Balance of convenience against injunction for party seeking global monopoly

 

R. Griggs Group Limited, Elizabeth Maertens, Herbert Fnuck and Dr Martens International Trading GMBH (plaintiffs) v Dunnes Stores (Ireland) Company (defendant).

Passing off - Injunction - Interlocutory - Arguable case - Boots manufactured by the plaintiffs had distinctive features - Claim by the plaintiffs that the defendant was passing off boots which they offered for sale as those of the plaintiff - Balance of convenience - Defendant was the retailer of the boots and did not manufacture nor commission the manufacture of the boots - No action was taken by the plaintiffs against the manufacturers of the boots - Plaintiff had instituted worldwide proceedings seeking to establish a monopoly in the design features of the boots.

The High Court (before Mr Justice McCracken); judgment delivered 4 October 1996.

IN determining where the balance of convenience lies in an interlocutory injunction application where the plaintiff claims that the defendant is passing off its goods as those of the plaintiff, the fact that the plaintiff's claim is merely part of a worldwide series of actions by the plaintiff seeking to establish a global monopoly in its design of the goods coupled with the fact that the defendant is merely the retailer of the goods and not the manufacturer against whom no action has been taken are factors to be taken into account.

The High Court so held in refusing to grant an interlocutory injunction to the plaintiffs prohibiting the defendant from offering for sale boots with a very similar design to those of the plaintiffs.

Paul Gallagher SC and John Gleeson BL for the plaintiffs; Rory Brady SC and Eoin McCullough BL for the defendant.

MR JUSTICE McCRACKEN said that the first plaintiff was a manufacturer of footwear which included a range of boots of a high standard which retailed in this jurisdiction at the upper end of the market. The second and third plaintiffs were the owners of the registered trade mark "Dr Martens" which had been taken out in respect of these boots. The defendant was the owner of a large chain of retail outlets which operated throughout the country and Which, among other items, sold footwear.

In August 1995, the defendant began to sell children's boots which the plaintiffs claimed were identical to or at least very similar to those manufactured by them. The boot was sold only in black whereas the plaintiffs' boots were manufactured in a range of colours. The judge noted that although the plaintiffs were aware of this fact no action had been taken to restrain the defendant from selling this product. In November 1995, the defendant introduced another boot which again was similar to those of the plaintiffs. The judge noted that the plaintiffs stated that they were not aware of this. Recently, the defendants began to market a large range of such boots.

Mr Justice McCracken said that these boots were not manufactured by the defendant nor were the boots commissioned by the it. Instead, the boots formed part of the standard production of two separate and independent manufacturers namely, Dunnicliff Bros Ltd and Melania SPA. The boots bore no reference to the manufacturers but did bear the reference "St Bernard".

Mr Justice McCracken said that the plaintiffs claimed that the defendant was passing off these boots, which the plaintiffs said were of an inferior quality, as those of the plaintiffs and therefore an interlocutory injunction was sought restraining the defendants from so doing. They claimed that their boots were so distinctive that they were associated in the minds of the public with the plaintiffs. The judge noted that the unique features which the plaintiffs said were distinctive of their goods included: an overall configuration; the existence of a black tab at the top of the heel a line of yellow stitching along the side between the sole and the upper; the edge of the sole was grooved or ridged; there was a two toned sole edge and there was a distinctive sole pattern. In some cases, the heel tag identified the boots by the trademark" Dr Martens" and generally the sole was stamped "Dr Martens". The defendant's boots retailed at less than half the price of the plaintiffs' boots.

Mr Justice McCracken said that the defendant did not seriously contest the allegation that their boots contained similar features to those of the plaintiffs. However, it was submitted on behalf of the defendant that these features were not unique to the plaintiffs' boots and were not recognised as such but were features which were fashionable at the present time and which as a result any manufacturer was free to use. The defendant also averred to the tact that the plaintiffs had not registered any of these features as a design under the Industrial and Commercial Property (Protection) Act 1927 and furthermore that an application in the United Kingdom by the plaintiffs to register a "three dimensional article of footwear" as a trademark was being opposed by six opponents on the basis that the plaintiffs' boot was not distinctive. The judge said that the defendant had also exhibited a number of other boots manufactured by different manufacturers all of which possessed very similar features to those of the plaintiffs' boots.

Mr Justice McCracken said that the plaintiffs were in the process of bringing similar claims against other manufacturers, none of which had as yet been decided, in an effort to establish a worldwide monopoly in boots of this design.

As regards the manufacturers of the boots sold by the defendant, Mr. Justice McCracken said that the plaintiffs had corresponded with Melania SPA but no proceedings had been taken against them. No steps appeared to have been taken against Dunnicliff Brothers Ltd which the judge said he found quite strange as the boots manufactured by them were on sale throughout the United Kingdom and the first plaintiff manufactured its boots there.

Mr Justice McCracken said that as this was an interlocutory application he merely had to decide whether the plaintiffs had an arguable case. At the trial of the action, the plaintiffs were required to satisfy the court that the combination of features referred to above were unique to the plaintiff and were recognised by the public as being so.

Mr Justice McCracken referred to Erven Warn ink BV v J. Townend & Sons (Hull) Ltd [1979] AC 731, where the action of passing off was defined as a misrepresentation, made by a trader in the course of trade, to prospective customers of his or ultimate consumers of goods or services supplied by him, which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence), and which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in quia timet action) will probably do so.

He stated that the plaintiff had an arguable case in respect of all of these elements but for the issue of a misrepresentation, where there was a question whether in fact this had occurred. While there was evidence that boots had been sold in the defendant's stores as "does" and that members of staff had on occasion, when asked by customers whether they stocked does, pointed out the boots in question, the defendant undertook to ensure that such practices would not continue and therefore the issue of misrepresentation was reduced to the question of whether the defendant by putting on sale these boots was representing to the public that these boots were those of the plaintiffs.

Mr Justice McCracken said that the plaintiffs had not produced any independent evidence to establish that the public would recognise the combination of the features referred to above as being unique to the plaintiffs save for a very informal survey carried out by the solicitors for the plaintiffs to which much criticism could be attached, for example some of the survey was carried out at night when it was dark and also no note had been taken as to whether persons surveyed were given an opportunity to examine the boots as they would in a shop.

Mr Justice McCracken referred to Adidas Sportschuhfabriken Adi Dassler KA v Charles O'Neill & Company Ltd [1983] ILRM 112, where the Supreme Court upheld the trial judge in refusing to restrain the defendant from placing on its manufactured sportswear three stripes which the plaintiff claimed had become indicative of its sportswear on the basis that the use of such stripes was merely a fashion in the sportswear industry. Mr Justice McCracken noted that the defendant in this case raised the same argument, namely that these features were merely those which were fashionable at the present time.

Mr Justice McCracken found, however, that the plaintiff had just about done enough to establish an arguable case. Mr Justice McCracken then moved on to consider where the balance of convenience lay as between the parties. He found that damages would not be an adequate remedy for the plaintiffs should they succeed, nor for the defendant should the plaintiff's action fail.

As regards the status quo, the defendant had been selling similar types of boots for a year, but as soon as a large range of footwear was launched onto the market, the plaintiff moved swiftly to seek injunctive relief and as a result, the judge found that the status quo arguments cancelled one another out.

Mr Justice McCracken said that he was mindful of the fact that this action was merely part of a worldwide campaign by the plaintiffs seeking to establish a monopoly in this type of foot wear, even though the outcome of this action would depend only on the reputation of the plaintiffs in this jurisdiction. He said that having regard to this he was influenced by the fact that the defendant was, as a retailer, a secondary target and that no action had been taken against the manufacturers. He said that having regard to the equitable nature of injunctive proceedings and the concept of the balance of convenience which is an equitable concept, it seemed inherently inequitable to him that proceedings were brought against a retailer who had bona fide purchased goods from two manufacturers, which goods had been offered to the defendant as goods' which it was entitled to sell, when no action had been taken against the manufacturers. If it was later held that passing off had occurred, the basic misrepresentation would have been that of the manufacturers and whilst this would not relieve the defendant from liability, it was a factor to be considered in granting or refusing an equitable remedy. In his view the damage likely to be suffered by the plaintiffs, especially if the case was given an early hearing, would be minimal in the context of its world wide campaign, whilst the defendant would be deprived of the sales of a complete range of a very popular style of footwear which taken in context would be more serious for them.

Mr Justice McCracken also said that he was entitled to take into account the strength or weakness of the plaintiffs case and on the evidence before him, the plaintiffs case was weak.

As a result, the Mr Justice McCracken found that the balance of convenience lay in favour of refusing an interlocutory injunction.

Solicitors: A. & L. Goodbody for the plaintiffs; Matheson Ormsby Prentice for the defendant