Her Honour Judge Melissa Clarke:
- This is a reserved judgment following the trial on 8 and 9 June 2016 of a claim for trade mark infringement and passing off which was issued in the Intellectual Property Enterprise Court on 17 November 2014.
- The Claimant ("Oran") is an Irish company, based in the town of Oranmore in Galway, which manufactures and sells precast concrete products. It is a family company which was set up by two brothers and a brother-in-law: Michael Melville, Peter Melville and Donall Dooley (married to their sister Noreen Mary Melville) in order to continue the existing family precast concrete business run since the mid 1970s through a previous company. Oran was incorporated in 1996 and has sold and offered for sale precast concrete products and related design and construction services in Ireland since that date and in the UK since 2008. Since its incorporation it has utilised a large number of other family members from that and the next generation as directors and employees.
- The First Defendant ("Oranmore") is an UK company based in Weeting, Norfolk. It also manufactures and sells precast concrete products and sells related design and construction services. It was incorporated in October 2011 and has traded in the UK since March 2012. The Second Defendant (Ross Melville) and Third Defendant (Richard Burke) are the founders and directors of Oranmore. Ross Melville was formerly a director of Oran. Richard Burke was formerly Oran's General Manager. They are related to many of the current directors, shareholders and employees of Oran by marriage or blood. Ross Melville is Michael Melville's son. Richard Burke was married to Donall Dooley's daughter Linda. From October 2011 to September 2014 Ross Melville was a director of both companies, Oran and Oranmore, simultaneously.
- This case, therefore, involves a family dispute in a business context.
- Oran is represented before me by Mr Thomas Moody-Stuart, Queen's Counsel, and the Defendants are represented by Mr Gwylim Harbottle. They both filed comprehensive skeleton arguments. On 18 July 2016 I invited further submissions on two authorities which had not been cited to me but on which I proposed to rely. Both Mr Moody-Stuart and Mr Harbottle took the opportunity to file further written submissions on 20 July 2016. I thank both of them very much for their clear and concise skeleton arguments, their skilful written and oral submissions and the efficient, timely and effective manner in which they conducted the trial.
- By a case management order dated 26 November 2015, His Honour Judge Hacon identified a list of issues. He permitted Oran to serve no more than five witness statements dealing with the issues of confusion and deception and two witness statements dealing with the other issues. He permitted the Defendants to serve two witness statements.
- Oran did not use its full allotment of witnesses. I heard from three officers/employees of Oran: Derek Duffy (Managing Director); John Dooley (Director); and Christina Lines (Senior Quantity Surveyor). Derek Duffy and John Dooley filed two witness statements each and Christina Lines filed one. All were cross-examined and re-examined.
- The Defendants called Richard Burke and Ross Melville, to give evidence for themselves and for Oranmore. They each filed two witness statements and were cross-examined and re-examined. On 6 May 2016 I permitted the Defendants also to rely on paragraphs 1 to 9 of the witness statement of Sean Sharkey, a previous employee of Oran and now the commercial manager of Hollowcore Solutions Limited, a company which exclusively provides design and management consultancy services to Oranmore and which is based on the same industrial estate in Oranmore, Galway, in which Oran is based. He also carries out freelance sales for Oranmore. He was cross-examined on that evidence.
- The main witnesses were John Dooley for Oran and Ross Melville and Richard Burke for Oranmore.
- John Dooley presented as an articulate, courteous and controlled witness, but it was clear to me that he is hurt by, and resents, what he perceives to be the unfair actions of his first cousin and ex brother-in-law in setting up Oranmore and trading in identical products to Oran. As he gave his evidence he struck me as a non-confrontational person who would harbour that sort of deep resentment mainly in silence, only allowing it to surface in the form of occasional angry and sarcastic comments. As a witness, I found him to be basically honest but capable of misrepresenting the truth in order to further his case. I have no doubt that he felt that was justified, but of course it is not. For example, his evidence that: "the negotiations which led to me signing [the Compromise Agreement] in May 2013 were all one continuous chain of discussions which started in 2011 and had nothing to do with Oranmore" sits ill with Derek Duffy's evidence, which I accept, that (i) Oran did not feel able to bring a claim for use of the Oranmore name until Richard Burke's back pay claim had been settled; and (ii) "the dispute with Richard as to his severance and his claim for €600,000 was resolved in May 2013 and it was a week or so later that we met with Acumen Business Law for the first time. We were advised to apply for a UK trade Mark for the Claimant's trading name. I discussed this with the Claimant's directors (with the exception of Ross… and Michael…) and we agreed that I would instruct Acumen Business Law to apply for a Trade Mark in the UK, which I subsequently did". I found Ross Melville to be a more obviously unsatisfactory witness. He was rather evasive and argumentative, resistant to giving a direct answer if he felt it might compromise his position, and on a number of occasions sought to establish what the line of questioning was seeking to establish before answering the questions. Richard Burke was less emotionally involved, gave his evidence in a more straightforward fashion and made the odd concession where necessary, but on a central point of whether he knew that Oran objected to the use of the Oranmore Signs I found him to be less than truthful. I treat the evidence of all three witnesses with some caution. For those reasons I don't prefer the evidence of one or the other where there is a dispute, but seek corroboration from other credible evidence or the inherent probabilities of the matter before weighing the competing arguments and deciding which account is more likely than not.
- I found the minor witnesses Christina Lines, Sean Sharkey and Derek Duffy to be honest and credible witnesses who did their best to assist the court. Sean Sharkey's evidence was limited in subject matter and, ultimately, of limited assistance. I found Christina Lines to be a particularly reliable and impressive witness. Derek Duffy made appropriate admissions and was careful only to provide evidence within his own experience. I do not accept some of his evidence but I do not believe he sought to actively mislead the court.
- Oran claims for infringement of its UK registered trade mark number 3021545 for the mark ORAN PRE-CAST ("the Registered Mark") in respect of the Defendants' use of the signs ORANMORE PRE-CAST / ORANMORE PRECAST / ORANMORE (in the form of the internet domain www.oranmore.co.uk) (the "ORANMORE Signs") both with and without the First Defendant's Device (set out in Annex 1 to this judgment). Oran applied for the Registered Mark on 11 September 2013 and it was registered on 6 December 2013. The trade mark infringement claim therefore relates only to Oranmore's trade after 6 December 2013.
- Oran claims for passing off in respect of the Defendants' use of the ORANMORE Signs both with and without the First Defendant's Device. The passing off claim relates to Oranmore's trade since it started trading in March 2012.
- Oran's pleaded case is that the acts of Oranmore are procured and controlled by Ross Melville and Richard Burke and are carried out pursuant to a common design of all three defendants. Specifically, Oran pleads that Ross Melville and Richard Burke were responsible for the choice of Oranmore's company name and the decision to use the ORANMORE Signs and the First Defendant's Device. For the purposes of this claim, Ross Melville and Richard Burke admit liability for any such acts of Oranmore found to be unlawful.
- Issue 1 (the nature of Oran's goodwill) is no longer contested by the Defendants who accept that Oran supplied identical and similar goods and services in the UK, including Hollowcore, to those traded by Oranmore both before and after Oranmore's incorporation and commencement of trade.
- Issue 2 (Oranmore's trade) is no longer contested by Oran, which accepts that Oranmore has traded in Hollowcore, precast concrete products, stair flights, landings and floors since March 2012.
- It is common ground that Oranmore has used the ORANMORE Signs in respect of goods and services identical or similar to the goods and services for which the Registered Mark is registered, namely Classes 19 (preformed concrete building elements; Hollowcore flooring; concrete beams; concrete columns; concrete twin-wall materials; concrete plate flooring; concrete building frames; concrete stairs; concrete balconies), 37 (construction project management services) and 42 (design of buildings). There is identity in respect of the central goods and services in respect of which Oranmore trades, namely preformed concrete building elements, twinwall, Hollowcore flooring, concrete beams and columns, concrete stairs and construction management services.
Oran's position - Infringement
- Oran relies on trade mark infringement under section 10 (2) of the Trade Mark Act 1994 (the "1994 Act"). The issues relevant to this are Issues 3 to 5 and 10. Also relevant are Issues 13 and 14, as lack of consent is necessary for founding the cause of action. However the parties have treated consent as a defence and so I will refer to it below. Oran relies on evidence of what it says are a number of instances of actual confusion, but says that even without such evidence, the names ORAN PRE-CAST and ORANMORE PRECAST are simply too close to co-exist in competing businesses without confusion.
Oran's Position - Passing off
- Oran's case is that the ORANMORE Signs with or without the First Defendant's Device are very closely similar to Oran's trading style (namely the word mark ORAN PRE-CAST and the OP Device set out in Annex 1 to this judgment) and in each case their use is likely to lead to deception on the part of the public which has damaged, and is likely to further damage, its trade. The relevant issues are Issues 6 – 10. In order to show deception it relies on the same evidence of confusion as it relies on in the infringement claim.
- The Defendants plead three defences:
i) they assert that Oran has consented to the use by Oranmore:
a) of the ORANMORE Signs, by an email sent from John Dooley, a director of Oran, to Ross Melville on 7 December 2011 (the "7.12.11 Email"). Strictly speaking, consent is not a defence to infringement. Rather, lack of consent is part of the cause of action. However having raised consent, it is common ground that it is for the Defendants to prove it. The relevant issues are Issues 13(a), 13(b) and 14; and
b) of the First Defendant's Device, by a copyright licence granted by Michael Melville ("Copyright Licence"). The relevant issues are Issues 11 and 12;
ii) alternatively, they rely on the 7.12.11 Email and the Copyright Licence as constituting encouragement on the part of Oran to Oranmore to develop its business under the ORANMORE Signs amounting to acquiescence to the use now complained of. The relevant issues are Issues 15 - 20;
iii) they assert that the claims were released and/or discharged pursuant to a compromise agreement entered into by exchange of three letters between Oran and Richard Burke on 17 May 2013 as further described below (the "Compromise Agreement"), in which Oran stated that it had "no claim against you, Richard Burke, in contract, common law and/or statute"; and this had the effect of releasing him from:
a) any claims that Oran may have had against him as at 17 May 2013, including claims arising out of the use of the ORANMORE Signs or the First Defendant's Device; and
b) any claims that Oran may have against him arising out of the continued use of the ORANMORE Signs or the First Defendant's Device after 17 May 2013;
and that the effect of such release and/or discharge was also to release and/or discharge Oranmore and Ross Melville, as joint tortfeasors with Richard Burke if such claims were proven, from any liability to Oran. The relevant issues are Issues 21 – 23.
- If the Compromise Agreement defence is successful it will be an answer to the entire claim. Accordingly, I will consider the Compromise Agreement first.
Relevant matrix of facts
The setting up and trading of Oranmore
- Except to the extent stated, these facts are not in dispute. As I say, Oran had been in the business of manufacture and sale of precast concrete products in Oranmore since 1996. In fact the family had been in that business for longer, since the mid 1970s, albeit through a different company.
- Richard Burke became the General Manager of Oran in June 2002. Oran began trading in the UK under the mark ORAN PRE-CAST and the OP Device in the course of 2008. Ross Melville was appointed a director of Oran in September 2010. Following his appointment, the directors of Oran comprised Donall Dooley and his son John Dooley; Michael Melville and his son Ross Melville; and Peter Melville and his son Alan Melville. Richard Burke continued as General Manager.
