Determining the source of infringing goods put on the market is often a priority for trade mark owners seeking to prevent sales of infringing products. The first line of attack, and often easiest to pursue, may be against the company caught selling infringing goods to customers. However, to prevent the same infringing goods entering the market via a different source, rights owners understandably look to attack further up the supply chain (i.e. the manufacturers and suppliers).
The recent case of Wilko Retail Limited v Buyology Limited  EWHC 2221 (IPEC) considers the availability of a Norwich Pharmacal order ("NPO") to obtain such disclosure – in other words an order requiring a party to proceedings to disclose the identity of a wrongdoer who is not party to proceedings (in this case, the suppliers of the infringing goods). The stakes were high in this case because the claimant had not obtained the information and had already settled the claim, but the court ultimately refused to grant an order as it was not persuaded that the "balance of irreparable harm" test would justify that grant.
Facts of the case
The Claimant, Wilko Retail Limited ("WLR"), sent a number of letters to Buyology Limited ("Buyology") requiring it to stop selling goods which infringed WLR's registered trade marks and to disclose the suppliers of the goods.
When WLR commenced proceedings for trade mark infringement and passing off in August 2013 it did not seek disclosure of Buyology's suppliers as part of its relief. Buyology admitted liability and the parties settled the action on the basis of a consent order. However, the terms of the order did not require Buyology to disclose the identity of the suppliers of the infringing goods.
WLR still required disclosure of the suppliers from Buyology but was left in a position whereby proceedings had been settled and Buyology were not breaching the terms of settlement by refusing to disclose its suppliers' identities. To compel Buyology to do so, WLR made an application for a NPO. The order requires a respondent to disclose certain documents or information to the applicant, in respect of a third party either involved or mixed up in a wrong doing, whether innocently or not, and where that third party is unlikely to be a party in the proceedings.
Despite settlement of the claim, the court held that WLR was entitled to make the NPO application and considered the relevant authorities in assessing whether to grant or refuse the application. The leading authority on the conditions for granting an NPO is the case of Mitsui & Co Limited v Nexen Petroleum UK Limited  EWHC 625 (Ch). The three conditions to be satisfied for the court to exercise the power are:
- a wrong must have been carried out by an ultimate wrongdoer (in this case, the supplier);
- there must be the need for an order to enable action to be brought against the ultimate wrongdoer; and
- the Respondent must: (a) be mixed up in the wrongdoing, so as to have facilitated it; and (b) be able or likely to be able to provide the information necessary to enable the ultimate wrongdoer to be sued.
In addition further factors are considered, these include, for example, the strength of the possible cause of action, where the "balance of irreparable harm lies", whether there is strong public interest in allowing an applicant to vindicate his legal rights and whether the information could be obtained from another source (Rugby Football v Consolidated Information Services Ltd (formerly Viagogo Ltd)  UKSC 55). In Rugby Football , it was stated that the essential purpose of a NPO, is to achieve justice.
In deciding whether to grant the application in this case, the court held that the only real question was to determine where the "balance of irreparable harm" lies. The court accepted that whilst WLR would have difficulty in preventing future infringements unless the identities of Buyology's suppliers were revealed, such disclosure would cause extensive harm to Buyology's business as suppliers would no longer trust Buyology and cease to do business with it. Consequently, the court refused WLR's application and there was no requirement on Buyology to disclose the identity of its suppliers.
We imagine that trade mark owners will take little comfort from this decision as it may seem that the court, in refusing the NPO, has put the infringing party's interests ahead of the rights owners.
The case serves as a reminder to rights holders not to wait until trial before seeking to ascertain the identity of a supplier of infringing goods as there is no guarantee that the court will compel a trade mark infringer from revealing the source of its goods. Therefore, rights holders should seek to determine this information independently where possible – for example using contacts in the market, hiring investigators, and/or capitalising on negotiations with infringers when in a position of strength (e.g. where a defendant has admitted liability, as was the case here).
Ultimately, despite stopping the sale of infringing goods by Buyology, it is uncertain whether other infringing goods manufactured and supplied by the same source will find their way to market via other retailers. No doubt a frustrating outcome for any rights holder.