Civil litigationi Forums
For cases with a value of under £10,000, the small-claims track of the Intellectual Property Enterprise Court (IPEC) (a specialist court within the High Court) provides a useful venue. No costs awards may be made on this track, but injunctions and other similar remedies may be available to the successful claimant. This track may not be suitable for cases of any complexity.
For cases with a value of up to £500,000, the multitrack of the IPEC is available. The Court’s procedures are designed for small and medium-sized enterprises, in that it has powers to limit the scope of the disclosure process and the number of witnesses. It is intended for cases that may be decided in a trial lasting typically two days. A particularly attractive feature of the IPEC’s process is that, with rare exceptions, the maximum award in costs that may be made after trial is £50,000. This gives a good degree of certainty to parties as to what their liability may be in the event that a case is lost.
The High Court is the traditional home for IP cases of any size. There is no cap on the value of cases that may be brought in the High Court and it has the greatest capacity for long trials, with significant disclosure exercises and witnesses. It is the most appropriate venue for the most complex cases. There is no costs-capping regime. The parties must, however, provide a detailed budget for the case fairly early in the proceedings but the budget itself can be expensive to prepare. It would not be unusual for legal costs in bringing a trademark case to trial to amount to at least £400,000.
The High Court recently piloted and has now made permanent a ‘Shorter Trials Scheme’. This scheme is intended for cases with a trial of no more than four days. The Court exercises powers akin to those in the IPEC, where disclosure or witness evidence may be controlled or limited. There is no requirement for budgeting, nor is there a costs-capping regime. It is intended that the limits and controls on procedure, and the expeditious processing of cases to trial (typically around 10 months), will reduce costs overall.ii Pre-action conduct
The Practice Direction on Pre-action Conduct is set out in the CPR. This specifies that, in the absence of special circumstances, a claimant should approach the defendant and set out the details of the complaint before any court claim is issued. If this requirement is not complied with, the claimant may later be penalised by not being granted as high an award of costs as it otherwise would (even where it is wholly successful in the substance of the claim).
In some areas, however, such as personal injury claims, there are additional protocols that set out in fuller detail the precise steps that must be taken before a claim is issued. There are no protocols in IP cases, mainly because the law of unjustified threats historically made it difficult to draft pre-action protocols mandating that a claim be set out in detail to an alleged infringer when the law of unjustified threats made it potentially actionable for a complainant to threaten to sue in respect of certain acts. The law of unjustified threats was reformed in 2017, so it may be that there will be a return to the question of whether it is possible to specify detailed protocols for pre-action conduct in IP cases.
It should also be noted that Part 36 of the CPR provides a formal set of rules whereby settlement offers, made in accordance with those rules, and that are not accepted, have an impact on any costs award that may be made after trial. The rules are complex, but broadly are intended to penalise a party that refuses a settlement offer on terms that are more favourable than the terms that party ultimately obtains after trial. Part 36 offers for settlement may be made prior to the issue of proceedings.iii Causes of actionIn the courts
A trademark owner may bring a complaint against third-party misuse of its trademark by way of:
- trademark infringement (where it is the proprietor of a registered trademark in the UK, whether UK trademark, EU trademark or international trademark designating the UK or EU); or
- the common law tort of passing off (where it is the owner of goodwill in a business in the UK represented by its trademark).
These causes of action may be brought simultaneously. For example, if a registered trademark has been used in the UK, it is frequently also the case that this use will have established a basis for a passing-off claim. There is nothing to prevent the running of both causes of action simultaneously and in many cases that may be a prudent course. There have been cases where, for example, an EU trademark has ultimately been held to be invalid by a UK court (which otherwise would have been infringed) and where the claimant was able to succeed in preventing the defendant’s use of its mark in the UK on the basis of the claimant’s alternative claim in passing off.
Either cause of action may be brought on a quia timet basis, that is to say on the basis of infringing activity that has not yet taken place. Either action may be brought to prevent third-party use of a trademark, trade name, company name, domain name, get-up or any other indicia or sign used in the course of business in respect of a good or service.
An action in infringement will be successful if the claimant proves that the defendant’s use of a relevant sign:
- is use of a sign sufficiently similar to the registered trademark, for sufficiently similar goods or services, that there is a likelihood of confusion; or
- is sufficiently similar to the registered mark, in which there is a reputation, that the sign will call to mind the registered mark and will:
- take unfair advantage of or free ride on the reputation;
- tarnish the reputation; or
- blur or erode the distinctive character of the registered mark.