- In mid 2011, Richard Burke and Ross Melville became aware that the lease of a pre-cast concrete manufacturing facility in Weeting, Norfolk, UK (the "Weeting facility") was back on the market. Oran had previously looked at leasing the Weeting facility in 2008, but Tarmac took a three year lease instead. That lease was coming to an end and not being renewed. In late summer of 2011 they proposed to Oran's board that Oran acquire the lease to facilitate the expansion of Oran's trade in the UK. Oran rejected the proposal. There is a dispute about whether this happened in late September or mid-October 2011, and how exactly it happened. Nothing turns on this for the purposes of construing the Compromise Agreement, as it is accepted by the Defendants that, at the latest, by the time of an Oran board meeting held on 18 October 2011 Richard Burke and Ross Melville knew that Oran had ceased considering acquiring the lease of the Weeting facility.
- Despite that, Richard Burke and Ross Melville continued their due diligence into the Weeting facility and entered into negotiations for the acquisition of the lease on their own account. On 21 October 2011 they incorporated Oranmore in the UK and became directors of it. They accept they could have informed, but did not inform, the other Oran directors of their intentions to take over the Weeting facility through the vehicle of a proposed new company at the 18 October 2011 board meeting.
- Richard Burke and Ross Melville say that they reached their decisions in the context of a decision made by Oran in April 2011 to cease selling Hollowcore into the UK market. Oran dispute that any such decision was made. Its position is that it had made a temporary decision to move its focus away from the UK Hollowcore market in light of unusually high transport costs between Ireland and the UK at that time, which reduced the profit margins that could be made from Hollowcore to uneconomic levels. Whether Oran had made a decision to pull out of the UK market or not is a dispute I will need to resolve.
- In the first week of December 2011, John Dooley undertook a UK company search and discovered that Richard Burke and Ross Melville were directors of the newly incorporated Oranmore. At a meeting between those three parties in the first week of December, John Dooley told them that he was aware of the existence of such a company and what it was called, so they should tell him its name. They confirmed that it was called Oranmore. There is a dispute between the parties about whether there was any discussion of what the trading name of the new company would be. John Dooley's evidence is that he asked if it would trade under that name and Ross Melville told him "it could be anything, it's a work in progress." Ross Melville disputes that, and both he and Richard Burke say that John Dooley did not make any comment or complaint about the name of Oranmore. That is a matter I will have to determine. I note as an aside that all parties accept that by the time of entry into the Compromise Agreement in May 2013, Oran was aware that Oranmore was trading under that name.
- On 7 December 2011 John Dooley sent Ross Melville the 7.12.11 Email from his personal email address, which stated: "I just wanted to send this email with regard to the new venture. I really don't have a problem with the overall situation now that it's out in the open. I personally don't have a problem with Vinny's redundancy situation, I would like to get some clarity on Richards [sic] situation and maybe firm up on the timescale and we can all then get our focus back. The 3 of us need to sit down and make some decisions on OPC when you get back. I'm sure there will be opportunities for both companies to help each other out going forward. I had a couple of good conversations with Richard on Monday and Tuesday about it and I believe if we all pull together and be straight up about things we shouldn't have any problem. Again, I do wish ye luck with it." The Defendants rely on this as an unlimited, irrevocable consent provided by a director of Oran to use the ORANMORE Signs in renunciation of Oran's own rights. Oran says it is nothing of the sort, merely a friendly email sent in his personal capacity with no intention to bind Oran. This is a matter I need to determine.
- On 8 December 2011, Oranmore signed a 10 year lease for the Weeting facility.
- It is Oran's case, strongly disputed by the Defendants, that Ross Melville was asked by Alan Melville, a director of Oran, in John Dooley's presence and immediately before an Oran board meeting on 13 December 2011, to change the company name of Oranmore. Ross Melville says he did not attend the meeting as he was in the UK and has provided evidence that he booked and paid for a hotel in Norfolk on both 12 and 13 December 2011. This is a matter I will need to determine.
- Richard Burke ceased working for Oran on 30 December 2011 and began working full time for Oranmore, in the circumstances described in the next section below. Ross Melville continued as a director and shareholder of both Oran and Oranmore.
- In March 2012, Oranmore began trading in the UK under the sign ORANMORE PRECAST and the First Defendant's Device. Oranmore says that it obtained an oral licence of the copyright in the First Defendant's Device from Ross Melville's father, Michael Melville, in 'early 2012'. However that was reduced to writing by Michael Melville in the Copyright Licence, an undated document which Oranmore states was signed in 'mid 2012'. In its entirety that states "I, Michael Melville, of [home address] hereby give consent to ORANMORE PRECAST LIMITED to use the logo created by me in 1980 in my personal capacity. The logo is as indicated below; [logo]. Signed, Michael Melville." I will need to determine a number of issues about the relevance or otherwise of the Copyright Licence in the absence of a copyright infringement claim, and whether it amounts to consent from Oran to Oranmore to use the First Defendant's Device, when I consider the infringement claim. However in my judgment, those issues have little relevance to the Compromise Agreement.
- On 11 June 2012 John Dooley sent an email to Ross Melville, Richard Burke, Alan Melville and Derek Duffy signed by him as "John Dooley, Oranmore Precast Ltd" giving Oranmore's business address, phone numbers and web address and attaching the Defendant's OP logo. It does not appear to be disputed that this was a spoof or sarcastic email referring to his discovery that Sean Sharkey, a previous employee of Oran who had resigned in May 2012 telling John Dooley that he was going to be business developer for his brother's poker business, was now working with Oranmore.
- On 18 June 2012, Richard Burke sent John Dooley, Alan Melville and Ross Melville, from his Oranmore email address, an email attaching a document which he described as a "Letter of Interest" saying: "I am sending this email to see if you have any interest in working together. As you are aware I am spending a significant amount of time meeting main contractors, subcontractors, pre-casters and house builders across the UK… a number of these customers have requirements for other products which are not manufactured by ourselves i.e. walls, columns, beams, bridge beams, block and beam flooring. I am being asked on a regular basis to source these products or recommend a supplier. …I am open to the idea of working… with Oran Precast. When in a meeting and presented with the opportunity to sell other products, specifically yours, I think it is a wasted opportunity not to do so… If this is of interest to you can you come back to me as soon as possible as I need to revert back to potential clients promptly." He sent a chasing email on 22 June 2012 to which John Dooley replied "I'm on holiday and I don't give a toss!!... I find it all rather stressful and would prefer to be thinking about where my next pint is coming from and not precast… Oran or Oranmore etc!!!"
- On 29 June 2012 John Dooley sent Ross Melville a text message saying "Hi Ross, would you be available to meet with me on Monday to discuss Oran and Oranmore relationship going forward? I would like to discuss it with you as a director of both companies and me as a director of Oran and see where it goes from there. I would prefer to keep Richard out of it at this point if you don't mind."
- Oranmore relies on, inter alia, these three communications as evidence that Oran knew that Oranmore was trading under the ORANMORE Signs and First Defendant's Device at the latest by June 2012. Oran disputes that, but accepts that it knew that Oranmore was so trading by September 2012 at the latest.
- Oran accepts that neither by the time of the Compromise Agreement nor at any time before the letter before action relating to the present claims of February 2014, had it produced any explicit written expression of opposition to the use by Oranmore of its company name, the ORANMORE Signs or the First Defendant's Device.
Richard Burke's claims against Oran
- Richard Burke's position is that he had from 2002 - 2007 been drawing only part of his salary, and deferring the rest, under an arrangement agreed with Michael Melville. It is not now disputed that on 17 December 2007 Michael Melville, as a director of Oran, signed a document stating that "as at the 31st December 2007, Richard Burke, General Manager of Oran Pre-Cast Ltd is owed €400,000 (fore [sic] hundred Thousand Euro) Gross in outstanding back pay". On 11 December 2009 Michael Melville and Donall Dooley, as directors of Oran, signed a document stating that "as at the 31st December 2009, Richard Burke, General Manager of Oran Pre-Cast Ltd is owed €600,000 (Six Hundred Thousand Euro) Gross in outstanding back pay".
- On 24 May 2011 Richard Burke's solicitors wrote to Oran asking for payment of the €600,000 (the "Back Pay Claim").
- On 22 November 2011 Richard Burke had a meeting with John and Donall Dooley and told them (i) that he intended to leave Oran to work on a new project in the UK and (ii) that he was owed €600,000 of unpaid salary as per the Back Pay Claim.
- It is Richard Burke's case that he was given a letter on 20 December 2011 stating that he was to be made compulsorily redundant, which had been backdated to 18 November 2011. Oran relies on the letter as dated. In my judgment, nothing turns on this as both parties accept that he was made redundant and his last day of employment by Oran was 30 December 2011.
- On 6 January 2012, Richard Burke's solicitors sent a letter before action relating to the Back Pay Claim to Oran. It demanded payment of the full €600,000 within 14 days. Oran did not respond. Oran's case is that the letter was intercepted internally and not put before the Directors.
- On 9 March 2012, Richard Burke's solicitors notified Oran by letter that a summons been issued against it in the High Court of Ireland in the sum of €600,000. Oran did not respond. Again, Oran's case is that the letter was intercepted internally and not put before the Directors for some weeks.
- The Oran directors must have become aware of those letters, because on 25 April 2012, Oran and Richard Burke executed two agreements relating to the cessation of Richard Burke's employment by Oran: (i) a document signed by two directors of Oran settling his redundancy package by agreeing to pay him €9,615 holiday pay and €47,000 redundancy pay (the latter to be satisfied by payment of €16,692 in cash and the transfer of a Jeep motor car) ("2012 Redundancy Agreement"); and (ii) a document signed as a deed by an Oran director and also signed by Richard Burke, compromising his €600,000 Back Pay Claim by agreeing to pay him the sum of €125,000 net of taxes, in monthly instalments of €10,000, beginning on the date of signature ("2012 Back Pay Agreement"). Clause 3d of the latter agreement provided that in the event of Oran "failing, refusing and neglecting to any one of the instalments due and payable herein then in that event the total amount of the sums claimed in the aforesaid high Court proceedings shall become due and payable by the Company to the said Mr Burke.". Clause 3e provided that on receipt of the final instalment Richard Burke "acknowledges and accepts that he has no claim against the Company whether it be under statute or common law."
- Oran failed to make any instalment payments under the 2012 Back Pay Agreement and failed to make the cash payment element of the 2012 Redundancy Agreement, although the car was transferred. Accordingly, Richard Burke filed a claim for redundancy pay with the Irish Employment Appeals Tribunal on 22 November 2012 ("Redundancy Claim"). Oran disputed this claim, stating that all payments had been made, which it now accepts was not the case. Richard Burke also issued further proceedings at the High Court in Ireland for the Back Pay Claim in the full amount of €600,000, as he was entitled to do pursuant to clause 3d of the 2012 Back Pay Agreement.
- On 5 February 2013 the High Court of Ireland granted summary judgment against Oran in the sum of €600,000 (the "Back Pay Judgment"). That was notified to Oran by a letter from Mr Burke's solicitors of 26 February 2013 which demanded payment within 14 days. Oran made no payment.
- Richard Burke lodged an application in the Sheriff's Office for immediate execution of the Back Pay Judgment. The Sheriff notified Oran on 17 April 2013 that it had 4 days from receipt of the notice to pay €600,000 plus enforcement costs, failing which the Sheriff would seek to levy that amount against it by seizure and sale of goods or otherwise.
