Lifestyle Equities v Santa Monica Polo Club: directors only pay back profits they actually received

What happened

An earlier 2017 judgment had already found that Santa Monica Polo Club signs infringed Lifestyle Equities' Beverly Hills Polo Club trademarks and amounted to passing off (using get-up or branding that misleads customers into thinking goods come from someone else). This second trial dealt with the money. The main infringing companies had gone into administration, so there was limited financial information available. The court had to work out whether two individual directors, a husband and wife, were personally liable alongside the company, and if so, how much they each had to pay.

What did the court decide in Lifestyle Equities CV v Santa Monica Polo Club?

The court found the husband was the ultimate decision maker for the infringing business and was jointly and severally liable (meaning either defendant could be pursued for the full amount, though contribution between them is possible) for all the infringing acts. The wife was liable only for a "House of Brands" division, which made up 10% of the business. On the legal question, the court held that someone jointly liable with a company does not have to account for profits the company made unless they personally received that money. So each director's liability was capped at what they personally received: a share of salary tied to the infringing trade, and in the husband's case, a company loan the court found had not been repaid.

What we learned from this

• What I'd take from this is that being found jointly liable for a company's trademark infringement doesn't automatically mean paying back everything the company earned from it. The court limited each director's exposure to money they actually took home.
• If you're a director of a company facing an infringement claim, what matters for your personal exposure is usually what you personally received, such as salary or loans, not the company's total profit.
• Keep clear records of director salary, loans and any repayments. In this case, an unrepaid loan became part of the personal liability calculation.
• The court flagged this as a relatively novel point with limited supporting authority, so the legal position here was not settled beyond doubt at the time.

Things to be aware of

The businesses involved

What happened next

• The underlying question of director liability and the account of profits went to the Supreme Court, which held that company directors are not strictly liable for their company's trademark infringement and set out the knowledge required before profits can be recovered from them personally.Source: The Global Legal Post, June 2024
• Following the Supreme Court ruling, commentary noted that Frasers Group, which had by then become linked to the case, avoided a substantial damages bill after the appeal succeeded.Source: Business Matters, May 2026

What others said about it

• IAM Stobbs frames the litigation as putting a spotlight on when company directors can be held personally liable for their company's trademark infringement.Source: Iamstobbs, July 2024
• RPC notes the Supreme Court later allowed the directors' appeal, reshaping the test for accessory liability and what counts as recoverable profits in IP cases.Source: RPC international law firm, July 2024