Get-up case goes forward
[2022] EWHC 2371 (Ch), Au Vodka Ltd v NE10 Vodka Ltd and another, High Court, 21st September 2022.
Claudine Sheers lays out the first steps in an expedited action.
Key point
• Passing off and trade mark claims will necessarily require an examination of the merits of the claim where a court is asked to grant an interim injunction
On 2nd September 2022 AU Vodka Ltd (the Claimant) applied for an interim injunction against NE10 Vodka Ltd (the first Defendant) and Leon Hogan (the second Defendant) in respect of the launch of a new vodka called NE10.
The Claimant’s application was based on alleged passing off by the Defendants of the Claimant’s get‑up of its vodka bottles, owing to the presentation of the NE10 product.
In a decision dated 21st September, Mr Justice Mellor denied the Claimant’s application for an interim injunction.
In addition, the allegations that the second Defendant was primarily liable were struck out, although the Judge declined to strike out the allegations of joint liability.
The Judge instructed the trial to be expedited and it is likely to take place at the beginning of 2023.
Background
The Claimant launched its vodka under the Au79 brand in 2015. The Claimant sells a range of vodkas of different flavours under the brand, each sold in a tall, slim bottle finished in metallic gold.
The bottle includes a square label containing the Au79 mark and a smaller label near the bottom of the front of the bottle.
The first Defendant launched its vodka brand NE10 on 22nd August 2022.
Its product range consists of three vodka bottles in various metallic colours, namely pink, blue and silver. The colour varies depending on the flavour of the vodka contained inside.
The NE10 bottle has a tall, thin profile, and at the top of the bottle is a shield‑shaped plate containing the words “NE10 VODKA”. Nearer the base of the bottle, a rectangular plate shows the flavour of the vodka.
The Claimant made a number of allegations in pre‑action correspondence concerning the branding and appearance of the first Defendant’s product and the second Defendant’s involvement.
The second Defendant was (at the time the claim was issued) the sole director of the first Defendant and its majority shareholder.
The Claimant issued its claim and application for an interim injunction on 2nd September 2022, relying solely on passing off in respect of the get‑up of the Claimant’s product.
Decision
Counsel for each party referred the Judge to the principles set out in American Cyanamid, namely: whether there is a serious question to be tried; whether damages would be an adequate remedy for either party, and if not, where does the balance of convenience lie?
The Judge noted that although the American Cyanamid principles are intended to avoid the need for the Judge to conduct a “mini‑trial” on the merits, authorities recognise that in passing off cases it is “frequently necessary to form a view as to the strength of the claimant’s claim in order to understand the scale of any likely damage”.
The Judge was satisfied that the Claimant had a reputation subsisting in the appearance of its products and that there was a serious issue to be tried as to where that reputation resides.
This was a matter for trial, but the Judge considered it necessary to form some view to assess whether damages might be an adequate remedy if no injunction were granted. He reviewed the manner in which the get‑up was pleaded by the Claimant.
The Judge noted that the Claimant’s evidence suggested the Claimant’s labelling is being noticed, since consumers refer to it as “Au Vodka”.
As regards misrepresentation, the Judge was not persuaded that any of the evidence submitted demonstrated actual deception.
However, he noted that the evidence at trial could provide a different result.
As to whether damages would be an adequate remedy for the Claimant, in light of the Judge ordering an expedited trial, he was satisfied that damages and an injunction at trial would suffice if the Defendants were found liable.
In contrast, as to whether or not damages would be an adequate remedy for the Defendants in the case of an injunction being incorrectly granted, the Judge agreed that an injunction would “kick the legs out” from underneath the Defendants after their successful launch.
As regards the status quo, the Judge concluded that the chronology of events appears not to favour either side.
Therefore, the Judge concluded that the balance of convenience favoured denying the application for an injunction.
Finally, the Judge dealt with the second Defendant’s application to have the case against him struck out.
The Judge found that the second Defendant had not committed any of the acts that may give rise to liability personally, and as such the claim that he was personally liable was struck out.
As regards the alleged joint liability of the second Defendant, the Judge was satisfied that the allegations were sustainable in law. He noted, however, that the particulars of his liability were likely to be required to be supplemented in due course.
This case is a reminder that passing off and trade mark claims will necessarily require an examination of the merits of the claim where a court is asked to grant an interim injunction.
Although the principles in American Cyanamid seek in part to avoid this, the peculiarities of these cases make it difficult, if not impossible, to consider the adequacy of damages without doing so.
As the Judge noted, passing off claims based on get‑up alone are rare.
He proceeded on the basis that consumers tend not to rely on the shape and appearance of products alone, although he was clear that evidence at trial may be capable of overturning that general proposition.
In addition, the fact that the Defendants have managed to defeat an application for an interim injunction should not give them comfort that they will necessarily win at trial, as much will turn on the evidence available at the time of the proceedings.
Locke Lord (UK) LLP represents the Defendants NE10 Vodka Ltd and Leon Hogan.