The Compromise Agreement
- Oran and Richard Burke entered into negotiations. Richard Burke was represented by his solicitors. Oran was not, although it had taken some legal advice upon receipt of the Sheriff's notice. John Dooley acknowledged in paragraph 15 of his first Witness Statement, and in oral evidence, that Richard Burke had informed Oran that he was not willing to waive his rights under the Back Pay Judgment unless he obtained a separate release of Oran's claims against him. Oran agreed to provide such a release.
- Accordingly, on 17 May 2013 Oran and Richard Burke entered into the Compromise Agreement, comprising three documents:
i) A letter from Richard Burke to Oran (the "Burke Release") stating:
"In consideration of the payment of the sum of €26,092, which payment I acknowledge in full and final settlement of all sums due and owing to me by Oran Pre-Cast Ltd whether arising by contract, common law and/or statute.
Further and [sic] consideration of the aforesaid payment I confirm I will instruct my Solicitors Steen O'Reilly 31/34 Trimgate Street, Navan to discontinue enforcement proceedings against your company arising from the High Court Judgement in the case: Richard Burke v Oran Pre-Cast Limited Record Number 2012/636S. I further confirm I have instructed by [sic] solicitors to withdraw such claims and actions that have been filed before the Employment Appeals Tribunal."
ii) A letter from Oran to Richard Burke (the "Oran Release") stating:
"In consideration of you compromising the amount due and owing to you on foot of High Court Judgement in the case: Richard Burke v Oran Pre-Cast Ltd Record Number: 2012/636S I confirm, on behalf of and under the authority of Oran Pre-Cast Ltd that Oran Pre-Cast Limited have no claim against you, Richard Burke, whether it be in contract, common law and/or statute."
iii) A document headed 'Discharge Form' signed by Richard Burke (the "Discharge Form") stating:
"I Richard Burke… hereby accept from Oran Pre-Cast Ltd… the net sum of €26,092 comprising notice, statutory redundancy, outstanding annual leave, ex-gratia payment and any monies owed by or to the company for termination of employment in full and final settlement of all statute and common law claims of every nature, type and kind whatsoever arising from my said former employment with the Company and the termination thereof by reason of my redundancy.
I hereby acknowledge and agree that this payment of €26,092 constitutes a full and final settlement of all claims (if any) which I may have against the Company, its parent, subsidiaries and associated companies and/or each and all of their respective officers, directors, employees and agents, whether such claims arise under contract, at common law, in tort, in equity and/or pursuant to statute (including but not limited to the Redundancy Payments Acts 1967 to 2001, the Minimum Notice and Terms of Employments Acts, 1973 to 2001, Protection of Employment Act, 1977 (as amended) Organisation of Working Time Act 1997, Payment of Wages Act 1991, Parental leave Act 1988, Maternity Protection Act 1994, Unfair Dismissals Acts 1977 to 2001, Employment Equality Act 1988 and National Minimum Wage Act 2000)."
- Richard Burke's evidence was that he signed the Compromise Agreement "on the basis that I was finished working with [Oran] and, free of any claims against me, I would now be able to get on with my life working for [Oranmore]". He said "I was only willing to compromise my claims worth over €600,000 on the basis that [Oran] had no further claims against me. I wanted to move on with my life."
- John Dooley's evidence is that Richard Burke wanted the separate release from Oran "to prevent us from pursuing him", "to make sure we could not come after him for anything he had taken after the company once he had left" and "so we would not pursue him in case anything came out after he left". At paragraph 15 of his witness statement, John Dooley stated that Oran could have pursued Richard Burke for sums of money arising from "a lot of malpractices on his part", and this was the reason why Richard Burke sought the Oran Release. He refers to conversations between Richard Burke and Donall Dooley at the end of 2011 to support his allegations. This is hearsay evidence. The court has not heard from Donall Dooley. Richard Burke strongly denies any such malpractices. There is no documentary evidence put before the court to corroborate these allegations and for the purposes of these proceedings, in my judgment, they are unfounded. For those reasons, I give John Dooley's evidence on this point no weight.
- The effect of the Compromise Agreement was that Richard Burke compromised his rights under the Redundancy Claim and the Back Pay Judgment for a total payment of €26,092. This is the same cash sum for which he had previously compromised his rights under the Redundancy Claim (but not the Back Pay Claim) in the 2012 Redundancy Agreement and effectively amounts to a waiver of the €600,000 awarded to him under the Back Pay Judgment.
- Oran provided Richard Burke with a cheque for €26,092 (plus another in payment of his agreed solicitor's costs) upon signature of the Compromise Agreement.
Oran's Financial Position at the time of the Compromise Agreement
- It is common ground that Oran was not in a financial position to easily meet the €600,000 Back Pay Judgment at the time of the Compromise Agreement. Oran's witness Derek Duffy stated in his witness statement that in 2012: "The dispute with Richard over his redundancy from [Oran] and the claim that he was asserting against [Oran] for €600,000 he claimed was owed to him, which is referred to in paragraphs 11 and 12 of John's witness statement with which I agree, threatened the solvency of [Oran]. [Oran] was therefore paralysed from taking any action in respect of the First Defendant's name throughout 2012 because if it did so, Richard could have pursued the winding up of [Oran] on the basis of his claim for €600,000". He confirmed in cross-examination that Oran's 'primary concern' throughout 2012 and into 2013 was its solvency.
- John Dooley stated in his 1st Witness statement that at the time of the negotiations and signature of the Compromise Agreement: "I was also aware of the risk to the company of having a judgment registered against it and so was focused on getting a settlement to draw a line under the court action in Ireland. The company would be in a dire position when trying to obtain credit if we had a judgment against it and so I wanted to settle this."
- Richard Burke, too, was aware of the potential implications to Oran of him enforcing his judgment, stating in paragraph 83 of his witness statement that he settled his claims for "a significantly reduced sum as [Oran] told me that they did not have sufficient funds and if I were to proceed for the full amount that it would result in redundancies within the company."
- None of this evidence was challenged in cross-examination.
Findings of fact on disputed issues
Did Oran make a specific decision to discontinue selling Hollowcore into the UK market in April 2011?
- John Dooley's evidence was that the move away from Hollowcore into the UK was only ever temporary, and arose because in 2011 there were problems with transport out of Ireland connected with the peat crisis. Accordingly profit margins on Hollowcore were reduced as Hollowcore was a lower-margin, bulky, heavy and difficult to transport product. He said (i) there was no point in exporting Hollowcore at that time if there were no profits to be made; (ii) profits could be made later when the industry became busier and the transport crisis eased, as has in fact happened; (iii) there would be no point in ceasing completely when it maintained the facility to manufacture it; (iv) Oran did not at any time stop pricing Hollowcore jobs if asked and continued to fulfil orders if they could profit from them. His evidence was supported by Derek Duffy who was clear that no decision was made to cease the Hollowcore trade in the UK.
- Ross Melville's evidence was that Oran decided to discontinue exporting Hollowcore to the UK save for the fulfilment of existing orders and the honouring of quotes already given. He points to monthly executive summaries preceding management produced by the finance director, Martin Hehir at the end of 2012 which show a reduction in turnover and refers to a "move away from Hollowcore sales in the UK". His evidence was fundamentally undermined, in my judgment, by Oran's financial information which shows that income attributable to UK Hollowcore sales continued through 2012, 2013 and 2014 and by Sean Sharkey's witness evidence which is that when he was working in sales at Oran in 2011 he continued to price UK Hollowcore jobs if customers asked for a price. I prefer the evidence of Oran's witnesses and find that no such decision was made in April 2011 or at all.
Did John Dooley know that Oranmore was going to trade under that name when he sent the 7.12.11 email?
- John Dooley says that when he spoke to Ross Melville and Richard Burke and told them that he knew they had set up a company a fortnight or so previously, Ross Melville told him that the company "could be called anything – it is a work in progress", so he was left with the impression that the trading name had not been finalised. His evidence is that he didn't know that Oranmore was trading under that name until September 2012. Ross Melville denies saying this, but neither he nor Richard Burke make a positive statement that they did tell John Dooley that it would trade under that name. Mr Harbottle submits that John Dooley should have known that it was likely to trade under the name of Oranmore because companies usually do trade under their own name. I am not convinced by that argument – equally companies very often trade under a different name.
- I prefer the evidence of John Dooley for the following reasons. First, his evidence was unshaken in cross-examination and I found him to be credible on this point. Second, in my judgment, the email of John Dooley of 11 June 2012, in which he adopted the Oranmore Precast signature and logo, suggests to me that this was the time that the penny dropped and he realised that Oranmore was trading under that name. I can perceive in that sarcastic email an undertone of fresh outrage and disbelief. I do not believe that he would have sent that email, and the later 22 June 2012 email and 29 June 2012 text message, if he had known since early December 2011 that Oranmore intended to trade under the ORANMORE Signs. For those reasons, I am satisfied on the balance of probabilities that he (and therefore Oran) only knew that Oranmore was trading under its own name around early June 2012. That means I reject John Dooley's evidence that he didn't find out until September 2012. In my judgment, that latter contention cannot survive consideration of those three June 2012 communications from John Dooley.
Did Alan Melville ask Ross Melville to change the company name of Oranmore on 13 December 2011?
- I have no direct evidence from Alan Melville on this point. John Dooley says that he was at the board meeting on 13 December 2011 and was present when Alan Melville had this conversation with Ross Melville. Ross Melville says that this was a fiction and he wasn't at the board meeting because he was in the UK that day, attending meetings in Norfolk. During the overnight adjournment after the first day of trial, he produced some documentary evidence, which I allowed him to rely on, showing that he had a booking at a hotel in Norfolk, near the Weeting facility, on the nights of the 12 and 13 December 2011 only, and a copy of a credit card statement showing that he had paid for those two nights at the hotel. Mr Harbottle suggested to him that he could have flown back to Ireland to attend the meeting. Ross Melville denied it.
- This is a direct dispute of fact between two witnesses. I prefer the evidence of Ross Melville for several reasons. First, the documentary evidence is clear that he booked and paid for hotels in Norfolk for two nights only on 12 and 13 December. Second, a return to Oranmore in Galway from Norfolk, attendance at the board meeting and a return back to Norfolk would have taken most of the day. It seems to me to be inherently unlikely that he would have booked a two night stay in the UK if he had known that he was going to spend the day in between travelling to and from Ireland. He would have been more likely to delay the trip or bring it forward by a day or two. Finally, I found John Dooley a less convincing witness than Ross Melville on this point. I find that no such request was made of Ross Melville.
Did the Defendants know, or should they reasonably have known, by the time of the Compromise Agreement that the Oran directors were unhappy about the use of the Oranmore Signs and/or the First Defendant's Device?
- It is accepted by Oran that no explicit written objection to the name of Oranmore as a company or the use of the ORANMORE Signs or First Defendant's Device was ever made by Oran to the Defendants. Derek Duffy said that there was no point in objecting to the trading name from 2012 onwards because Oran was not in a financial position to take legal action against Oranmore, particularly in light of the back pay owed to Richard Burke.
- However I am satisfied that during 2012 and through 2013 relations between the Oran-only directors and employees and the Oranmore directors was strained, as recognised by all of the witnesses. In particular, I am satisfied on the evidence before me that a large part of the reason for the strained relations was because of the Oran-only directors' underlying discontent with the company name of Oranmore and its use of the ORANMORE Signs and the First Defendant's Device on the one hand, and the Oranmore directors' awareness of that.
