based on the allegation that Dalsouple France was the owner of goodwill in the sign DALSOUPLE in respect of rubber flooring products.[7]Dalhaus filed a counterstatement in response to Dalsouple France’s application for a declaration of invalidity in which it alleged inter alia that(i) the true relationship between DDL and Dalsouple France in 1998 was one of principal and supplier rather than agent and principal and(ii) the application to register the mark DALSOUPLE in the UK was made with the express consent of Raymond Mortoire, the then owner and Directeur General of Dalsouple France, in 1998.[8]Dalsouple France had previously filed an application for a declaration of invalidity of CTM175 at the Office for Harmonisation of the Internal Market (Trade Marks and Designs) on 7 December 2010 on grounds raised under Articles 8(4), 52(1)(b) and 53(1)(c) of Council Regulation 207/2009/EC of 26 February 2009on the Community trade mark (codified version) (“the Regulation”). In the context of those proceedings Dalhaus alleged that the application to register the mark DALSOUPLE as a Community trade mark was made with the express consent of Pierre Mortoire, one of Raymond Mortoire’s sons and the then owner ofDalsouple France, in 2004. It is convenient to note at this point that the OHIM Cancellation Division rejected that allegation of consent and held that the objection under Article 52(1)(b) of the Regulation was well-founded in a decision dated 28 June 2013. Dalhaus has appealed against the decision and the appeal is still pending.[9]The opposition and invalidity proceedings were consolidated and both proceedings came on for hearing before Mark Bryant acting for the Registrar of Trade Marks on 19 and 20 March 2014. At the hearing Pierre Mortoire and Paul Bartlett (witnesses for Dalsouple France) and Mr and Mrs Gaukroger (witnesses for the Respondents) were all cross-examined on their witness statements.[10]In his decision dated 20 May 2014 (O/219/14) the Hearing Officer identified the core issues between the parties as follows (at [41]):
“* Did DDL apply to register the UK mark with the consent of Raymond Mortoire? * What was the true nature of the relationship between the two sides? * Where does the goodwill in the UK lie? With DDL or with Dalsouple France?”
[11]He went on to decide that: i) Raymond Mortoire had consented on behalf of Dalsouple France to the registration of the trade mark DALSOUPLE in the UK, and accordingly Dalsouple France’s application for a declaration of invalidity of UK458 based on section 3(6) and section 5(4)(a) failed. ii) Dalsouple France’s claim under section 60 failed because Dalsouple France had not shown that it was the proprietor of the trade mark DALSOUPLE in a Convention country. iii) Given that Dalsouple France’s attack on the validity of UK458 had failed, the Opponents’ opposition to IR946 succeeded.[12]Having decided the issue of consent in the way which he did, with the consequences set out above, the Hearing Officer did not determine the second and third of the core issues he had identified. Thus he did not decide whether, absent consent to the registration of UK458, Dalsouple France’s objections under sections 3(6) and section 5(4)(a) would have succeeded.[13]Dalsouple France has appealed against the Hearing Officer’s decisions to dismiss its application for a declaration of invalidity in so far as it was based on sections 3(6) and section 5(4)(a) and against the Hearing Officer’s decision to uphold the opposition to IR946. There is no appeal against the Hearing Officer’s dismissal of the section 60 objection. Dalsouple France contends that the Hearing Officer was wrong to find that Raymond Mortoire had consented to the registration of the trade mark DALSOUPLE in the UK. It is common ground that, if the appeal is allowed, the proceedings will have to be remitted to the Registrar for the determination of the section 3(6) and section 5(4)(a) objections.[14]Dalsouple France applied to adduce further evidence in support of its appeal, but I dismissed that application for the reasons given in an extempore ruling during the course of the hearing.

The legislative framework

[15]Section 3(6) of the 1994 Act provides as follows:
“A trade mark shall not be registered if or to the extent that the application is made in bad faith.”
[16]This provision implements Article 3(2)(d) of Directive 2008/95/EC of 22 October 2008 to approximate the laws of the Member States relating to trade marks (codified version) (“the Directive”), which provides:
“Any Member State may provide that a trade mark shall not be registered or, if registered, shall be liable to be declared invalid where and to the extent that: …. (d) the application for registration of the trade mark was made in bad faith by the applicant.”
[17]Section 5 of the 1994 Act provides, so far as relevant, as follows: “(4) A trade mark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented— (a) by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade, or … A person thus entitled to prevent the use of a trade mark is referred to in this Act as the proprietor of an ‘earlier right’ in relation to the trade mark. (5) Nothing in this section prevents the registration of a trade mark where the proprietor of the earlier trade mark or other earlier right consents to the registration” (a) by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade, or … A person thus entitled to prevent the use of a trade mark is referred to in this Act as the proprietor of an ‘earlier right’ in relation to the trade mark.[18]These provisions implement Articles 4(4)(b) and 4(5) of the Directive, which provide: “4. Any Member State may, in addition, provide that a trade mark shall not be registered or, if registered, shall be liable to be declared invalid where, and to the extent that: … (b) rights to a non-registered trade mark or to another sign used in the course of trade were acquired prior to the date of application for registration of the subsequent trade mark, or the date of the priority claimed for the application for registration of the subsequent trade mark, and that nonregistered trade mark or other sign confers on its proprietor the right to prohibit the use of a subsequent trade mark; … 5. The Member States may permit that in appropriate circumstances registration need not be refused or the trade mark need not be declared invalid where the proprietor of the earlier trade mark or other earlier right consents to the registration of the later trade mark.” … (b) rights to a non-registered trade mark or to another sign used in the course of trade were acquired prior to the date of application for registration of the subsequent trade mark, or the date of the priority claimed for the application for registration of the subsequent trade mark, and that nonregistered trade mark or other sign confers on its proprietor the right to prohibit the use of a subsequent trade mark; …

Consent as an answer to an allegation of bad faith

[19]It can be seen from the statutory provisions cited above that, while both the Directive and the 1994 Act make express provision for consent to override an objection under Article 4(4)(b)/section 5(4)(a), neither the Directive nor the 1994 Act make comparable provision with regard to Article 3(2)(d)/section 3(6). It is common ground, however, that consent will generally prevent an allegation of bad faith succeeding where the allegation is based on the behaviour of the applicant for registration vis-à-vis another party (as opposed the behaviour of the applicant for registration vis-à-vis the Registrar). Certainly, it is not suggested by Dalsouple France that, if it consented to the registration of UK458 by Mr Gaukroger, its allegation that Mr Gaukroger made the application in bad faith can succeed.

