Delivery Hero/Glovo : why competition compliance must go beyond sales teams

On 2 June 2025, the European Commission (“EC”) imposed fines of €329 million on Delivery Hero and Glovo for participating in a cartel to eliminate competitive rivalry in the online food delivery sector across the EEA.

Aside from reinforcing the message from our May 2025 horizon scanning that labour markets are a global enforcement trend that shows no sign of abating anytime soon, this investigation also highlights the risks associated with holding shares in competitor businesses – increasing the risk of information exchange and collusion.

How could it impact your business?

Delivery Hero/Glovo is a reminder for HR teams, hiring teams and internal teams managing contracts for freelance workers and contractors that their processes and procedures should be aligned with competition law.

In its investigation, the EC found that the parties had entered into no-poach agreements which rapidly increased in scope, reminiscent of the recent investigation into sports broadcasting services by the Competition and Markets Authority. No-poach agreements between competitors are looking increasingly high-risk, as are information sharing pertaining to rates of pay and contractual terms of staff and contractors. Businesses should also be live to the risk that competitors in labour markets may differ significantly to competitors in the marketplace and perhaps think twice before meeting the warehouse next-door to discuss benchmarking.

Delivery Hero/Glovo also raises an important consideration regarding information exchange at board level. It is clear from the decision that it is not an infringement of competition law to simply hold a minority shareholding in a competitor's business, however organisations should tread carefully. Any form of involvement with competitor businesses poses a risk – particularly where that involvement provides access to competitively sensitive information. Whilst it is rare that a business will directly hold a minority shareholding in a competitor’s premises, it is much less unusual for a minority shareholding in two competing businesses to be held by the same private equity or venture capital fund. This case marks the first time that the European Commission has explicitly addressed the risks posed by holding shares in a competitor and is likely to lead to increased scrutiny of information exchange via board representation in the future.

What steps should you take?

Delivery Hero/Glovo highlights the importance of ensuring that a culture of compliance exists in each team across your business, not just sales teams. Often, non-compliant practices outside of sales teams go under the radar, as other business areas are perceived to carry a lower risk to the business. In order to better understand the risks currently facing their businesses, clients are advised to audit their processes to ensure compliance across the entirety of their business including sales, marketing and bids, HR, procurement, and up to board-level. If you would like to discuss how to go about auditing your business for compliance, our competition team is more than happy to help.

Dynamic Pricing

Dynamic pricing (where firms adjust prices rapidly and frequently in response to changing demand conditions) is the focus of a new policy paper and guidance from the Competition and Markets Authority (CMA).

In 2024, Ticketmaster was accused of using dynamic pricing practices during the sale of Oasis tickets, which led to increased scrutiny on the dynamic pricing strategies across the economy. Whilst the CMA acknowledges that dynamic pricing can produce positive outcomes for consumers, the recent publications from the CMA demonstrate an ongoing suspicion in relation to dynamic pricing and set the baselines for compliance with consumer law – at least, in the eyes of the CMA.

How could it impact your business?

Dynamic pricing strategies are used across a number of industries. The CMA’s policy paper is quick to call out ride-hailing, air transport, hotels and passenger rail, however this is by no means an exhaustive list of the sectors utilising dynamic pricing. Whilst not a legislative change, the policy paper and accompanying guidance are a clear signal of intent from the CMA, and the timing of the publications is no coincidence; the CMA gained its new suite of consumer enforcement powers earlier this year. In the policy paper, the CMA writes “we will continue to actively review pricing practices and will use our new toolkit – including the ability to make decisions about consumer law and impose fines – to act when we see egregious conduct that could harm consumers, fair dealing businesses and the UK economy.”

The CMA’s top tips for compliance include:

• Be transparent about your use of dynamic pricing, and that prices can change;

• Consider what customers need to know, this might include:

  • an explanation of what factors influence price fluctuations, for example time or date changes, so consumers can understand when they might be able to get the best price for them; and

  • the range of prices (for example minimum and maximum amounts) so that customers understand whether something could end up being above their budget if they wait or whether they want to delay purchase to wait for a better deal.

