High Court decision: AGA Rangemaster Group Limited v (1) UK Innovations Group Limited (2) Michael Patrick McGinley

Background to dispute

The Claimant, AGA Rangemaster Group Limited, is a manufacturer and retailer of the well-known range cookers sold in the UK since 1929 under the name “AGA”.

The First Defendant, UK Innovations Group Limited, was launched by the Second Defendant, Mr McGinley, to fit AGA cookers with an electric control system (the “eControl System”) to convert them from running on traditional fossil fuels to running on electricity. Between October 2021 and June 2022, the First Defendant sold 26 AGA cookers after obtaining them from trade suppliers or as trade-ins from customers, refurbishing them and fitting with the eControl System. These refurbished and converted cookers looked the same as their AGA equivalents save that they had an “eControl System” badge in place of the temperature gauge fitted to the original AGA cookers.

Issues considered by the judge

Allegations

Whilst the Claimant did not object to the Defendants supplying eControl Systems fitted to AGA cookers owned by existing customers, it did complain about the Defendants’ sale of complete retrofitted AGA cookers fitted with the eControl System (the “eControl Cookers”).

The Claimant alleged that the extent of the changes made by the Defendants to the AGA cookers refurbished and sold meant that they were no longer the original AGA cookers and, as a result, in marketing and selling the eControl Cookers using the AGA name the Defendants infringed its trade mark rights, including its “AGA” word marks as well as its 2D and 3D marks (the “AGA Trade Marks”) as set out below:

In claiming trade mark infringement, the Claimant relied on sections 10(1), (2) and (3) of the Trade Marks Act 1994 (the “Act”).

Further, the Claimant also asserted that by making the control panels for their eControl Cookers, the Defendants infringed its copyright in a CAD drawing showing the design of its electric AGA cooker control panel. It was also alleged that the Second Defendant was personally liable for the above infringements as a joint tortfeasor.

Defences

Save as regards the 2D mark and the non-admission of reputation and distinctive character, the Defendants did not deny that their actions fell within sections 10(1), (2) or (3) of the Act. However, they claimed that they had a defence to all of the trade mark infringement claims based on section 12 of the Act; the Defendants argued that because the eControl Cookers sold by them were AGA cookers which had previously been placed on the market by the Claimant, or with its consent, the Defendants did not infringe the AGA Trade Marks by using them when further dealing with the cookers.

The Defendants also claimed that they used the “AGA” word marks purely descriptively (i.e. to explain the purpose of their products and indicate that the eControl System could be used to convert AGA cookers) which provided them with a defence under section 11(2) of the Act (use of AGA was to explain the purpose of their products – to indicate that the eControl System could be used to convert AGA Cookers), and counterclaimed for declarations of invalidity of the Claimant’s 2D and 3D marks on the basis that they lacked certainty as to their nature and would be misunderstood by the average consumer.

In rebutting the copyright infringement allegations, the Defendants argued that copyright could not subsist in the drawing because (i) the work was entirely dictated by technical considerations and (ii) it was not an expression of the artist’s own intellectual creation as the drawing had been copied from an earlier work.

Whilst the Defendants did not deny that there has been copying, they claimed that they had a defence to any copyright infringement action by reason of section 51 of the Copyright Designs and Patents Act 1988 (the “CDPA 1988”) i.e. it is not an infringement of any copyright in a design document recording or embodying a design to make an article to the design.

Decision

Trade mark infringement

The Court held that exhaustion of trade mark rights does not apply where the proprietor of the trade mark has legitimate reasons for opposing further dealings with the goods.

The decision confirmed that the renovation and conversion works carried out by the Defendants to the AGA cookers per se did not give the Claimant legitimate reasons to object to the Defendants’ activities. However, the Court found that the Claimant had legitimate reasons to object to the Defendants’ activities because of the way in which they marketed and sold the eControl Cookers which gave customers the impression that there was some commercial connection between the Defendants (or their products) and the Claimant.

