Facts

5D Puzzle Inc is a Chinese company involved in the sale of various fashion products including bracelets. Its key product is a silicone bracelet consisting of three metal joints and silicone which is sold in different colours and styles. The bracelet is sold by distributors in various countries under different names: Rubbzz in Israel, Rubbs in the United States, Rubba in South Africa and Curbbz in Great Britain.

The Rubz ApS is a Danish company that sells fashion products, including bracelets. In 2014 5D Puzzle and The Rubz ApS entered into an exclusive distribution agreement under which 5D Puzzle would supply The Rubz ApS with bracelets consisting of silicone and three metal joints, sold in Europe under the name The Rubz.

In 2015 5D Puzzle cancelled the distribution agreement due to The Rubz ApS's alleged breach of the exclusive distribution agreement. 5D Puzzle claimed that The Rubz ApS had not purchased the minimum order required and had instead copied the bracelet's design, employed a third party in China to manufacture copies and then sold them to customers in territories covered by the distribution agreement.

The Rubz ApS continued to sell the disputed bracelets. 5D Puzzle brought a preliminary injunction action against The Rubz ApS before the Maritime and Commercial Court based on the rules of unfair competition under the Marketing Practice Act.

Decision

The court found in favour of The Rubz ApS and rejected the call for a preliminary injunction. In particular, the court found that the breach of contract could not establish the foundation for a preliminary injunction, regardless of whether 5D Puzzle was right.(1) Further, the court found that 5D Puzzle had not established a claim to the bracelets in question. The court relied on the fact that numerous manufacturers had been selling similar bracelets with a combination of metal and silicone in China for some time. The court also found that 5D Puzzle had not produced documentation to support its claim that the bracelets had been sold to distributors other than The Rubz ApS. Finally, 5D Puzzle had failed to establish that the three metal joints featured on its bracelet were a distinctive mark.

Comment

This is the first case of its kind to establish that contractual disputes cannot invoke a right to render a preliminary injunction. The case also highlights the need to demonstrate that the plaintiff has a right on which to base an injunction, which can be difficult to illustrate for non-distinctive products (as in this case).

For further information on this topic please contact Mads Marstrand-Jørgensen at NJORD Law Firm by telephone (+45 33 12 45 22) or email (mmj@njordlaw.com). The NJORD Law Firm website can be accessed at www.njordlaw.com.

Endnotes

(1) Maritime and Commercial High Court, September 7 2015, A-12-15: 5D Puzzle Inc v The Rubz ApS.

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