• Present information clearly and in plain english, avoid hiding information in terms and conditions or other “small print”;

• Consider vulnerable consumers and how your pricing practices may specifically disadvantage those customers;

• Do not make consumers make snap decisions: take steps to ensure consumers are not put under undue or unfair pressure to make snap decisions if prices are changing, particularly whilst customers are in an online queue where prices are changing; and

• Don't change prices whilst consumers are paying, once the consumer has gone through to pay – secure the price.

What steps should you take?

For businesses using dynamic pricing strategies, it is recommended that existing practices are reviewed to ensure alignment with the CMA’s recommendations. The CMA has noted it will be particularly concerned with dynamic pricing usage where:

• Consumers are unaware that dynamic pricing is being used;

• Consumers feel pressured to make extremely time-pressured decisions;

• Vulnerable consumers are particularly disadvantaged; and/or

• Dynamic pricing is used as a tool to enhance or maintain market power or raise barriers to entry.

As the CMA already has its powers under the DMCC, a breach of consumer law leaves businesses at risk of a CMA investigation, including fines of up to 10% group worldwide turnover for businesses infringing consumer law and dawn-raids. It is therefore recommended that businesses act fast to review current processes to prevent falling foul of the law.

Directors' Duties and Unfair Prejudice

In the recent case of Saxon Woods Investments Ltd v Costa [2025] EWCA Civ 708, the Court of Appeal provided clarification on the test to assess whether a director has failed to fulfil their duty to promote the company's success in good faith under Section 172 of the Companies Act 2006 (“s172 CA Duties”).

The case

Saxon Woods Investment Ltd (“SW”), a minority shareholder of Spring Media Investments Limited, bought an unfair prejudice petition against Mr Costa, the chairman of the Company and a shareholder holding more than 50% of the Company’s shares. The claim centred around a clause in the company’s shareholders' agreement which required the company and its shareholders to ‘work together in good faith towards the sale of the Company’ by a specific date. No sale was achieved by the prescribed date, and the company's value significantly declined due to the COVID-19 pandemic. SW alleged Mr Costa misled the board of directors and had not taken steps to achieve a sale by the specified date.

The High Court found Mr Costa caused the Company to breach the shareholders’ agreement clause, as he misled the board about his strategy to achieve a sale by the specified date. It also found that SW suffered unfair prejudice. However, the High Court concluded Mr Costa had not breached his s172 CA Duties, focusing solely on Mr Costa’s subjective state of mind and whether he ‘believed’ that he was acting in the best interests of the company. The High Court believed Mr. Costa thought he was acting in the company's best interests by delaying the sale, even though he was misleading the board.

The Court of Appeal overturned this decision clarifying that a director's duty to act in good faith requires not just a subjective belief in what is best for the company, but also includes an objective requirement for being honest.

The Test

In order for a director to fulfil s172 CA Duties, he or she must believe their actions are in the best interests of the company (subjective test) and if this belief is established, an objective test to assess whether the director acted honestly by the standards of ordinary decent people is undertaken.

The Result

The Court of Appeal held that, in addition to being responsible for his and the company’s breach of the shareholders’ agreement, Mr Costa had breached his s172 CA Duties because he had acted dishonestly. An unconditional order was made pursuant to section 996 of the Companies Act 2006, requiring Mr Costa to purchase SW’s minority shareholding, based on the pre-COVID-19 valuation.

How could it impact your business?

The Court of Appeal’s decision clarifies that a director’s subjective belief that they are acting in a company's best interests is not sufficient if their conduct is objectively dishonest, particularly if it involves misleading the board. Honesty is central to acting in good faith.

The decision also highlights interaction between the directors’ duties and the terms of shareholders’ agreements. In this case, the requirement to ‘work together in good faith towards the sale of the Company’ created enforceable legal obligations on its parties and a direct contractual link between the s172 CA Duties and the shareholder’s agreement.

The courts have broad powers when granting remedies for unfair prejudice and in cases where a minority shareholder has been disadvantaged an unfair prejudice petition may provide relief.