The impression of a commercial link resulted from the statements made on the Defendants’ website which were further reinforced by the details on the Defendants’ invoices both of which suggested that customers were being offered an AGA product (i.e. an eControl AGA). The judge explained that in these types of cases there is a need for parties operating in the conversion or refurbishment industry to ensure that customers are not given the impression that the conversion is somehow linked to the owner of the trade mark and active steps must be taken to dispel any such impression. The Defendants were found to have done the opposite.

The judge also held that the “AGA” word marks were not used by the Defendants descriptively but rather as part of a badge of origin (i.e. to suggest that the eControl Cookers and the eControl System were associated with the Claimant as the proprietor of the AGA Trade Marks). Consequently, the Defendants could not rely on section 11(2) defence. Neither were they successful with their invalidity arguments regarding the Claimant’s 2D and 3D marks.

Joint tortfeasorship

As recently confirmed in the landmark Lifestyle Equities judgment, for a person to be liable as an accessory they must have known the essential facts that made the act unlawful. This is contrary to establishing primary liability in trade mark infringement cases where knowledge is not a requirement.

The judge held that in this case Mr McGinley did not know or had reason to believe that the Defendants’ activities were liable to affect the origin function of the AGA Trade Marks, that they gave rise to a likelihood of confusion or that they would be detrimental to the reputation or distinctive character of the AGA Trade Marks. As such, Mr McGinley was not found to have had the requisite knowledge of the essential facts relating to the Claimant’s infringement case, nor knowledge of the facts which meant that there was no exhaustion defence.  As a result, he was found not to be a joint tortfeasor.

Copyright infringement

In the judge’s view the design of the control panel depicted in the CAD drawing was not dictated by technical function and the author of the work indeed made creative and aesthetic choices which included selecting rotational dials (rather than push buttons) aligned vertically or adding an elongated oval line around the dials. And so, the drawing was an original artistic work which qualified for copyright protection. The judge also held that the Defendants’ control panel was copied from the Claimant’s, thereby indirectly copying the design drawing.

Nevertheless, he agreed that the Defendants could rely on section 51 of the CDPA 1988 in defending the copyright infringement claim. The judge was not prepared to consider the significance of the decision of the CJEU in Cofemel and the way in which English courts should respond to it (the CJEU judgment arguably made the status of section 51 unclear). However, he confirmed that the purpose of section 51 is to limit the role of copyright in relation to the protection of industrial designs (i.e. designs for non-artistic articles). Therefore, based on the wording of this section alone, and given that the CAD drawing was a design document for something which was not an artistic work, the judge held that the Defendants did not infringe the copyright in the drawing by making control panels to the design recorded in that drawing.

Practical takeaways

The following practical points can be taken from this decision:

1. The case indicates that merely refurbishing and converting goods that had been put on the market by the trade mark owner is unlikely to give the trade mark owner a legitimate reason to object to such activities. This is encouraging news for businesses selling refurbished goods and therefore supporting the more sustainable circular economy. However, it also clarifies that in such scenarios businesses must ensure that their websites and other marketing materials do not suggest any commercial link with the trade mark owner, and that any such connection is actively and clearly dispelled.

2. The judgment serves as a useful reminder that the volume of infringing goods (in this case only 26 eControl Cookers were sold by the Defendants) is not always the primary factor for claimants in deciding whether or not to bring infringement proceedings. “Big players” in the market are likely to have more resources and, therefore, a greater inclination to litigate over principles as opposed to for financial gains.

3. The ruling highlights the challenge currently faced by claimants seeking to establish a party’s personal liability as a joint tortfeasor. To do so, they are required to show that the party had the requisite knowledge of the essential facts that made the primary actor’s act tortious. Simply asserting that they were responsible for the day-to-day management of the affairs of the primary actor or that they personally authorised or procured the infringement will not suffice to meet the evidential threshold.

4. The judge did not address the impact of the Cofemel decision on the status of section 51 CDPA 1988. However, with the Claimant granted permission to appeal the decision on the copyright point, we can expect greater clarity on this uncertain area of law in the very near future.