Friday, 21 March 2014
This post is about interim injunctions in trade mark infringement actions.In cases of trade mark infringement, as with all intellectual property rights, the claimant’s main if not only goal is often to put as quick a stop as possible to the conduct of which he or she complains. Often a cease and desist letter will do the trick, but if not, you may have to sue for an injunction. But proceedings can take many months, sometimes years, and by then it may be too late. If you wish to put a stop to something immediately – sorting it all out in court later – you can generally apply for an injunction on an interim, interlocutory or preliminary basis.
Although European trade mark law is largely harmonised, and the Member States share an Enforcement Directive requiring them to empower courts to issue interim injunctions, the practice and requirements for these varies from country to country, sometimes considerably. The precise procedural peculiarities of each could fill a book, but with the help of several of my European Simmons & Simmons colleagues, I present the following overviews of the UK (excluding Scotland), Germany (from Martin Gramsch and Daniel Kendziur), France (Frédérique Potin), Italy (Rocco Lanzavecchia), The Netherlands (Laurens Kamp) and Belgium (Jérémie Doornaert). As you might expect, each is illustrated by an appropriately themed (or rather, stereotyped) critter.
A court may grant an injunction where it is just and convenient for it to do so. Guidelines for the grant of interim injunctions were laid down in the celebrated American Cyanamid judgment of the House of Lords (the UK’s highest court before it became the Supreme Court) in 1975. It was a patent case, but its principles have general application to all intellectual property rights and beyond.
The guidelines suggest that (1) there must be a “serious question to be tried”; (2) damages must not be an adequate remedy for the claimant; (3) if the defendant claims an injunction will also hurt it in a way which cannot be compensated in damages should it win at trial, the court must weigh up the “balance of convenience”: the party that faces the most harm will succeed whether that means granting or refusing the injunction.
Applications are uncommon in the UK. They can cost upwards of tens of thousands of pounds and those obtaining them must give a cross undertaking to the defendant, undertaking to repay any damages it suffers from the injunction in the event that it is discharged following trial.
Applications are generally made on notice, but without notice (ex parte) or short notice injunctions can be obtained in cases of real urgency. For without notice applications (which are rare in the UK), a return date is likely to be listed shortly thereafter to give the defendant a chance to defend itself and discharge the injunction.
Delay is often cited as a key factor pointing away from the grant of an interim injunction. If you want one, act swiftly on discovering the infringement.
The rules of obtaining an interim injunction in trade mark matters (as with other disputes) are laid down in the German Code of Civil Procedure.
The basic test is much more focused on the merits of the action than in the UK and other jurisdictions. In effect, the applicant has to make out a trade mark infringement case on the merits, albeit that the court will expect less by way of evidence (it may, for example, accept evidence by affidavit rather than in person). Urgency is a second and key element of the test. If an applicant takes its time having discovered the infringement, even if that time was spent in correspondence and negotiation with the infringer, he or she may not get an interim injunction at the end of it. To be safe, an application should be brought within four weeks of discovering the infringement, although practice on this timescale varies amongst German courts.
Applications are much more common in Germany than in the UK. As regards costs, they are generally a fair bit cheaper than in the UK – perhaps typically obtainable for in the region of Euro 10,000. If an injunction is obtained on an interim basis and later the case is lost, there is a statutory requirement for the applicant to compensate the respondent for any claimed losses. The court may therefore ask the applicant to pay an amount by way of security if it is to obtain an injunction.
Applications are routinely made without notice. Many courts will expect a warning or cease and desist letter to have been sent first, but once that is shown courts will typically grant the injunction on paper without hearing from the respondent. However, if the respondent is based outside of Germany, the court will usually order an oral hearing at which the respondent is given the chance to attend. Once in place, it will be up to the respondent to oppose an injunction and bring about a full hearing. Interestingly (in this Kat's view at least), if a court rejects a without notice application, the applicant can bring an appeal without even involving the respondent.
It is worth adding that if an applicant seeks an interim injunction in respect of the respondent’s appearance at an imminent trade fair, it is generally much easier to obtain the injunction ex parte. The court may not even expect an applicant to send a warning letter first, or may be satisfied that one has been sent giving just hours of notice before the application is made. This is the case whether the infringer is in or outside of Germany. If outside, the court is likely to agree that an interim injunction is the only way to deal with the matter, as waiting until after the fair is no use if the respondent will then have left the jurisdiction. An applicant will commonly serve the respondent at the trade fair, with documents in German, and bring along a bailiff to seize the respondent’s goods there and then. A quite effective remedy.
In France, the rules governing interim injunctions in trade mark matters are found in article L. 716-6 of the French Intellectual Property Code. This type of action is known as a “référé”.
As is the case in most jurisdictions covered in this post, a prima facie case needs to be established of current or imminent infringement and no injunction will be granted if it is not obvious that the trade mark concerned deserves protection. Validity of the mark will not come under consideration at this stage.
Inter-parte proceedings for interim injunctions are fairly common. Depending on the case, interim injunction proceedings can cost up to Euro 10,000-15,000 in legal fees.