What steps should you take?

Businesses, directors and shareholders should ensure they understand any contractual obligations agreed in shareholders’ agreements, particularly around conduct and goals that have been set, and directors should consider if their conduct is aligned with the s172 CA Duties with a particular focus on the objective standard of honesty. A shareholders’ agreement carefully drafted by a legal advisor, good communication and a shared belief in the strategy and goals of a company are key ingredients to its success.

Directors should promote a culture of honesty when making decisions and taking actions to achieve company goals, regardless of whether the director has a differing view. Concealing and providing misleading information, despite whether the director believes it is in the best interests of the company, could have significant implications on the director, the company and its shareholders.

The Data (Use and Access) Act 2025 (DUAA) becomes law

After some debate between the Lords and Commons, DUAA finally received Royal Assent on 19 June 2025. The new Act updates (and does not replace) the UK General Data Protection Regulation (UK GDPR), the Data Protection Act 2018 (DPA) and the Privacy and Electronic Communications Regulations (PECR). It does so with the intention of promoting innovation, economic growth and easier compliance for businesses, whilst continuing to uphold the privacy rights of individuals.

The UK data protection regulator, the Information Commissioner’s Office (soon to be the Information Commission under DUAA) (ICO) describes the changes as enabling organisations “to do things differently, rather than needing you to make specific changes to comply”.

The changes will be phased in between June 2025 and June 2026.

How could it impact your business?

The DUAA measures aimed at making things easier for businesses include:

• New lawful basis of ‘recognised legitimate interests’, which removes the need for organisations to conduct a legitimate interests assessment (LIA) for specific interests.

• Subject access request updates, confirming that businesses can ‘stop the clock’ whilst awaiting clarification of a request and need only make ‘reasonable and proportionate’ searches for information requested.

• Other clarifications, making the law easier for organisations to follow and apply (e.g. by expressly listing direct marketing as a legitimate interest).

Measures intended to promote innovation include changes to:

• Research provisions, clarifying when organisations can use and re-use personal data for scientific research, including commercial scientific research, via a new standard of ‘broad consent’ and without providing a privacy notice for re-use, if this would involve disproportionate effort.

• Automated decision-making (ADM), by making all lawful bases (including legitimate interests) available to organisations making automated decisions about individuals, subject to appropriate safeguards (and excluding ADM involving special category data).

• Cookie rules, by allowing businesses to set certain cookie types without obtaining consent, including those used to collect information for statistical purposes and website optimisation.

New requirements under DUAA include provisions addressing:

• Complaints: requiring organisations to help individuals complain (e.g. by providing a digital form for this purpose), acknowledge complaints within 30 days and respond to them ‘without undue delay’.

• Children and online services: requiring online service providers likely to be used by children to consider their needs in deciding how to use children’s personal information.

What steps should you take?

All organisations processing personal data should:

• Familiarise themselves with the changes DUAA makes to data protection law, including by reference to the ICO’s preliminary guidance;

• Consider how your organisation can use the opportunity to streamline processes in line with DUAA;

• Monitor DUAA’s implementation timeline to ensure you are clear about which sections of the Act come into force and when (most are forecast to take up to 12 months);

• Think about how you can enable your customers and third parties to exercise their rights under DUAA (including to complain) more easily;

• If you provide an online service that children are likely to access, ensure that, as a minimum, you are following the ICO’s Age Appropriate Design Code (AADC) in considering children’s needs; and

• Monitor the ICO’s website and newsletters to keep abreast of evolving guidance and Codes of Practice.

The risks of using AI tools

The recent judgement on the cases of R (Ayinde) v Haringey LBC [2025] and Al-Haroun v Qatar National Bank QPSC [2025] has highlighted issues with reliance on AI tools in the production of written legal arguments or witness statements which, in these cases, resulted in false information being placed before the Court.

In the case of Ayinde, a law centre represented an applicant for housing assistance in his judicial review claim. A junior barrister had been instructed to draft the judicial review grounds in which they cited five cases that did not exist.

