A recent Inner House decision has confirmed that, in certain circumstances, the Scottish IP Court can issue an interim interdict order (the Scottish equivalent of a preliminary injunction) which extends beyond the borders of Scotland, in favour of a company which is not domiciled in Scotland.
First Instance Decision
As a recap of this case, the Pursuer produces Hendrick’s Gin and owns various trade marks including the shape of the bottle and packaging. The Pursuer claimed that Lidl’s own brand Hampstead Gin infringed the Hendrick’s Gin trade mark and that Lidl has committed the legal wrong of passing off. For more background, see our previous Law-Now here.
Whilst the first instance Scottish IP judge did grant the interim interdict, crucially, he did not grant a UK-wide interim interdict against Lidl, as was requested by the Pursuer. Instead, the first instance IP judge held that the Scottish IP court did not have jurisdiction to apply a pan-UK order in this case.
Both Parties appealed this decision and the territorial authority of the Scottish IP Court was revisited. The Inner House decided that a Scottish Court could indeed grant an interim interdict which would apply across the UK. The most relevant section of the judgment states:
“The short point is that Lidl, or at least the third defenders, are domiciled in Scotland, as they are in England and Wales. Grants had a choice of proceeding in either jurisdiction. They elected to sue in Scotland, as they are entitled to do. It would be surprising if it were otherwise given that the alleged infringement is being committed partly in Scotland and Hendrick’s is produced in Scotland. There is no need, where there is jurisdiction in both countries, to raise separate actions in each one.”
Many readers will of course appreciate that granting an interdict/injunction in a different jurisdiction is well-established in the English courts and the Inner House judges went onto conclude that:
“It is clear from the approach of the courts in England (Lucasfilm v Ainsworth) that the grant of orders, against persons who are domiciled in the jurisdiction, which have an extra territorial effect are commonplace. The same approach is appropriate in Scotland.”
Other factors which appear to have influenced the judgment were that there were no parallel proceedings taking place in England, the Court had in personam jurisdiction over Lidl, and Lidl had not entered a plea of forum non conveniens at the outset of proceedings being raised in Scotland.
Scottish IP Court Benefits
The Scottish IP Court offers a rights holder-friendly and cost effective forum which is very well-set up for the enforcement of IP rights such as trade marks. Often infringements are occurring across the UK and in those circumstances brand holders have a choice as to where they want to bring proceedings. In almost all cases, Scottish jurisdiction can be obtained by carrying out a test purchase from Scotland.
Some of the benefits of enforcing IP rights in Scotland include:
There is no requirement to send correspondence in advance of proceedings being raised. Whilst parties are free to issue pre-action correspondence if they wish, there are no mandatory provisions that require them to do so.
Preliminary injunctions (known in Scotland as interim interdicts) are regularly granted on a without notice basis. In these instances, no advance notice of the proceedings is provided and a hearing will proceed before the judge without the infringer or their lawyers being present. In such cases, the first an infringer will know that the interim interdict has been awarded against them will be when process servers turn up at their door to serve the order.
Irrespective of the value of the case, the IP Court charges a flat fee of just over £300 in court fees to have an action raised. This is the case no matter what type of IP is involved, which can offer a significant cost saving in comparison to court costs in other jurisdictions.
Conclusion and Practical Effects of Decision
In certain IP actions, e.g. dealing with online sales of infringing goods, an order to take down a website in Scotland may in effect bring the entire website down, but that was considered more of a practical consequence of such a Court order in these spheres rather than the Court extending their geographical remit beyond Hadrian’s Wall.
However, before this decision, achieving the same result where potentially infringing products were on sale in physical shops, was much more difficult to achieve. Following the decision in this appeal, a new benefit can now be added to the list above which is that any interim interdict order granted in Scotland in trade mark infringement cases, can provide brands with UK-wide protection. As such, brands have the opportunity to take advantage of some of the benefits outlined above, and still obtain UK-wide relief.
Time will tell if this decision will open the flood-gates to a raft of Scottish IP litigation but standing the benefits outlined above, it is clear that in-house teams could be getting a lot more bang for their buck by considering bringing IP infringement proceedings before the Scottish IP Court.