IP Insight: Trade Mark and Design Right Infringement Wheeling into Personal Liability

IP Insight is a series from IP specialists Virtuoso Legal covering key decisions and changes in IP law. This case pertains to a trade mark and design right infringement case and personal liability of directors in cases of blatant infringement.

Bayerische Motoren Werke AG v Premier Alloy Wheels (UK) Ltd & Ors [2020] EWHC 2094 (Pat) (30 July 2020)

Background

Bayerische Motoren Werke AG (BMW) brought proceedings against five defendants that sold alloy wheels using designs similar to BMW’s registered EU designs and bearing BMW’s registered trade marks.

BMW had initially written to the second Defendant (Mr Devon Thomson) in 2014, who signed undertakings which said he will not infringe BMW’s intellectual property rights in the future.

Mr Thomson then asked his stepson, Mr Jerome Layzell (the fourth Defendant), to incorporate another company to help him with his business. This company is called DGT Wheels and Tyres Limited (the third Defendant, “DGT”) and Mr J Layzell is its sole director, also owning all of its voting shares.

The fifth Defendant, Mr David Layzell, is Mr J Layzell’s maternal grandfather. Mr D Layzell lent Mr Thomson money to help with his business, and he helped DGT by raising invoices and ordering products. The first Defendant, Premier Alloy Wheels (UK) Limited, operates the warehouse premises for DGT.

Trade Mark Infringement

On 8 June 2018, a search order and an interim injunction were granted against the defendants.

The search order was executed in DGT’s warehouse, where it was found that the defendants were using a “badging station” and had over 1,600 wheel centre caps bearing BMW’s trade marks.

Furthermore, the judge found that the defendants bought several alloy wheel products from China bearing BMW’s trade mark, all being replicas of BMW’s products.

It was therefore easy for Recorder Douglas Campbell QC to find that the defendants infringed the claimant’s trade marks. 

Design Right Infringement

BMW has several EU registered designs. The judge found that each of the six designs said by BMW to be infringed had been infringed.

Although there are several constraints on the freedom of the designer of BMW’s alloy wheels due to the fact that the wheels must be, for example, circular, the judge held that the Defendants’ alloy wheels are similar to BMWs.

Some of the highlighted similarities were in the “shape of the spokes, the shape of the central structure .”

It was therefore held that DGT’s alloy wheels do not create a different overall impression and they infringed BMW’s rights.

The Liability of Each Party

The infringing goods were imported by DGT and were held in the First Defendant’s warehouse.

Therefore, both were liable for trade mark and design right infringement. As Mr Thomson was involved in previous infringements and was the one that directed the infringements here, he was liable for trade mark and design right infringement, as well as breach of contract.

Although there was no clear evidence that Mr J Layzell committed any of DGT’s infringing acts or that he procured/directed them, he was a director of, signed cheques for and fitted tyres for the company.

Recorder Campbell QC went even further and held that the grandfather, Mr D Layzell, was also jointly liable for the infringing acts of DGT. Mr D Layzell was not a director, but his duties included invoicing, making payments, arranging shipping, and he seemingly must have been aware that he was infringing the Claimant’s rights.

Our Insight

This case was a clear-cut infringement of BMW’s rights.

The defendants were aware of BMW’s rights and attempted to benefit out of BMW’s reputation.

However, it is worth noting that the case shows liability is not limited to a company and its directors.

In this case, other decision-makers were not able to hide behind the corporate veil, and rather they were held to be jointly liable.

This is extreme in our view and is unlikely to be something we see in other cases except where the infringing acts are so blatant and premeditated.

Who are Virtuoso Legal

Virtuoso Legal is a specialist team of IP solicitors, founded in 2007 by Elizabeth Ward and based in London and Leeds.

The team offer a comprehensive IP offering with registration, commercialisation and litigation expertise - all present in-house.

In recent years, the Virtuoso Legal team have represented cases in the UKIPO, EUIPO, IPEC, High Court, Court of Appeals and Supreme Court of the United Kingdom.