In the Al-Haroun case, both the client and his solicitor made witness statements in response to a strike out application. Eighteen of the forty-five cases cited simply did not exist and many of the remaining citations either did not support the propositions for which they were cited, or did not have any relevance to the subject matter of the application.

How could it impact your business?

In the above cases, it is noted that there was a failure to verify or independently check the citations that had been generated by AI tools. The court has noted in the judgment that generative AI tools, which are trained on a large language model, such as ChatGPT, are simply not capable of conducting reliable legal research. While they can produce results which appear to be both coherent and plausible, they might be misleading or incorrect, these are known as hallucinations.

Where a lawyer (whether in private practice or working in-house) has failed to comply with their duties to the court, the court's powers included public admonition, making a costs order, making a wasted costs order, striking out a case, referral to a regulator, initiating contempt proceedings, and referral to the police.

What steps should you take?

Whilst there is an increasing focus on the use of AI to improve efficiency and reduce legal spend, the above cases highlight some key considerations.

Caution should be used if conducting legal research on platforms that rely on generative AI, this includes platforms such as Google, which now provides AI generated commentary in its responses. Research needs to be undertaken properly so, if you do utilise AI, it is important to verify the output. References should be to substantive authorities such as the Government's database of legislation, the National Archives database of Court judgments, the official Law Reports published by the Incorporated Council of Law Reporting for England and Wales and the databases of reputable legal publishers.

As noted above, failure to conduct proper legal research could have far ranging consequences affecting both companies and the individual members of those companies.

Litigation Funding – the UK Civil Justice Council publishes its Final Report

The Civil Justice Council (“CJC”) has published the final report on its review of litigation funding. The report makes 58 recommendations for reform, which aim to promote effective access to justice while also introducing fair and proportionate regulation.

The CJC initial recommendation urges immediate legislation to reverse the effects of the Supreme Court’s ruling in R (PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28. This would clarify that litigation funding agreements (“LFA”) which entitle the funder to a percentage of any damages recovered, are not Damages-Based Agreements (“DBAs”) and therefore do not have to comply with the strict DBA regulations in order to be enforceable. This change would have full retrospective effect.

The report also recommends a “formal, comprehensive regulatory scheme” for all forms of Litigation Funding, which it emphasises should be “light-touch” and overseen by the Lord Chancellor (not the Financial Conduct Authority as was considered).

How could it impact your business?

The reforms proposed by the CJC could significantly impact how businesses and legal teams engage litigation funding.

The reversal of the PACCAR judgement, particularly its retrospective effect, will alleviate concerns around the enforceability of any LFAs currently in place. Also, prospectively, it improves the provision and accessibility of litigation funding, opening the door for its further use when managing risk and considering pursuing disputes. It is clear that the CJC see litigation funding as becoming increasing prevalent.

The report does include some more controversial recommendations, such as Court approval of funding agreements and inquiry into whether the return received by the funder is fair, just and reasonable.

Institutional defendants and their insurers may be less welcoming of the proposed changes, given they may face increased and large-scale claims (particularly group and collective proceedings) as a result of easier access to litigation funding. There are concerns that this may promote unmeritorious and speculative claims.

What steps should you take?

The next steps will depend on the Governments’ reaction to the report and whether the CJC’s recommendations are implemented. Although it was recommended that the legislation required to reverse the effects of PACCAR should be dealt with urgently, this is still likely to take some time. It will not be until 2026 (at the earliest), before comprehensive legislative proposals are drafting addressing the CJC’s remaining recommendations.

External HR Consultant and liability – Handa v The Station Hotel & Ors

In the recently decided case of Handa v The Station Hotel & Others [2025], the Employment Appeal Tribunal (EAT) upheld a decision that claims brought personally against independent HR advisors (who had assisted in pre-dismissal investigations) should be struck out.

The HR consultants were not, on the facts of the case, the employer’s ‘agents’ in relation to the allegations concerned. There was therefore no legal basis for a whistleblowing claim against them, when issue was taken with the employer’s resulting decision to dismiss.

