When is an interim injunction appropriate in passing off cases?
Mr Justice Mellor has declined to grant an interim injunction in a passing off case concerning vodka bottles.
The case was brought by Au Vodka Limited, whose Au Vodka brand was launched in 2015, against NE10 Vodka Limited, which launched its vodka brand in August this year. The rival bottles are pictured side-by-side below. Shortly after NE10's product launched, on 2 September 2022, Au Vodka’s solicitors sent a letter before action and issued a claim for passing off.
Following a three-hour hearing on 16 September 2022, the judge refused the application for interim relief, and ordered an expedited two-day trial to be held as soon as possible in the term starting in January 2023 (AU Vodka Ltd v NE10 Vodka Ltd & Anor).
After reviewing the law on passing off and the facts of the case, the judge concluded that
“there is plainly a serious issue to be tried on passing off. At the moment, the case is finely balanced. The evidence which will emerge between now and trial could swing the case one way or the other.”
He added that this type of case “cries out for a speedy resolution at trial”. As the next available trial date is in January, that means a delay of about four months.
Having decided there should be an expedited trial, the judge turned to the application for an interim injunction, and weighed up the risks to each side.
From the claimant’s point of view, Mellor J said he could not rule out “a small number of instances of deception” over the four-month period, but added that “any effect will be small”. He stated:
“Overall, although the claimant may suffer some irreparable damage if instances of deception occur, my conclusion on the evidence is that any such instances will be small in number and likely to be corrected reasonably quickly even if they do occur. My conclusion is that, if the claimant wins at trial, any damage it suffers pending trial will be largely compensated by an injunction at trial and an award of damages.”
On the other side, he found that damages would not be an adequate remedy for the defendants if an interim injunction were to be granted. He explained:
“if the defendants were to win at trial, so that an injunction would have been wrongly granted, the defendants would face the further problem that the claimant would know that they were about to (re-)launch and would be likely to address their marketing efforts so as to defeat the launch efforts as much as possible. Whilst in theory such damage could be picked up on any inquiry as to damages under the cross-undertaking, it would be very difficult to quantify, in my view.”
The balance of convenience (or, as the judge called it, balance of risk of injustice) slightly favoured NE10, as its products were already on the market and instances of confusion already cited were “at best, inconclusive”. This means that any evidence of confusion that comes to light in the next four months should help the Court judge whether or not there is passing off.
The judge also found that the second defendant, a director of NE10, should remain a defendant to the allegation that he is jointly and severally liable – though certain allegations against him must be struck out.
A commercial approach
This judgment seems to take a very practical and commercial approach: the judge weighed up both side’s arguments and decided they should be heard fully as soon as possible. He also sought to cause minimum disruption in the meantime by refusing to grant an interim injunction.
It is also interesting that he decided that letting things play out over the next few months might provide useful evidence of confusion (or, perhaps, lack of it) that could assist the trial judge. We will find out early next year!