- In reaching this finding I am rejecting the evidence of Richard Burke and Ross Melville that they had no idea there was any issue about Oranmore's use of the ORANMORE Signs and the First Defendant's Device until they received Oran's letter before action in early 2014, for the following reasons. First, I found their evidence unconvincing in its delivery. In particular, Ross Melville appeared very uncomfortable when giving his evidence in cross-examination that he couldn't understand how Oran could possibly object to Oranmore, because the names were completely different. Secondly, their case on this point in incompatible, in my judgment, with (a) the acknowledgement in Richard Burke's second witness statement he was aware there might be "trade mark issues", which is why he sought the Oran Release; and (b) Oranmore's request of Michael Melville in mid-2012 to produce a written Copyright Licence for the First Defendant's Device, rather than rely on the oral one which it says it already had. Ross Melville was asked about this point in cross-examination and found it very difficult to answer, resorting to saying that the Copyright Licence request was a "belt and braces" approach. Thirdly, the sarcastic emails of John Dooley relating to Sean Sharkey's employment by Oranmore and his refusal to consider Richard Burke's proposal that the companies work together can, in my view, only be read in this way, although they fall short of explicit objections.
- It is common ground that the court should treat English law and Irish law of contractual construction as the same, and apply English law when construing the Compromise Agreement.
- Both parties accept that the approach of the court should be that described by Lord Clarke of Stone-cum-Ebony JSC, with whom the other members of the court agreed, in Rainy Sky SA v Kookmin Bank  UKSC 50,  1 WLR 2900. In paragraphs 20 and 21 he stated:
" The language used by the parties will often have more than one potential meaning. I would accept the submission made on behalf of the appellants that the exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a person who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant. In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other."
- Lord Clarke went on to say in paragraph 22: "Where the parties have used unambiguous language, the court must apply it" and quotes with approval the statement of Hoffman LJ at p99 of Co-operative Wholesale Society Ltd v National Westminster Bank plc  1 EGLR that:
"This robust declaration does not, however, meant that one can rewrite the language which the parties have used in order to make the contract conform to business common sense. But language is a very flexible instrument, and, if it is capable of more than one construction, one chooses that which seems most likely to give effect to the commercial purpose of the agreement."
- The Supreme Court has considered the subject more recently in the case of Arnold v Britton & Ors  UKSC 36, in which Lord Neuberger expanded on the guidance given in Rainy Sky, in paragraphs 14 – 23 of his judgment, with which Lord Sumption, Lord Hughes and Lord Hodge agreed. Lord Carnwath produced a dissenting judgment, but did not take issue with Lord Neuberger's discussion of the law. I will not reproduce those paragraphs in full here, but I highlight a number of points.
- Lord Neuberger made it clear in paragraph 15 that in interpreting a contract, the court must focus on the meaning of the relevant words (in that case in a lease, in this case in the Oran Release) in their documentary, factual and commercial context. The meaning must be assessed in light of: (i) the natural and ordinary meaning of the relevant clause; (ii) any other relevant provisions of, in this case, the Compromise Agreement; (iii) the overall purpose of the clause and, in this case, the Compromise Agreement; (iv) the facts and circumstances known or assumed by the parties at the time the document was executed; and (v) commercial commonsense; but (vi) disregarding subjective evidence of any party's intentions.
- At paragraph 17 Lord Neuberger makes clear that what the parties meant is most obviously to be gleaned from the meaning of the language used, and at paragraph 18, he emphasises that the clearer the natural meaning the more difficult it is to justify departing from it. In relation to 'commercial common sense', Lord Neuberger stated in paragraph 19 that it was not to be invoked retrospectively: "It is only relevant to the extent of how matters would or could have been perceived by the parties, or by reasonable people in the position of the parties, as at the date that the contract was made." In paragraph 20 he cautioned that: "While commercial commonsense is a very important factor to take into account, a court should be slow to reject the natural meaning as correct simply because it appears to be a very imprudent term for one of the parties to have agreed, even ignoring the benefit of wisdom of hindsight. The purpose of interpretation is to identify what the parties have agreed, not what the court thinks that they should have agreed." In paragraph 21 he reminds us that when considering what facts are known to the parties, that means those which were "known or reasonably available to both parties… it cannot be right, when interpreting a contractual provision, to take into account a fact or circumstance known only to one of the parties."
Submissions and discussion by issue
Does the Compromise Agreement extend as to: (i) subject matter; (ii) jurisdiction; and (iii) future claims, so as to cover claims of the present type?
- The Defendants' position is that it relies on the Compromise Agreement, and specifically the Oran Release, as providing a complete answer to the claim. Mr Harbottle submits that the wording of the release granted by Oran in the Oran Release is unambiguous and wide-ranging, covering present and future claims of whatever nature. Accordingly it encompasses the present claims of trade mark infringement and passing off.
- Mr Moody-Stuart makes a primary submission for Oran that the Compromise Agreement only covers claims: (i) relating to the employment of Richard Burke and his redundancy; and (ii) made under Irish law; and so not the present claims, because:
i) there is no basis in the Compromise Agreement for suggesting that the claims being settled or discharged by Oran in the Oran Release were broader in scope than those being settled or discharged by Richard Burke in the Burke Release and the Discharge Form. The Discharge Form makes it clear that the subject matter of the Compromise Agreement was the compromise of any and all claims arising in respect of Richard Burke's employment and its termination, and it is 'nonsensical' to suggest that it extends beyond matters relating to Richard Burke's employment to encompass the current claims.
ii) similarly, the Discharge Form makes it clear that the Compromise Agreement extends only to matters arising under the law of Ireland and so cannot encompass the present infringement and passing off claims which relate to Oranmore's trade in the UK.
- Mr Harbottle submits in response that if the parties had intended the release to be provided to Richard Burke by Oran to mirror that given to Oran by Richard Burke then: (a) there would be no need for a separate Oran Release as the Burke Release and the Discharge Form would have been sufficient to cover all claims relating to Richard Burke's employment and redundancy; or (b) the wording of the Oran Release would have mirrored that of the Discharge Form. He submits that none of the documents making up the Compromise Agreement restrict the claims for which waiver or discharge is being given to claims under Irish Law; nor is Irish Law referred to in any of them; there is no basis for inferring that the parties intended to limit the scope of the Compromise Agreement to Irish law claims.
- Mr Moody-Stuart's secondary submission for Oran is an alternative one in the event that the court finds that the Compromise Agreement extends beyond matters concerning Richard Burke's employment and termination. In that case, he submits that it only relates to causes of action that were in existence at the date of the Compromise Agreement and does not act to release liability for future tortious acts. He submits that it makes no commercial sense for Oran to have abandoned claims which had not yet arisen, including acts of passing off after 17 May 2013 and infringement of the not-at-that-time-existing Registered Mark, which accordingly must be outside the scope of the compromise.
- In response, Mr Harbottle submits for the Defendants that such a submission defies commonsense: since it was known by Oran that Oranmore had been trading and continued to trade under the ORANMORE signs and the First Defendant's Device, the parties cannot have intended to compromise any passing off claim in respects of acts up to and including 17 May 2013 but then left it open to Oran to sue in respect of acts commencing the next day. He reminds me that Oranmore in paragraph 10D of the Amended Defence seeks the implication of a term releasing Richard Burke from liability "in respect of the continued use of the expression "ORANMORE PRECAST" and/or the First Defendant's [Device] after 17 May 2013".
- I have set out the matrix of facts and my findings of fact above. Of particular importance, in my view, is the fact that the Compromise Agreement was entered into in order to settle the disputes arising from Richard Burke's employment, and termination of employment by Oran. This termination was intimately and entirely connected, in my judgment, with his setting up of Oranmore, with Ross Melville, as a company to take a lease of the Weeting facility and start to manufacture and sell Hollowcore products in the UK. There has been made no suggestion to me in the documentation or in the evidence of the witnesses for either party that Richard Burke would have left the employment of Oran in December 2011 if Oran had decided to take on the lease of the Weeting facility itself. Both John Dooley and Richard Burke acknowledge that the former had been trying to push the latter out of Oran for some time, but John Dooley's evidence was that it was impossible to do so while the Back Pay Claim remained unresolved. Accordingly it required Richard Burke to resign so that he could set up Oranmore in the UK, for Oran to get him out of the company. I accept that evidence, which was not challenged.
- Also important is that, by the time the parties entered into the Compromise Agreement, they both knew that: since Oranmore had started trading, it had at all times been trading under the ORANMORE Signs and the First Defendant's Device; Oranmore knew that Oran was unhappy with the company name of Oranmore and its use of the ORANMORE signs and the First Defendant's Device; Richard Burke had been working full time for Oranmore in the role of director since he had left Oran and would continue to work full time for Oranmore in the role of director after the Compromise Agreement was signed; Richard Burke had obtained the €600,000 Back Pay Judgment against Oran; Oran was in breach of the four day time period the Sheriff's office had given it to pay the Back Pay Judgment in full; Oran was not in a financial position to easily meet the Back Pay Judgment, which threatened the jobs of workers at Oran; and Richard Burke refused to enter into the Compromise Agreement unless Oran signed the Oran Release.
- It is necessary to distinguish the various releases provided for in the Compromise Agreement. The Discharge Form is in the identical form of a document originally provided to Richard Burke by Oran together with the letter notifying him of his redundancy dated 18 November 2011. That accepts "€26,092 comprising notice, statutory redundancy, outstanding annual leave, ex-gratia payment and any monies owed by or to the company for termination of employment in full and final settlement of all statute and common law claims of every nature, type and kind whatsoever arising from my said former employment with the Company and the termination thereof by reason of my redundancy." The Burke Release is an acknowledgment that payment of €26,092 is in "full and final settlement of all sums due and owing to me by Oran Pre-Cast Ltd whether arising by contract, common law and/or statute." I accept Mr Harbottle's submission that these two documents together are unambiguous. The former provides a discharge which is clearly defined in terms of claims arising from Richard Burke's employment and termination by redundancy for consideration which is equivalent to sums due for "notice, statutory redundancy, outstanding annual leave and ex-gratia payment". The latter releases all claims that Richard Burke has against Oran in consideration of that same sum. Without more, I accept that the reasonable person having all the background knowledge available to the parties would not consider that the parties meant those two documents to encompass claims that Oran had against Richard Burke outside the closely-defined scope, namely 'arising from' his employment and termination by redundancy.
- However, there is more. Richard Burke refused to sign those two documents unless Oran also signed the Oran Release. The Oran Release is specifically expressed to be in consideration of "you compromising the amount due and owing to you on foot of [the Back Pay Judgment]". It confirms that "Oran Pre-Cast Limited have no claim against you, Richard Burke, whether it be in contract, common law and/or statute". This is a very concise but extremely wide-ranging release. The fact that it is bare and does not contain any assistive or explanatory text which one often sees in such clauses, and which can assist the court in defining the scope of the claims that the parties intended it to cover, means that the context in which the release was given becomes of particular importance. Per Lord Nicholls at paragraph 29 of Bank of Credit and Commerce International SA v Ali  1 AC 251 as cited in Rainy Sky: "…the scope of general words of a release depends upon the context furnished by the surrounding circumstances in which the release was given. The generality of the wording has no greater reach than this context indicates."