While ex-parte proceedings remain an exception, they will be granted where the "circumstances dictate" that an injunction is granted without the court first having heard the other side (eg, in a situation where a delay is likely to cause irreparable damage to the applicant). Inter-parte proceedings will usually take at least a month to be heard, although where urgency can be established the matter can be heard in a matter of days. Ex-parte proceedings will be much more rapid.
Interim injunctions are obtained against the alleged infringer, but may also extend to intermediaries whose services are used by the alleged infringer and could include the persons involved in shipping or storing goods; internet service providers or e-commerce platforms.
A successful applicant must bring full proceedings within 20 working days of obtaining the interim injunction, if it fails to do so the respondent can apply to cancel the injunction and claim damages.
The rules for obtaining an interim injunction in trade mark matters are laid down in the Italian Code of Industrial and Intellectual Property and the Italian Code of Civil Procedure.
The two conditions for courts to grant preliminary injunctions are (i) a prima facie case; and (ii) urgency. Quite what meets the latter requirement can depend on the particular Italian court – an unjustified delay in seeking relief of over six months may be regarded by some courts as a hurdle. As in the UK, there is a need to show that there will be irreparable harm if no injunction is granted, and so an injunction may be denied where damages are an adequate remedy.
As in Germany and France, applications in Italy are much more common than in the UK. The costs of interim injunction proceedings are generally in the region of Euro 15,000.
Ex parte interim injunctions are awarded only in extreme cases, eg, if there is an imminent trade fair.
If a party obtains an interim injunction but ultimately loses its case, it is rare for it to have to compensate the winning party in respect of losses caused by the interim injunction. The party subject to the injunction would have to show that the injunction was granted as a result of an abuse of process or bad faith by the applicant, which in practice is difficult to prove.
In some cases a court may ask the applicant to pay an amount by way of security to cover such losses, although for the above reasons this is rare too.
The provisions on interim injunctions have been laid down in articles 254 to 260 of the Dutch Code of Civil Procedure.
In order to obtain an interim injunction, the claimant has to establish that he has an urgent interest. The requirement of urgent interest is not interpreted strictly in the Netherlands. The Dutch Supreme Court established a few years ago that if the claimant can establish an ongoing infringement of his subjective rights, it is assumed that he has sufficient urgent interest. Recent developments in the lower courts have suggested a move away from this generous concept of urgency and a move towards a requirement to act expeditiously.
Interim injunctions are frequently used in the Netherlands. They provide a quick and cost efficient solution for a claimant who is faced with an infringement of his intellectual property rights. Under normal circumstances, a judgment is handed down between six to eight weeks after the writ of summons is served on the defendant but the court will react much more quickly if the circumstances require.
Costs as everywhere vary by complexity, but the simplest cases could be handled for as low as Euro 6,000.
It is not uncommon in the Netherlands to file an application for an ex parte injunction. The advantage for applicants is that the application remains confidential if it is not granted, so there is relatively limited risk in filing an application (other than the initial cost).
An application for an interim injunction is governed by the Belgian Judicial Code. Several types of injunction can be applied for in Belgium.
The most popular and efficient type is under an ex-parte procedure named “saisie-contrefaçon”/”beslag inzake namaak” by which the applicant can apply for (1) the appointment of an expert for describing the alleged infringing products (the taking of evidence) and (2) the seizure of the alleged infringing products. In order to obtain an order that an expert be appointed to describe the allegedly infringing items (a first step which helps the claimant pursue other measures or a substantive claim later), the claimant must prove that his trade mark (a) is prima facie valid and (b) has been prima facie infringed. In order to obtain seizure measures, the conditions above must be fulfilled and, in addition, the claimant must prove (i) the existence of an infringement of his trade mark which is not seriously challengeable and (ii) that the seizure measures are reasonably justified on a balance of convenience test. It takes between a day and a week to obtain such order and applications are always made without notice.
A bond or guarantee may be required from the applicant to compensate the defendant if it later wins the case but these guarantees are quite rare if the application is limited to the taking of evidence without requesting seizures.
In addition, a broader set of interim measures can be claimed in a summary procedure before the President of the Commercial Court who will consider three questions prior to granting a measure, including an interim injunction: (a) is the matter urgent?; (b) does the trade mark proprietor enjoy prima facie valid claims and rights?; and (c) does the interest of the trade mark proprietor outweigh the other interests at stake? It typically takes between 2 and 6 months to obtain such order. However, in 2007 accelerated proceedings on the merits became available to trade mark proprietors. Since then, urgency has become much more difficult to establish and so the “saisie-contrefaçon” procedure is the one most often pursued.
The costs of these proceedings are on a par with the costs in The Netherlands referred to above.
While we have considered this topic in the context of trade mark infringement, many of the principles and tests set out above apply equally to other intellectual property rights. Trade marks do provide their own particular considerations. For example, inadequacy of damages may be more easily shown in trade mark cases, where the nature of a mark makes valuing damage to reputation or brand attraction and recognition difficult.
It is worth remarking that the difference in practice shown above can have a significant impact on the strategy to be adopted in tackling any trade mark infringement taking place in more than one European Member State. An interim injunction is a powerful weapon, which can often be determinative of a case – force an infringer off the market up front, or fail to force him off the market and be faced with having to wait a year or more to find out if you can – can be a major motivator to reach a settlement or co-existence agreement or simply to abandon a brand altogether. Choose your jurisdiction wisely!