Courts continue to struggle to find appropriate forms of injunctive relief when social media is involved: Frank Industries versus Nike

Social media offer new opportunities for trademark owners to contact and engage consumers.  At the same time, alleged unauthorised uses of trademark by third parties in social media threads have become more and more frequent. In an attempt to control and limit the damage, rightsholders apply for injunctive relief, presenting the courts with the difficult task of balancing between the protection of a registered trademark and the irreparable damage that might result from erasing social media threads in connection with the alleged infringer.  The case at hand, Frank Industries v. Nike Retail [2018] EWCA Civ 497 , in addressing the alleged unauthorised use of the registered trademark LNDR (UK and EU mark) owned by Frank Industries (FI), by Nike UK, provides an excellent example of this tension. 

Both companies design and sell sportswear. Nike launched an advertising campaign to promote its brand to Londoners, under the slogan “Nothing beats a Londoner”. During the campaign, Nike used the marks LDNR and LNDR as forms of abbreviation for the slogan. The campaign was launched in the beginning of January 2018, and already on 26 January 2018, FI's solicitors wrote to Nike, complaining that the sign was infringing the registered mark.  Nike carried on using the sign, and the following week it proceeded to launching a video using the signs on YouTube. 

FI began proceedings against Nike, alleging both trade mark infringement and passing off seeking also both an injunction restraining Nike from infringing the marks and from passing off and an order for delivery up or destruction on oath of infringing material.

Preliminary injunctions ruling

On 22 February 2018, FI applied for an interim injunction, which  was granted on  2 March 2018 by the High Court of Justice ([2018] EWHC 424 (IPEC). Paragraph 1 of the order was a restraining order while paragraph 2 was a mandatory order requiring Nike, by 4 p.m. on 16 March 2018, to take all reasonable steps to delete the signs LDNR, LNDR, LDNER and LNDER from social media accounts within its reasonable control, including Twitter, Facebook, Instagram and YouTube.  The scope of the interim injunction is for a period of four months (taking into consideration that the trial date is set for the 12th of July 2018). The ruling of the High Court was appealed and the Court of Appeal ruling came on the 13March 2018.

Lord Justice Lewison considered the steps followed by the High Court in ruling on the preliminary injunction (see paragraph 10 of the High Court judgement):

 "Following the sequence set out by Lord Hoffmann, I must consider the following matters in deciding whether to grant an interim injunction.  One, whether the damages will be an adequate remedy for the claimant; if so, no injunction should be granted.  This must be on the assumption that the defendant is good for the damages: See American Cyanamid at page 408. Two, whether there is a serious question to be tried; if not, no injunction should be granted.  Three, if the answers to one and two are no and yes, respectively, whether the cross‑undertaking in damages would provide the defendant with an adequate remedy if an injunction were granted; if yes, the injunction should be granted.  Four, if there is a risk of irreparable harm both ways, the court must go on to assess the balance of irreparable harm in order to determine whether granting or withholding the injunction is more likely to cause the greater irremediable prejudice overall.  Five, among the non‑exhaustive list of matters which the court may take into account are (a) the nature of the prejudice to the claimant if no injunction is granted and the nature of the prejudice to the defendant if an injunction is granted; (b) the likelihood of the prejudice in each case occurring; (c) the extent to which the prejudice may be compensated by an order of damages, or by the cross‑undertaking; (d) the likelihood of either party being able to satisfy such an award; and (e) the court's opinion of the relative strength of the parties' cases."

According to Lord Justice Lewison, the High Court application of the above-mentioned criteria was correct. There is a serious danger that the public would perceive FI’s own goods as being in some way part of Nike’s business. The issue to be tried was undoubtedly serious, and thus the  remaining core question was whether Nike would suffer irreparable harm by the grant of the injunction. While the reasoning behind the prohibitory injunction is, according to the Court of Appeal, solid, the High Court  sparse in its words when it comes to the mandatory injunctions. It simply provided that Nike is not only supposed to refrain from future activities but also to take affirmative steps to remove Instragram posts, tweets and a Youtube video.

According to the Court of Appeal, mandatory actions in general are more likely to cause irremediable prejudice than where a defendant is merely prevented from taking or continuing with some course of action (see Films Rover International Limited v Cannon Film Sales Limited [1987] 1 WLR 670. The High Court judge dealt with the mandatory part of the order in one short passage, at paragraph [28] of the judgment.  He said: 

"The effect of an injunction would be to require Nike to remove its video in its present form from YouTube and other media and to remove LDNR references from its website.  So far as the YouTube video is concerned, LDNR is only used, or only significantly used, right at the end of the video.  Mr. Campbell told me that no objection would be taken to the remainder of the video being used. Therefore all that Nike would have to do would be to remove that small last section; otherwise, the video can remain on YouTube and other social media.  So far as Nike's website is concerned, it would not, it seems to me, be very difficult to remove the sign."

The ruling of the Court of Appeal

The Court of Appeal had to consider the  delicate balance between the interest in providing adequate and efficient injunctions until trial, and the importance of not causing irreparable damage to the social media presence of the alleged infringer. The Court of Appeal concluded that the High Court ruling disregarded the fact that amending a YouTube video entails its removal and reposting (with a different URL).  The effect would be that Nike would lose all posted comments as well as all video shares and likes. Similarly, deleting Instagram posts would lead to the removal of all related comments and posts. 

Twitter posts particularly concerned the Court of Appeal. Deleting existing posts was considered by the Court of Appeal to be of an irreversible and far-reaching nature because it would deprive Nike of the benefit of continuing conversations between young Londoners. 

LNDR an abbreviation for London, free for all or trademark use?

Twitter posts particularly concerned the Court of Appeal. Deleting existing posts was considered by the Court of Appeal to be of an irreversible and far-reaching nature because it would deprive Nike of the benefit of continuing conversations between young Londoners. The Court of Appeal  reversed thus the High Court ruling   regarding Twitter posts. Furthermore, the Court of Appeal ruled that with regards to Instagram, Nike would be able to archive them rather than simply deleting them, while the YouTube video need not be removed provided the offending signs are blurred.

Conclusions

This case reminds us of the importance of social media, the role they play and the power that they have in the communication between trademark holders and the public. They are much more than a mere communication media, being rather the platform upon which public discussion takes place and, as such,  worth protecting (such as the tweets by young Londoners in connection with Nike). The Court of Appeal, contrary to the High Court, seems to take into consideration the potential value of social media (by providing for the archiving posts in the case of Instagram and blurring offending signs in YouTube videos) as well as  undesirable  technical  consequences (such as deleting a tweet deletes all subsequent comments and discussions on the  tweet in question) in order to find a balance between the interests of the rightsholder and the potential damages inflicted on the alleged infringer.