Lumos Skincare (Lumos) operated a skincare products distribution business under the trade mark “Lumos”. Sweet Squared and the other businesses against which Lumos issued proceedings (SS) distributed nail care products that were produced in the US and which carried the trade mark “Lumos”. Lumos issued proceedings against SS for passing off, relying on the goodwill that had been generated in the “Lumos” mark by Lumos itself but also by Lumos Products Limited, which had previously assigned goodwill to Lumos.
In order to succeed, Lumos needed to prove to the Patents County Court (PCC) that (i) goodwill was attached to the products in question, (ii) SS had committed a misrepresentation to the public so that the public would believe that the products offered by SS were in fact those of Lumos, and (iii) Lumos had suffered damage because of SS’s misrepresentation due to it seeming to the public that the source of Lumos’ and SS’s products was the same.
SS denied passing off, arguing that:
- Lumos’ goodwill was very small in general, and more so in the skincare market itself;
- nail care products were sufficiently different to skincare products so that misrepresentation was unlikely;
- SS sold products to professionals, whereas Lumos sold products to consumers, which made misrepresentation even more unlikely;
- in any event, the products that SS distributed carried the mark “FN Lumos”, not just “Lumos”.
The PCC dismissed the claim for passing off. In relation to goodwill, the PCC ruled that Lumos had used the “Lumos” mark to an extremely limited extent, and that its targeted share of the skincare industry was very small. Whilst even a modest amount of goodwill could support a passing off claim, there was not enough goodwill in this particular case.
The PCC also ruled that there had been no misrepresentation for a number of reasons, including:
1. Lumos’ market for the relevant products was small, so a material misrepresentation would only have been possible with a very small number of people;
2. there was a clear separation between the nail care industry and the skincare industry, which was recognised within each industry and in the wider beauty industry itself; and
3. there was no evidence that there would be widespread confusion for customers.
However, the PCC ruled that the distinction between sales to consumers and businesses should not come into consideration for passing off, and that the use of “FN Lumos” rather than “Lumos” did not provide any differentiation for SS.
Given that the PCC ruled that there was little goodwill attached to the products and a misrepresentation had not taken place, there were no damages in this case. However, the PCC did say that, if a misrepresentation had been proved, the PCC would have accepted that some damage had been caused at least to Lumos’ trade reputation as Lumos had produced evidence that customers would have been prepared to pay less for the high-priced products that were sold restrictively by Lumos alone.
This case is interesting as the PCC reiterates that passing off can be proved even with a small market share with little goodwill attached to the products in question. However, Lumos was unable to prove this to the PCC and the PCC expressed surprise that Lumos produced as little evidence from its customers as it did, where such evidence could have assisted its claim. The case also shows that there is always better protection with obtaining a registered trade mark to enforce rights in a brand, but particularly before goodwill is well-established.