Having a bash at cross-undertakings: a boxing dispute in three rounds

Damages cross-undertaking:
a knock-out blow ...?

Cross-undertakings in support of interim injunctive relief are an increasingly important, and frightening, part of intellectual property law. While it is only right and proper that a defendant who has been wrongly ordered not to do something for a period of months or years should be compensated for his loss of ability to trade profitably, the prospect that an unsuccessful claimant might have to pay out a vast sum of money to the wrongly-enjoined defendant can have a chilling effect on the launch of infringement litigation in the first place -- particularly if the claimant is a relatively small business and the defendant is a big one.

Under the laws of boxing, unlike those of IP litigation, the contestants tend to be more or less the same size: heavyweights slug it out with fellow heavyweights, while featherweights flap around with their peers.  The dispute discussed below comes from the world of boxing, but follows the rules of IP litigation.  It is brought to you by Katfriend and occasional contributor Aaron Wood (Swindell & Pearson Ltd):

Jab, Cross, Cross-Undertakings

What happens if you succeed in a trade mark infringement action in respect of a broad range of products, but the final injunction only covers a selection of those products? Or if the final injunction misses a range of goods for which you originally sought relief?

These questions were the subject of Round 3 of the proceedings between Frank Warren’s Boxing Brands (BBL) and four defendants, the main defendant being Queensberry Boxing IP. Round 1 [refereed by Mr Justice Sales in December 2012] resulted in the grant of an injunction and an order for a speedy trial (there being proceedings before OHIM). Round 2 [before Mr Justice Birss in August 2013, noted by the IPKat here] was the final hearing which concluded that infringement had occurred in relation to clothing.

It later transpired that the judge in Round 2 had not been made fully aware that the dispute went beyond mere clothing and extended to items of sports equipment. The judge ordered a further hearing to resolve this point. The defendants provided a detailed list of the items of sports equipment and BBL provided a statement of case which relied upon further rights not relied upon in Round 2. Birss J permitted these rights to be relied upon as this reliance arose from knowledge of what goods were actually in question, and also permitted the defendants to amend their counterclaim for invalidity, made in Round 2, to incorporate the rights now relied upon by the BBL.

In Round 3, at [2014] EWHC 91 (Ch), Birss J considered the defendants' argument that, if items in the list did not infringe, an enquiry on the cross-undertaking would be necessary; on this issue he concluded that BBL was correct that the dispute was about clothing and that the defendants did not have an active intention to market a boxing equipment brand without clothing before they lost in the main trial.

Why is it called a "ring" if it's
not round but square?

Concluding that there was infringement as against most items, with the exception of certain specialist products (tote buckets, gym fitness training equipment, corner pads and boxing rings, punch bags, punch bag utilities), Birss J observed that, of these items, only corner pads and punch bags had been ordered prior to the injunction. Of the items the defendants intended to order, most were held to infringe. Birss J emphasised that the judge has a discretion as to whether to order an enquiry on the cross-undertaking, but decided no such enquiry would be ordered. He was not convinced that the defendants ever intended to launch a “free-standing” equipment range but added that, if he had concluded that most items of equipment did not infringe, he might have ordered such an enquiry (albeit with misgivings as to the proportionality of such an enquiry). Since however there was no intention to launch a range of goods consisting of the narrow range of goods which did not infringe, there could be no loss. If they now chose to launch the narrow range, he concluded that this was a new idea.

Comment

This seems an sensible outcome in the circumstances. The defendant may feel that it has been put to some cost since, if it now launches the reduced range of products, that launch will be at a substantially later time than if it had received the final injunction last year. This is arguably not BBL's fault, however. As the judge noted, the defendant did not really lose an opportunity by virtue of the injunction being too wide in scope, since it was not an opportunity that it had pursued or would reasonably have pursued prior to the injunction. Coming only a few days after the decision of Sales J in Astrazeneca (& Another) v. KRKA, d.d. Novo Mesto (& Another) [explained and analysed on PatLit, here], litigators will now have a better view of how enquiries on cross-undertakings will be handled

Thanks, Aaron, for this explanation!

Rules of boxing here and here
Rules of civil litigation in England and Wales here and, if you're unlucky, here