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URL: http://www.bailii.org/ew/cases/EWCA/Civ/2012/1038.html
Cite as: [2012] EWCA Civ 1038

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Neutral Citation Number: [2012] EWCA Civ 1038
Case No: A3/2012/0656

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
(CHANCERY DIVISION)
ROBERT ENGLEHART QC,
SITTING AS A DEPUTY HIGH COURT JUDGE

[2012] EWHC 339 (Ch)

Royal Courts of Justice
Strand, London, WC2A 2LL
26/07/2012

B e f o r e :

LORD JUSTICE PILL
LADY JUSTICE ARDEN
and
LADY JUSTICE BLACK

____________________

Between:
WOOLLEY & ANR
Respondents
- and -

ULTIMATE PRODUCTS LTD & ANR
Appellants

____________________

Mr Thomas Moody-Stuart (instructed by Kuit Steinart Levy LLP) for the Appellants
Mr Simon Malynicz (instructed by Collyer Bristow LLP) for the Respondents
Hearing date : 4 July 2012

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Lady Justice Arden:

  1. This is an appeal from the order of Robert Englehart QC sitting as a Deputy Judge of the Chancery Division dated 1 March 2012. The judge held that the appellants, Ultimate Products Limited ("Ultimate") and Henleys Clothing Limited ("HCL"), through using the name of HENLEYS for their watches, were liable for passing off their watches as goods of the respondents, Mr Woolley and Timesource Limited ("Timesource"), who sold watches under the name of HENLEY. The fundamental issue on this appeal is whether the judge was entitled in fact and law to find that two of the essential ingredients of the tort, namely misrepresentation and damage, were satisfied.
  2. There are in all three requirements for passing off: they are goodwill, misrepresentation and damage (see per Lord Oliver, with whom the other members of the House agreed, in Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341 at 499 ("the Jif Lemon case")). Little needs to be said about goodwill as it is accepted that goodwill attached to the respondents' business of the importation and sale of watches.
  3. The second requirement for the tort of passing off is that there must be a misrepresentation by the defendant that his goods emanate from the claimant. It is not enough to show that purchasers were merely confused as to the provenance of the defendant's goods: purchasers must be led to believe that the goods emanate from the claimant (see per Lord Jauncey, with whom the other members of the House also agreed, in the Jif Lemon case at 510-1). There is some flexibility in this. As Lord Jauncey explained, it is enough that the defendant:
  4. "misrepresents his goods in such a way that it is a reasonably foreseeable consequence of the misrepresentation that the plaintiff's business or goodwill will be damaged. Thus a misrepresentation by B that his inferior goods are of a superior quality, which is that of A's goods, whereby people buy B's goods instead of A's, is actionable."
  5. The misrepresentation must be more than transitory: it is not sufficient that a purchaser is misled initially but his misunderstanding is dispelled before any material step is taken (see Cadbury-Schweppes Pty Ltd v Pub Squash [1981] 1 WLR 193, PC). In this case, for example, trade purchasers who were confused as to HENLEYS watches checked the position with Mr Woolley so that any misrepresentation to them was not operative.
  6. Misrepresentation must operate to mislead a substantial number of members of the public. Substantiality is not a question of counting heads. It is relative to the product and market in question. The judge has to make both a qualitative and quantitative assessment of substantiality: Neutrogena Corpn v Golden Ltd [1996] RPC 473. The judge found that there was little direct evidence of misrepresentation in this case. There is an issue as to whether he gave adequate consideration to the need for substantiality and whether it was satisfied.
  7. Misrepresentation must be "the right way round", that is to say, members of the public must be confused into believing that the goods of the defendant are goods of the claimant. It is not enough for them to be misled into thinking that goods of the claimant are goods of the defendant. This is "the wrong way round", or "reverse misrepresentation", as I shall call it. It may suffice for trade mark infringement but not for passing off.
  8. The third requirement for the tort of passing off is damage. The claimant must show that he or she has suffered damage as a result of the misrepresentation. There is an exception for actions to prevent future passing off, when it is enough to show that such damage is likely. This action does not fall within that exception. Heads of potential damage include:
  9. It is sufficient that the claimant proves damage under only one of these heads. In this case, there was no damage to reputation because the quality of the products of the parties was similar, but the judge found damage in the form of a loss of sales.
  10. BACKGROUND

