Goodwill Hunting… to be taken literally when leaving a firm
Monday 16th January 2017
In the recent case of Bhayani v Taylor Bracewell, Ms Bhayani, an employment solicitor, claimed that she had generated goodwill in the brand name “Bhayani Bracewell”, a sub-brand of Taylor Bracewell, as the name referred specifically to her. When Taylor Bracewell continued to use this brand after she left the firm, Ms Bhayani claimed it was passing off its services as her own and taking advantage of the goodwill she had generated.
Ms Bhayani was employed by Taylor Bracewell in 2011. It was agreed that Taylor Bracewell would offer employment legal services under the name “Bhayani Bracewell” and the name was registered by Taylor Bracewell as a UK trade mark for legal services.
When Ms Bhayani left Taylor Bracewell in 2014 she set up her own firm, Bhayani Law Ltd. Taylor Bracewell continued to use the name “Bhayani Bracewell”.
Ms Bhayani objected to the use of the name and argued that by offering employment legal services using the name after she had left the firm, Taylor Bracewell were falsely representing that she was still involved with the business and was thereby passing off its services as hers.
The parties’ arguments were focused around the goodwill in company names, particularly those that refer to the names of the individuals involved in the company. Ms Bhayani argued that the goodwill she generated whilst at Taylor Bracewell was associated solely with her own name. Taylor Bracewell argued that any goodwill associated with the trading name Bhayani Bracewell was in the partnership and not the individual.
The Intellectual Property Enterprise Court found in favour of Taylor Bracewell in its application for a summary judgment and held that goodwill which had been generated by an employee was vested in the employer.
The Court did note that in some cases an employee could generate personal goodwill, separate from that of the employer, for example the image rights of well-known sports personalities. However, the goodwill in this case vested in Taylor Bracewell and not Ms Bhayani.
This may seem a harsh decision to some, but the Court took the view that Ms Bhayani was always employed by the firm, the quality of her work was always guaranteed by the firm and she had the benefits of working for the firm (such as insurance and resources) when carrying out this work. There was no separate business that belonged solely to Ms Bhayani.
Ms Bhayani was however allowed to proceed on one aspect of her claim: that use of the trade mark may mislead the public. The Court held that Taylor Bracewell may have retained the right to use the Bhayani Bracewell trade mark name but that use of the trade mark may mislead the public regarding the origin of the services. This argument was held to have a prospect of success and was allowed to proceed and the final decision is awaited with interest.
If you would like to discuss this article in further detail, please contact Stephen McVey on 0113 227 0245 or Catherine Woodward on 0113 227 0366.