Uncontested background facts

[20]The Hearing Officer set out some uncontested background to the dispute in his decision at [13]. I reproduce this with some small additions and omissions below.[21]Dalsouple France has been producing rubber floor tiles since about 1966. Its floor tiles have always been marketed under the trade mark DALSOUPLE. Dalsouple France was owned and run by Raymond Mortoire from the 1960s until his death in 2001. Raymond Mortoire had two sons, Pierre Mortoire and Bruno Mortoire, both of whom were both involved in the business, Pierre on the production side and Bruno on the sales and marketing side. Bruno left the business in 2000.[22]Dalsouple France made sales in the UK from at least 1982, initially through a company called Jaymart. Jaymart’s turnover in respect to DALSOUPLE goods was approximately £100,000 per annum. Mr Gaukroger was on the sales team at Jaymart and that is how he first came to know Raymond Mortoire and DALSOUPLE goods. In May 1986 Dalsouple France began doing business with Mr Gaukroger’s company The Launch Rubber Company Ltd, which later became DDL. From 1991, DDL was the exclusive supplier of DALSOUPLE goods in the UK.[23]In 1995 an agency agreement was signed between DDL and Dalsouple France, with DDL being identified as Dalsouple France’s exclusive agent in the UK and some other territories, although the Respondents contend that this did not accurately reflect the relationship between Dalsouple France and DDL. In support of that contention, the Respondents rely on a letter from Pierre Mortoire on behalf of Dalsouple France dated 2 January 1999 which the Hearing Officer set out in his decision at [16].[24]Under DDL, sales of DALSOUPLE products in the UK flourished. By the late 1990s, they amounted to £2 million a year.[25]In 2001 Raymond Mortoire died and Pierre Mortoire took control of Dalsouple France. In 2009 Pierre Mortoire sold Dalsouple France to Pascal Le Saec.

The evidence on consent

[26]The principal evidence on consent came from Mr Gaukroger andPierre Mortoire. In paragraph 17 of his witness statement Mr Gaukroger said:
“Later on in 1998 I discussed with Raymond Mortoire the advantages of registering a Dalsouple trade mark in the United Kingdom to protect the Dalsouple name, and I asked Raymond Mortoire whether his company wanted to carry out this work so that it owned the trade mark. Raymond Mortoire was reluctant to spend any money on registering a trade mark in the UK that would essentially be for the benefit of myself and DDL, and instead he readily agreed that I should undertake the application. Therefore I began the application process in November 1998, securing a UK trade mark for DALSOUPLE that was registered in June 1999 at the UK Trade Marks Registry”
No documentary support for this account was produced by Mr Gaukroger.[27]The key passages in Mr Gaukroger’s cross-examination on this subject were as follows:
“Q. The owner of DALSOUPLE France. That he consented to the registration of the trademark, of the filing of the trade mark application and its eventual registration. You approached him presumably, but tell me if this is wrong, you thought that a consent would be needed. Is that what you are saying? A. If we look in the earlier correspondence I asked him if it was ok that we used the DALSOUPLE name. He said that was fine, no problems at all. The reason that we actually registered the trade mark in the first place was Bruno Mortoire, which is one of the two sons -- Pierre will be in later, the other son as disappeared -- who was really our prime contact in the early days, not Pierre, had told me that their German distributor had registered the DALSOUPLE name in Germany and he said that they could not register it in France. He suggests that it would be a good thing of we registered it in the UK. I said, ‘Okay, I will check with your father’ because Bruno was always -- Bruno is a nice guy but he was always up to no good, especially with his father. They did not get on well at all and so I decided it was better to check with father. I said, ‘Rene has registered the trade mark in Germany, is it okay if I do it for UK?’ He just said yes because, again, it was not a big thing back then. It just was not. For me, if I am doing all this work, I am building a brand, the logic would be that I try and protect the brand that I am building. The guys in Germany had done it so I am going, ‘Okay, we will just do the same’. Q. But you were building the brand at the time? A. Yes Q. Under the agency agreement, for the benefit of ---- A. Was it? By then I would still say that this had gone beyond what would have been the classic agency thing. We were distributors. Q. That is why you registered the name in ---- A. No, it was not. I registered it because the German distributor had registered it. It had not actually entered into my conscious at the time that it was something that I should or should not do. They are doing it, why don’t we do the same? It had been suggested to me by Bruno to do it. I checked with the father, who clearly was not bothered. They could not register their one in France apparently. I think Bruno tried again in 2000 but I think it failed, I am not sure, and so I went ahead and did it. Q. You did not ask him to put anything in writing? A. No. There was no need. Q. There was no need? Why is that? A. Because it was just a conversation that we had. He was going, ‘That is ok, yes Tim’. … Q. I suppose what I am putting to you is that would you not agree that it seems constitutionally unlikely that someone would engineer a situation where in November 1998 he gives away the brand in the United Kingdom? A. Not give away. Q. That is the effect of it, is it not? A. Again, we created and we built the brand in this country where effectively there was not one before. Q. Okay. A. The same could be true whatever they did in Germany. The guys in Germany let theirs go because of all the quality issues.”
Q. But you were building the brand at the time? A. Yes Q. Under the agency agreement, for the benefit of ---- Q. That is why you registered the name in ---- Q. You did not ask him to put anything in writing? Q. There was no need? Why is that?

