Infringement - Trade marks – Irreparable harm – Balance of injustice

Cowshed Products Ltd v (1) Island Origins Ltd (2) Patrick O’Connor (3) Bianca O’Connor: Chd (Judge Birss QC): 17 December 2010

The applicant company (C) applied for an interim injunction to restrain the respondents (X) from using the brand ‘Jersey Cow’ for a range of beauty and other products pending trial.

The applicant company (C) applied for an interim injunction to restrain the respondents (X) from using the brand ‘Jersey Cow’ for a range of beauty and other products pending trial.

C had a substantial goodwill and reputation in the UK relating to toiletries and beauty products under the general brand ‘Cowshed’, with a series of subsidiary brands with humorous cow-themed product names, such as ‘Lippy Cow’ and ‘Knackered Cow’. C had around 30 trade registered trade marks in class 3 containing the word ‘cow’. The first respondent company, which had been set up by the second and third respondents, sold a range of products, including toiletry products of the same general type as C, but also other things. The range was intended to consist of Jersey origin products and X’s marketing placed considerable emphasis on that Jersey element, but cows also played an important part in X’s marketing efforts and the name ‘the JERSEY COW company’ appeared on the products.

C, having taken the view that X’s activities amounted to trade mark infringement and passing off, sent X a letter before action and then sought an interim injunction. C contended that the merits of its claim were so strong that there was no credible or sustainable defence, and that interim relief was necessary to protect innocent third parties and members of the public and the business community from being misled by X’s actions. C submitted that interim relief was appropriate because damage to it would be irreparable and X could not pay damages even if a financial assessment was made. X denied those allegations and contended that their product ranges were in different segments of the market, and that their key design concept was ‘Jersey’ rather than a cow, so that nobody would associate their products with those of C. They argued that the risk of confusion on the part of the public was slight and that there was no warrant for an interim injunction, particularly as that would simply destroy their business because they had substantial amounts of stock labelled and ready for sale and relabelling and repackaging would not be viable.

Held: (1) While it was difficult to apply the American Cyanamid approach to cases about trade marks and passing off, because assessing the risk of damage pending trial often involved asking the same likelihood of confusion questions which went to the heart of the merits of the underlying case, that approach was appropriate in the present case (see paragraphs 31-32, 34 of judgment).

(2) C had a good arguable case on its claim. An ordinary consumer who was aware of C’s goodwill and reputation would be familiar with the way in which C used a general cow theme and branding consisting of the word ‘cow’ plus another descriptor: that was a prominent and striking aspect of C’s trading. There was a real possibility that a consumer who encountered ‘Jersey Cow’ might think that was an extension of C’s range. On the other hand, X had an arguable defence. The striking element to C’s brand was that the ‘cow’ referred to was an allusion to the person who was going to use the product, whereas it was arguable that X did not use the word ‘cow’ in the same, allusive way. As it was plain that the case raised triable issues on both sides, following American Cyanamid, the court was required to consider the question of unquantifiable harm and the balance of convenience (paragraphs 35, 38, 42).

(3) C’s case on the balance of irreparable harm was weak. While any damage to it caused by X’s activity would, assuming it were found to be lawful, not be trivial, C would not suffer serious irreparable harm before a trial. The damage which would be caused to X by an interim injunction would, however, be of a different order as it would be very likely to put them out of business altogether, and no damages could compensate adequately for that. With unquantifiable harm on both sides, one approach was to preserve the status quo, but that was not the answer in the present case, as the parties disputed what the status quo represented. Accordingly, the question more material to the likelihood of causing injustice was whether one side or the other was more likely to suffer damage on account of the grant or refusal of an injunction, Management Publications Ltd v Blenheim Exhibitions Group Plc [1991] FSR 348 ChD applied. If an injunction was granted, it would effectively decide the action and there was a real risk that X’s business would be destroyed. If an injunction was refused, C would by no means be defeated: the matter could be taken to a speedy trial within months, and even if C was right about the merits of its claim, the damage in the meantime would be modest, albeit difficult to quantify or to compensate for in damages. In those circumstances, and given that X offered undertakings, pending a speedy trial, not to offer their products at a discounted rate and to pay a percentage of net profits on all sales of ‘Jersey Cow’ products into a designated escrow account, it was not appropriate to grant the injunction sought (paragraphs 43-44, 46, 50, 52, 54-55).

Application refused.

Denise McFarland (instructed by Olswang) for the applicant; Fiona Clark (instructed by Hansel Henson) for the respondents.