Trade Mark Licence Registration: Court of Appeal Rules on Recovering Sub-Licensee Losses

A Court of Appeal decision (Lifestyle Equities v Frasers Group Trading Ltd & others 2026 EWCA Civ 583) has clarified an important and potentially costly issue for businesses:

Losses suffered by sub-licensees (third-party or group companies using a brand under license) cannot be recovered in trade mark infringement claims unless the licence has been properly registered with the IPO.

This ruling, involving the Beverly Hills Polo Club brand and goods sold under the Santa Monica Polo Club brand, provides a clear warning to businesses relying on licensing structures. This is particularly the case where trade marks are used across group companies or third-party licensees.

Table of Contents

• Background to the case
• Key legal issue at the heart of the case
• Court of Appeal decision
• The impact on this case for businesseses
• Registering IP licenses as a business
• Action points your business can take now
• How Napthens can support your IP strategy

The case background in brief

The long-running claim considers a single EU mark and a single UK mark, related to the Beverly Hills Polo Club brand. It was contested that goods sold under the ‘Santa Monica Polo Club’ brand were alleged to have infringed on the Beverley Hills Polo Club trade marks.

The timeline of events prior to the Court of Appeal’s decision, where the claimants are the trade mark owners and the defendants are Frasers Group & others:

• September 2015: The trade mark owner (Lifestyles Equities C.V.) and its exclusive licensee (Lifestyle Licensing B.V.) issue proceedings in relation to alleged infringement between 2014 and 2015.
• April 2018: Following a trial of liability, the High Court ruled largely in the claimants’ favour.
• April 2019: The claimants elected for an enquiry into damages.
• June 2025: The defendants sought a judgment summary to exclude sub-licensee losses, which was dismissed.
• August 2025: An appeal is made by the defendants, seeking to limit damages, to the Court of Appeal.

The claimants sought damages not only for their own losses, but also for losses suffered by sub-licensees.

However, most of the sub-licences:

• Were not registered with the UK IPO
• Had unclear or confidential terms
• Were only raised later during the damages phase and were not pleaded from the outset

The Court of Appeal was asked to decide whether those unregistered licensee losses could be recovered, an appeal that would have the potential of significantly reducing the scale of damages due by the appellants.

The key legal issue

The case turned on the interaction between:

• Section 25(3)(b) Trade Marks Act 1994: limits rights of licensees until licences are registered
• Section 30(6) Trade Marks Act 1994: allows the court to take account of losses suffered by licensees in infringement claims

Court of Appeal’s decision

The Court of Appeal overturned the High Court and held:

1. Licensee protections depend on registration

The court confirmed that:

The right to recover licensee losses under section 30(6) is a protection for licensees.

As a result:

• It falls within section 25(3)(b)
• It is therefore unavailable unless the licence has been registered

In simple terms:

If the licence is not registered, the court will not take the licensee’s losses into account.

2. You cannot recover losses for unregistered licences

The consequence in this case was clear:

• The claim for damages relating to sub-licensees failed
• Summary judgment was granted dismissing those claims

This contrasts with the High Court’s concern about a potential “black hole” in recovery, but only where licences are properly registered.

3. Timing still matters (limitation risk)

The Court also clarified an important second point:

• While licences can be registered late,
• That does not override limitation periods

This means:

• A licence must be registered before the limitation period expires
• Otherwise, the claim for licensee losses may be time-barred

In this case, the attempt to rely on sub-licensee losses came years after the infringement, making those claims beyond the time limitations.

The Court of Appeal’s decision reversed the more permissive approach taken by the High Court, where recovery of sub-licensee losses had been allowed despite non-registration.

This had a significant financial impact, effectively removing a substantial portion of the damages claimed.

Why this matters for businesses

This decision has immediate and practical consequences:

1. IP licensing is commercially critical

Businesses frequently:

• License trade marks as revenue streams
• Use licences across group structures
• Rely on licensees to generate real commercial value

2. Legal protection depends on registration

Without registration:

• You may not be able to enforce the full value of your IP rights
• Courts may only consider losses suffered by the registered owner
• Significant parts of your commercial loss may be irrecoverable

3. Late registration may still be too late

While licenses can be registered after they are entered into, this case highlights that late registration does not override limitation periods.

If a licence is only registered after the limitation period for the infringement has expired, it may be too late to recover losses suffered by licensees or sub-licensees.

IP license registration: a simple but essential step

The Court of Appeal’s decision reinforces a key practical point:

Recording IP licences is not optional from a risk perspective—it is essential.

Registration:

• Is low cost and straightforward
• Can usually be done quickly through the IPO
• Provides legal certainty and enforceability

But delay creates risk, especially where infringement occurs. It’s important to register licenses as close as possible to entering the license.

Action points for businesses

In light of this decision, businesses should act now:

1. Review all existing licences

Ensure the below licences are properly recorded with the IPO:

• Trade marks
• Patents
• Registered designs

2. Check group structures

Where IP is held centrally and licensed internally:

• Confirm all intra-group licences are registered
• These are particularly at risk of being overlooked

3. Register new licences immediately

Make IPO recording a key part of your standard process when:

• Entering into licensing agreements
• Updating commercial arrangements

4. Consider limitation risks

If infringement has already occurred:

• Check whether licences were registered in time
• Late action may not fix the issue

How Napthens can help

At Napthens, our specialist Intellectual Property solicitors advise businesses on:

• Trade mark registration
• Trade mark licensing and strategy
• Recording licences and IP interests with the IPO
• Trade mark infringement and passing off claims and enforcement
• Patent infringement and enforcement
• Design right infringement
• IP audits and risk mitigation

If you are unsure whether your licensing arrangements are fully protected, we can help review and secure your position. Get in touch today to speak with an expert.