Q. That is the effect of it, is it not?

[28]Pierre Mortoire gave evidence that Raymond Mortoire had not mentioned any such conversation either to him or to his brother Bruno Mortoire. He also said that his father was an astute businessman who would not have given away Dalsouple France’s most valuable asset. If his father had given any consent to registration in the UK, which he doubted, he could only think that his father meant that Mr Gaukroger should register the trade mark on behalf of Dalsouple France.[29]Dalsouple France also adduced similar fact-type evidence from Mr Bartlett, a former employee of DDL from 1997 to 2009. Mr Bartlett said in his witness statement that another company of Mr Gaukroger’s had been distributing KRAIBURG agricultural flooring manufactured by a German company called Gummiwork Kraiburg since at least the early 2000s. He went on in paragraph 30:
“I recall that prior to moving to the new offices and warehouse that Mr Gaukroger was having issues with one or two senior personnel at Kraiburg in Germany. Mr. Gaukroger then told those who were present in the office, which included me, that Kraiburg had discovered that he owned the KRAIBURG trade mark registration and that they were not very happy about it. He mentioned that they would have to pay him to get it back. I heard no more about it but have recently come to learn from Dalsoupe France trade mark agents, Beck Greener, that it was Ms. Gaukroger’s wife, Julie Gaukroger who had applied to register the KRAIBURG trade mark in her own name before the registration was transferred in September 2005, presumably after the event I have just described, to what I would assume to be its rightful owner, namely Kraiburg Germany.”
[30]It was put to Mr Bartlett in cross-examination, and he accepted, that the record showed that the applicant for the UK KRAIBURG registration was “Julie Gaukroger, Kraiburg Ltd” and that Mrs Gaukroger had applied in the name of Kraiburg Ltd. For her part, Mrs Gaukroger gave evidence that she had intended to make the application on behalf of Kraiburg Ltd. Kraiburg Ltd was a company in which Gummiwork Kraiburg had a 10% stake, and so she and Mr Gaukroger had not thought they needed Gummiwork Kraiburg’s consent. It is common ground that subsequently the registration was assigned to Gummiwork Kraiburg.

The Hearing Officer’s decision on the issue of consent

[31]The Hearing Officer’s assessment of the witnesses was that Mr Gaukroger“appeared both honest and trustworthy” and that he “provided considered and very plausible answers”, while Pierre Mortoire “was not always wholly consistent in his answers, but … he was both honest and sincere”. Having rejected a submission on behalf of Dalsouple France that consent had to be in writing, the Hearing Officer reasoned as follows:
“50. Pierre Mortoire denied all knowledge of the alleged consent, but I do not consider this as being tantamount to the consent not been given by his father. At the time, in 1998, Pierre Mortoire was focussed on the manufacturing side of the business and it appears that it was his father and brother who were responsible for the other aspects of the business. As the evidence shows, there was a very poor relationship between Pierre Mortoire and his brother and this must bring into question whether or not Bruno Mortoire would have shared with him information about the consent and existence of DDL’s UK mark. There is no obvious reason why his father would not have mentioned it, but it is plausible that he did not. Also, bearing in mind the length of time between the alleged consent and the time when Pierre Mortoire provided his evidence, it is also possible that he has forgotten his father’s mention of it. This would be particularly plausible if Pierre Mortoire was not aware of the potential importance of consent. 51. The very nature of business relations being agreed verbally is that the parties do not have the benefit of expert advice at the time of making the agreement and may not seek advice. The nature is one of informality. If, as Mr Gaukroger states, verbal consent was given, it is, once again, plausible that Raymond Mortoire did so without being fully aware of the consequences. This may also explain why it was not discussed with Pierre Mortoire. 52. Taking all of this into account, with hindsight, to provide consent (verbal or otherwise) may not have been in the best interests of Dalsouple France, but Raymond Mortoire did not have the benefit of hindsight in 1998. In cross examination, Mr Gaukroger showed himself to be a very plausible witness and his version of events is supported by evidence of the high level of trust placed inalleged consent does not create sufficient doubt in my mind. 53. One issue raised by Mr Bartlett is that, not only is the consent not in writing, but further, the scope of the consent is unknown. In particular, it is unknown whether any consent included permission for DDL to register the mark in its own name as opposed to in the name of Dalsouple France. Mr Gaukroger has explained circumstances where Bruno Mortoire alerted him to Dalsouple France’s German agent registering the mark in Germany and that he should do the same in the UK. This version of events provides some support for any consent to be in respect of DDL also registering the mark in its own name. 54. There is an absence of detailed supporting evidence, what evidence there is appears to corroborate Mr Gaukroger’s version of events. He clearly had a close and trusting relationship with Raymond Mortoire and this increases the likelihood that Mr Mortoire trusted him to register the mark in the UK, Dalsouple France was becoming increasingly reliant upon DDL to produce growth of the business and the German agent had done the same, apparently without sanction from Dalsouple France. Further, Mr Gaukroger has provided convincing statements under cross examination to support his version of events. Against this is Pierre Mortoire’s insistence that his father would not have given away the businesses most valuable asset and that if he had, Pierre Mortoire would have known about it, but he did not. I have already discussed these points and concluded that it is plausible that Pierre Mortoire is incorrect on both these points. 55. Further, I am not persuaded by Dalsouple France’s claim that DDL’s registration of the DALSOUPLE mark was part of a pattern of behaviour. Mrs Gaukroger, under cross examination provided a credible explanation regarding the use of her name in the proprietor details of the application to register the KRAIBURG mark. Whilst it is arguable whether, in fact, it was made in her own personal name or whether it was in the name of Kraiburg Limited with Mrs Gaukroger as its contact name, I am satisfied that the intention was to file in the name of Kraiburg Limited. As the German manufacturer had a stake in this company, I see nothing underhand in Mrs Gaukroger’s actions. 56. Taking all of the above into account, I find that the most likely position is that Raymond Mortoire did indeed, give verbal consent to DDL applying to register the mark in its own name.”

