Licensing is a cornerstone of modern brand monetisation. From fashion labels and hospitality brands to sports franchises and consumer goods businesses, trade mark owners frequently rely on licensing structures to expand into new territories, channels and product categories. The Court of Appeal decision in Lifestyle Equities CV v Frasers Group Trading Ltd [2026] EWCA Civ 583 has highlighted an often-overlooked aspect of those arrangements: the registration of trade mark licences. While registration has traditionally been viewed as an administrative formality, this decision makes clear that failing to register a licence can have significant consequences when seeking to recover damages for trade mark infringement.
Background
Lifestyle Equities C.V. ("Lifestyle Equities") is the owner of certain trade marks, in relation to which Lifestyle Licensing B.V. ("Lifestyle Licensing") has an exclusive licence. The marks are also sub-licenced to various third parties.
Lifestyle Equities and Lifestyle Licensing (together “Lifestyle”) brought trade mark infringement proceedings against Frasers Group Trading Ltd (formerly Sportsdirect.com Retail Ltd) and others (“Frasers Group”). Following a trial on liability, the court found largely in favour of Lifestyle. The matter then turned to a consideration of damages.
When seeking recovery of damages, Lifestyle claimed losses suffered not only by themselves but also by various sub-licensees. Frasers Group argued that this was not permitted where the sub-licences had not been registered, or were not registered at the time when the alleged losses were suffered.
What is trade mark licence registration and why does it matter?
A trade mark licence is an agreement under which a trade mark owner authorises another party to use the mark. Under UK law, licences may be recorded on the UK trade mark register maintained by the UK Intellectual Property Office (“UKIPO”). Registration is not mandatory and unregistered licences are still valid. Many businesses have therefore historically chosen not to register licences because of administrative burden or confidentiality concerns. The Court of Appeal’s decision may prompt a reassessment of that approach.
The legal issue
At first instance, the court held that (i) losses suffered by a sub-licensee could be taken into account, despite the lack of registration; and (ii) that there was no time limit for registration, so it could be done at a later date to give the licensee protection.
Frasers Group appealed the decision.
The Court of Appeal's decision
The crux of the appeal was the question: can a trade mark owner recover losses suffered by its licensees if those licences have not been registered?
The Court of Appeal held that:
Ground 1 - s.30(6) is a protection for licensees, not owners
The Court held that the sole function of s.30(6) of the Trade Marks Act 1994 (“TMA”) is to allow a trade mark owner to recover sums that go beyond its own losses, namely losses attributable to third-party licensees, and licence registration is a prerequisite to invoking the s.30(6) protections.
Ground 2 – Time bar
The Court accepted that there is no time limit within the TMA for registering a licence. However, a claim to recover losses of a licensee cannot be brought until an application to register the licence has been made, and that claim remains subject to the ordinary limitation periods (five years in Scotland and six years in England).
In this case, since the last pleaded infringing act took place in June 2016, and the claim for sub-licensees' losses was not raised until June 2023 (with most licences still unregistered), the claims were time barred. The Court treated the claim for losses suffered by the sub-licensees as a separate claim to that of Lifestyle for its losses (which was brought in time).
The Court therefore granted summary judgment dismissing the claims for damages in respect of losses suffered by the sub-licensees.
Branding considerations
Trade mark licensing is central to modern brand strategy. Brand owners regularly use licensing and sub-licensing arrangements to extend their reach across product categories, territories and retail channels - building brand equity through carefully managed networks of exclusive licences, territorial licences and sub-licences. However, they also mean that a significant proportion of the economic harm caused by infringement may be suffered by entities other than the registered owner. Lifestyle Equities highlights the tension between the commercial desire to keep licensing structures confidential and the legal need to register those arrangements. Unregistered sub-licences may now represent a significant gap in a brand owner’s ability to protect the economic value generated by those partnerships.
This is particularly relevant for fashion, lifestyle, hospitality and consumer goods brands, where sub-licensing is commonplace and where infringing products can erode not only sales but also the broader brand image cultivated through licensee relationships.
Enforcement considerations
- Register your licences: This case is a powerful reminder that trade mark licence registration is not just administrative housekeeping. Although registration remains voluntary in the UK, failure to register can potentially prevent licensees from recovering damages in infringement proceedings, even where the owner brings the claim on their behalf. In practice, recording a licence with the UKIPO is generally a straightforward process. Depending on the circumstances, parties may be able to record only limited details of the arrangement rather than publicly filing the full agreement. Businesses concerned about confidentiality should therefore obtain advice on the information that must be disclosed and the extent to which commercially sensitive terms can remain private.
- Act promptly: The Court confirmed that limitation periods run from the date of infringement, not from when a licence is registered. Delay in registering, combined with delay in bringing claims, could mean losing out on damages claims.
- Audit existing arrangements: Brand owners with complex licensing structures should review their portfolios to identify any unregistered licences or sub-licences. If infringement is discovered, the clock is already ticking.
- Factor registration into your brand protection budget: For brand owners who rely on licensing as a revenue model, the cost of registering licences should be seen as part of the broader brand protection investment, not just a legal formality. The ability to recover the full range of losses flowing from infringement (including those suffered across licensing networks) depends on it.
- Consider the infringer's perspective: Those defending trade mark infringement actions should check the registration status of any licences relied upon. This judgment gives a clear basis for challenging unregistered licensee loss claims.
For more information, please contact the authors or your usual contact at CMS.