An action in passing off will be successful if the claimant proves that:
- it is the owner in the UK of goodwill in a business represented by a trademark or other distinctive indicia (such as a packaging get-up);
- the use by the defendant of its sign amounts to, or would amount to, a deceptive misrepresentation to a substantial proportion of the relevant consumers; and
- that such misrepresentation would be liable to lead to damage to the claimant’s goodwill.
Companies House administers the registration of companies in the UK. Rules provide that a new company may not adopt a name that is identical to the name of an existing registered company or one that is very similar (according to specific narrow rules).
Despite the general rules, it is possible to register a company name that (in trademark terms) would be considered similar to an existing name. It may be possible to prevent the use and registration of such a name under actions for passing off or trademark infringement through the courts.
An alternative venue, however, is the Company Names Tribunal. This has a narrow remit, adjudicating on cases that might broadly be described as abusive names. It provides a useful and cheap facility to remove from the companies register any names that are obviously attempting to take unfair advantage of more famous existing companies or trademarks. A significant limitation, however, is that a complaint may be made only in respect of a company that has not yet traded under its name.
Abusive .uk domain names may also be addressed through the dispute resolution service provided by Nominet. The rules of procedure are similar to the ICANN rules applicable to .com domain name disputes, but there are some differences.iv Conduct of proceedings
The process of a claim in the IPEC follows the following broad outline. There are variations in other courts.
- Issue of a claim form. This step consists of a claimant forwarding a completed claim form (a brief summary of the claim) to the IPEC and paying to the Court the issue fee. This fee may vary between £1,000 and £10,000, depending on the level of damages sought in the claim. The Court then seals (i.e., officially stamps) the claim form and returns it to the claimant.
- If the defendant is in the UK, the claimant now has four months to serve the claim form (along with full details of the claim, called the ‘particulars of claim’) on the defendant. For a defendant UK company, good service of the claim form and particulars may be achieved by posting the documents to the company’s registered address.
- Once the defendant has been served with the claim form and particulars of the claim, it has 14 days to file an acknowledgement of service at court. (Later deadlines are determined by the particular court in which the claim is brought.) Typically, a defendant in the IPEC will have a period of 42 days from service of the claim to file its full defence. Shorter periods apply in the High Court.
- Once a defence has been filed, the claimant may take steps to bring the matter to a case management conference (CMC) and, where applicable in the High Court, this will include preparation of legal costs budgets for the case. The CMC may be fixed some time after the defence has been received.
- At the CMC, the Court will make findings as to the issues to be decided in the case and specify what disclosure and inspection of documents will be provided by the parties, what witness evidence, including expert evidence, may be filed and served by the parties and, in the IPEC, when the trial and issue of judgment shall take place.
- A typical period to provide initial disclosure may be one month but the parties have some latitude to agree amendments to the timetable. In the IPEC, it is more typical for the Court to order specific disclosure (i.e., disclosure of documents relating to particular issues) rather than standard disclosure (i.e., all relevant documents, both supportive and adverse to a party’s case). From the point where litigation is contemplated, the parties remain under a duty to preserve documents that may need to be disclosed.
- After the disclosure process, evidence may then be prepared and filed in the form of witness statements, which do not have the formality of other jurisdictions; that is to say they do not need to be notarised. However, the particular format of the statement requires a ‘statement of truth’, and a false statement may be punishable as contempt of court. It should be borne in mind that all witnesses who give evidence may be cross-examined at trial.
- Trial: skeleton arguments (i.e., short summaries of the facts and legal arguments) should be filed shortly before trial along with authorities (i.e., relevant cases and legislation). At trial in the IPEC, typically one day may be taken up by cross-examination of witnesses and a second day with legal submissions and argument.
- Judgment is likely to be pencilled in to be issued around six weeks after trial.
- The overall process may take 18 months on average, but there is a wide variation since the parties to some extent influence how quickly the proceedings move to a decision.
The courts have a wide inherent jurisdiction in granting remedies to a claimant who is successful in an action for trademark infringement or passing off. The following are some of the more usual remedies sought.
- An injunction preventing use of the trademark or sign complained of. In trademark infringement cases, the injunction may be granted in broad terms (i.e., ‘the defendant shall not infringe UK trademark number . . .’). In passing-off cases, the order may be more limited, enabling a defendant to continue use of its mark if it takes sufficient steps to ensure that no misrepresentation is caused. Breach of an order, in whatever form, by the defendant may amount to contempt of court, punishable by a fine and ultimately imprisonment.
