The Court of Appeal has upheld an injunction, granted in favour of the London jeweller and luxury goods retailer Asprey & Garrard Ltd, to restrain a seventh generation Asprey from running a competing business under the Asprey name. The case illustrates some of the issues that can arise with family names and the "own-name" defence.

Both sides accepted that Asprey & Garrard Ltd (the claimant) had a worldwide reputation for luxury goods and that the name "Asprey" was recognised by the public as distinctive of this company and its goods.

The defendant, William Asprey, was a scion of the Asprey family which had owned the claimant's business unti11995. He had worked in the claimant's gun department unti11999 when he set up WRA (Guns) Ltd (the first defendant) as a competing business trading as "William R Asprey Esquire".

Mr Asprey publicised his business, saying "William R Asprey Esq. was established in 1999 by William Asprey, the seventh generation of the renowned Asprey family who established their first luxury business in 1781... Continuing his family tradition, William Asprey is now opening a new luxury goods store in Mayfair."

Although there had been several instances of confusion between the two businesses, Mr Asprey took pains to distinguish his business from the claimant and in January this year he had even put a disclaimer notice in his shop window. Nevertheless, the claimant sued for trade mark infringement and passing-off.

A passing off claim requires a claimant to show:

  • that he has goodwill attached to goods or services,
  • that the defendant has made a misrepresentation (which need not be intentional) that his goods or services are those of the claimant, and
  • that the claimant has therefore suffered damage.

There is a limited "own-name" defence to passing off, summarised by the Court of Appeal in Asprey as follows: a man is entitled "to carry on business in his own name subject to two conditions: (1) he must not do anything more than that to cause confusion with the business of another, and (2) he must do it honestly".

There is also an own-name defence to trade mark infringement, set out in section 11(2) of the Trade Marks Act 1994: a registered trade mark is not infringed by "the use by a person of his own name or address & provided the use is in accordance with honest practices in industrial or commercial matters."

On passing off, both the High Court and Court of Appeal accepted that Mr Asprey had sought to correct any instances of confusion. However, the High Court concluded that "although ... I entirely acquit Mr William Asprey of any intention to pass off, I fear that what he is doing would lead to just that, the deception of some customers" and the Court of Appeal supported the High Court's view that disclaimers "unless they are massive and omnipresent, hardly ever work".

The Court of Appeal found it hard to understand why the defendants thought it important to incorporate the Asprey name into their trading name, unless to benefit from an association with the Asprey family and hence with the claimant's goodwill. The claimant had no doubt paid handsomely for the Asprey name and for the goodwill generated over six generations when it bought the business in 1995.

The Court of Appeal held that the limited company was not saved by the own-name defence. Its "own name" was not "William R Asprey Esquire" but "WRA (Guns) Limited" (which it was not trading under). The Court of Appeal confirmed that the defence does not apply to names of new companies, as otherwise a route to piracy would be obvious; the same logic applied to a newly adopted trade name.

Although the Court of Appeal did not rule on whether Mr Asprey personally could rely on the own-name defence if he traded on his own account (rather than through his limited company) the High Court did consider the issue. The judge observed that Mr Asprey was entitled to say he was a seventh generation Asprey and proud of it. The difficulty was that, in so saying, it had to be unambiguous that he was no longer connected with "Aspreys". Despite Mr Asprey's "evident honesty" and his efforts to avoid confusion, the judge decided he was on the wrong side of the line.

In light of this, it appears that, if a family business is sold, a relative of that family - who may have nothing to do with the original business - might in effect be prevented from setting up a competing business under his own name. The underlying difficulty appears to be that goodwill in a family trading name may derive partly from the activities and reputation of the business (business goodwill) and partly from the family reputation and heritage (family goodwill). In Asprey, the High Court effectually enforced business goodwill over family goodwill.

Because the Court of Appeal did not comment on this point, the High Court's decision currently stands as authority but it is unlikely that this will be the last word on the subject. Mr Asprey's situation is not unique and the courts are almost certain to be faced with a similar problem before long.

First published in Brand Strategy in December 2001.

Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.