  11. I will consider the background against two particular features of HCL's trading in watches:
  12. HCL's concurrent goodwill: The judge held that HCL has concurrent goodwill in the name HENLEYS CLOTHING. This is confirmed by the fact that the injunction granted by the judge at trial, aimed at further passing off, excluded trading in watches using the name HENLEYS CLOTHING. Ultimate is an importer and wholesaler of fashion goods and accessories which it sells to mail order companies, retailers and online sales companies. The articles that it sells may have the retailers' brand applied for the purpose of retail sale. The second appellant ("HCL") is a retailer of fashion garments and accessories in the youth market. It uses the brand HENLEYS. Ultimate imports goods for retail by HCL, and has been importing watches to be sold as accessories for HCL's clothing range since about 2007. It obtained a licence from HCL to use its brand name HENLEYS for the purpose of selling watches.
  13. The Woolley Licence: The Woolley licence had been executed at the suggestion of Ultimate. HCL had decided to enter the watch market but had discovered that Mr Woolley held a Community Trade Mark for the name HENLEY in relevant classes. Founded by Mr Woolley in 2004, Timesource had developed a substantial reputation as a wholesaler of watches, the majority of which were ladies' watches. These watches were marketed under three brand names, the most successful of which was HENLEY.
  14. The Woolley licence pre-empted passing off issues so long as it was in force. The Woolley licence was restricted to men's watches. It contained safeguards for the name HENLEY. Ultimate's sales were confined by the terms of the Woolley licence to mail order companies and regular retail shops rather than discount retailers and wholesalers. In addition Ultimate's customers had to be approved by Mr Woolley so as to avoid conflicts with Timesource sales. Ultimate was only to use the name in a manner (a) which Mr Woolley approved and (b) which was not confusing or misleading. Publicity for Ultimate's watches was subject to Mr Woolley's approval. In return Mr Woolley received a 5% royalty on sales.
  15. However, in July 2009, Ultimate gave three months' notice to terminate the Woolley licence with effect from 31 October 2009 and after that date there was no contractual restriction on Ultimate's use of the HENLEY name. The judge found that HCL came to the view that the Woolley licence was not needed or at least that to carry on business without the Woolley licence would be a commercial risk worth taking.
  16. In December 2010, following the termination of the Woolley licence, Mr Woolley and Timesource sued Ultimate and HCL for trademark infringement and passing off. The trademark infringement claims were stayed as the appellants have a pending UK application and have applied to the Office of Harmonisation for the Internal Market (OHIM) to invalidate the registration of Mr Woolley's mark.
  17. THE JUDGE'S REASONS FOR CONCLUDING THAT THERE HAD BEEN MISREPRESENTATION AND DAMAGE

