Earlier this year, ex-UB40 frontman Ali Campbell, and two other former members of the band, made an application for summary judgment and/or to strike out a passing off claim made against them by other members of the band. In a judgment that has recently been made available the High Court rejected the application, meaning that the case could continue to trial.
Background
The parties were all members of the reggae band UB40, and were employed as musicians by DEP International Limited (DEP). In October 2006 DEP was placed in administration, and a new company called Reflex Recording Limited (Reflex) was subsequently formed.
Ali Campbell left the band in 2008 and recruited Mickey Virtue and co-frontman, Astro; the remaining members continued to perform and trade as UB40. However, the breakaway members subsequently began to perform under the name ‘UB40 featuring Ali Campbell, Astro and Micky Virtue”, and a passing off claim was brought against them by the other band members in 2014.
In support of their application for summary judgment and/or to have the claim struck out, the defendants argued that in 2015 DEP’s liquidators assigned them the rights in the UB40 name and the domain name www.ub40.co.uk, and the claimants therefore had no reasonable prospect of success at trial.
The claimants contended that DEP did not have a business to assign in 2015, and it was at least realistically arguable that the goodwill had been abandoned or extinguished prior to the purported assignment.
Decision
The judge concluded that the defendants’ submissions were “mistaken” and rejected the application.
He held that it was “at least arguable that DEP had no business in any real sense” at the time of the purported assignment. Each original member of the band ceased to be employed by DEP in 2006, and DEP’s business and goodwill were not subsequently sold to Reflex or anyone else. The catalogue of previous UB40 recordings was sold to Reflex in 2009, and thereafter DEP carried out no commercial activity of any sort. The judge found that the business to which goodwill attached was at an end by the time of the sale.
The judge also commented that the intention of the liquidator was irrelevant – if the assets of the business were sold but not the goodwill, or the business dissolved, then the goodwill was extinguished or abandoned, or at least could be by the passage of time, regardless of intent.
The claimants had a realistically arguable basis for succeeding at trial and the defendants’ application was therefore defeated.