The facts

Mr Handa, the Claimant, was a Director at The Station Hotel Ltd (“The Hotel”). He initially made several allegations of financial impropriety against his employer. Following on from those allegations, other staff raised grievances in turn which stated Mr Handa had bullied and harassed them.

The Hotel engaged independent consultants to assist with related grievance and disciplinary investigations. Subsequently:

• A (first) independent HR consultant investigated the staff grievances. He found two of the grievances could be substantiated and recommended that a disciplinary hearing against Mr Handa would be justified;

• A (second) independent HR consultant completed the disciplinary hearing, and produced a report which stated The Hotel could justifiably summarily dismiss Mr Handa for gross misconduct.

As a result of action taken in response to the reports, Mr Handa was subsequently dismissed.

Mr Handa subsequently brought claims against various parties (including the HR Consultants) for detriments relating to his alleged status as a whistleblower. Those claims were, however, struck out by an Employment Tribunal (a decision upheld by the EAT).

In this case the consultants went as far as ‘investigating, reporting and recording’ their views but they did not make the disputed decision to dismiss. There was no arguable basis on the facts to say that they were ‘agents’ of the employer in relation to that decision.

How could it impact your business?

This case turned on the legal concept of agency: whether independent HR consultants were liable together with an employer, as its ‘agents’.

It is increasingly common for employers to hire professional independent HR consultants to conduct various aspects of employment-related processes, such as disciplinary and grievance processes.

Whilst pre-termination HR assistance (extending to investigating, reporting and recording their findings) did not lead to the dismissal (and liability for it) on these facts, there is no wider immunity conferred by this case.
In fact, the EAT was clear that an HR consultant who was retained for an employment-related procedure (such as a grievance or disciplinary investigation) can be regarded as the employer’s ‘agent’, and therefore liable, in carrying out those functions.

What steps should you take?

Whilst the Claimant didn’t win against the HR consultants on the facts of this case, it will be important to ensure two things, when hiring external consultants.

1. ensure clear terms of reference; and

2. make sure those consultants have adequate business insurance in place, covering their designated purpose and role.

Hendy Group Ltd v Kennedy – requirement to explore alternative employment in a redundancy scenario

In a redundancy scenario, an employer has an obligation to take reasonable steps to find alternative employment for the employee who is at risk. In this case, the employer failed to go far enough in looking for work (and actively obstructed the employees search). The resulting redundancy dismissal was held to be unfair.

The facts

Mr Kennedy was employed by Hendy Group Ltd (“the company”), a car dealership. He was initially employed as a car salesman before moving on to manage a distributorship and then transitioned to be based in the training team.

During the Covid pandemic, Mr Kennedy’s position was identified as at risk of redundancy. He agreed that the process for selecting his role for redundancy was fair and there was a genuine redundancy scenario. However, he alleged that the company had unfairly dismissed him because they had failed to actively consider him for alternative roles within the business.

During the period between being given notice and being dismissed (some seven weeks) there were several roles advertised, including sales positions which Mr Kennedy had experience in. He applied for these roles but was ultimately unsuccessful. Throughout this time, Mr Kennedy was not provided with any support by the HR team and in some situations the feedback he received in other interviews was used against him. He was ultimately discouraged from applying for sales roles after his first couple of unsuccessful attempts, despite training people for those roles. When he handed back his laptop a week before he left, he lost all remaining access to his emails and data on available alternative employment.

An Employment Tribunal found that the company had failed in its obligation to seek alternative employment, and so Mr Kennedy had been unfairly dismissed. He was awarded £19,566.73.

The decision was appealed by the company as they claimed the Judge had substituted its own view for that of the employer. However, the EAT dismissed the appeal on all grounds. The EAT found that the company had not made any effort to find alternative employment for Mr Kennedy and had failed to communicate to hiring managers that he was at risk of redundancy. Latterly, HR had communicated with Mr Kennedy via an email address he no longer had access to.