  18. With respect to misrepresentation, the judge had to look at the various strands of evidence in turn. It is common ground that, in determining whether there had been misrepresentation about the watches, the judge had to assess all the evidence in the case and use his own common sense and experience as a member of the public (see per Lord Diplock in Re GE Mark (1973) RPC 297). In the well-known words of Lord Parker in A.G. Spalding & Bros v A.W. Gamage [1915] 32 RPC 274, which the judge quoted:
  19. "There may, of course, be cases of so doubtful a nature that a Judge cannot properly come to a conclusion without evidence directed to the point; but there can be no doubt that in a passing-off action the question whether the matter complained of is calculated to deceive, in other words, whether it amounts to a misrepresentation is a matter for the Judge, who, looking at the documents and evidence before him, comes to his own conclusion, and, to use the words of Lord Macnaughten in Payton & Co Ltd v Snelling, Lampard & Co Ltd (17 RPC 635) 'must not surrender his own independent judgment to any witness whatever'."
  20. One strand of relevant evidence was the existence of the Woolley licence and the judge, having considered the various factors that could be deduced from the Woolley licence in either direction, decided to leave it out of account for all the purposes of the passing off claim. This was because the factors went either way. The judge held:
  21. "[34] The trademark licence from Mr Woolley is in my view of limited significance to the issues which I have to decide. Whilst broadly allied, the causes of action for trademark infringement and for passing off are, of course, different, and they require the establishment of different facts. It may be said that Mr Woolley's willingness to grant a licence and the absence of any notable harm to the Timesource business in consequence tend to demonstrate that the HENLEY and HENLEYS businesses can readily co-exist with each other. On the other hand, it also has to be acknowledged that Mr Woolley did require compensation in the form of the licence royalties and, notably, that the licence did incorporate a number of safeguards for the HENLEY business. With the termination of the licence, none of these safeguards apply. It must also be remembered that the licence only covered gentlemen's watches whereas about 60% of HENLEY sales were of ladies' watches. I therefore propose to consider the material facts for the purposes of the claim in passing off without regard to the previous existence of the trademark licence."
  22. As to the direct evidence of witnesses as to misrepresentation, there was some evidence that buyers had been misled. The judge mentions two trade buyers who had initially been misled, namely Ms Lyons, a buyer for NEXT, and a Ms Coulthard, a buyer for JD Williams. There was also some evidence showing or suggesting that members of the public were misled. HCL had paid for "HENLEY" as a Google Adword so that Google would deliver search results with HENLEYS as well as HENLEY, providing scope - as the judge found- for considerable confusion.
  23. There was also evidence that trading standards officers and a Ms Clare Stote had thought that HENLEYS watches were the same as HENLEY watches:
  24. "[22] Lastly, I should mention references in the evidence to Trading Standards Officers having seized HENLEY watches in the mistaken belief that they were HENLEYS watches. This may have occurred in consequence of HCL using a brand protection agency to monitor counterfeit goods. There was also one fairly recent occasion recorded by HCL in its records of a member of the public, Clare Stote, emailing them on 12 March 2011 to enquire if she could buy a model of watch which she had had before and had liked. This was in fact a HENLEY watch, not a HENLEYS watch. It is right to say that, although this was the only example of something like this in the HCL records, I was told that all its earlier emails had been deleted. Accordingly, it is not possible to know whether this was an isolated incident."
  25. However, in the judge's view, the balance of the direct evidence supported the appellants' point of view. The judge held at [37]:
  26. "It is true there is not much evidence of HENLEYS watches being mistaken for HENLEY watches, although there is a certain amount of evidence going in the other direction, ie a belief that HENLEY watches were associated with HCL or Ultimate."
  27. There was what might be called "real" evidence, that is, evidence about the characteristics of the watches themselves. The judge considered that this showed significant similarities between the parties' goods:
  28. "[38] In assessing the evidence I bear in mind, in particular, the following features. First, the brand names in issue are virtually the same. I agree with Mr Malynicz [for the respondents] that the addition of the letter "S", whether by way of possessive or plural, is of little or no significance. Second, I bear in mind that the way the respective brand names are overtly presented on the dials of watches is very similar; frequently, a similar typeface is used. As is evident from the catalogues and other publicity material in evidence, promotion of watches tends to concentrate on the appearance of the product itself and the dial.