- Similar orders compelling the defendant to change its company name or transfer its domain name.
- An order to deliver up all infringing goods or articles in the claimant’s possession, custody or control.
- An enquiry as to damages or at the claimant’s election an account of profits.
- An order to pay the claimant’s legal costs. The claimant, where successful, is in principle entitled to compensatory payment from the defendant for legal costs, provided they are proportionately and reasonably incurred. Nevertheless, the courts have a wide discretion and may take into account the parties’ behaviour before and during proceedings, as having an effect on any costs order that is made. A rough rule of thumb is that a court is likely to make an award of cost amounting to around 70 per cent of the actual costs incurred.
- An order for publication of judgment. In certain circumstances, the courts may order that a defendant should publicise the judgment (on its website, for example), if it is thought that this may assist in dispelling the confusion that has been caused by the previously infringing use.
The courts may also grant interim remedies before trial (particularly interim injunctions). The test for whether an interim injunction should be granted includes a number of factors but a critical one is the speed at which the claimant seeks the remedy. If the defendant has been on the market for several months, with the claimant’s knowledge, that will reduce the likelihood that the claimant will be able to obtain an interim injunction.
Other enforcement proceedingsi Criminal proceedings
It is a criminal offence (under Section 92 of the Trade Marks Act 1994) to apply to goods or their packaging a sign identical to, or likely to be mistaken for, a registered trademark, or to sell, or offer to sell, such goods. No equivalent provisions apply to misuse of a trademark in respect of services. Penalties upon conviction include fines and potentially substantial prison sentences. In principle, many acts of trademark infringement could be pursued under criminal law as much as under civil law. In practice, the criminal provisions are rarely relied upon between, or against, legitimately trading businesses.
There is a statutory duty on public authorities (namely trading standards offices of local government) to prevent unauthorised use of registered trademarks. In practice, funding of these offices may vary across the country and they may not necessarily have the manpower to pursue criminal trademark cases except in the most serious matters.
It is also possible for trademark proprietors to bring a private prosecution, that is to say to initiate criminal proceedings themselves rather than relying on a trading standards office. This is often an unattractive option, since the evidentiary burden is high (the case will need to be proved to the criminal standard ‘beyond reasonable doubt’ rather than the civil standard ‘on the balance of probabilities’). Further, there will be no automatic award of legal costs, although forfeiture proceedings may be separately pursued.
The Police Intellectual Property Crime Unit, part of the City of London Police, has recently been established, with funding from the UKIPO, to address IP crime with a particular focus on counterfeits provided online. The website provides a form enabling reports or allegations of IP crime to be submitted.ii Customs procedures
Regulation (EU) No. 608/2013 (the Regulation) provides a comprehensive procedure for customs action to prevent import into the UK or EU of goods infringing an IP right. This applies also to goods that infringe registered trademarks but not to grey goods.
UK Customs (HMRC) and the UK Border Force work together in implementing these provisions.
A trademark proprietor may make an application to HMRC for action under the Regulation to specify, for example, the registered trademarks that it would like HMRC particularly to monitor. This may apply to the UK only or, in an EU application, to several customs authorities within the EU. An application will need to include information such as the trademark right, with evidence of registration, a description of the relevant goods to be monitored along with any technical data permitting recognition of authentic goods, and the name and contact details of any legal representatives. The trademark proprietor will also need to indemnify the customs authorities for their costs, expenses and liabilities. There are no official fees in making the application.
Where any goods are seized under the application for action, HMRC will notify the registered trademark proprietor, or its representative, and grant a period of 10 days (or three days in the case of perishable goods), during which the trademark proprietor may indicate that the goods, in its view, infringe its right, and request destruction of the goods. The proprietor may obtain samples for assessment. If the importer of the goods provides no objection to destruction within the same 10-day period, or provides no response, the goods may proceed to destruction. If the importer objects to destruction, the goods shall be released, unless the trademark proprietor promptly issues a claim for trademark infringement in the courts. The goods shall be detained pending resolution of the court action.
HMRC may also notify a trademark proprietor ex officio if it detains goods that it suspects infringe a registered trademark right, even if no application for action is in force. A similar procedure shall apply but the first step will be for the trademark proprietor to make an application for action.