Licence to claim? Only if you register

The Court of Appeal’s decision in Lifestyle Equities C.V. v Frasers Group Trading Limited is a technical ruling with very real consequences if your business relies on licensed intellectual property, whether as a licensor or licensee.

The facts

At first instance, Lifestyle Equities brought proceedings against Frasers Group alleging unauthorised use of its brand. It sought declarations of infringement, injunctions to restrain further use, and financial remedies in the form of damages or an account of profits. It later expanded its claim, arguing that compensation should also include losses suffered by its network of licensees and sub-licensees.

The appeal considered whether that broader recovery was legally permissible. In particular, the court examined whether a trade mark owner can recover losses suffered by licensees where those licences hadn’t been formally registered under the Trade Marks Act 1994.

The Court of Appeal rejected that position. It held that the statutory mechanism allowing licensee losses to be considered is intended to protect licensees. As a result, those protections are only available where the licence has been registered.

In practical terms, if your business operates a licensing model but doesn’t register those arrangements, you can’t rely on the statute to recover losses across your wider commercial network. Equally, if you’re a licensee, you can’t assume the licensor will recover damages on your behalf.

The court also addressed timing. Although licences can be registered after infringement, claims for licensee losses remain subject to standard statutory limitation periods. Here, attempts to introduce those claims years later meant they were out of time and unrecoverable.

Implications for your business

First, damages may be narrower than expected where a licensing structure isn’t properly formalised. Many businesses assume losses across a distribution or franchise network can be captured in a single claim. This decision shows recovery depends on proper registration.

Second, the judgment highlights the risk in informal or unregistered licensing arrangements. While you may prioritise confidentiality or simplicity, failing to register can limit recoverable damages which may be a significant trade off in the long term.

Finally, timing and governance matter. Registration directly affects your rights. Delays in bringing claims, especially where additional losses are introduced later, can leave those claims time-barred, even where infringement is established.

This decision underlines how closely Intellectual Property strategy and compliance are linked. If your business relies on licensing, you should ensure those arrangements are properly documented and registered to protect the full value of any future claim.

If your business relies on licensing, whether as a licensor or licensee, get in touch with our Intellectual Property team to review your current arrangements and identify any steps needed in light of this decision.