- Far from being nonsensical, as Mr Moody-Stuart submits, in my judgment the reasonable person with the relevant background knowledge of the parties would understand that the parties meant the scope of the Oran Release to be wider that the scope of the Burke Release and Discharge Form, i.e. with a subject-matter extending beyond claims relating to Richard Burke's employment and termination. That reasonable person would understand that the parties meant Richard Burke to waive his €600,000 Back Pay Judgment only in return for something which he valued over and above the €26,092 employment and redundancy settlement. That something was the Oran Release.
- Turning to the Irish law point, I accept Mr Harbottle's submission. There is no mention of Irish law in any of the documents of the Compromise Agreement. It is true that a number of Irish employment statutes are referred to in the Discharge Form, but only in a non-exhaustive list of examples of statutory claims that an employee might bring against an employer. Accordingly, in order to read the Compromise Agreement as being limited to claims under Irish law, I consider that such a term would need to be implied.
- It is clear from both Richard Burke and John Dooley's evidence, and I am satisfied, that the Oran Release was an additional release required by Mr Burke, and agreed by Oran, before he would waive his right to the €600,000 Back Pay Judgment. This is supported by the fact that no equivalent release was sought by Richard Burke or given by Oran at the time of the 2012 Redundancy Agreement and 2012 Back Pay Agreement, when, far from waiving the Back Pay Claim, Richard Burke had agreed to settle it for the sum of €120,000. Now, in 2013, Richard Burke was in an even stronger negotiating position. He was holding a judgment, rather than a mere claim, for €600,000, which was in the process of being enforced against Oran by the Sheriff and which he knew Oran would not easily be able to pay.
- So what was Richard Burke buying, and Oran selling, for a waiver valued at €600,000? The commercial context is, in my judgment, that Richard Burke was seeking a wide-ranging release to enable him draw a line in the sand, end the wider family discord, and get on with his working life as a director and shareholder of Oranmore. Oran was selling a wide release of its claims against Richard Burke, in order to neutralise the Back Pay Judgment and free itself from the threat of enforcement by seizure of assets by the Sheriff's office or, potentially, issuance of a winding up petition. I am satisfied that each party knew of the commercial imperatives of the other. Of course the subjective intentions of the parties are not relevant in themselves, but common knowledge of both parties is part of the background knowledge held by the reasonable person.
Decision on scope of the Compromise Agreement
- In my judgment, the reasonable person with all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant that the Oran Release would cover all known and foreseeable claims connected with Richard Burke leaving the company, in order to resolve all matters between them and provide the parties with a clean slate. That includes, in my judgment, any claims arising from the founding and trading of Oranmore, which I have found was intimately connected with Richard Burke's departure from Oran. In order to achieve that clean slate, so that Oran could go forward without owing Richard Burke €600,000 and Richard Burke could continue running Oranmore in the UK, I find that the reasonable person would have understood the parties to have meant the Oran Release to encompass the present passing-off and registered trade mark infringement claims.
- In order to reach that conclusion, I decline to imply a term limiting the jurisdiction of the Compromise Agreement to Irish Law, but I do construe the Oran Release as covering future claims.
- In considering Mr Moody-Stuart's submission relating to Irish law, I remind myself of Lord Steyn's well-known dictum in Watts v Aldington 1999 LTR 578 that "the touchstone of implication is strict necessity" and the Supreme Court's guidance in Marks and Spencer plc v BNP Paribas Securities at para 18 – 21, in particular that the implied term must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective (or has commercial or practical coherence) without it.
- In my judgment there is nothing in the documentary, factual or commercial context to lead me to find there is a necessity to imply a limitation of the Compromise Agreement to Irish law. Indeed, such an implied term would defeat the purpose of achieving a clean slate between the parties.
- In considering whether or not the Oran Release covers future claims, I find the drafting to be rather ambiguous. "Oran Pre-cast Ltd have no claim against you" is somewhat ungrammatical. It is neither clearly limiting the release to claims at that time in existence, nor clearly covering both present and future claims. It could, in my judgment, be read in either way. Following Lord Justice Hoffman's guidance in Co-operative Wholesale Society Ltd v National Westminster Bank, as cited in Rainy Sky, where language "is capable of more than one construction, one chooses that which seems most likely to give effect to the commercial purpose of the agreement."
- If the Oran Release did not cover present and future claims, the commercial purpose of achieving a clean slate between the parties would be defeated, in my judgment. In the circumstances where both parties knew that Oranmore was going to continue to trade and that Richard Burke was going to continue to work full-time as a director of Oranmore, I accept Mr Harbottle's submission that the reasonable person would understand the parties to have meant the Oran Release to compromise not only any passing off claim in respects of acts carried out up to and including 17 May 2013, but also in respect of the identical acts carried out the next day, and later. Similarly, the reasonable person would not, in my judgment, understand the parties to have meant that the Oran Release could be circumvented by the simple and foreseeable action of Oran applying for the Registered Mark and then suing for its infringement. That would completely defeat the commercial purpose of Richard Byrne in entering the Compromise Agreement, for which he had waived his right to €600,000.
- If I am wrong about the ambiguity of the Oran Release in relation to future claims, then the question is whether a term that the Oran Release covered both present and future claims should be implied. It brings us to the same place, in my view. I find that such a term should be implied as it would not be effective, and have no commercial coherence without it, for the reasons given above.
If Oran's claims of passing off and/or trade mark infringement were proven, would Oranmore and Ross Melville be joint tortfeasors with Richard Burke?
- I believe it is common ground that they would. In case there is any doubt, it is in my view unarguable that they would be joint tortfeasors in light of Oran's pleaded claim that Ross Melville and Richard Burke have procured the acts of Oranmore complained of and that those acts have been carried out to a common design.
Is the Oran Release merely a covenant not to sue rather than a true release?
- Mr Moody-Stuart for Oran submits that on its true construction, the Oran Release is not a settlement or release of claims against him, but only a promise not to bring a claim. Such a promise does not act to release joint tortfeasors, under the principle in Hutton v Eyre (1815) 6 Taunt 289, 128 ER 1046.
- Mr Harbottle responds that this argument cannot be sustained in face of the wording that Oran 'have no claim against you, Richard Burke'. I am with Mr Harbottle. In my judgment the Oran Release is unambiguously a release, which is why I have referred to it as such throughout this judgment.
In the absence of an express reservation of a right to sue Ross Melville and Oranmore, is there any basis for implying a reservation of a right to sue?
- Mr Moody-Stuart submits for Oran that on a proper construction, the Oran Release only acts to release Richard Burke from personal liability, and not any joint tortfeasors, because the words 'Richard Burke, whether acting alone or in combination with others as a joint tortfeasor' do not appear in the Oran Release and should not be read into it. Mr Harbottle submits that as Oran did not reserve its rights against Ross Melville and Oranmore in the Compromise Agreement, it follows that they are released.
- It appears to me, with great respect, that Mr Moody-Stuart is approaching this from the wrong direction and Mr Harbottle from the right one. The general rule at common law is that where a person has a cause of action against two or more joint tortfeasors, a settlement by which he releases one or more of them operates as a release of the others. This is subject to an exception, namely where the settlement agreement for the release of one or more of them contains a reservation of his right to sue the others (Watts v Aldington). That reservation may be express or implied. Accordingly, it is not the case that where a settlement agreement is silent as to the reservation of a right to sue joint tortfeasors, as in the Compromise Agreement, joint tortfeasors are not released unless there is an express or implied term releasing them. Rather, joint tortfeasors are also released, unless a reservation of the right to sue can be implied. Mr Moody-Stuart makes no argument for the implication of a term reserving the right to sue Oranmore and Ross Melville. In fact he specifically states in his Additional Submissions that he does not seek the implication of such a term.
Conclusion – Compromise Agreement
- Accordingly, I conclude that:
i) The Compromise Agreement of 17 May 2013 operated as a release of liability of Richard Burke for the present claims of trade mark infringement and passing off, and precluded Oran from bringing the present claims against him;
ii) The Compromise Agreement of 17 May 2013 also operated as a release of liability of Ross Melville and Oranmore, as alleged joint tortfeasors with Richard Burke, for the present claims, and precluded Oran from bringing the present claims against them;
iii) Oran's claims must be dismissed.
- In case I am wrong about this, I shall go on to consider the infringement and passing off claims.
TRADE MARK INFRINGEMENT
- Section 10(2) of the 1994 Act provides
"A person infringes a registered trade mark if he uses in the course of trade a sign where because –
(a) the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or
(b) the sign is similar to the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark."
- The Court of Appeal summarised the six requirements for infringement under section 10(2) of the 1994 Act at paragraph 68 of Interflora v Marks & Spencer  EWCA Civ 1403,  FSR 10 as follows:
. A proprietor of a registered trade mark alleging infringement under art.5(1)(b) of the Directive (art.9(1)(b) of the Regulation) must also satisfy six conditions, namely (i) there must be use of a sign by a third party within the relevant territory; (ii) the use must be in the course of trade; (iii) it must be without the consent of the proprietor; (iv) it must be of a sign which is identical with or similar to the trade mark; (v) it must be in relation to goods or services which are identical with or similar to those for which the trade mark is registered; and (vi) it must give rise to a likelihood of confusion.
- The Court of Appeal in Interflora v Marks & Spencer went on to explain that the correct approach to the assessment of the likelihood of confusion was that endorsed by it at paragraphs 51 and 52 of Specsavers International Healthcare Ltd v Asda Stores Ltd  EWCA Civ 24,  FSR 19, as follows;
 The general approach to be adopted in assessing the requirement of a likelihood of confusion under the Regulation and Directive has been considered in a number of important decisions of the Court of Justice…
 On the basis of these and other cases the Trade Marks Registry has developed the following useful and accurate summary of key principles sufficient for the determination of many of the disputes coming before it:
(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense;
(k) if the association between the marks causes the public to wrongly believe that the respective goods [or services] come from the same or economically-linked undertakings, there is a likelihood of confusion.
- The most recent Court of Appeal authority on likelihood of confusion is Comic Enterprises Ltd v Twentieth Century Fox Film Corp  EWCA Civ 41. At paragraph 30 the court stated:
" The similarity of the goods or services is central to the issue of infringement under art.5 (1)(b) and comes in at two points in the analysis. As this court explained in Maier v Asos plc  EWCA Civ 220;  FSR 20 at , it raises first of all a threshold question. If the goods or services are not similar then there can be no infringement."
- The Court of Appeal again endorsed the Specsavers approach to the assessment of the likelihood of confusion in paragraph 31, but added in paragraphs 32, 33 and 34:
 In Maier we explained (at ) that to this summary should be added the further guidance provided by the Court of Justice in Canon (at ) that the risk that the public might believe that the goods or services in question come from the same undertaking or, as the case may be, from economically-linked undertakings, constitutes a likelihood of confusion for the purposes of the provision.
 The decision in Specsavers clarified one further important point concerning the context of the accused use. As this court said at : "… In assessing the likelihood of confusion arising from the use of a sign the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer's mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its context."