The Employment Judge took account of the fact that a Tribunal’s assessment of efforts to find alternative employment will take into account the size and administrative resources available to an employer. In this instance, the company was a large business which had substantial resources. Despite this, they had failed to consider alternative roles, and it was clear from the evidence they had already decided that Mr Kennedy would not be considered for sales roles no matter how well he interviewed.

How could it impact your business?

This is a useful reminder for employers of their positive obligation to find alternative positions for individuals who are at risk of redundancy. A Tribunal will generally consider that more should be done than simply notifying an individual of a role’s availability.

What steps should you take?

Reasonable efforts should be made to find alternative positions for individuals at risk of redundancy and an employer should take proactive steps to assist. Employers should consider:

• Communicating with employees via a method they have easy access to;

• Making details available of the financial package available with any alternative role, so an informed decision can be made;

• Notifying hiring managers of the individual’s risk of redundancy, ahead of interview;

• Speaking with the individual at risk to ask where their interests lie and look for roles accordingly; and

• Avoiding assumptions about which roles an individual might be willing to take.

What transfers on a TUPE transfer – ABC v Huntercombe (No 12.) Ltd

In the recently decided case of ABC v Huntercombe (No 12) Ltd & Others [2025], the High Court confirmed that liabilities to a third party as a result of wrongdoing by employees prior to a TUPE transfer, would not pass to the buyer.

Background

At common law, an Employer is ‘vicariously liable’ for a breach (such as negligence) committed by their employees. A transfer subject to the Transfer of Undertaking (Protection of Employment) Regulations 2006 (TUPE) states that where a business in which employees are employed changes ownership, their employment rights transfer to the buyer. The legal statement of this principle is that all ‘rights, powers, duties and liabilities’ in connection with the transferring employees transfer to the new employer.

The facts

ABC was an in-patient at a hospital which was owned and operated by Huntercombe (No 12) Ltd. (“Transferor”). ABC argued that the Transferor was vicariously liable for the alleged wrongdoing of two employees who, because of a TUPE transfer, later became employees of Active Young People Ltd ("Transferee"). A preliminary hearing was held to determine whether vicarious liability of the Transferor to a third party would transfer to the Transferee under TUPE.

The High Court held that vicarious liability to a third party would not transfer under a TUPE transfer from the Transferor to the Transferee. They held that the purpose of TUPE was to provide protection to transferring employees, so the only liabilities which transfer are those arising out of the employment contract. Therefore, there must be a direct obligation between the employer and employee. Subsequently, an obligation between the Transferor and a third party is too remote to transfer under TUPE.

How could it impact your business?

This case provides welcome guidance on the extent of liabilities which can transfer under TUPE. This confirms that liabilities only transfer which arise directly out of the employment relationship between the Transferor and the employee (or relationship ‘akin’ to employment). Whilst claims under tort and contract can arise in this situation, vicarious liability is, by its nature, a liability to a third party which is too remote. Therefore, any claim for vicarious liability (subject to some exceptions for insurance contracts) will likely not transfer to a Transferee.

AI and the risks associated with using AI in recruitment

A recent social media post by a team manager has demonstrated the risks of employing AI to filter applications for new roles.

The manager worked for a major tech developer in India and was seeking new recruits to join his team. The role was advertised for several months but he did not receive a single application from the HR team. This led to project delays and significant loss of revenue. He grew suspicious and so applied for the job himself under a pseudonym.

The CV he used was drafted to match the job description perfectly except for the inclusion of a system called ‘AngularJS’. He was rejected. He contacted the HR team to explain his experience and, upon review, it was found that the AI system used to filter applications had not just filtered applications but outright rejected them based on a faulty input from the HR team.

The manager was looking for an individual who had knowledge on a programme called ‘Angular’, but the HR team had inadvertently set up the AI to reject any applications which did not mention ‘AngularJS’ which was an outdated and unused version of the new ‘Angular’. It has been reported that this apparently small error, which, when reported to upper management, lead to half of the HR team being dismissed.

How could it impact your business?

