5 minute read
Just the Tonic:
Just the Tonic:
A look at IP Enforcement in the Scottish Courts
In recent years, the UK courts have witnessed several high-profile "supermarket wars" cases, involving budget supermarkets facing legal action for alleged infringement of intellectual property (IP) rights in popular products. Notably, Marks & Spencer's claim against Aldi over their Colin the Caterpillar cake has garnered significant attention. Similarly, Scotland has seen a notable case with cross-border implications, aligning its IP enforcement approach with that of England and Wales.
Not having to Gin and bear it
While Scotland is renowned for its whisky industry, its gin sector has also flourished. One prominent brand in the craft gin scene is Hendrick's Gin, produced by William Grant & Sons Ltd, recognized for its distinctive "medicine" style bottles.
The German discount supermarket Lidl is well-known for stocking own-brand goods including Hampstead Gin. In December 2020 Lidl re-launched this product across the UK in a new-look bottle which bore more than a passing resemblance to the Hendrick’s medicine bottle.
William Grant & Sons raised proceedings in the Court of Session (equivalent to the High Court) in Edinburgh seeking an interim interdict (i.e. an injunction) against Lidl to prevent it from selling its rebranded product on the basis of trade mark infringement and passing off1
At first instance the Court found that no likelihood of confusion existed between the two products. Accordingly, arguments under s.10(2) of the Trade Marks Act 1994 and the law of passing off were not successful.
However, the Court did determine that the claimant had set out a prima facie case under s.10(3) of the 1994 Act. Hendricks enjoyed significant goodwill and reputation and Lidl was seeking to take unfair advantage of the Hendrick’s mark by redesigning the Hamstead bottle to resemble the Hendricks’ product and then selling it at a considerable discount.
An interim interdict was granted pending full trial. However, this only prevented the sale of the infringing Hampstead bottles in Scotland.
Raising a glass (and an appeal)
Both parties appealed. In its cross-appeal Hendricks sought to widen the scope of its interdict to cover the whole of the UK to dispense with the need for parallel proceedings in England.
The Inner House (the appellant Court) confirmed that when a defender is domiciled in Scotland, the Scottish Court has jurisdiction to prohibit infringing activities, regardless of where they take place. If the infringement occurs in Scotland but the defender is domiciled elsewhere, the court can only prohibit the infringing activities conducted within Scotland. In this specific case, Lidl was found to have establishments in both Scotland and England, establishing its domicile in both jurisdictions.
As a result, the territorial scope of the order did not need to be restricted because Hendricks chose to initiate legal proceedings in Scotland.
Putting a Kilt on IP Enforcement
The Hendricks case has highlighted some of the benefits to brand holders seeking to enforce their IP rights in Scotland where injunctive relief can be granted on a UK wide basis.
Solicitors and their clients based south of the border might want to consider whether raising proceedings in Scotland could be tactically advantageous. Some considerations are set out below:
• As an economy with a number of IP rich sectors including oil and gas, hospitality and tech the Scottish Courts are used to hearing applications regarding IP infringement and the Court of Session has a number of specialist IP judges who actively case manage actions using a streamlined procedure.
• There is less of an emphasis on pre-action protocols in Scotland. Actions can be raised without the need to send pre-action correspondence. Likewise, applications for interim interdict are also regularly heard without notice to the other party and without the need for extensive evidence and affidavits.
• Parties who believe they might become involved in litigation in Scotland should consider lodging caveats in appropriate courts. Providing a caveat is lodged they will be given advance notice of any attempt to seek an ex-parte interim order in that court and will have an opportunity to oppose the application.
• When seeking an application for injunctive relief there is also no requirement to provide a cross damages undertaking to the Court. However, if an interim order is obtained and subsequently recalled then this could give rise to a counterclaim.
• English solicitors are often surprised to learn that there is no general duty of disclosure in Scottish Court proceedings. Documents can be recovered from parties to the action as well as third parties through a process of targeted disclosure. What can be recovered is closely tied to the parties’ written pleadings to prevent so-called “fishing expeditions”.
• Generally speaking, the costs of litigating in Scotland are lower. The lack of disclosure and pre-action processes can also alleviate the costs burden of litigation. There is no requirement to submit cost budgeting to the Court and Court fees are considerably lower (approximately £300 regardless of the size of the claim).
• The rate of recovery of judicial expenses (i.e. costs) is generally lower in Scotland. However, costs uplifts can be obtained where matters are sufficiently complex (with IP cases usually meeting this threshold). English solicitors’ costs can be recovered as part of Scottish proceedings provided they are reasonably incurred. Finally, the Scottish Courts attract less publicity than those in England & Wales even where relatively high-profile parties are involved. This may be of some advantage particularly when combined with the element of surprise which can be leveraged by bringing proceedings in an unfamiliar yet user friendly and cost-effective jurisdiction.
