Decision: Lifestyle Equities CV v Frasers Group Trading Ltd (formerly Sportsdirect.com Retail Ltd) [2026] EWCA Civ 583
Court: Court of Appeal
Judges: Zacaroli, Arnold and Peter Jackson LJJ
Decision: Here
Key issues: Trade mark licences

Published: 5 June 2026
Authors: Leigh Smith

Introduction

In the United Kingdom, as in most jurisdictions, it is possible to register a licence of a registered trade mark, but it is not mandatory. Licensees are incentivised to do so, most notably by rendering the licence ineffective against a person acquiring a conflicting interest in the licensed trade mark in ignorance of the licence. Section 30 and section 31 of the Trade Marks Act 1994 as amended ("TMA") also grant certain further protections to licensees of registered trade marks in the case of third party infringements. Section 25(3)(b) TMA 1994 however provides that a licensee cannot benefit from these protections until an application to register the licence with the United Kingdom Intellectual Property Office (“UKIPO”) has been made.

It is not unusual for a trade mark licence not to be registered, and there are many good reasons why a licensor and/or licensee would prefer not to do so. A well-drafted licence will typically deal with the allocation of responsibility and costs of third party infringement claims in any event, putting in place a contractual arrangement between the parties which either replicates or modifies the majority of the effects of registering the licence as between the parties.

The recent case of Lifestyle Equities C.V. and Lifestyle Licensing B.V. v. Frasers Group Trading Limited and others [2026] EWCA Civ 583shines a light however on the potential impact a failure to register a licence can have vis-à-vis the recovery of losses from the infringing third party. If only the licensee has suffered loss by the infringement, a failure to register could create what the judge at first instance called a "black hole", where the licensor has a right to bring proceedings but has no loss to recover, and the licensee has no right to bring proceedings but suffered the loss.

Background

Lifestyle Equities is the registered proprietor of certain United Kingdom trade marks (the "Marks"), and Lifestyle Licensing its exclusive licensee of the Marks. Lifestyle Equities and Lifestyle Licensing alleged that the defendants had infringed the Marks in 2014 and 2015. Proceedings were issued in September 2015, and on 20 April 2018 the claimants received judgment largely in their favour. Lifestyle Equities and Lifestyle Licensing elected for an inquiry as to damages.

The Marks are also subject to a number of intra-group sub-licences, the details of which (including in most cases the identity of sub-licensee) Lifestyle Equities and Lifestyle Licensing sought to avoid disclosing. In fact, only one sub-licence had been registered against the sub-licensed Marks with the UKIPO. By the time Lifestyle Equities and Lifestyle Licensing served their points of claim in the inquiry in June 2023 (and then as amended in September 2024), they sought to recover the losses of these sub-licensees on the basis of section 30(6) TMA. That sub-section provides that:

"In infringement proceedings brought by the proprietor of a registered trade mark any loss suffered or likely to be suffered by licensees shall be taken into account; and the court may give such directions as it thinks fit as to the extent to which the plaintiff is to hold the proceeds of any pecuniary remedy on behalf of licensees."

The defendants applied to strike out this head of loss on the basis that the recovery was not permitted if the sub-licences had not been registered with the UKIPO, or alternatively had not been registered at the time of the infringing acts. They relied upon section 25(3)(b) TMA 1994 which provides that:

"Until an application has been made for registration of the prescribed particulars of a registrable transaction… a person claiming to be a licensee by virtue of the transaction does not have the protection of section 30 or 31".

The strike out application was dismissed on 9 June 2025. Marcus Smith J found that the sub-licences did not need to be registered to take into account the losses under section 30(6) TMA. He also held that if there was a requirement to register the sub-licences to benefit from section 30(6) TMA, there was no time limit for doing so. Those findings were appealed by the defendants to the Court of Appeal.

Protections of a (sub-) licensee

At first instance, Marcus Smith J found that section 25(3)(b) TMA did not prevent the application of the entirety of section 30(6) TMA since the first part of it was in fact a protection for the proprietor rather than the licensee. He reasoned that only the second part of section 30(6) TMA granted a protection to a licensee, in that the recovered losses could then flow back to the licensee through the court's discretion. This interpretation was not accepted by the Court of Appeal, as it was not willing to accept that section 30(6) TMA could be partitioned in such a way. If it were, it could well result in unjustified windfall for proprietors. Read as a whole, the purpose of section 30(6) TMA was to ensure that losses of the licensee, which otherwise could not be taken into account, were recoverable. This, along with the rest of section 30 TMA, was seen as a protection for a licensee and therefore only available if the licence was registered.

The Court of Appeal then turned to the second ground of appeal, which in essence asked if there was a time limit by which the registration of the licence must occur to benefit from section 30(6) TMA. It was common ground that the registration could have retrospective effect. However, the Court of Appeal would not accept that there was no time limit at all for making the application. Applying to register the licence should still be subject to the limitation period for bringing proceedings. The Court of Appeal considered that a claim by a proprietor to recover its own losses is different from a claim to recover the losses of its licensee. The registration of the licence must therefore occur within the limitation period for the latter claim. Since the only registration of a licence in the present case occurred well after the limitation period for that claim expired, the defendants were not entitled to seek recovery of damages suffered by any of its licensees.

Practical application for trade mark litigation

As was the case here, there are often compelling reasons why a proprietor and licensee may not wish to register a trade mark licence. This is particularly the case in the context of intra-group licensing arrangements. Confidentiality may be a concern, or it may simply be impractical or carry a disproportionate expense. Whilst a failure to register the licence within six months of its grant could limit recovery of a licensee's costs in infringement proceedings under section 25(4) TMA, this may not be a major consideration in intra-group arrangements. What this case demonstrates is the impact this can have on the recovery of losses. Depending on the royalty payable, and the basis of its calculation, there is likely to be significant gap between the losses of the sub-licensees in this case and the losses of the licensor.

This decision highlights the importance of taking into consideration licence registration in the broader context of trade mark litigation strategy. The key takeaways for litigators are that:

• the losses of a licensee are to be treated as a separate head of claim
• the licence will need to be registered for a proprietor to recover those losses; but
• the registration of the licence only needs to occur within the limitation period for the licensee's claim, and not before the infringement occurs or even the claim is issued

This gives the parties to a licence a degree of flexibility to decide how best to plead and run a case, and to ultimately recover losses suffered by the licensee.