Massimo Osti SRL v Global Design And Innovation Ltd & Anor, Court of Appeal - Chancery Division, August 30, 2018, [2018] EWHC 2263 (Ch)

Resolution Date:August 30, 2018
Issuing Organization:Chancery Division
Actores:Massimo Osti SRL v Global Design And Innovation Ltd & Anor
 
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Neutral Citation Number: [2018] EWHC 2263 (Ch)

Case No: IL-2018-000019

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice, Rolls Building

Fetter Lane, London, EC4A 1NL

Date: 30/8/2018

Before:

MASTER CLARK

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Between:

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Jeremy Heald (instructed by Bird & Bird LLP) for the Claimant

Tim Austen (instructed by Collyer Bristow) for the Defendants

Hearing date: 25 July 2018

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Judgment ApprovedMaster Clark:

Application

  1. This is the claimant's application dated 19 February 2018 seeking to set aside my order dated 2 February 2018 (``the transfer order'') transferring the claim to the IPEC. The order was made at the triage stage on the court's own initiative. The application has a protracted procedural history, which it is unnecessary to recount for present purposes.

    Evidence

  2. The evidence on behalf of the claimant was contained in:

    (1) the second witness statement dated 16 April 2018 of its solicitor, Ewan James Grist (``Grist 1'');

    (2) the third witness statement dated 10 May 2018 of Mr Grist (``Grist 3'');

    (3) the fourth witness statement dated 14 May 2018 of Mr Grist (``Grist 4'');

    (4) the fifth witness statement dated 10 July 2018 of Mr Grist (``Grist 5'').

  3. The evidence on behalf of the defendants was contained in:

    (1) first witness statement dated 3 May 2018 of their solicitor, Patrick John Wheeler (``Wheeler 1'');

    (2) the second witness statement dated 14 May 2018 of Mr Wheeler (``Wheeler 2'')

    (3) the third witness statement dated 17 July 2018 of Mr Wheeler (``Wheeler 3'').

    Parties and the claim

  4. The claimant, Massimo Osti SRL maintains the archive of an influential garment engineer and fashion designer, Massimo Osti, and offers fashion and design consultancy services and under the name ``Massimo Osti Archive''. It is the owner of two trade marks (``the Marks''), both registered in respect of goods in classes including 25 (clothing, footwear, headgear):

    (1) EUTM no. 5225339 for the word mark MASSIMO OSTI;

    (2) International Registration no. 1039334 for a figurative mark comprising the words MASSIMO OSTI ARCHIVE.

  5. The first defendant, Global Design and Innovation Limited (``D1''), designs, makes and sells clothing under the ``MA.STRUM'' brand in the UK. It was incorporated on 9 February 2011 by the 2nd defendant, Mr John Sharp, who has at all material times been its sole shareholder and a director. He is also its sole director, and has been at all relevant times, other than the period 24 May 2011 to 1 October 2014.

  6. The claim is based on two causes of action: breach of contract and trademark infringement.

  7. The breach of contract claim arises in the following factual circumstances. The claimant was the licensor under a licence agreement dated 22 September 2010 (``the Licence'') between it and a third party, Global Design and Innovation LLC (`the Delaware company'), a Delaware registered company and founder of the ``MA.STRUM'' brand. Under article 2 of the Licence, the claimant authorised the Delaware company to use the marks ``MASSIMO OSTI ARCHIVE'' and ``INSPIRED BY MASSIMO OSTI ARCHIVE'' on goods within the classes for which the Marks are registered.

  8. The Licence included the following terms:

    (1) the term was 22 September 2010 to 31 December 2013, renewable by the written consent of the parties;

    (2) it provided for a ``sell-off'' period (during which items made during the term of the Licence could be sold) of 12 months following termination;

    (3) the royalty payable was 5% of the ``Actual Sales Amount'' of the co-branded products;

    (4) ``Actual Sales Amount'' is defined as the wholesale price charged by the Delaware company and/or its distributors/sub- distributors, less certain deductions.

  9. The claimant's invoices are addressed to the company named Global Design and Innovation, LLC at an address in New York (``the New York address''). Although this might appear to be the trading address of the Delaware company, the defendants' case is that the invoices were addressed to another company, with the same name as the Delaware company, registered under the laws of New York.

  10. The Delaware company was `cancelled'' under Delaware law on 1 June 2011, and the claimant alleges, ceased to trade and has been wound up.

  11. Notwithstanding the ``cancellation'' of the Delaware company (and it is unclear when the claimant became aware of this), the claimant continued to send its invoices for royalties to ``Global Design and Innovation, LLC'' at the New York address. The particulars of claim alleges that these invoices were paid by a number of different companies, all of which are alleged to have been under the operational control of Mr Sharp.

    The Implied Licence

  12. In these circumstances, the claimant alleges, an implied agreement (`the Implied Licence'') arose between the claimant and the defendants. The terms of this licence are alleged to be:

    (1) the claimant agreed to consent to the defendants' use of the Marks;

    (2) the defendants agreed to provide royalty statements and pay royalties to the claimant for such use on the same basis as under the Licence;

    (3) the term of the Implied Licence was the same as that of the Licence.

  13. Accordingly, the claimant alleges that the Implied Licence expired on 31 December 2013 (subject to the sell-off period until 31 December 2014).

  14. The use of the Marks alleged by the claimant is use on goods co-branded with the Delaware company's ``MA.STRUM'' mark (``co-branded products'').

  15. In these circumstances, the claimant alleges the following breaches of the Implied Licence:

    (1) failure to pay licence fees totalling €79,835.80 for the period from 1 January 2013 to 31 December 2013;

    (2) failure to provide royalty statements for the period 1 July 2013 to 31 December 2014;

    (3) failure to pay royalties due for that period.

    Trademark infringement

  16. The claim for royalties for the period ending on 31 December 2014 is also pleaded, in the alternative, on the basis that the defendants' use of the Marks was not pursuant to the Implied Licence, as a claim for damages for infringement of the Marks.

  17. The claimant also alleges that the defendants have continued to use the Marks after 31 December 2014 (i.e. after the end of the sell-off period), and thereby infringed them.

    Claim against Mr Sharp

  18. There is also an independent claim against Mr Sharp, based on his being a joint tortfeasor with D1.

    Relief

  19. The relief sought is

    (1) €79,835.80, unpaid royalties under the Implied Licence;

    (2) damages for breach of the Implied Licence;

    (3)...

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