 All of this guidance makes clear that the matter must be assessed from the perspective of the average consumer. This court considered the characteristics of the average consumer at some length in [Interflora v Marks & Spencer]. The following general points emerge further to those set out above:
(i) the average consumer is a hypothetical person or, as he has been called, a legal construct; he is a person who has been created to strike the right balance between the various competing interests including, on the one hand, the need to protect consumers and, on the other hand, the promotion of free trade in an openly competitive market, and also to provide a standard, defined in EU law, which national courts may then apply;
(ii) the average consumer is not a statistical test; the national court must exercise its own judgment in accordance with the principle of proportionality and the principles explained by the Court of Justice to determine the perceptions of the average consumer in any given case in the light of all the circumstances; the test provides the court with a perspective from which to assess the particular question it has to decide;
(iii) in a case involving ordinary goods and services, the court may be able to put itself in the position of the average consumer without requiring evidence from consumers, still less expert evidence or a consumer survey. In such a case, the judge can make up his or her own mind about the particular issue he or she has to decide in the absence of evidence and using his or her own common sense and experience of the world. A judge may nevertheless decide that it is necessary to have recourse to an expert's opinion or a survey for the purpose of assisting the court to come to a conclusion as to whether there is a likelihood of deception;
(iv) the issue of a trade mark's distinctiveness is intimately tied to the scope of the protection to which it is entitled. So, in assessing an allegation of infringement under Article 5(1)(b) of the Directive arising from the use of a similar sign, the court must take into account the distinctiveness of the trade mark, and there will be a greater likelihood of confusion where the trade mark has a highly distinctive character either per se or as a result of the use which has been made of it. It follows that the court must necessarily have regard to the impact of the accused sign on the proportion of consumers to whom the trade mark is particularly distinctive;
(v) if, having regard to the perceptions and expectations of the average consumer, the court concludes that a significant proportion of the relevant public is likely to be confused such as to warrant the intervention of the court, then it may properly find infringement."
- In this case, there is no dispute in relation to Interflora conditions (i), (ii) and (v). It is common ground that Oranmore has used the ORANMORE Signs and First Defendant's Device in the UK, in the course of trade, in relation to goods or services which are identical to those for which the Registered Mark is registered. The dispute relates to Interflora conditions (iii), (iv) and (vi). Accordingly, it is for Oran to establish that one or more of the ORANMORE Signs with or without the First Defendant's Device are similar to the Registered Mark, and that because of such similarity and the identity or similarity of the goods and/or services for which the Registered Mark and those in relation to which the ORANMORE Sign had been used, there existed a likelihood of confusion in the mind of the average consumer of the goods and services in question. However, having alleged that Oran has consented to the disputed use, it is for Oranmore to prove that it has such consent, not for Oran to prove the absence of it (per Lewison LJ in Honda Motor Co Ltd v Neesam  EWHC 1051 at paragraph 5).
Issues 3 and 4 - Is there similarity between Oranmore Signs and the Registered Mark such that, when used with identical goods and services, there is a likelihood of confusion?
The average consumer - submissions
- The goods the subject of dispute in this case are preformed concrete building elements, as previously described, and the services complained of are the design of such elements and the provision of construction management services and services relating to the design of buildings to such customers. That is apparent from the particulars of claim.
- Mr Harbottle for the Defendants submits that the average consumer in relation to those goods and services is a specialist in the building trade who is purchasing for mainly large, scale, commercial or institutional building projects, rather than individual domestic ones; that such a consumer often purchases following the invitation of tenders; that he may require potential suppliers to be on a list of approved suppliers, or to pre-qualify by the provision of insurance and financial details and risk assessments before they can tender as part of a due diligence process; that he frequently purchases large quantities of materials in high-value contracts. The Defendants rely on the oral evidence of Oran's witness, Christina Lines, who agreed in cross examination with these principles. She additionally stated that such purchasing decisions on large scale projects with a main contractor were often made by a supply chain manager, and that such a role was generally occupied by persons with the relevant supply chain management professional qualification. Accordingly, Mr Harbottle for the Defendants submits that the average consumer is likely to be a sophisticated and knowledgeable individual who will pay a high degree of attention to the identity of the party from which it is purchasing and this renders confusion less likely.
- Conversely, Oran does not say that the average consumer in this case is anything other than an ordinary human being, whose reaction is the same as anyone else in this court. Mr Moody-Stuart submits that the terms Oran and Oranmore are so closely similar they are almost interchangeable, such that even when a person is trying very hard indeed not to get it wrong, they can nonetheless get the terms mixed up. He reminds me that Mr Harbottle mistakenly referred to Oran when he meant Oranmore in writing in his skeleton argument and orally in closing argument, as did one of the Defendants' witnesses.
- Mr Moody-Stuart submits for Oran that the purchase processes described by Miss Lines, which the Defendants rely on as rendering confusion less likely, do not vitiate the likelihood of confusion, as the care and attention given by the consumer in such cases is not to do with who is supplying but their attributes – namely whether they are insured, whether they are on a list of approved suppliers etc. He submits that if such a consumer has already assumed a connection between Oran and Oranmore because of confusion between mark and sign, that is something which is already in his mind when the tenders are requested.
- Mr Moody-Stuart reminds me that the guidance of Specsavers sub-paragraph 52(b) is that the average consumer "rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind". He submits that because of this doctrine of imperfect recollection, the average consumer in this case is not more careful than an ordinary human being, including those in this courtroom, and is just as likely to be confused between the Registered Mark and the ORANMORE Signs, with or without the device, given the close similarity between the Registered Mark and ORANMORE Signs and the fact that they are used in relation to identical goods and services.
The average consumer - conclusions
- The average consumer in this case is a consumer of specialised pre-cast concrete building elements and design and consultancy services relating to design of those elements and building design. It is common ground that the relevant goods are high-value products. As well as his deemed features described in Specsavers sub-paragraphs 52(b) and 52(c), I find that he has a number of additional features to be considered:
i) He is a construct from a spectrum of consumers with different roles and different purchasing responsibilities. Some will be employed within large main contractors responsible for building large-scale commercial and institutional projects for third party clients. Some will be employed within smaller contractors, building smaller-scale developments for third party clients. Some may be, or may be employed by, developers sourcing for their own builds. They may be professional supply chain managers, quantity surveyors, procurement managers, quantity surveyors, architects, building professionals or property developers. However the average consumer is one with professional experience in the building industry.
ii) Although some consumers will only order from suppliers they have pre-approved or dealt with before, and some will carry out extensive due diligence on potential suppliers, requiring financial, insurance and other details as part of a tender for work, others will not. In my judgment the average consumer in this case will exercise an average degree of attention to the identity of the potential supplier but not the high degree of scrutiny for which the Defendants contend, which I accept he may give to the financial, risk and other attributes of a potential supplier.
iii) The different types of purchasing process described in sub-paragraph (ii) above form part of the context within which the average consumer operates. I am satisfied that the potential for confusion of the average consumer can occur at various stages of the purchasing process: for example, when inviting suppliers to price a job, or to submit information for the purposes of pre-approval, or when notifying suppliers of a tender process and inviting them to participate.
iv) I find that the average consumer in this case is sensitive to the reputation of a potential supplier and places a value on previous dealings he has had with them and recommendations he has received of that supplier from others.
Signs used by the Defendants
- It is common ground that the Defendants' use complained of falls into three categories: (i) use of ORANMORE PRECAST or ORANMORE PRE-CAST simpliciter, (ii) use of the ORANMORE PRECAST or ORANMORE PRE-CAST together with the First Defendant's Device (which I will refer to as ORANMORE Signs plus device); and (iii) use of ORANMORE in www.oranmore.co.uk (this is listed as a separate issue – Issue 10 – but I find it convenient to consider it together with the other uses).
Issue 3 - Comparison between Registered Mark and signs
- Dealing with the Registered Mark ORAN PRE-CAST and the signs ORANMORE PRECAST or ORANMORE PRE-CAST simpliciter first:
i) It is common ground that: that PRECAST/PRE-CAST are identical non-distinctive and descriptive elements; and that there is no conceptual similarity between ORAN PRE-CAST and ORANMORE PRECAST because, although Oranmore is an Irish place name, a UK consumer is unlikely to know that or to perceive Oran or Oranmore as having any particular meaning.
ii) Oran's case is that the Registered Mark and the ORANMORE Signs simpliciter are so highly similar as to be easily interchangeable, giving rise to a high likelihood of confusion even absent any evidence of actual confusion. Mr Moody-Stuart submits that: the entirety of the Registered Mark is contained in ORANMORE PRECAST and ORANMORE PRE-CAST; they are visually and aurally very similar; the first syllable of the Oranmore Signs is the visually and aurally dominant one; and the only addition to the Registered Mark is the single syllable 'MORE' which comes after the visually and aurally dominant first syllable 'ORAN'. Mr Moody-Stuart submits that suggests an additive connection, i.e. something which is 'more ORAN'.
iii) Mr Moody-Stuart submits that there is no basis for suggesting that ORAN/ORANMORE are the dominant elements in the mark and signs such that the identity between the second words PRECAST/PRE-CAST would be disregarded. PRECAST/PRE-CAST are not negligible components causing this case to fall within the guidance in sub-paragraph 52(d) of Specsavers.
iv) Mr Moody-Stuart submits that, for the purposes of Specsavers sub-paragraph 52(h), ORAN is highly distinctive, as it has no particular meaning for UK consumers and it is not descriptive of, nor has any relationship with, the goods and services for which it is registered. 'Oran' has no meaning or relationship to precast concrete per se. Mr Harbottle disagrees and submits that ORAN cannot be said to have a highly distinctive character.
v) Mr Harbottle for the Defendants submits that the average consumer is unlikely to attach any significance to the word PRECAST/PRE-CAST, which is wholly descriptive and commonplace in the pre-cast concrete industry and so negligible. He does rely on the guidance in sub-paragraph 52(d) of Specsavers, and asks me to make the comparison solely on the basis of ORAN and ORANMORE as the dominant elements in the mark and signs. Alternatively, he says that even if PRECAST/PRE-CAST are not negligible, the overall impression of the mark and sign conveyed to the public are dominated by ORAN and ORANMORE.
vi) He submits that ORAN and ORANMORE, are visually very different, Oranmore being twice the length; and aurally very different, Oranmore having three syllables not two. Alternatively he submits that any similarity between ORAN PRECAST and ORANMORE PRE-CAST is 'very slight', and relies on evidence that the industry tolerates close names, such as CB Precast and CBS Precast.
vii) Mr Harbottle disputes that there is any additive quality to the 'MORE' in ORANMORE and submits that 'ORAN' is not dominant in ORANMORE, as the words are very different and ORANMORE stands alone, with no conceptual similarity.
- Upon evaluating the mark and signs through the eyes of the average consumer, and in the context of the disputed use, I am satisfied that: the entirety of the Registered Mark is contained in ORANMORE PRECAST and ORANMORE PRE-CAST; PRECAST/PRE-CAST, although non-distinctive and descriptive, cannot be described as negligible components within the mark and signs such that this case falls within sub-paragraph 52(d) of Specsavers; accordingly I consider the overall impression of the mark and the signs as a whole; I find them to be visually and aurally very similar, but with no conceptual similarity; although PRECAST/PRE-CAST are not negligible, because of their non-distinctive and descriptive nature, the overall impression of the mark and sign conveyed to the public are dominated by ORAN and ORANMORE; and the first syllable of the ORANMORE Signs is the visually and aurally dominant one.
- I am not satisfied that 'MORE' in ORANMORE provides the additive quality for which Oran contends. Nor do I find relevant to this evaluation of similarity the Defendant's contention that the pre-cast concrete industry tolerates close names, such as 'CB Precast' and 'CBS Precast'. I accept that probative evidence on the point might form part of the context against which I carry out such an evaluation, but as Mr Moody-Stuart submits, I have no such evidence. Accordingly I cannot know whether they are, in fact, connected companies; whether they are locked in their own trade mark dispute; etc. I have no evidence about them save their names.
