STEALTH saga continues - Court of Appeal overturns order granting defendants permission to amend
The judgment of the Court of Appeal in ABP Technology Ltd v Voyetra Turtle Beach Inc & Anor  EWCA Civ 594 concerns a decision to allow amendments to a statement of case in a trade mark infringement claim. The defendants had sought to conduct their case in such a way as to deprive the claimant of the opportunity to challenge the use of a trade mark. This was deemed an attempt to take advantage of the process of civil justice and the court considered that permitting the amendments would: “sanction an act of deliberate concealment by the party seeking to be permitted to amend”. As a result, the appeal was allowed and the defendants were refused permission to amend their defence and introduce a counter-claim.
ABP Technology Limited (ABP) is a producer of gaming accessories in the UK, including a range of gaming headsets, sold under the marks STEALTH VR and STEALTH. Voyetra Turtle Beach Incorporated and its subsidiary Turtle Beach Europe Limited (together referred to as Voyetra) also sold gaming headsets in the UK under the mark STEALTH.
In November 2020, following an unsuccessful challenge by Voyetra to one of ABP’s trade marks, ABP issued trade mark infringement proceedings against Voyetra. Voyetra relied on the defence of honest concurrent use of the STEALTH mark.
The defendants filed a defence and counterclaim on 02 February 2021. However, on 05 July 2021, they applied to amend these to introduce a new defence under section 11(1B) of the Trade Marks Act 1994 (TMA), and a counterclaim for infringement, due to Voyetra’s acquisition of the word mark STEALTH, which pre-dated ABP’s marks (the 250 mark). A shell company, acting on the defendants’ behalf, had acquired the 250 mark on 28 January 2021. On 15 March 2021, it granted an exclusive licence for 250 mark to Voyetra, and on 15 June 2021, the 250 mark was assigned in full to Voyetra.
The delay in amending the defence and counterclaim was significant because, under section 46(3) of the TMA, where a registered trade mark has been unused for five years or more, there is a three-month window when revocation applications can be made during which any commencement or resumption of use will be disregarded, and the 250 mark had, as at 28 January 2021, been unused for over five years.
The defendants obtained permission to amend their pleadings to bring a counterclaim alleging that there was no breach and that the trade mark was invalid.
ABP appealed against this decision.
The Court of Appeal upheld ABP’s appeal. The court’s reasoning included that the judge erred in concluding that this was not a late amendment. The defendants could have pleaded this point in January with no amendment. The lateness manifestly deprived ABP of a defence which it would have had if the point had been raised at an earlier point.
The Court of Appeal was highly critical of the defendants’ approach and the way in which they conducted the amendment application.
In the words of Lord Justice Birss: “Voyetra’s conduct will not do”. It was the defendants’ deliberate lateness coupled with the lateness being the cause of the prejudice to ABP that led to the application to amend being refused.
Ultimately this is a decision on a purely procedural question of lateness in applying to amend a statement of case, but it has important implications.
Any scheme which seeks to resume use of a trade mark but to hide the connection between the trade mark and the use for any period sufficient to overcome section 46(3) TMA (that is, at minimum three months) will be considered late because of the prejudice it causes.
The court emphasised the importance, within the civil justice system, of conducting litigation “with cards on the table – face up”, and that parties must spell out their case; the system permits amendments to statements of case, which is for the benefit of all parties, but always subject to the overriding objective of enabling the court to deal with cases justly.
Case details at a glance
Jurisdiction: England and Wales
Decision level: Court of Appeal
Parties: ABP Technology Limited, Voyetra Turtle Beach Incorporated and Turtle Beach Europe Limited
Date: 04 May 2022
Citation:  EWCA Civ 594
Link to decision: https://dycip.com/abp-voyetra-turtle-beach