Court of Appeal clarifies when licensee losses can be recovered — 4 practical steps for IP owners & licensees

Handed down on 12 May 2026, the Court of Appeal’s decision in Lifestyle Equities CV v Frasers Group Trading Ltd [2026] EWCA Civ 583 (Lifestyle Equities) is an important reminder for intellectual property (IP) owners and licensees alike of the critical role of licence registration in trade mark infringement claims. 

The case centres on the licensing of the ‘Beverly Hills Polo Club’ brand — owned by Lifestyle Equities CV and widely exploited through third-party licences — and looks at when losses suffered by licensees (and sub-licensees) may be taken into account in assessing damages in a trade mark infringement claim.

Here, Sara Ludlam from our commercial and IP team explores the Court of Appeal’s approach to licensee losses and outlines the key steps that IP owners and licensees should be taking to protect their position.

Why trade mark licence registration matters

Trade mark licences are capable of registration at the UK IPO and should be registered if licensees want to be able to exploit their rights under the Trade Marks Act 1994 (TMA 1994). 

These rights include:

• The right to exploit the mark over a person acquiring a conflicting interest in it — so if someone buys the brand from the owner and your licence isn’t registered, they can ignore it.
• If you’re a non-exclusive licensee, the right to bring a claim for trade mark infringement where the brand owner consents.
• If you’re an exclusive licensee, the right to require the brand owner to bring a trade mark infringement claim.

The importance of timing has always been clear under the TMA 1994. If you don’t register your licence within six months of it being granted, you can’t recover costs in the event of an infringement action. 

Costs may be as much as — or more than — the damage suffered in a UK infringement claim, making this an expensive mistake to make.

The legal framework considered by the Court

This judgment of the Court of Appeal specifically examines the construction of s.25(3)(b) and s.30(6) of the TMA 1994. 

S25(3)(b) states that:

“Until an application has been made for registration of the prescribed particulars of a registrable transaction

1. the transaction is ineffective as against a person acquiring a conflicting interest in or under the registered trade mark in ignorance of it, and
2. a person claiming to be a licensee by virtue of the transaction does not have the protection of section 30 or 31 (rights and remedies of licensee in relation to infringement).”

What happened in this case?

Lifestyle Equities CV and Lifestyle Licensing BV (both Respondents in the appeal, having been successful as Claimants in the infringement trial) had a policy to keep sub-licensee details confidential. As a result, with one exception, those sub-licences weren’t registered.

It’s a peculiarity of IP disputes that there’s first a trial on liability — in this case, where the appellants were found liable for trade mark infringement — followed by an ‘Inquiry as to Damages’.  This is effectively a second trial in which the details of the losses and damage suffered is assessed.

The successful brand owner, Lifestyle Equities CV, didn’t include in its Particulars of Claim in the Inquiry as to Damages any claim for losses suffered by its sub-licensees but later sought to recover those losses. The Appellants (Frasers Group) argued that the brand owner wasn’t able to recover such losses where the sub-licensees hadn’t registered their licences or weren’t registered at the relevant time. 

High Court vs Court of Appeal

On a summary judgment application, the High Court dismissed this argument and concluded that the brand owner could claim for losses suffered by its sub-licensees, even where they hadn’t registered.

The Court of Appeal overturned this decision. It made it clear that while a licensee can register its licence after an infringing act has taken place and still be able to recover losses in any subsequent action, it can’t do so if the effect of the Limitation Act is to prevent bringing an action at all.

Four practical steps for IP owners & licensees

For licensees of IP rights, in-house counsel and private practice IP, commercial and corporate lawyers, Lifestyle Equities offers a clear set of takeaways:

1. Always register new IP licences within six months of execution where possible.
2. Audit existing IP licences — and register any that haven’t yet been recorded.
3. If your brand is being infringed, check that all licensees who’ve suffered loss can recover damages by ensuring that their licences are registered. 
4. Build registration into transaction checklists — treat it as a critical post-completion step, not an optional formality.
   
    

Talk to us

If this decision has highlighted gaps or risks in your own IP arrangements, our team of specialist lawyers can help you to address them. We advise on registering trade mark licences, auditing existing portfolios, drafting and negotiating licence structures and enforcing and defending trade mark infringement claims — including where licensee losses may be in issue.

Talk to our team by calling 0333 004 4488, emailing hello@brabners.com or completing our contact form.