- Finally, for the purposes of the guidance in Specsavers sub-paragraph (h), I find that the Registered Mark has acquired a highly distinctive character, for the reasons Mr Moody-Stuart gives.
- For those reasons, and when considered within the context of the use in relation to identical good and services, I find that the average consumer would consider there to be a high degree of similarity between the Registered Mark and the ORANMORE Signs simpliciter.
- Dealing next with the Registered Mark ORAN PRE-CAST and ORANMORE PRECAST plus device:
i) Oran's case is that the ORANMORE Signs plus device encompasses all of the Registered Mark. Mr Moody-Stuart makes the same submissions as to visual and aural similarity as for the ORANMORE Signs simpliciter. He accepts that the addition of the First Defendant's Device makes the sign and the mark less visually similar, but submits that the words retain an independent distinctive character as part of the composite sign and so any such reduction in similarity is slight.
ii) The Defendants' case is that the First Defendant's Device uses the letters 'OP', which are the same first two letters for ORAN PRE-CAST as ORANMORE PRE-CAST, and so do not render the latter different from the former. Mr Moody-Stuart submits that the nature of the device is such that the 'OP' does no more to allude to ORANMORE PRECAST than the average consumer might equally allude to ORAN PRE-CAST. Comparing the Registered Mark and the ORANMORE Signs plus device, he submits that there exists a likelihood of confusion.
iii) The Defendants submit that the device does not represent the letters 'OP' but is a letter P in a circle, with no conceptual significance. Visually, it adds a significant element to the overall impression of the sign making the mark and the sign visually dissimilar. Mr Harbottle submits that the average consumer would not consider it to impart a high level of similarity to the Registered Mark.
- I find that the average consumer would consider the First Defendant's Device to have some conceptual significance as it would read it as the letters 'OP' and not a letter P in a circle as the Defendant contends. It would do so because the dominant element of the ORANMORE Signs, as I have already found, is the ORANMORE element, not PRECAST/PRE-CAST which is non-distinctive and descriptive and accordingly the average consumer would look for the letter 'O' in the device to make sense of the more visually significant 'P'. I find that the device reduces the similarity between the Registered Mark and ORANMORE Signs somewhat, but I find that reduction will be relatively small because I accept Mr Moody-Stuart's submission that the words ORANMORE PRECAST retain their independent distinctive character within the composite sign.
- For those reasons, and when considered within the context of the use in relation to identical good and services, I find that the average consumer would consider there to be a somewhat lower, but still relatively high degree of similarity between the Registered Mark and the ORANMORE Signs plus device.
- Finally, dealing with the Registered Mark ORAN PRE-CAST and ORANMORE (within www.oranmore.co.uk):
i) I believe it is common ground that the domain and the prefix are to be treated as entirely non-distinctive and would be ignored by the public as technical elements necessary in a website address, per page 111 of the Trade Marks manual. If it is not common ground, I find that to be the case.
ii) Oran's case is that ORANMORE would be viewed by the average consumer as an abbreviation of the complete sign ORANMORE PRECAST and he would be likely to bear in mind the identity between the missing element and the second part of the Registered Mark. Mr Moody-Stuart submits that ORANMORE and ORAN PRE-CAST are conceptually similar when used in relation to precast products, and when considered within the context of the use in relation to identical good and services, a likelihood of confusion is established.
iii) The Defendants make no separate submissions on this point but acknowledge the domain is in use.
- In my judgment the average consumer is rarely likely to consider the website address www.oranmore.co.uk without also noting or being aware of the complete sign ORANMORE PRECAST. If he uses the domain to access the website, that is branded with the sign ORANMORE PRECAST. If he is sent the website address as a link by an employee of Oranmore, the complete sign will be present in the employee's email address and probably the email signature as well. If he sees the link in marketing material or letterhead, that is likely to be in conjunction with the full use of the company name or use of the ORANMORE PRECAST sign. Accordingly I accept Mr Moody-Stuart's submission that the average consumer would likely view ORANMORE as an abbreviation of the complete sign, as he is likely to be familiar with the abbreviation of marks within website addresses in this way. I find that any reduction in similarity will be correspondingly slight. Accordingly I find that there is almost the same level of similarity between the Registered Mark and ORANMORE alone as between the Registered Mark and the ORANMORE Signs simpliciter, and almost the same likelihood of confusion.
- For completeness, I do not accept Mr Moody-Stuart's submission that there is any conceptual similarity between ORANMORE alone and ORAN PRE-CAST, for the reasons I have already stated in relation to the ORANMORE Signs.
Issue 5 - Evidence of actual confusion
- In this case I have no direct evidence of confusion from members of the public. Oran relies on evidence of actual confusion set out in the first witness statements of Derek Duffy and John Dooley and the witness statement of Christina Lines. All of the evidence before me is either documentary evidence of communications from and to potential or actual consumers or suppliers or provided through Oran's witnesses, who are employees and directors of Oran. Some of that is hearsay or double hearsay. I have no direct evidence from any potential or actual consumers or suppliers as to whether they were confused at all, and if they were, whether that confusion was caused by the similarity between mark and sign and identity of the goods and services for which the mark is registered and in relation to which the sign has been used, and the Defendants have been unable to subject any of them to cross-examination. I have been told why some of them were unable to be called, but it is unclear why none were called.
Submissions and evaluation
- Mr Harbottle for the Defendants reminds me that I am concerned with the average consumer, and cautions me that the confusion of others who are not consumers – including suppliers, employees working in the accounts department of customers with no input in procuring goods and services, or counsel and witnesses in this courtroom – may have some relevance as part of the overall context of the disputed use, but no further. I accept that. I remind myself that the question is whether there is a likelihood of confusion on the part of the public because the sign is the same as or similar to the registered mark and is used in relation to goods identical with or similar to those for which the mark is registered. This question must be considered from the perspective of the average consumer who is reasonably well informed and reasonably observant and circumspect.
- The evidence of actual confusion relied on by Oran falls into a number of categories. I refer to some but not all of the examples before me:
i) Evidence of actual confusion of potential consumers:
a) May 2013, Liam Friel, seeking a price for flooring on an Irish development, emailed Oranmore instead, which replied "this is the UK company" and directed him to Oran. Oran relies on this as an example of an actual consumer being actually confused because of the similarity between Oran and Oranmore. Mr Harbottle for the Defendants submits that I cannot be sure, without hearing from Mr Friel, whether he emailed Oranmore on purpose, or because he was confused between Oranmore and Oran, and if the latter, what caused that confusion. I accept that. However, given that Mr Friel and the development were based in Ireland and there is no obvious reason why he would seek a supplier in Norfolk, and given that Mr Friel did not continue to deal with Oranmore but allowed himself to be redirected to Oran, I find it a fair inference that he had been confused between the two companies and I allow it some probative value;
b) 10 September 2014, Henry Hathaway of Toureen Group Ltd contacted Oran by telephone and informed Christina Lines that he had been led to believe, by Oranmore, that it was 'part of Oran'. Mrs Lines made what she described as a contemporaneous note of the conversation immediately after the phone call, which said "He phoned looking for Sean Sharkey's contact number and was put through to me. He dealt with Sean when he was working for Oran… he was surprised to learn that Oran and Oranmore were two separate companies. He said that he has dealt with Sean since Oranmore started up and was very clear that he was specifically led to believe by Oranmore that the two companies were one and the same, and he believed he was dealing with us". In cross-examination she confirmed that she didn't ask him to explain how he had come to think they were connected, or how he had been led to believe they were 'one and the same', as she didn't want to talk about the dispute between Oran and Oranmore with a customer. Mrs Lines' evidence was that she had called Mr Hathaway to see if he would appear as a witness in this case but he didn't want to get involved. Ross Melville's evidence is that the only dealings Oranmore had with Mr Hathaway were with Sean Sharkey, some time after this call, in June 2015. His evidence was not challenged in cross-examination. Accordingly, Mr Harbottle submits that it is improbable that Mr Hathaway said what Mrs Lines' note reports, and asks me to find that the note is not sufficiently accurate to rely on. I do not make that finding. It is inherently implausible, in my judgment, that Mr Hathaway would phone Oran looking for Sean Sharkey if he had never had any dealings with him before, or that he would raise the issue of confusion between the two companies unless he was actually confused. In any event, I find Mrs Lines to be a credible and reliable witness and so I accept Mrs Lines' evidence that the note she made was contemporaneous and therefore likely to be accurate. The only alternative is that Mrs Lines fabricated this conversation with someone who, coincidentally, did deal with Sean Sharkey at Oranmore some months later. That has suggestion has not been made by the Defendants and seems equally implausible. Accordingly it seems more likely than not that Ross Melville is mistaken that Sean Sharkey had not dealt with Mr Hathaway for Oranmore before June 2015. Sean Sharkey was not cross-examined on this point as his evidence was closely limited as to subject matter not including this. Subject to the caveats that I do not know whether and how the confusion arose, I find that I cannot disregard this evidence and I do give it some probative weight.
c) February 2014, an agent for McCarthy & Stone (Developments) Ltd, when investigating a faulty access link to an online platform for tender submissions, questioned whether Oran and Oranmore were 'one company'. It is clear from Christina Lines' evidence and the documentary evidence of an exchange of emails, that both Oranmore and Oran were registered to McCarthy & Stone's tender platform as two separate companies under two separate email addresses. The employee who invited participation in the tender, when told that Oran was having difficulties logging in to the platform, noted the two registrations and two email addresses and questioned whether Oran Precast and Oranmore Precast Ltd were the same company. Mr Harbottle submits this is not sufficient to show evidence of actual confusion but concedes that it may give cause to wonder. I disagree and do consider this evidence to be quite powerful. In my judgment it shows an actual consumer in the process of inviting and managing tenders, aware of Oran and Oranmore as suppliers of identical or similar goods, with sight of both the Registered Mark and the ORANMORE PRECAST Sign, being confused by whether Oran and Oranmore are a single company. I give it significant weight.
ii) Third party recommendations of Oran to potential consumers who mistakenly contact Oranmore: October 2014, Paul Geraghty's recommendation of Oran to MORI Developments Ltd, resulting in MORI contacting Oranmore. Mr Duffy's evidence was that Oran had not dealt with Mr Geraghty before, but believed he had been on a site where Oran's products were used which caused him to recommend them to MORI. After receiving an initial email from Mr Geraghty requesting a call, he spoke to him. His evidence in cross-examination was that Mr Geraghty made it clear that he didn't know that Oran and Oranmore were separate companies until Mr Duffy told him. He sent an email on 15 October giving his account, upon Mr Duffy's request, which said "I'm very confused by what has happened here. I recommended Oran Precast to Raj at Mori… and somehow we have come in contact with another company Oranmore Precast which you tell me is totally separate to you. This doesn't reflect good on my recommendation as I have never dealt with these guys. What puzzles me is that Oranmore Precast have never informed Raj that they weren't who we believed them to be i.e. we asked about products being ferried across etc. and were never told that this would never be happening... I'm not sure if I want to be involved in installing this precast job as I don't know anything about Oranmore Precast." Mr Harbottle for the Defendants submits that the evidence about what Raj at MORI was or wasn't told was double hearsay and is disputed; that there is no evidence whether and how any confusion occurred, including how Raj came to contact Oranmore and whether Mr Geraghty expressed himself clearly to Raj; and that after this date Raj continued to deal with Oranmore. He questions why neither Mr Geraghty nor Raj has been produced as a witness. All of these points are good ones and the cumulative effect of them is that I find this example of no real probative value.
iii) Customers contacting Oran asking for details of its UK office when it did not have one: March 2013, Mr Mury of Danimore Construction. Oran submits that Mr Mury must have been referring to Oranmore because Oran did not have a UK office at that point. I am unconvinced. Oran previously had a UK office and I heard some evidence that in fact its virtual office facility in the UK was still running at this time, despite no payments being made to it. Without hearing from Mr Mury I am not prepared to draw an inference of confusion at all, let alone an inference as to how any such confusion might have arisen.