Grounds of appeal

[32]Dalsouple France’s grounds of appeal can be summarised as follows: i) The Hearing Officer erred in law in holding that consent did not need to be in writing. ii) The Hearing Officer erred in law since he should have concluded that consent had to be clear, distinct, unconditional and unequivocal, and that the alleged consent failed to satisfy these requirements. iii) The Hearing Officer’s finding thatRaymond Mortoire had consented to DDL applying to register the mark in its own name was inconsistent with the undisputed fact that it was Mr Gaukroger who had applied to register UK458. iv) The Hearing Officer failed to recognise the improbability that consent was granted. v) The Hearing Officer engaged in impermissible conjecture and speculation. vi) The Hearing Officer wrongly failed to take the agency agreement into account, and he should have concluded that UK458 was held on trust for Dalsouple France. vii) The Hearing Officer wrongly failed to consider the position regarding CTM175. viii) The Hearing Officer failed properly to consider the position regarding the KRAIBURG trade mark.[33]Grounds one and two raise issues of law. The remaining grounds are all challenges to the Hearing Officer’s findings of fact, which were made after hearing oral evidence from the principal witnesses. Accordingly, it is necessary to consider the role of the appeal court in such circumstances.

The role of the appeal court

[34]The role of the appeal court was recently reviewed by Lewison LJ in Fine & Country Ltd v Okotoks Ltd [2013] EWCA Civ 672, [2014] FSR 11, where he said: “50. The Court of Appeal is not here to retry the case. Our function is to review the judgment and order of the trial judge to see if it is wrong. If the judge has applied the wrong legal test, then it is our duty to say so. But in many cases the appellant's complaint is not that the judge has misdirected himself in law, but that he has incorrectly applied the right test. In the case of many of the grounds of appeal this is the position here. Many of the points which the judge was called upon to decide were essentially value judgments, or what in the current jargon are called multi-factorial assessments. An appeal court must be especially cautious about interfering with a trial judge's decisions of this kind. There are many examples of statements to this effect. I take as representative Lord Hoffmann's statement in Designers Guild Ltd v Russell Williams (Textiles) Ltd [2000] 1 WLR 2416, 2423: ‘Secondly, because the decision involves the application of a not altogether precise legal standard to a combination of features of varying importance, I think that this falls within the class of case in which an appellate court should not reverse a judge's decision unless he has erred in principle.’ 51. Where the appeal is (or involves) an appeal against a finding of fact, the role of an appeal court is as stated by Lord Mance in Datec Electronics Holdings Ltd v United Parcels Service Ltd [2007] UKHL 23 [2007] 1 WLR 1325 at [46] approving a passage from the judgment of Clarke LJ in Assicurazioni Generali SpA v Arab Insurance Group [2003] 1 WLR 577, 580 – 581 as follows: ‘14. The approach of the court to any particular case will depend upon the nature of the issues kind of case determined by the judge. This has been recognised recently in, for example, Todd v Adams & Chope (trading as Trelawney Fishing Co) [2002] 2 Lloyd's Rep 293 and Bessant v South Cone Inc [2002] EWCA Civ 763. In some cases the trial judge will have reached conclusions of primary fact based almost entirely upon the view which he formed of the oral evidence of the witnesses. In most cases, however, the position is more complex. In many such cases the judge will have reached his conclusions of primary fact as a result partly of the view he formed of the oral evidence and partly from an analysis of the documents. In other such cases, the judge will have made findings of primary fact based entirely or almost entirely on the documents. Some findings of primary fact will be the result of direct evidence, whereas others will depend upon inference from direct evidence of such facts.15. In appeals against conclusions of primary fact the approach of an appellate court will depend upon the weight to be attached to the findings of the judge and that weight will depend upon the extent to which, as the trial judge, the judge has an advantage over the appellate court; the greater that advantage the more reluctant the appellate court should be to interfere. As I see it, that was the approach of the Court of Appeal on a 'rehearing' under the RSC and should be its approach on a 'review' under the CPR 1998.16. Some conclusions of fact are, however, not conclusions of primary fact of the kind to which I have just referred. They involve an assessment of a number of different factors which have to be weighed against each other. This is sometimes called an evaluation of the facts and is often a matter of degree upon which different judges can legitimately differ. Such cases may be closely analogous to the exercise of a discretion and, in my opinion, appellate courts should approach them in a similar way.’ 52. I would add to that citation the statement of Lord Steyn in Smith New Court Securities Ltd v Citibank NA [1997] AC 254, 274: ‘The principle is well settled that where there has been no misdirection on an issue of fact by the trial judge the presumption is that his conclusion on issues of fact is correct. The Court of Appeal will only reverse the trial judge on an issue of fact when it is convinced that his view is wrong. In such a case, if the Court of Appeal is left in doubt as to the correctness of the conclusion, it will not disturb it.’ 53. This corresponds with the test under CPR Part 52.11(3)(a).” ‘Secondly, because the decision involves the application of a not altogether precise legal standard to a combination of features of varying importance, I think that this falls within the class of case in which an appellate court should not reverse a judge's decision unless he has erred in principle.’ ‘14. The approach of the court to any particular case will depend upon the nature of the issues kind of case determined by the judge. This has been recognised recently in, for example, Todd v Adams & Chope (trading as Trelawney Fishing Co) [2002] 2 Lloyd's Rep 293 and Bessant v South Cone Inc [2002] EWCA Civ 763. In some cases the trial judge will have reached conclusions of primary fact based almost entirely upon the view which he formed of the oral evidence of the witnesses. In most cases, however, the position is more complex. In many such cases the judge will have reached his conclusions of primary fact as a result partly of the view he formed of the oral evidence and partly from an analysis of the documents. In other such cases, the judge will have made findings of primary fact based entirely or almost entirely on the documents. Some findings of primary fact will be the result of direct evidence, whereas others will depend upon inference from direct evidence of such facts. 15. In appeals against conclusions of primary fact the approach of an appellate court will depend upon the weight to be attached to the findings of the judge and that weight will depend upon the extent to which, as the trial judge, the judge has an advantage over the appellate court; the greater that advantage the more reluctant the appellate court should be to interfere. As I see it, that was the approach of the Court of Appeal on a 'rehearing' under the RSC and should be its approach on a 'review' under the CPR 1998. 16. Some conclusions of fact are, however, not conclusions of primary fact of the kind to which I have just referred. They involve an assessment of a number of different factors which have to be weighed against each other. This is sometimes called an evaluation of the facts and is often a matter of degree upon which different judges can legitimately differ. Such cases may be closely analogous to the exercise of a discretion and, in my opinion, appellate courts should approach them in a similar way.’ ‘The principle is well settled that where there has been no misdirection on an issue of fact by the trial judge the presumption is that his conclusion on issues of fact is correct. The Court of Appeal will only reverse the trial judge on an issue of fact when it is convinced that his view is wrong. In such a case, if the Court of Appeal is left in doubt as to the correctness of the conclusion, it will not disturb it.’[35]I would add that the Registrar of Trade Marks is a specialist tribunal, and therefore the warning given by Baroness Hale of Richmond in AH (Sudan) v Secretary of State for the Home Department [2007] UKHL 49, [2008] 1 AC 678at [30], which was approved by Sir John Dyson SCJ giving the judgment of the Supreme Court in MA (Somalia)v Secretary of State for the Home Department [2007] UKSC 49, [2011] 2 All ER 65 at [43], is apposite in this context:
“ … This is an expert tribunal charged with administering a complex area of law in challenging circumstances. To paraphrase a view I have expressed about such expert tribunals in another context, the ordinary courts should approach appeals from them with an appropriate degree of caution; it is probable that in understanding and applying the law in their specialised field the tribunal will have got it right: see Cooke v Secretary of State for Social Security [2002] 3 All ER 279, para 16. They and they alone are the judges of the facts. It is not enough that their decision on those facts may seem harsh to people who have not heard and read the evidence and arguments which they have heard and read. Their decisions should be respected unless it is quite clear that they have misdirected themselves in law. Appellate courts should not rush to find such misdirections simply because they might have reached a different conclusion on the facts or expressed themselves differently. … ”

Ground one: the need for writing

[36]Dalsouple France contends that consent to registration must be given in writing. In support of this contention, Dalsouple France’s attorney pointed out that the 1994 Act required assignments to be writing: see section 24(3). I do not accept this contention. The comparison with section 24(3) tells against it, rather than supporting it, since no requirement of writing is to be found in section 5(5). Still less, obviously, is there any requirement of written consent in the context of section 3(6). In my judgment there is no requirement of writing in either context.

Ground two: the interpretation of “consent”

[37]Dalsouple France contends that consent to registration must be clear, distinct, unconditional and unequivocal. In support of this contention, Dalsouple France’s attorney submitted that “consent” must be interpreted in the same manner throughout the Directive and relied on the way in which the term had been interpreted by the Court of Justice of the European Union in the context of Article 7(1) of the Directive in Joined Cases C-414/99 to C-416/99 Zino Davidoff SA v A & G Imports Ltd [2001] ECR I-8731. In that case, the CJEU said “42. If the concept of consent were a matter for the national laws of the Member States, the consequence for trade mark proprietors could be that protection would vary according to the legal system concerned. The objective of ‘the same protection under the legal systems of all the Member States’ set out in the ninth recital in the preamble to Directive 89/104, where it is described as ‘fundamental’, would not be attained. 43. It therefore falls to the Court to supply a uniform interpretation of the concept of ‘consent’ to the placing of goods on the market within the EEA as referred to in Article 7(1) of the Directive. …45. In view of its serious effect in extinguishing the exclusive rights of the proprietors of the trade marks in issue in the main proceedings (rights which enable them to control the initial marketing in the EEA), consent must be so expressed that an intention to renounce those rights is unequivocally demonstrated.46. Such intention will normally be gathered from an express statement of consent. Nevertheless, it is conceivable that consent may, in some cases, be inferred from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market outside the EEA which, in the view of the national court, unequivocally demonstrate that the proprietor has renounced his rights.”[38]Notwithstanding the argument of counsel for the Respondents to the contrary, I accept that “consent” in Article 4(5) of the Directive must be given an autonomous and uniform interpretation and that it should be interpreted in like manner to “consent” in Article 7(1). Just as consent in that context has the serious effect of extinguishing the exclusive rights of the trade mark proprietor, so too consent in the context of Article 4(5) may have the serious effect of extinguishing earlier trade mark or other rights owned by the person alleged to have consented to registration. Accordingly, I accept that consent must be so expressed that an intention to renounce those rights is unequivocally demonstrated.[39]Although I have some doubts as to whether the same approach should be adopted in the context of Article 3(2)(d) of the Directive, I shall assume that this is the case.[40]As counsel for the Respondents submitted, however, the CJEU was clear in Zino Davidoff that an express statement of consent does amount to an unequivocal demonstration of an intention to renounce rights. Whether an express statement of consent was in fact made is a matter for determination by national courts or tribunals in accordance with their own rules of evidence and procedure, as indicated by recital 6 of the Directive.[41]In this regard, counsel for the Respondents accepted that the burden of proving consent lay upon the Respondents as the party making that allegation. He submitted, however, that the standard of proof was the ordinary civil standard. In support of this submission, he relied upon the decision of the Court of Appeal in Mastercigars Direct Ltd v Hunters & Frankau Ltd [2007] EWCA Civ 176, [2007] RPC 24, which was concerned with the interpretation of Zino Davidoff in circumstances where it was argued that implied consent had been given to the importation of trade marked goods into the EEA. Jacob LJ said “17. … I also accept that the onus lies on the defendant to prove consent express or implied. But I do not go as far as Mr Arnold seemed to suggest, that the onus lay on the defendant to prove implied consent to what English law calls the criminal standard of proof, namely beyond a reasonable doubt.18. He sought to get that from the court's use of the word ‘unequivocal’ or ‘unequivocally’ in [45], [46], [47], [53] and its answer to the first question and from Roche Products Ltd v Kent Pharmaceuticals Ltd [2006] EWCA Civ 1775 .19. I do not think the court's repeated use of the word ‘unequivocal’ is about standard of proof at all. What the court was concerned with is acts of the proprietor which do not show that he must have consented to marketing in the EEA. It was not concerned with a standard of proof of those acts.It was saying that a proved act which is merely consistent with such consent, but also consistent with its absence is not enough. All the examples considered in Davidoff are of that type.”