The claimant, trading as Autopaint International, v Anglo-Dutch Paint: supplier liable for going beyond agreed brand use

What happened

The claimant ran Autopaint International, a car paint franchise, buying stock from manufacturer De Beer through its UK distributor, Anglo-Dutch. When the claimant fell into serious debt to De Beer, the parties orally agreed Anglo-Dutch could sell Autopaint branded paint directly to franchisees, but only where Autopaint itself could not supply. Anglo-Dutch went further, selling extra products outside that limit, putting its own De Beer and Octoral paint into Autopaint tins, and at a June 2005 trade conference inviting franchisees to commit long term to buying the full range direct from Anglo-Dutch under the Autopaint name.

What did the court decide in Autopaint International v Anglo-Dutch Paint and Chemical Co. Ltd & Ors?

The court found there was a genuine oral consent agreement, but it was limited to situations where Autopaint could not meet demand. Selling ancillary products outside that limit, putting other paint into Autopaint tins, and pitching the whole franchise network at the June 2005 conference all went beyond what the claimant had agreed to, and amounted to trademark infringement and several forms of passing off. Claims for malicious falsehood, false representation of status, copyright infringement and causing loss by unlawful means all failed, with the unlawful means claim failing because the conduct was not shown to have actually caused the loss of the franchise network.

What we learned from this

• What I'd take from this is that giving someone limited permission to use your name, logo or tagline on specific terms doesn't give them a free hand to use it however they like afterwards.
• If you agree to let a supplier or distributor use your brand in defined circumstances, it's worth putting those limits in writing so there's no argument later about what was actually agreed.
• Acting outside the scope of a consent you've been given can still count as trademark infringement, even where some of your use of the mark was genuinely authorised.
• Winning on trademark infringement and passing off doesn't mean every claim succeeds. The claimant lost on malicious falsehood, copyright and the economic harm claims in the same case.

Things to be aware of

The businesses involved

What happened next

• The claimant appealed, and the Court of Appeal gave judgment in the case in February 2008.Source: 8Newsquare

What others said about it

• World Trademark Review framed the case as a cautionary tale for distributors who go beyond the scope of consent they've been given to use a brand owner's mark.Source: Worldtrademarkreview
• Practical Law's case note highlights that the decision turned on how the High Court assessed the limits of a consent defence to trademark and passing off claims.Source: Practical Law (Thomson Reuters)
• Lexology noted that despite bringing several intellectual property claims, the claimant was only partially successful against the paint supplier.Source: Lexology