Lifestyle Equities C.V. & Anor v Ahmed & Anor [2021] EWCA Civ 675 (07 May 2021)

Lifestyle Equities C.V. & Anor v Ahmed & Anor [2021] EWCA Civ 675 (07 May 2021)

Accessories (directors) are only liable to account for profits they themselves derived from the infringement, not for the profits made by the principal company. Directors who are personally involved in infringing acts are liable as joint tortfeasors, regardless of motive or knowledge, unless their actions are strictly limited to constitutional governance. The court retains discretion to order an account of profits against such accessories. Loans outstanding as debts are not profits; salaries may be profits only to the extent attributable to infringing activity.

Citation
[2021] EWCA Civ 675
Parties
Respondent/appellant: Lifestyle Equities C. V.; Respondent/appellant: Lifestyle Licensing B. V.; Appellant/respondent: Mr Kashif Ahmed; Appellant/respondent: Ms Bushra Ahmed
Jurisdiction
England and Wales
Judgment Date
07 May 2021
Procedural Posture
Appeal (civil) / Court of Appeal Judgment Following High Court Trial
Outcome
Lifestyle's appeal dismissed; Ahmeds' appeal allowed in part (loan not profit); account of profits ordered against Ahmeds for portion of salaries only.
Legal Topics
Trade Mark Infringement, Passing Off, Accessory Liability, Account of Profits, Directors' Personal Liability, Joint and Several Liability
Intellectual Property Equity Company Law Trade Mark Infringement Passing Off Accessory Liability Account of Profits Directors' Personal Liability +1 more

Case Brief

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Parties

Lifestyle Equities C. V.

Respondent/appellant

Lifestyle Licensing B. V.

Respondent/appellant

Mr Kashif Ahmed

Appellant/respondent

Ms Bushra Ahmed

Appellant/respondent

Procedural Posture

Appeal (civil) / Court of Appeal Judgment Following High Court Trial

Legal Issues

  1. 1 Whether accessories (company directors) jointly and severally liable for all profits of principal infringer or only their own profits
  2. 2 Whether directors acting within authority and without improper motive can be personally liable as joint tortfeasors
  3. 3 Whether an account of profits should be ordered against accessories

Ratio Decidendi

Accessories (directors) are only liable to account for profits they themselves derived from the infringement, not for the profits made by the principal company. Directors who are personally involved in infringing acts are liable as joint tortfeasors, regardless of motive or knowledge, unless their actions are strictly limited to constitutional governance. The court retains discretion to order an account of profits against such accessories. Loans outstanding as debts are not profits; salaries may be profits only to the extent attributable to infringing activity.

Court Disposition

Lifestyle's appeal dismissed; Ahmeds' appeal allowed in part (loan not profit); account of profits ordered against Ahmeds for portion of salaries only.

Orders

  • Lifestyle's appeal on scope of accessory liability dismissed.
  • Ahmeds' appeal on loan issue allowed; loan not treated as profit.