[42]I accept this submission. I would add that the House of Lords and the Supreme Court have held that there is only one civil standard of proof, namely proof on the balance of probabilities, and that there is no necessary connection between the seriousness of an allegation and the improbability that it has taken place: see In re B [2008] UKHL 35, [2009] AC 11 at [15] and Re S-B (Children) (Care Proceedings: Standard of Proof) [2009] UKSC 17, [2010] 1 AC 678 at [34].[43]In summary, consent must be so expressed that an intention to renounce the consenter’s rights is unequivocally demonstrated, but an express statement of consent satisfies that requirement. Whether an express statement of consent has been made is a question of fact to be determined in accordance with the normal civil rules of evidence. The burden of proof lies on the party making the allegation, but the standard of proof is the ordinary civil standard of the balance of probabilities. The mere fact that the allegation is one of some seriousness does not in itself mean that it is improbable.[44]In the present case the Hearing Officer found on the balance of probabilities that Raymond Mortoire had expressly consented to the registration of the trade mark DALSOUPLE in the UK. I see no error of law in his approach to the determination of this question.[45]Dalsouple France’s attorney submitted that Mr Gaukroger’s evidence was lacking in particularity: Mr Gaukroger had not specified the precise words used by Raymond Mortoire, nor had he stated that exact date or place of the conversation, whether anyone else was present or the circumstances of the conversation. Accordingly, he submitted, even taken at face value, Mr Gaukroger’s evidence did not unequivocally demonstrate an intention on the part of Raymond Mortoire to renounce Dalsouple France’s rights.[46]I do not accept these submissions. Given the passage of time, it is not surprising that Mr Gaukroger did not recall the precise words used by Raymond Mortoire, but he gave the gist of them. It is equally unsurprising that he did not recall the precise date, but he made it clear that it was sometime in 1998. As for the other points, reading Mr Gaukroger’s evidence as a whole, it seems clear that he was saying that the conversation took place by telephone following his conversation with Bruno Mortoire about the German registration.[47]It is fair to say that it was only when cross-examined that Mr Gaukroger referred to his prior conversation with Bruno Mortoire. It was this that led to Dalsouple France’s attempt to adduce further evidence on appeal, consisting of a witness statement from Bruno Mortoire. As I explained in more detail in my ruling on that application, however, Dalsouple France failed to adduce evidence from Bruno Mortoire before the Hearing Officer even though it was clear from both sides’ evidence that he was potentially a significant witness. In particular, Dalsouple France did not obtain evidence from Bruno Mortoire to confirm Pierre Mortoire’s hearsay statement that Raymond Mortoire had not mentioned to Bruno Mortoire that he had consented to Mr Gaukroger registering the trade mark. No proper explanation was given by Dalsouple France for its failure to obtain a witness statement from Bruno Mortoire at that stage. If Dalsouple France had called Bruno Mortoire, he could have been asked to respond orally to Mr Gaukroger’s account of their conversation. As it was, the Hearing Officer had to assess Mr Gaukroger’s evidence without the benefit of any evidence from Bruno Mortoire. Furthermore, Mrs Gaukroger had referred in her witness statement to the fact that Dalsouple France’s German distributor had registered the trade mark in Germany, and had exhibited the details of the registration. I shall return to this point below.[48]Dalsouple France’s attorney also submitted that it was not sufficient for the Respondents to prove that Raymond Mortoire had consented to Mr Gaukroger applying to register the mark in the UK, it was necessary for them to go further and prove that Raymond Mortoire had consented to Mr Gaukroger applying to register it in his own name. He further submitted that the Hearing Officer had failed to distinguish between the former and the latter.[49]I accept the first limb of this submission, but not the second. It would not have assisted the Respondents to prove that Raymond Mortoire had consented to Mr Gaukroger applying to register the mark in the UK on behalf of Dalsouple France. But that was not Mr Gaukroger’s evidence. Mr Gaukroger’s evidence was to the effect that Raymond Mortoire had consented to Mr Gaukroger applying to register the mark on his own behalf. I do not consider that the Hearing Officer fell into the error he is accused of.[50]Subject to Dalsouple France’s other grounds of appeal, I conclude that, on the Hearing Officer’s finding of fact, Raymond Mortoire made an express oral statement of consent and thus unequivocally demonstrated an intention to renounce Dalsouple France’s right to prevent Mr Gaukroger registering the trade mark in the UK. There is no dispute that Raymond Mortoire had full authority to give such consent on behalf of Dalsouple France.

