Grenade can't be dodged for sole director found jointly liable for IP infringement

In a recent decision of the Intellectual Property Enterprise Court ('IPEC'), a sole company director has been found jointly liable with his company for trade mark infringement and passing off (Grenade (UK) Ltd v Grenade Energy Ltd and another [2016] EWHC 877 (IPEC)).

Grenade (UK) Ltd ('the Claimant') filed for summary judgment against Grenade Energy Limited and its sole company director ('the Defendants') for its use of the name 'Grenade'. Although the Defendants admitted trade mark infringement, they argued that the Claimant had suffered no damage to its goodwill and therefore no passing off claim could be satisfied. The Defendants also argued that the director, who was also the sole shareholder, should not be jointly liable.

Having been presented with evidence of actual confusion, including correspondence from the Claimant's supplier, the IPEC held that damage to the Claimant's business was inevitable. The IPEC also found the Defendants to be jointly liable as the Second Defendant's status as a sole director raised an evidential presumption that all acts done by the First Defendant were at the exclusive instigation of the Second Defendant. The IPEC saw no evidence to show the acts complained of were not controlled by the Second Defendant. The IPEC therefore granted summary judgment for the Claimant against the Defendants.

This case is an important reminder for directors exerting sole control of their companies that they are likely to be held personally liable for IP infringement, unless they can satisfy the Court that they did not knowingly participate in, or control, the activities amounting to infringement. The IPEC has made it clear that the availability of this defence is likely to be limited in these circumstances.