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Wednesday, 20 June 2007

Court of Appeal breaks down Boehringer's dogged resistance

The balance of interests between trade mark protection and freedom of speech was the focus of attention in Boehringer Ingelheim Limited and others v VetPlus Limited [2007] EWCA Civ 584, a decision from the Court of Appeal for England and Wales this morning (Lords Justices Pill, Longmore and Jacob - the last-named giving judgment) on appeal from the decision of Mr Justice Pumfrey at [2007] EWHC 972 (Ch) not to grant interim injunctive relief in an application made by Boehringer against one of its critics.

In short, Boehringer sought interim injunctive relief to stop VetPlus publishing an advertisement and a press release ("Are all chondroprotective joint supplements created equal?") in various journals relating to one of Boehringer's products, SERAQUIN, a nutritional supplement for dogs. VetPlus sold the competing SYNOQUIN supplement. both were reputed to have a beneficial effect on dogs' joints.

The press release cited Boehringer's own test results, which the company had handed over to VetPlus on the basis that they were not to be disclosed. According to Boehringer, publication would denigrate its product. In support of its application, Boehringer produced a list of test results it had carried out and other results carried out by others, all of which were designed to indicate that the test results which formed the basis for the press release were scientifically unreliable.

In March Mr Justice Patten J granted Boehringer's ex parte application on the basis that, under the circumstances, it was appropriate to ban publication until trial (see IPKat note here). The scientific evidence pointed only one way, showing that Vetplus's own scientific evidence was unreliable and wrong. Even if there was room for legitimate doubt, the status quo should be preserved, subject to VetPlus being given liberty to apply to discharge or vary the order before trial. In April, in an inter partes hearing, Pumfrey J refused to grant further restraint. Boehringer appealed.

Right: "A treatment for arthritis is great, but I'm still looking for a cure for my spots"

The Court of Appeal dismissed Boehringer's appeal, making the following points.

* What VetPlus was seeking in effect was to publish a comparative advertisement, based upon tests that were performed in accordance with a methodology that was standard although Boehringer alleged that it was known to be unreliable. This was however the method that Boehringer itself employed when making its own product claims;

* existing authority (Bonnard v Perryman [1891] 2 Ch 269) prevents the restraint upon publication of a statement which the defendant says it will justify, unless that statement is "obviously untruthful and libellous";

* a person who makes a damaging statement involving use of another’s trade mark which he reasonably believes to be true at the time, but which later turns out to be untrue, would not be acting in accordance with an honest practice if he were not prepared to compensate the owner of the damaged mark. He can express his honestly-held opinion but, unless that is on the basis that he will compensate his trade rival if it is proved to be wrong, he is acting in accordance with an honest practice and will be adjudged to infringe. The Comparative Advertising Directive 97/55 confirms the position;

* the rule in (Bonnard v Perryman does not apply to cases involving alleged trade mark infringement in the same way as it does to allegations of defamation and malicious falsehood - an action for trade mark infringement is based not merely on the protection of a reputation but on the protection of a property right, and more is required of a defendant in a serious commercial dispute of this nature;

* although there is an important issue of free speech involved in comparative advertising, other more complex factors are involved too. This was not a question of “pure” free speech since VetPlus had a commercial interest in diverting trade which would otherwise have gone to Boehringer;

* This application required consideration of the Human Rights Act 1998, s.12(3), which states:

"No such relief [which might affect the exercise of the Convention right to freedom of expression] is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed.".
In Cream v Banerjee Lord Nicholls addressed this provision and said it demanded flexibility in its application. In particular he said:

"Section 12(3) makes the likelihood of success at the trial an essential element in the court's consideration of whether to make an interim order. But in order to achieve the necessary flexibility the degree of likelihood of success at the trial needed to satisfy section 12(3) must depend on the circumstances. There can be no single, rigid standard governing all applications for interim restraint orders. Rather, on its proper construction the effect of section 12(3) is that the court is not to make an interim restraint order unless satisfied the applicant's prospects of success at the trial are sufficiently favourable to justify such an order being made in the particular circumstances of the case. As to what degree of likelihood makes the prospects of success "sufficiently favourable", the general approach should be that courts will be exceedingly slow to make interim restraint orders where the applicant has not satisfied the court he will probably ("more likely than not") succeed at the trial. In general, that should be the threshold an applicant must cross before the court embarks on exercising its discretion, duly taking into account the relevant jurisprudence on article 10 and any countervailing Convention rights. But there will be cases where it is necessary for a court to depart from this general approach and a lesser degree of likelihood will suffice as a prerequisite".
* applying that approach in this case, Jacob LJ, for the Court of Appeal, said:

"48. The general “threshold” which must be crossed by the claimant is that he will probably succeed at the trial. I do not see why that should not be the general rule for trade mark infringement in a comparative advertising case. Indeed there is every reason why it should. A man who finds his trade mark disparaged by a rival trader in a comparative advertisement can obtain a prior restraining order only if he can show that it is more likely than not that the disparagement is wrong and misleading. Unless he can do that, then his rival, both for his own commercial interests and in the interests of the public, ought to be free to say that which he honestly believes.

49. Traders will have nothing to fear if they have sure foundations for claims they make about their products. Such traders will be able to obtain prior restraint orders because they will be able to cross the threshold. Traders who make claims for their products which they cannot readily and firmly justify will have to live with the risk that their rivals can honestly and reasonably call those claims into question pending a final resolution as to whether the claims are in fact good".
* on this basis, applying the American Cyanamid [1975] AC 396 standards for granting interim relief, the Court of Appeal would dismiss Boehringer's appeal.

The IPKat says, the fact that the Human Rights Act 'trumps' ordinary principles of IP law - in this case trade mark law - is nothing sinister. It simply shows that the courts have the power to find the right balance in each set of unique circumstances in which the principles of IP protection and free speech come into conflict. Merpel says, I spotted that Jacob LJ called for the repeal of the Trade Marks Act 1994, s.10(6) - but, if it has no effect, why bother?

Chondroitin arthritis claims: fact or fiction?
More on chondroitin here

STOP PRESS: since this post was written, the Court of Appeal's decision has been posted here on BAILII.

1 comment:

Anonymous said...

This case can perhaps be contrasted with the Mr Miss World dilution case where Pumfrey J granted an injunction in the face of quite a strong free speech( in my view)argument

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