Ground three: inconsistency

[51]The Hearing Officer’s finding at [56] was thatRaymond Mortoire consented to DDL applying to register the trade mark DALSOUPLE in its own name, but there is no dispute that it was Mr Gaukroger who applied to register UK458, not DDL. Dalsouple France contends that this vitiates the Hearing Officer’s conclusion that the registration was consented to: on the basis of the Hearing Officer’s own finding of fact, Dalsouple France did not consent to Mr Gaukroger registering the trade mark.[52]I do not accept this contention. In my judgment this is a classic example of a situation where the judgment could have been better expressed, but this does not undermine the Hearing Officer’s essential reasoning and conclusion. As counsel for the Respondents pointed out, it is clear from the decision (e.g. at [3(a)] and [6(a)]) that the Hearing Officer was aware that Mr Gaukroger had made the application to register UK458. Furthermore, it is equally clear from the decision (e.g. at [32] and [43]) that the Hearing Officer appreciated that, onMr Gaukroger’s account, Raymond Mortoire had consented to Mr Gaukroger registering the mark. Finally, it is also clear from the Hearing Officer’s decision (in particular at [52] and [54]) that he accepted Mr Gaukroger’s account. Given that, as the Hearing Officer recorded in the decision (e.g. at [6(c)] and [7]), DDL was principally owned by, and controlled by, Mr Gaukroger, it is understandable that, towards the end of the passage quoted above, the Hearing Officer conflated Mr Gaukroger and his company. Thus it is clear that what Hearing Officer meant to say at [56] was that Raymond Mortoire had consented to Mr Gaukroger applying to register the trade mark DALSOUPLE in his own name.

Ground four: improbability

[53]Dalsouple France contends that the Hearing Officer failed to recognise the improbability that Raymond Mortoire had consented to the registration of the trade mark by Mr Gaukroger. Dalsouple France’s attorney submitted that this was both inherently improbable and improbable in the light of Pierre Mortoire’s evidence that his father had not mentioned any such conversation and would not have done such a thing.[54]I do not accept this contention. As I read the decision, in particular at [51]-[52] and [54], the Hearing Officer did recognise that it was unlikely that Raymond Mortoire would have consented to the registration of the trade mark by Mr Gaukroger for the reasons given by Dalsouple France’s attorney. As he also recognised, however, that did not mean that it was impossible. Although it was improbable, Mr Gaukroger had given positive evidence that Raymond Mortoire had consented. The Hearing Officer found Mr Gaukroger to be a truthful and very plausible witness (indeed, as discussed below, his veracity was not challenged). Even if Mr Gaukroger’s evidence on the point had stood alone, the Hearing Officer would have been entitled to accept it. As the Hearing Officer recognised, however, it did not stand alone, but was supported by other evidence. In particular, it was supported by the undisputed fact that Dalsouple France’s German distributor had registered the mark in Germany, and the absence of any evidence that Dalsouple France had objected to this.

Ground five: conjecture and speculation

[55]Dalsouple France contends that the Hearing Officer was wrong to consider what was “possible” and “plausible”: the fact that something was possible, or even plausible, did not make it probable. Furthermore, this amounted to impermissible conjecture and speculation on the part of the Hearing Officer.[56]I do not accept this contention. In considering the significance of Pierre Mortoire’s evidence that his father had not mentioned any such consent to him, which the Hearing Officer clearly accepted, the Hearing Officer rightly considered whether this excluded the possibilities that Raymond Mortoire had consented, but either he had not told Pierre Mortoire or he had told Pierre Mortoire and Pierre Mortoire had forgotten this. He rightly concluded that Pierre Mortoire’s evidence did not exclude those possibilities. Accordingly, Pierre Mortoire’s evidence did not directly conflict with Mr Gaukroger’s evidence. In considering the matter in that way, the Hearing Officer was not confusing possibilities with probabilities. Nor was he engaging in conjecture or speculation. Rather, he was properly analysing the effect of the evidence.

Ground six: the agency agreement and trust

[57]Dalsouple France contends that the Hearing Officer wrongly failed to take the agency agreement into account, and that he should have concluded that UK458 was held on trust for Dalsouple France. Although related, these are in fact distinct points which it is necessary to consider separately.[58]First, Dalsouple France’s attorney submitted that the Hearing Officer had wrongly failed to take the agency agreement into account. As to this, it is clear that the Hearing Officer was mindful of the agency agreement, because he expressly referred to in his decision (e.g. at [13]). It is true that he did not expressly take it into account when deciding the issue on consent. It appears that the reason for this was that he did not determine the second and third of the core issues he had identified. It is reasonably clear, however, that he approached the issue of consent on the assumption that Dalsouple France had the earlier rights it claimed, which is why he accepted that it was inherently improbable that Raymond Mortoire had consented (see in particular [51]-[52] and [54]). It follows that taking the agency agreement into account would have made no difference, even assuming that it had the effect contended for by Dalsouple France (which the Respondents dispute).[59]Secondly, Dalsouple France’s attorney submitted that the Hearing Officer should have held that Mr Gaukroger (and now Dalhaus) held UK458 on trust for Dalsouple France, having regard both to the agency agreement and the Hearing Officer’s own finding (at [54]) that Raymond Mortoire “trusted [Mr Gaukroger] to register the mark in the UK” . In my judgment there are two answers to this submission. The first answer is that, as discussed above, the Hearing Officer held that Raymond Mortoire had consented to Mr Gaukroger applying to register the trade mark on his own behalf. It follows that, on the Hearing Officer’s findings of fact, there is no foundation for the assertion that the UK458 was held on trust for Dalsouple France. The second answer is that, if Dalsouple France wished to contend that Dalhaus held UK458 on trust for Dalsouple France, then its proper course was to apply to this Court for a declaration to that effect: see Ennis v Lovell (O/148/14) at [22] (Geoffrey Hobbs QC sitting as the Appointed Person).