This is just one of many stories where the use of AI has led to disastrous consequences. Whilst AI can be used effectively to enhance performance of your business and find efficiencies, it should be used with caution as overreliance without checking its results can lead to problems such as this. Whilst not shown in the story mentioned here, you should also be aware of the potential discriminatory impact that AI can have when filtering applications.

What steps should you take?

Where AI is put to use as a recruitment tool, it will be important for senior managers to check that the AI recruitment tools used are being used transparently and are compliant with data protection principles. Further guidance from the ICO can be found here. These obligations should be on-going and topped up regularly to ensure your employees’ knowledge is up to date so they can spot any issues with the recruitment process and make necessary amendments.

It will be important to check how AI providers monitor and mitigates fairness in the AI tool and request results or reports back and what filters are being used.

It will be important to ensure that commercial contracts for the provision of AI clearly define how you provide privacy information to candidates, and which party is responsible for this. You will also need to provide detailed privacy information to inform candidates telling them how you process their personal information and (where you instruct the AI provider to do this) check the privacy information processed is clear, accurate, and detailed.

Finally, your HR team should manually review the results generated by the AI to ensure they are consistent with the policies mentioned above. This human oversight is essential in ensuring any issues are addressed in a timely fashion.

The EU wobbles on the Green Claims Directive

On 20 June 2025, the EU Commission (Commission) announced its intention to withdraw the proposed Green Claims Directives (Directive). The Commission is focused on reducing the administrative burden on companies operating in the EU, including smaller companies, through simplifying ESG legislation.

The Directive proposed requirements for substantiating, verifying and disclosing evidence for environmental claims made by businesses marketing to EU consumers.

Following significant criticism, the proposal was dropped, and the Commission and Parliament have agreed now not to scrap the Directive in its entirety and negotiations remain on the table. The likely future form of the Directive is not yet clear, leading to uncertainty for UK businesses which trade with the EU.

Iconix v Dream Pairs: The impact of post-sale confusion on trademark infringement proceedings

A recent Supreme Court ruling relating to trade marks has shed light on how evidence of post-sale confusion will be incorporated into the assessment of similarity in the context of trade mark infringement proceedings. The Supreme Court found that post-sale factors can be considered when assessing whether there is a likelihood of confusion between two trade marks.

The facts

Iconix are the owners of the renowned brand UMBRO, along with the associated registered rights in the logo. Dream Pairs sell footwear branded with a stylised ‘DP’ logo, which Iconix alleged infringed their UMBRO trade marks.

The Supreme Court ruling followed two prior decisions. In the first instance the judge ruled that there was no infringement due to a very low degree of similarity between the trade marks. However, the Court of Appeal later ruled that there was a likelihood of confusion resulting from ‘the post-sale context’. In short, the Dream Pairs DP logo appeared closer to the UMBRO trade marks when considering how it was appended to football boots and how it was generally perceived by the public, which was not the same as when it was viewed straight on, as registered.

Dream Pairs subsequently filed a further appeal. The Supreme Court accepted the appeal, whilst clarifying that post-sale confusion can be taken into account when assessing the similarity between two trade marks. The decision therefore establishes that realistic and arguable post-sale circumstances can be taken into account for the purposes of determining whether trade marks are similar, and to what degree.

How could it impact your business?

The implications for businesses and trade mark right holders in particular are important, as trade mark proprietors should try to be aware of various factors influencing their trade mark post-registration – with a particular view to how their trade mark is actually perceived by the public in reality. Factors including how a trade mark is appended to a product and how it is marketed to the public can have a telling impact in the wider assessment of whether one trade mark is similar to another.

What steps should you take?

Any party considering initiating trade mark infringement proceedings, or any party on the receiving end of allegations of trade mark infringement, should look beyond the trade marks at face value and make a proper assessment of how marks are perceived by the public when the trade mark is viewed in operation. Failure to properly consider these factors could lead companies to unwittingly fall foul of trade mark infringement proceedings, or fail to properly secure and defend their rights.

Rightsholder should therefore pay due attention to the full lifecycle of their trade mark, including how it is utilised post-sale, from the very outset of applying to register their rights and then onwards throughout the trade mark lifecycle.