Blog - 13/02/2017
Lawyer’s name: reputation is not the same as goodwill
Following a summary judgment application, the Intellectual Property Enterprise Court has held that a solicitor’s reputation does not amount to goodwill to form the basis of a passing off claim.
In Bhayani & Anor v Taylor Bracewell LLP  EWHC 3360, the first Claimant, Ms Bhayani, was a Partner at Taylor Bracewell specialising in employment law. Part of the agreement between the two parties was that the firm would offer services under the name “Bhayani Bracewell” in relation to services supplied by Ms Bhayani. Taylor Bracewell registered this name as a trade mark in relation to legal services amongst other things on 23 May 2014 (the ‘Trade Mark’).
Following a breakdown of trust between the two parties, Ms Bhayani left Taylor Bracewell, but the firm, for a while, continued to offer employment law services under the Trade Mark without Ms Bhayani. Consequently Ms Bhayani issued proceedings for passing off on the basis that Taylor Bracewell had falsely represented that Ms Bhayani was still involved with their business and had thus passed off its services, particularly its employment law services as being those of Ms Bhayani. Ms Bhayani also sought to revoke the Trade Mark on the ground that the firm’s use of the mark was liable to mislead the public.
Taylor Bracewell applied for summary judgment or in the alternative a strike out of the claims.
One of the elements required to succeed in an action for passing off is goodwill. Although it was not in dispute that reputation in itself does not found an action in passing off, the question was whether Ms Bhayani had also acquired goodwill.
The Judge held that goodwill cannot in law subsist as a thing alone, rather it is indivisible from the business with which it is associated. This is to be distinguished from reputation which can exist by itself. So a solicitor may enjoy the highest possible reputation and this will be personal which can only be attached to that individual. Reputation however cannot on its own form the basis of an action for passing off.
In this case Ms Bhayani’s reputation was derived from her acts carried out in the course of business at Taylor Bracewell (and at a previous firm). Accordingly the Judge found that there was no reason to depart from the general rule that the goodwill generated by the activities of employees in the course of their employment vests in the employer and that likewise, goodwill generated in the course of duties carried out within a partnership vests in the partnership. The goodwill in this case therefore vested in Taylor Bracewell (and Ms Bhayani’s previous firm) and consequently the application for summary judgment succeeded.
It should be noted that the Judge also commented that if a solicitor moved to another firm and the previous firm continued to represent that the solicitor was still employed by them or remained as a Partner after they have left that firm, it could be possible to take action against them on the grounds that the goodwill associated with the name of that solicitor now vests in their new firm and/or that there has been an injurious falsehood.
Accordingly firms should beware that once an employee leaves a firm, they should ensure the prompt removal of references to that employee from their website and other collateral (aside from possibly historical references) to make it clear that the employee is no longer employed at that firm.
In relation to the application to revoke the Trade Mark, the Judge agreed that it had a realistic prospect of success at trial and refused to strike out that part of the claim.
If you wish to discuss any of the issues raised above, please contact Karen Lee – Associate, or any member of the Edwin Coe Intellectual Property team.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing.