After the Event insurance (ATE) helps family company beat Bentley Motors in long-running trademark battle

7 January 2021

The Court of Appeal has upheld a High Court decision made last year that determined Bentley Motors had infringed the registered trademarks of Bentley Clothing by using identical trademarks on its clothing range. Harbour Underwriting provided family company Bentley Clothing with ATE to cover adverse costs to manage its exposure if it was unsuccessful at trial.

Background

Bentley Clothing is a family business established in 1962 that has had trademarks for clothing sold under the name ‘Bentley’ since 1982. Since about 1987, Bentley Motors moved into the sale of clothing and headgear.

Bentley Clothing first contacted Bentley Motors in 1998 about granting a licence. Despite Bentley Clothing’s continued desire over the next few years to licence their trademarks, no agreement was reached.

Dispute with Bentley Motors

Bentley Motors increasingly used the name Bentley on its clothing leading to a dispute with Bentley Clothing. As attempts to agree a licence had failed, the family business was left with no option but to bring High Court proceedings against Bentley Motors for trademark infringement.

High Court proceedings

Bentley Clothing was aware that it would be liable to pay Bentley Motors’ costs if it lost its case. As a result, on the advice of its solicitors Fox Williams, the company sought to limit its financial risk by taking out ATE insurance with Harbour Underwriting so that it could manage its exposure if it were unsuccessful at trial.

High Court trial

Despite various attempts by Bentley Clothing to engage in settlement discussions, Bentley Motors ran the action to trial knowing that it was in a stronger financial position. Indeed, it threatened to bring a security for costs application against Bentley Clothing. Harbour Underwriting issued an anti-avoidance endorsement to the ATE policy that Bentley Motors accepted as security for costs.

Bentley Clothing succeeded in the High Court, with His Honour Judge Hacon saying Bentley Motors’ use of the name Bentley on its clothing “amounted to a steady encroachment on Bentley Clothing’s goodwill”. 

Appeal to Court of Appeal

Bentley Motors appealed the decision in the Court of Appeal. To manage Bentley Clothing’s further costs exposure in the appeal, Harbour Underwriting agreed to extend the policy to cover the appeal.

The Court of Appeal unanimously dismissed the appeal, saying Bentley Motors had infringed Bentley Clothing’s trademarks by using an identical mark on its clothing range. The court held that Bentley Motors could not rely on the defence of “honest concurrent use” and was, therefore, not considered to have acted honestly with regards to Bentley Clothing’s rights.  

Testimonial

Simon Bennett, the partner at Fox Williams LLP who acted for Bentley Clothing in the case, said: “We used Harbour Underwriting for a particularly sensitive case where a number of unexpected and challenging issues arose. At each point, Harbour Underwriting provided a solution in a very user-friendly and efficient way.”

You can read more about the case in Fox Williams’ article, David beats Goliath again in Bentley Clothing legal battle.

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