Ground seven: CTM175

[60]Dalsouple France contends that the Hearing Officer wrongly failed to consider the position regarding CTM175. Dalsouple France’s attorney pointed out that Mr Gaukroger’s evidence was that Pierre Mortoire had consented to Dalhaus applying to register the trade mark as a CTM in 2004, while Pierre Mortoire had denied this. He submitted that the Hearing Officer should have resolved this dispute, which would have assisted him to determine the issue regarding consent to the registration of UK458.[61]I do not accept this submission, for a number of reasons. First, it is clear from the Hearing Officer’s decision (at [57]) that the Hearing Officer was acutely conscious of the fact that OHIM was seized of the issue with respect to the alleged 2004 consent. It is manifest that the Hearing Officer therefore appreciated that he should not attempt to determine that issue. Secondly, as the Hearing Officer rightly said, the issues were distinct: the issue before OHIM concerned an allegation of consent by a different person in respect of a different territory allegedly given six years later. Thus, even if Mr Gaukroger was wrong about the alleged consent by Pierre Mortoire to registration of a CTM in 2004, it would not necessarily follow that he was wrong about the alleged consent by Raymond Mortoire to registration of a UK trade mark in 1998. Thirdly, as counsel for the Respondents pointed out, Dalsouple France’s attorney did not challenge Mr Gaukroger‘s evidence concerning the alleged 2004 consent in cross-examination (and as a result counsel did not cross-examine Pierre Mortoire on the point either).In those circumstances, for the reasons explained below, it would not have been open to Dalsouple France to invite the Hearing Officer to reject Mr Gaukroger’s evidence on the point.

Ground eight: KRAIBURG

[62]Dalsouple France contends that the Hearing Officer failed properly to consider the position regarding the KRAIBURG trade mark. As Dalsouple France’s attorney acknowledged, the Hearing Officer did set out the evidence concerning this issue in his decision (at [30] and [34]). As Dalsouple France’s attorney also acknowledged, the Hearing Officer also accepted Mrs Gaukroger’s explanation for what she had done (at [55]). He nevertheless submitted that the Hearing Officer had wrongly failed to take into account Mr Bartlett’s evidence regarding what Mr Gaukroger had said about the matter.[63]I do not accept this submission. While it is true that the Hearing Officer did not reach a conclusion as to whether Mr Gaukroger had made the statement attributed to him by Mr Bartlett, he did consider the underlying facts regarding the registration in question. On his findings, this did not amount to similar fact evidence supporting Dalsouple France’s case.

Respondents’ Notice

[64]The Respondents contend that the Hearing Officer’s decision should be affirmed on a number of additional grounds. It is only necessary for me to mention one. This is that Dalsouple France’s attorney neither put it to Mr Gaukroger in cross-examination, nor submitted to the Hearing Officer in his closing submissions, that Mr Gaukroger’s evidence about his conversation with Raymond Mortoire was untruthful. Indeed, when counsel for the Respondents had raised this point before the Hearing Officer, Dalsouple France’s attorney expressly stated that he was not submitting that Mr Gaukroger had lied, but only that there was “insufficient detail” in Mr Gaukroger’s account to enable the Hearing Officer to conclude that Raymond Mortoire had consented to registration of the trade mark by Mr Gaukroger. In those circumstances, counsel for the Respondents submitted that it was not open to Dalsouple France to contend that Mr Gaukroger’s account was untruthful.[65]In support of this submission, counsel for the Respondents relied on the statement by the Court of Appeal in Markem Corp v Zipher Ltd [2005] EWC Civ 267, [2005] RPC 31, applying Browne v Dunn (1894) 6 R 67 and Allied Pastoral Holdings v Federal Commissioner of Taxation (1983) 44 ALR 607, that a witness whose credibility is to be impeached must be challenged in cross-examination. As Jacob LJ said at [61]:
“We think all that applies here. It is not necessary to explore the limits of the rule in Browne v Dunn for this case falls squarely within it. Indeed the position is stronger here, for the judge was not even asked to disbelieve the witnesses.”
[66]Dalsouple France’s attorney relied on what I had said when sitting as the Appointed Person in BRUTT Trade Mark [2007] RPC 19 at [23], namely that giving a witness a proper opportunity to deal with a point does not necessarily require cross-examination in Registry proceedings where written evidence is served sequentially. Where a witness is cross-examined, however, the rule in Browne v Dunn applies.[67]Accordingly, I agree with counsel for the Respondents that it was not, and is not, open to Dalsouple France to contend that Mr Gaukroger’s evidence was untruthful. In my judgment, however, this does not provide an additional reason for affirming the Hearing Officer’s decision. As discussed above, I think it is clear that the Hearing Officer proceeded on the basis that both Mr Gaukroger and Pierre Mortoire were truthful witnesses. He therefore had to consider whether their evidence could be reconciled, and concluded that it could. He also concluded on the balance of probabilities, in the light of Mr Gaukroger’s evidence and other evidence, that Raymond Mortoire had consented to Mr Gaukroger registering the trade mark in the UK. For the reasons given above, I consider that he was entitled to reach that conclusion.

Conclusion

[68]The appeal is dismissed.

Cited in 3 later judgments