  29. The judge also found similarities in the way the watches of the parties were marketed:
  30. "[37]…Third, the way the respective watches are marketed to the public, the approximate retail selling prices and the outlets through which they are sold substantially overlap. Both HENLEY and HENLEYS watches are marketed as "fashion" watches and are promoted in the similar section of catalogues for their respective public sales outlets. Both brands of watch are far from being conventional unadorned watches of the sort sold by several well known Swiss manufacturers."
  31. The judge found further similarities in the retail outlets for the watches and their prices. He continued at [37]:
  32. "Whilst the evidence is that HENLEYS watches tend to retail at slightly more than HENLEY watches, both brands occupy a similar place in the market in terms of price. Finally, it has to be said that, although over 80% of HENLEYS watch sales are apparently made through Argos, both brands tend to be sold in the same sort of outlets such as store chains or online sellers like Amazon."
  33. The judge found that HCL had concurrent goodwill for its fashion brand but held that this was not the answer to the question whether there had been misrepresentation with respect to watches. He held:
  34. "[39] Much of the Ultimate and HCL evidence was directed towards establishing that HENLEYS has goodwill and is well known as a leading fashion brand, particularly for the 18 to 25 year old age group. I accept that this is so. There is no doubt that, despite recent setbacks, HENLEYS has achieved a high turnover in what has been a relatively short period of time. There is also no doubt that HCL has established considerable goodwill under its HENLEYS name in the clothing market. Flowing from this, it was suggested by Mr Moody-Stuart that buyers of HENLEYS watches would make their purchases because of an association with the clothing brand rather than any association with HENLEY. Doubtless, some more youthful buyers of a HENLEYS watch would be attracted because of that brand's "cool urban street wear" image. But I cannot accept that the HENLEYS clothing brand will be known to buyers of watches generally. Nor can I accept that purchasers will buy without regard to the reputation of the watches themselves and are simply interested in external associations."
  35. Weighing up the various strands of evidence, the judge concluded that there was a misrepresentation that watches sold by the appellants under the name HENLEYS were those of the respondents:
  36. "[40] I have come to the conclusion, notably in light of the factors to which I referred in para 38 above, that sales of watches under the brand name HENLEYS engenders the belief that the watches are, or are associated with, HENLEY watches. This is apparently what Miss Stote thought, and I can well understand that. Of course, I emphasise that there is no question here of any deliberate deception of the public. But that is not in issue. The question is whether or not there is a misrepresentation, and in my view there is."
  37. The judge's conclusion did not, however, extend to other articles which HCL sold, in which it had concurrent goodwill:
  38. "[41] Whilst there is a misrepresentation in relation to watches, different considerations apply in the case of jewellery and bags. I do not accept that someone who sees a HENLEYS piece of jewellery or bag is going to associate it with a HENLEY watch or any other items associated with HENLEY watches. Evidently, Timesource would wish to expand its business and goodwill beyond the sale of watches. But, whatever may happen in the future, I have no doubt that there has been in this case no deception in relation to jewellery or bags."
  39. The judge rejected two claims for damage, namely a claim for loss of royalty income and erosion of goodwill:
  40. "As for the claimed loss of royalty income, I do not regard that as recoverable on the facts of this case. It does not flow from the misrepresentation. Nor do I regard this as a case where Timesource can complain of dilution of the HENLEY brand. I agree with Mr Moody-Stuart that such a claim is unreal on the present facts. Mr Malynicz also mentioned in opening that there may be damage in that the HENLEY reputation could be affected by the way HCL carried on business. However, he did not rely on this argument in his closing submissions. I therefore simply record that I regard it as a merely theoretical head of damage which does not have any sound basis on the present facts."
  41. However, the judge inferred that there was damage in the form of lost sales but he did not consider that the damage would be great. The judge held:
  42. "[42] There is no evidence of any actual damage. This is perhaps unsurprising, particularly in view of the existence of the licence until shortly before these proceedings were commenced. Nevertheless, having found a misrepresentation, I accept Mr Malynicz's argument that damage would be likely to ensue even though I do not think it is likely to be great. In the circumstances of this case there is likely to be a loss of sales of HENLEY watches. Moreover, I do note the difficulties which Timesource has had with its JD Williams sales in consequence of that company also stocking HENLEYS watches. Timesource's business has been damaged with Timesource being precluded from selling under its own brand name. …"