- Oran also relies on instances of 'wrong way round' confusion of which the following are examples:
i) Potential consumers getting in touch with Oran in the mistaken belief that they are Oranmore, or having dealt with Oranmore previously, thinking they are the same company: Mr Hayes of O'Halloran & O'Brien Limited – quote previously provided by Oranmore for the supply of precast stairs, sent an email to Oran asking it to tender for twinwall. Mr Harbottle for the Defendants accepts this as an example of a consumer being confused about who he received a quote from, but suggests that shows he is not paying the kind of attention the court should expect from the average consumer. I cannot draw that inference. I could equally draw the inference that he represents the average consumer showing an average level of attention but nonetheless being confused. Again, subject to the caveats that I cannot know without asking Mr Hayes what caused his confusion, I cannot disregard this evidence and I give it some weight;
ii) Evidence of confusion of suppliers and potential suppliers to Oranmore: May 2012, Mr Bayford of Anglian Doors writing to Oran saying "I understand that Oran has taken over" the Weeting facility of Oranmore, and seeking a contract to maintain the doors. Mr Harbottle submits that it is not clear how Mr Bayford formed that impression, and reminds me that Richard Burke accepted that he had given Mr Bayford his contact details some months earlier, at a time when Oran was carrying out due diligence at the Weeting facility. Mr Moody-Stuart submits that he must have considered who took over the plant and seeing Oranmore assumed it was Oran. I cannot draw this inference on the information before me. He could equally simply have heard that the plant had been taken over and assumed that the new lessee was Oran, who had recently been carrying out due diligence into it. I find this example has little probative value.
- Taking all of these examples into account, and standing back and considering them overall, although some of the evidence upon which Oran relies is of limited or no probative value, I consider that there are enough examples of sufficient weight to give positive support to Oran's case that the identity of the goods and services provided by Oran and Oranmore and the similarity between the Registered Mark and the Oranmore Signs (with or without the First Defendant's Device) have caused a number of potential and actual consumers to believe either that there is an economic connection between Oran and Oranmore or that they are the same undertaking.
Issue 4 - Likelihood of confusion
- It is for me to assess the likelihood of confusion globally, taking account of all relevant factors, and judging the matter through the eyes of the average consumer who is reasonably well informed, reasonably circumspect and observant; who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them that he was kept in his mind; and who has the additional attributes that I have previously identified.
- In this case, the goods and services to which the Registered Mark and the ORANMORE Signs and First Defendant's Device are used are identical. I have found the Registered Mark to be highly distinctive. I have found the Registered Mark and the ORANMORE Signs to have a high degree of similarity and the Registered Mark and the ORANMORE Signs plus First Defendant's Device to have a somewhat lower but still relatively high degree of similarity. I have found some evidence in support of the contention that the association between the mark and signs causes the public to wrongly believe that the respective goods and services come from the same or economically linked undertakings. For those reasons, I am satisfied that all of the disputed uses by the Defendants of the ORANMORE Signs alone or with the First Defendant's Device give rise to a likelihood of confusion.
Issues 11 to 14 – Consent
- The Defendants' case is that, since there is no copyright infringement claim, this document is only relevant to the extent that use of the First Defendant's Device would otherwise amount to trade mark infringement (or passing off). In that case they rely on the grant to Oranmore by Michael Melville of the Copyright Licence and the oral licence which the Defendants say preceded it.
- Oran's case is that it does not accept that Michael Melville was the owner of the copyright in the device. In any event, the Copyright Licence is expressed on its face to be granted by Michael Melville in his personal capacity; Oranmore do not plead that Michael Melville was acting in his capacity as a director of Oran; Ross Melville in his evidence acknowledged that it was granted by his father in his personal capacity; and accordingly it cannot be used as evidence of consent by Oran to the use of the device.
- The witness evidence filed by Oranmore states that Michael Melville designed the device himself, in his personal capacity, and accordingly he maintained the copyright in it. The Copyright Licence is specifically stated to be granted by Michael Melville in his personal capacity, and it is drafted using letterhead from his home address. Although it is common ground that at the time Oranmore say it was drafted, Michael Melville was a shareholder and director of Oran, there is no mention of Oran in the very short document and no evidence before me to indicate that he was granting it in that capacity. Accordingly I am satisfied that any such licence was given by Michael Melville in his personal capacity and cannot represent any sort of consent by Oran in relation to the First Defendant's Device.
- The parties agree that the relevant law is that considered by the CJEU in Zino Davidoff SA v AG Import Ltd (and others) in Joined Cases C-414/99, C-415/99 and C-416/99  CH 109,  RPC 20. Mr Moody-Stuart relies on Lewison LJ's summary of the principles to be gleaned from this case in Honda Motor Co Ltd v Neesam at paragraph 5:
"In the joined cases of Zino Davidoff SA v A & G Imports Limited and Levi Strauss & Co v Tesco Stores Limited… the European Court of Justice said that the concept of consent for this purpose was to be uniformly interpreted across the whole of the EU. The ECJ made a number of important points. First; consent amounts to renunciation of the right to the trademark proprietor, and must, therefore, be unequivocally demonstrated. Second, and intention to renounce will normally be gathered from an express statement. Third; there may be circumstances from which consent may be inferred, but it is an actual consent and not a deemed consent, that must be established. Fourth; it is, in almost all cases, for the trader to prove consent, not for the trademark proprietor to prove the absence of consent. Fifth; consent cannot be inferred from the trademark proprietor's silence, nor from the fact that the goods carry no warning, nor from the fact that the trademark proprietor originally placed goods on the market without any further restriction on the onward sale of those goods."
- Mr Harbottle makes the following additional points:
i) The need to unequivocally demonstrate consent does not affect the standard of proof, which is the normal civil standard, but it does mean that a proved act which is merely consistent with consent, but also consistent with its absence, is not enough (Mastercigars Direct Ltd v Hunters & Frankau Ltd  RPC 24 at paragraph 19);
ii) Effective consent for these purposes can only be given by someone with authority to give such consent. There is apparent authority if: (i) Oran has expressly represented to the Defendants by words or conduct that the person who is supposed to have given consent had Oran's authority to do so; and (ii) the Defendants did in fact rely on that representation (Chitty on Contracts, 32nd ed paragraph 31-056).
- The Defendants accept that the 7.12.11 Email does not use the words 'consent', 'licence' or 'Oranmore'. However Mr Harbottle submits that the email as a whole can be read as an unequivocal, permanent, unconditional renunciation of Oran's rights in respect of the use of the Oranmore name by the Defendants. He particularly relies upon John Dooley's statements "I really don't have a problem with the overall situation now that it's out in the open", "I'm sure there will be opportunities for both companies to help each other out going forward" and "I believe if we all pull together and be straight up about things we shouldn't have any problem. Again, I do wish ye luck with it.". He asks me to consider the email in the context that Richard Burke and Ross Melville understood Oran to have decided to cease selling Hollowcore in the UK in April 2011 and so it would be 'unsurprising' that Oran's directors would have no objection to the operation of a competing UK Hollowcore company run by members of their own families. Of course I have found they did not make that decision.
- Oran's position can be fairly summarised, I think, by a single one of Mr Moody-Stuart's submissions: "Hopeless".
- In his closing submissions Mr Harbottle conceded that if I accepted John Dooley's evidence that on 7 December 2011 he was told that the trading name of Oranmore was "a work in progress", it made consent 'very difficult'. I have accepted that evidence. Even if I had not, however, I would have found this email to be a very long way from complying with the stricture in Davidoff at paragraph 53 that: "it follows… that consent must be expressed positively and that the factors taken into consideration in finding implied consent must unequivocally demonstrate that the trade mark proprietor has renounced any intention to enforce his exclusive rights.". In my judgment this email is nothing more than an acknowledgement by John Dooley that Ross Melville is starting a new company, an expression that perhaps it can work with Oran in the future, and some handsome good luck wishes. There is nothing whatsoever in it, in my view, which can be interpreted as a trade mark licence at all, let alone the wide ranging one for which the Defendants contend. I accept Mr Moody-Stuart's submission.
Issues 15 - 20 – Acquiescence
- I will deal with this shortly. In light of my findings on the Copyright Licence and the 7.12.11 Email, and in the context of my finding that at the time of the 7.12.11 Email John Dooley had no knowledge of the likely trading name of Oranmore, the Defendants' contention that the Copyright Licence and the 7.12.11 Email amounted to: (i) encouragement to Oranmore to trade under the name of ORANMORE; or (ii) assurances that Oran would not object to Oranmore trading in Hollowcore in the UK under the name Oranmore and the First Defendant's Device, must fail. No other acts of encouragement are pleaded or relied upon.
Conclusion on infringement
- It follows that Oran has established the conditions for infringement under section 10(2) of the 1994 Act. Had I not found that Oran was precluded from bringing the Registered Mark infringement claim by operation of the Compromise Agreement, I would have given judgment to Oran on the infringement claim.
- Oran also relies on passing off pursuant to the 'classical trinity' of that tort as described in the Jif Lemon case (Reckitt & Colman Product v Borden  1 WLR 491 HL), namely goodwill, misrepresentation leading to deception and damage. As previously stated, goodwill is not in issue.
- Insofar as the passing off claim concerns the use of the ORANMORE Signs with and without the First Defendant's Device, both parties rely on the same submissions in respect of whether the use of the signs constitutes a misrepresentation likely to lead to deception on the part of the public as they did in relation to confusion. I am satisfied that my findings in respect of confusion for infringement of the Registered Mark are equally as persuasive of deception of the public for the part of passing off, in particular given the support provided by the examples of actual confusion relied on by Oran. Accordingly I am satisfied that use of the ORANMORE Signs is a misrepresentation to the public which leads or is likely to lead the public to believe that the goods or services offered by it are the goods or services of Oran.
- I will deal briefly with the issue of Oran's own use of its OP Device. I do not find it to be conceptually very similar to the First Defendant's Device such that the use of the First Defendant's Device alone is a misrepresentation likely to lead to deception. It is, in my opinion, the ORANMORE Signs that cause the misrepresentation, and that misrepresentation is not negated by the addition of the First Defendant's Device.
- Finally, I accept Mr Moody-Stuart's submission that such misrepresentations are likely to damage Oran's trade or business, as Oran and Oranmore are direct competitors in the UK market and there is some evidence before me that Oran has already suffered lost sales in the UK by reason of Oranmore's trade. Accordingly it follows that Oran has made out its case in passing off. Had I not found that Oran was precluded from bringing the passing off claim by operation of the Compromise Agreement, I would have given judgment to Oran on the passing off claim in accordance with the paragraph above.
- It follows from my findings in respect of the Compromise Agreement in paragraph 98 above, that I dismiss the claim.
First Defendant's Device (and ORANMORE Sign plus First Defendant's Device):
Oran's OP Device: