Fenty v Arcadia Group Brands Ltd [2015] EWCA Civ 3

Topshop sold t-shirts bearing a photograph of Rihanna, licensed from the photographer but not from her. The Court of Appeal upheld Birss J's finding of passing off: in the particular circumstances the image implied her endorsement, damaging her goodwill. Appeal dismissed.

Facts

In 2012 the appellants (“Topshop”), operators of the well-known high street fashion chain, sold in stores and online a fashion t-shirt bearing a clearly recognisable photographic image of the recording artist Rihanna. The photograph had been taken by an independent third-party photographer during the video shoot for the single “We Found Love” from her “Talk That Talk” album, and Topshop had taken a copyright licence from the photographer. Rihanna had given no licence for the use of her image on clothing. About 12,000 units were sold between March and August 2012 at £22.00 each. The garment was initially described online as “RIHANNA TANK”, though references to her name were removed by 14 March.

Rihanna and two of her corporate licensing vehicles sued for passing off. Birss J ([2013] EWHC 2310 (Ch)) found that Rihanna had substantial goodwill, not merely as a musician but as a style leader in the world of fashion, arising from her merchandising and endorsement businesses (including collaborations with H&M, Gucci and Armani). He found the sale of this particular t-shirt was likely to lead a substantial number of purchasers to believe it had been approved or authorised by Rihanna, that this belief would form part of their motivation to buy, and that damage followed both in lost merchandising sales and in loss of control over her reputation in the fashion sphere. He granted an injunction restraining further dealing in the garment without clearly informing prospective purchasers that it had not been approved or authorised by her.

Two matters were of particular significance in the judge’s reasoning: (i) Topshop’s own promotion of its connection with Rihanna, including a 2010 competition offering entrants the chance to win a personal shopping appointment with her at the Oxford Circus store (which attracted over 1,300 entries in four days), and a February 2012 tweet from @Topshop publicising her presence in that store; and (ii) the nature of the image itself, which resembled a publicity shot for the recent album, showing the same hairstyle and headscarf as the album imagery.

Issues

The Court of Appeal had to decide whether Birss J had erred in principle or on the evidence in finding passing off. The specific grounds raised were:

• Whether the judge failed properly to distinguish between character merchandising (which does not necessarily import any representation of endorsement) and false endorsement.
• Whether, given that the sale of a garment bearing a recognisable image of a famous person is not in itself passing off, the judge should have treated such use as “origin neutral” and dismissed the claim, including any claim founded on misrepresentation by omission.
• Whether the judge should have assessed the position from the perspective of those for whom the image was origin neutral, rather than those liable to treat it as denoting authorisation, given that the absence of an image right is a matter of law.
• Whether the case was properly pleaded and developed, and whether the judge wrongly relied on inadmissible or valueless evidence (in particular opinion evidence of Mrs Perez of Rihanna’s management team), including whether permission to appeal should be granted against the judge’s pre-trial admissibility ruling of 5 July 2013 ([2013] EWHC 1945 (Ch); [2013] FSR 37).

Arguments

Topshop (Mr Geoffrey Hobbs QC and Mr Hugo Cuddigan)

Topshop argued that purchasers of t-shirts bearing images of pop stars buy them because they want to wear a picture of their idol, not because of any perceived material connection; merchandising therefore carries no misrepresentation, and even a belief in a licensing arrangement would be unlikely to affect the buying decision. It was not the province of the common law to create exclusive rights in categories of product. The market for garments bearing images of Rihanna was one others were in principle entitled to enter, and the injunction wrongly made Topshop answerable for a misrepresentation by omission. The judge should have assessed the claim by reference to those for whom the image was origin neutral. Finally, Rihanna had never properly alleged or proved that the particular image was distinctive of her through any promotional activity; the evidence of Mrs Perez was expert evidence for which no permission had been obtained, the judge had ruled that parts of it were argument not requiring cross-examination, and yet he had relied upon it at [67] as an essential foundation of his finding.

Rihanna (Mr Martin Howe QC and Mr Andrew Norris)

Rihanna accepted she had no right in English law to prevent all use of her image and that selling garments bearing her image was not in itself passing off. But it did not follow that the image had to be excluded from the matrix of facts giving rise to an overall representation of endorsement. Topshop was in substance contending not for the absence of an image right but for a positive right to market goods bearing an image even where its use in particular circumstances gave rise to a misrepresentation. Reliance was placed on the styling competition entries as demonstrating fans’ devotion and their regard for Rihanna as an authority on fashion and style.

Judgment

Kitchin LJ gave the leading judgment, dismissing the appeal and refusing permission to appeal against the 5 July 2013 ruling. Underhill LJ agreed, with additional observations; Richards LJ agreed with both judgments.

The legal framework

Kitchin LJ began by restating that there is no image or character right in English law, citing Douglas & ors v Hello! Ltd & ors (No 3) [2007] UKHL 21, [2008] 1 AC 1, where Lord Hoffmann said at [124] that “There is in my opinion no question of creating an ‘image right’ or any other unorthodox form of intellectual property”, and Lord Walker at [293] observed that under English law a celebrity cannot claim a monopoly in his or her image as if it were a trademark or brand. A celebrity must therefore rely on some other cause of action, here passing off, which protects goodwill and is not designed to protect against fair competition. He applied the classic tripartite test of Lord Oliver in Reckitt & Colman Products Ltd v Borden Inc & Ors [1990] RPC 341 at 406 (goodwill, misrepresentation, damage), noting that it suffices that goods are represented as connected or associated with the claimant provided the connection is material.

He endorsed the analysis of Laddie J in Irvine v Talksport Ltd [2002] EWHC 367 (Ch), [2002] 1 WLR 2355, distinguishing endorsement (which implies approval) from merchandising (which need not), and noting Laddie J’s requirement that a false endorsement claimant prove significant reputation or goodwill and a false message understood by a not insignificant section of the market. Kitchin LJ stated: “I detect no criticism of Laddie J’s analysis in the opinions of the House of Lords in the Hello! case and I would respectfully endorse it.” He balanced this against Elvis Presley Trade Marks [1999] RPC 567, where no assumption could be made that use of a well-known name must have been licensed, and Harrods Ltd v Harrodian School Ltd [1996] RPC 697, where Millett LJ required a connection by which the claimant would be taken to have made himself responsible for the quality of the defendant’s goods.

Accepting the force of Mr Hobbs’ framing, Kitchin LJ identified two critical hurdles in a merchandising case:

“First, it must be shown that application of the name or image to the goods has the consequence that they tell a lie. This requirement, which is closely allied to distinctiveness, will not be satisfied if the name or image denotes nothing about the source of the goods. Second, it must be shown that the lie is material.”

Ground 1: merchandising and endorsement

The court held the judge had properly directed himself. He had reminded himself of the three elements of passing off, referred to Irvine, acknowledged that merchandising need not involve any perception of endorsement, and recognised that any false representation of connection must be of a relevant kind (material responsibility for quality) and must play a part in the purchasing decision. On the facts he found the use of this image in these circumstances represented Rihanna’s endorsement. Kitchin LJ concluded that “the reasoning of the judge discloses no error of principle of the kind for which Mr Hobbs contends.”

Ground 2: “origin neutral” use and misrepresentation by omission

Kitchin LJ accepted Mr Howe’s submission that the absence of a general image right does not require the image to be excluded from the factual matrix. He held:

“I am entirely satisfied that the proposition that a famous personality has no right to control the use of her image in general does not lead inexorably to the conclusion that the use of a particular image cannot give rise to the mistaken belief by consumers that the goods to which it is applied have been authorised.”

The injunction was not inconsistent with that analysis: it “simply recognises that the vice in the impugned activities lay not in the use of Rihanna’s image but in using it in such a way as to cause a misrepresentation.” To accept Topshop’s argument would be “to sanction a trade which results in the deception of the public.”

Ground 3: the relevant perspective

This was described as misconceived. A claimant must show the likelihood of confusion of a substantial number of consumers, not necessarily all of them. Since the t-shirts were sold through Topshop stores, it was plainly relevant to consider potential customers who were both fans of Rihanna and prepared to shop at Topshop, and the judge was bound to take into account Topshop’s own publicising of its connection with Rihanna. Kitchin LJ agreed that the styling competition was “particularly striking”, and that the judge was entitled to find Topshop was recognising and seeking to take advantage of Rihanna’s public position as a style icon — an unobjectionable activity, but an important part of the background.

Ground 4: pleadings and evidence

The pleading complaint failed: the statement of claim, the witness statements and the opening written argument had made the case clear, including that the image showed Rihanna dressed for the We Found Love video shoot which had received press coverage.

The evidential complaint had “more substance”. Kitchin LJ accepted that the judge, having ruled that parts of Mrs Perez’s statement were argument not requiring cross-examination, had then in the last two sentences of [67] focused on her opinion that fans would think the image came from promotional material. Mr Hobbs “can fairly complain” of this. However, reading [67]–[69] as a whole, the judge had made findings he was entitled to make on the evidence: that the image was striking and oversized; that Rihanna was posed looking straight at the camera with her hair tied above her head in a headscarf; and that similar images had been used for the Talk That Talk album and video. From those findings he was entitled to conclude at [69] that the relationship between the image and the album/video imagery would be noticed by her fans. Kitchin LJ added that “the nature of the image may be thought to have made it very likely indeed that it would be taken to be an authorised publicity shot”. He was therefore satisfied the inappropriate reference to Mrs Perez’s opinion “had no effect upon the conclusion to which the judge came”. In consequence he expressly declined to decide the wider question, saying it was neither necessary nor appropriate to consider “whether and to what extent evidence of trade practice, trade usage, consumer behaviour and consumer perception constitute expert evidence to which the provisions of s.2(3) of the Civil Evidence Act 1972 and CPR Part 35.4 apply.”

Underhill LJ’s concurrence

Underhill LJ agreed the appeal should be dismissed for Kitchin LJ’s reasons, but added a significant qualification:

“I am bound to say that I regard this case as close to the borderline. … I do not believe that either by itself would suffice; in particular, Rihanna’s association with Topshop does not seem to me to have been such as to weigh very heavily in the balance. But the judge considered the question very carefully, taking due account of the factors going the other way, and in my view he was entitled to find that the two features in combination were capable of giving rise to the necessary representation.”

The two features were Rihanna’s past public association with Topshop and the particular posed features of the image reflecting the Talk That Talk publicity.

Implications

The decision confirms, at Court of Appeal level, several propositions that had previously rested largely on first-instance authority and House of Lords obiter:

• English law recognises no free-standing image or character right; a celebrity must fit a complaint about unauthorised use of their image into an established cause of action. The court expressly reaffirmed Douglas v Hello! (No 3) on this point.
• A claim in false endorsement can nonetheless succeed in passing off, and the court respectfully endorsed Laddie J’s analysis in Irvine v Talksport. The claimant must prove relevant goodwill, a misrepresentation of endorsement or approval understood by a substantial number of the relevant public, and damage.
• Crucially, the absence of a general image right does not require the image to be treated as legally irrelevant or “origin neutral” when assessing the overall impression created. The image can form part of the factual matrix which, combined with other circumstances, generates the misrepresentation.
• Kitchin LJ’s formulation of the two hurdles in merchandising cases — that the goods must “tell a lie” (a requirement closely allied to distinctiveness) and that the lie must be material to the purchasing decision — provides a useful practical framework, consistent with Elvis Presley Trade Marks and Harrodian School.

The outcome is heavily fact-dependent and should not be read as establishing that selling garments bearing a celebrity’s image is generally actionable. Both Birss J and the Court of Appeal accepted the contrary starting point. What made the difference here was the combination of Rihanna’s substantial goodwill extending into fashion, Topshop’s own prior publicity linking itself to her, and the particular quality of the image as resembling an album publicity shot. Underhill LJ’s view that the case was “close to the borderline”, and that neither factor alone would have sufficed, is an important qualification for practitioners assessing the strength of comparable claims.

The decision matters to celebrities and their licensing vehicles (who may build a case around a documented endorsement business and a retailer’s own promotional conduct), and to retailers and merchandisers (for whom a copyright licence from a photographer does not answer a passing off claim, and for whom prior promotional association with a celebrity may itself become evidence against them). It also carries a practical evidential lesson: the Court of Appeal criticised reliance in the judgment on opinion evidence that the trial judge had earlier characterised as argument not requiring cross-examination, though the error was not material because the judge’s own findings on the image independently supported his conclusion. The wider question of when evidence of trade practice and consumer perception amounts to expert evidence under s.2(3) of the Civil Evidence Act 1972 and CPR Part 35.4 was expressly left undecided.

Verdict: The appeal was dismissed. The Court of Appeal (Kitchin LJ giving the leading judgment, with Underhill and Richards LJJ agreeing) upheld Birss J’s finding that Topshop’s sale of the t-shirt bearing Rihanna’s image amounted to passing off, and the injunction granted. Permission to appeal against the judge’s pre-trial evidential ruling of 5 July 2013 was refused.

Source: Fenty v Arcadia Group Brands Ltd [2015] EWCA Civ 3