    CHALLENGE TO THE JUDGE'S CONCLUSIONS ON MISREPRESENTATION AND DAMAGE

  43. Mr Thomas Moody-Stuart, for the appellants, submits that the judge erred in law and fact in concluding that there had been any misrepresentation.
  44. First, Mr Moody-Stuart submits that the judge drew the wrong inferences from the evidence of misrepresentation. The thrust of the evidence on misrepresentation was of reverse misrepresentation, rather than evidence of misrepresentation the right way round. Two of the trade witnesses, Ms Lyons and Ms Coulthard, gave evidence of misrepresentation that was on his submission clearly the wrong way round. Ms Lyons, for instance, thought that HENLEY watches were ones she had seen in an Argos catalogue. There was also evidence that one trader actually offered to sell HENLEY watches representing that they were "genuine HENLEYS watches". As regards members of the public, Mr Frost (a trade witness) said that several members of the public had asked whether HENLEY watches were the same as the watches that they had seen in the Argos catalogue. On Mr Moody-Stuart's submission, they could only have been HENLEYS watches since HENLEY did not supply to Argos. There was also evidence of confusion among members of the public from another trade witness, Mr Nevitt.
  45. On Mr Moody-Stuart's submission, the judge effectively and wrongly left this evidence out of account. The absence of evidence of misrepresentation "the right way round" was probative of the appellants' case. Any misrepresentation to the trade witnesses was non-operative and therefore had to be disregarded. Thus the judge should have treated the evidence of misrepresentation as showing that the respondents had failed to make out their case.
  46. Secondly, Mr Moody-Stuart submits that the judge was wrong not to take the licence into account. There had been no evidence of any breach of the terms of the Woolley licence. This was important because the terms of the Woolley licence gave safeguards to Mr Woolley and rendered passing-off inoperative. There was also, on Mr Moody-Stuart's submission, no evidence that HCL changed the way it sold watches after the Woolley licence terminated.
  47. Thirdly, on Mr Moody-Stuart's submission, the judge reached the wrong conclusion because he failed to appreciate the significance of HCL's concurrent goodwill. HCL had built up goodwill in the name HENLEYS in relation to clothing. Mr Moody-Stuart submits that a person looking in a shop window with garments marked HENLEYS, and seeing a HENLEYS watch, would associate it with HENLEYS branded clothing rather than with HENLEY watches. The judge therefore gave insufficient weight to the concurrent goodwill which he found HCL had.
  48. Fourthly, on Mr Moody-Stuart's submission, the judge failed to consider at all whether there was a substantial number of members of the public to whom the misrepresentation that HENLEYS watches were those of the respondents was made. The fact that the judge went on to hold in relation to damage that he did not consider that the loss of sales due to passing off was likely to be great was a clear indication that the judge had not addressed the question that any misrepresentation had misled a substantial number of people. He was relying solely on his impression.
  49. As to damage, Mr Moody-Stuart's basic submission here is that once the judge had found that there was no erosion of the HENLEY brand he could not logically then say that a loss of sales was likely. Once the good reputation of HENLEYS watches had been utilised as a defence to the claim for damages for erosion of goodwill, it could not logically be used again to justify the finding of loss of sales.
  50. Mr Simon Malynicz, for the respondents, addresses misrepresentation first. He submits that the thrust of the direct evidence as to misrepresentation was equivocal rather than of reverse representation. Argos was not an outlet for the respondents' watches. Therefore, he submits, the mere fact that a purchaser, such as Ms Lyons, thought that HENLEY watches were the same as the watches in Argos catalogues could only be a clear reverse misrepresentation if he or she knew that the watches shown in the Argos catalogue were HENLEYS as opposed to HENLEY watches. There was, he points out, no evidence that this was so: the witnesses were not asked this particular question. The evidence of these purchasers was thus equivocal. Equivocal evidence of misrepresentation was not enough to show misrepresentation for the purposes of passing off but evidence of confusion was part of the background against which the judge could decide the other issues.
  51. Mr Maynicz submits that that it is not correct to say that there was a complete absence of misrepresentation "the right way round". There was some evidence as to misrepresentation "the right way round", namely:
  52. Mr Malynicz submits that the judge was entitled to decide how much weight to give to the evidence other than direct evidence of misrepresentation. He did not ignore the direct evidence but relied "notably", i.e. principally on the evidence as to the characteristics of the watches, their marketing, sales outlets and prices (Judgment, paragraph [40]). He balanced the various strands of evidence and was entitled to do so.
  53. Mr Malynicz goes on to submit that further inferences could be made because the respondents could not confirm whether or not they received other enquiries from members of the public before that of Ms Stote. There was also no log of calls by members of the public. It is not known whether members of the public telephoned HCL to make enquiries about HENLEY watches. He submits that it is a common problem with deception that the better the quality of the products of the defendant the less likely it is that the deception would come to light. However, the judge did not go so far as to draw inferences from the absence of records of earlier emails. Likewise, I do not consider that this court need do so.
  54. As to the licence, Mr Malynicz submits that the effect of the Woolley licence was neutral. The judge could have gone further because, after the termination of the Woolley licence, the safeguards to prevent passing off had ceased to apply. In that period also HCL began selling ladies' watches. However, the respondents have not filed a respondents' notice to raise the point that the judge was wrong to leave the Woolley licence out of account. Mr Malynicz's submission on this point is, therefore, that the judge was entitled to take the view that the evidence about the Woolley licence went both ways and that it should therefore be left out of account.
  55. As to HCL's concurrent goodwill, Mr Malynicz submits that this was another strand of evidence and again the weight to be given to it was a matter for the judge. Mr Malynicz submits that the concurrent goodwill was in a different field, and that the judge gave adequate reasons for holding that the presence of this concurrent goodwill did not mean that there was no misrepresentation.
  56. On substantiality, Mr Malynicz submits that there was no error of law by the judge. He submits that the judge made a clear finding that there was a substantial deception because of the close similarities between the parties' watches. HENLEYS was only known to a certain group of purchasers. There was evidence that Timesource, on the other hand, had sales of over 1.2 million watches in the period since 2004. The judge rightly, on his submission, held that purchasers of watches would not generally have known of HENLEYS. Accordingly, Mr Malynicz submits that the judge by implication held that there was a sufficient number of persons deceived.
  57. As to damage, Mr Malynicz relies on the judge's finding of lost sales. He submits that this was sufficient. He calls dilution of goodwill an exotic head of damage, on which the respondents had no need to rely.
  58. MY REASONS FOR REJECTING THE CHALLENGE TO THE JUDGE'S CONCLUSIONS ON MISREPRESENTATION AND DAMAGE

  59. It is clear that there was little direct evidence from the witnesses of operative, non-transitory misrepresentation to meet the requirement for the tort of passing off of misrepresentation. However, the judge was not bound by this to reach the conclusion that misrepresentation was not made out. On the authorities such as Spalding v Gamage, the judge was entitled to form his own judgment as to whether there had been a misrepresentation. He had to assess the totality of the evidence. On the issue of misrepresentation, he had to make an evaluation of the relative weight of the various strands of evidence. That being so, this court will not intervene on appeal and set aside his findings unless he was plainly wrong: see, for example, the well-known case of Designers Guild Ltd v Russell Williams (Textiles) Ltd [2000] 1 WLR 2416 at 2423.
  60. The appellants could succeed on this appeal if they could show that the judge was clearly wrong to leave the Woolley licence out of account. The appellants contend that the Woolley licence assisted them. However, over the years the appellants paid substantial royalties under the licence, indicating that Ultimate had reasonably thought that without the Woolley licence there would be passing off. The judge took a middle course between the parties. He recognised that the grant of the Woolley licence indicated that Mr Woolley was prepared to tolerate some competition, a point adverse to the respondents. In my judgment, the question of the weight (if any) to give the Woolley licence was clearly finely balanced. In those circumstances the appellants do not succeed in establishing that the judge the judge's decision to leave it out of account was plainly wrong so far as the appellants were concerned.
  61. As to concurrent goodwill, I accept that concurrent goodwill was established by HCL by virtue of its fashion garment business under the name of HENLEYS. The judge dealt with this at length and reflected it in the injunction that he made. However, concurrent goodwill did not constitute a defence to passing off because HCL did not prove that it had goodwill in the name HENLEYS on its own in the field of watches.
  62. On substantiality, I also accept Mr Malynicz's submission. The judge was greatly influenced by the similarities between the HENLEY name and the HENLEYS name. They are in truth virtually identical. The judge was entitled to reach the view that they would be perceived as such by all, or almost all, prospective purchasers. It followed that a substantial number of members of the public would be involved. The judge gave reasons for holding that the misrepresentation would be the "right" way round: purchasers of watches were more likely to know of HENLEY watches than HENLEYS clothing, which was known only in the youth market.
  63. The crucial point remaining on misrepresentation is whether the judge can be said to have been clearly wrong in the weight he gave to the various strands of evidence other than the licence, principally the direct evidence of witnesses and the evidence as to similarities. Much of the direct evidence showed that people were simply confused by the two names HENLEYS and HENLEY. That is not enough of course for passing-off. Mr Malynicz submits that such evidence went to the point that there was a propensity for the two names to mislead. I would prefer to say this. The situation, in which a judge is faced with limited evidence of misrepresentation and clear evidence of confusion, is exactly the sort of situation in which the judge is justified in giving more weight to his own experience and to the other evidence, especially the "real" evidence, as I have called it, than to the evidence of the witnesses. As I see it, that is what happened here. Given the judge's clear findings as to very substantial similarities between the watches, in my judgment, the judge was entitled to give the deciding weight to that other evidence and to conclude in substance that there would be a substantial number of people who would be actually deceived.
  64. As to damage, in my judgment, the judge was entitled to infer that there was a significant loss of sales. As to loss of sales, there was evidence that JD Williams had stocked both brands of watches but airbrushed out the name of HENLEY on pictures of HENLEY watches to prevent customers being confused. The judge was entitled to find that because of this the respondents would have lost some sales. There could also be other traders who took the same view. Argos did not for instance stock HENLEY watches although it stocked HENLEYS watches. There is no absolute requirement for damage to be substantial. His finding is not on the facts undermined by his quite separate finding that there was no damage to goodwill. Nor need damage be shown under more than one head. Thus the judge's rejection of erosion of goodwill as a head of damage does not undermine the judge's conclusion that this third requirement of the tort of passing off was satisfied.
  65. SUMMARY AND CONCLUSION

  66. In my judgment, the judge was entitled to reach the conclusion that the appellants had misrepresented their watches produced under the name HENLEYS as those of the respondents. The judge gave a clear, comprehensive and succinct judgment and no error of law or fact in it has been shown. I would dismiss this appeal.
  67. Lady Justice Black:

  68. I agree.
  69. Lord Justice Pill:

  70. I also agree.


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