Class 46 is delighted to offer you this fascinating case report, submitted by Louise Carey, of Irish IP practice and MARQUES member Tomkins:

"A lean compromise is better than a fat lawsuit" (George Herbert, British Poet)

Wise words indeed in the light of the decision last month of Mr. Justice Twomey in the Commercial Division of the Irish High Court in the case of Nutrimedical B.V. & Another v Nualtra LTD [2017] IEHC 253 (delivered on 2nd May, 2017). The case, on the face of it a standard trade mark infringement action, is extraordinary for a number of reasons.

First, the defendant steadfastly refused to give an undertaking to cease use, despite in fact having done so via a rebranding exercise, and thereby defended the claim solely on a point of principle and conviction that its mark was not infringing the plaintiff’s mark.

Additionally an award of damages was made in the sum of €35K whereas the costs of the defendant alone were €1.3 million and the Court assumed total costs to exceed €2m.

Further of interest is the fact that the Court refused in equity to permit the plaintiff to pursue its claim for an account of profits on the basis that this option would occasion more costs to the defendant in having to attend a further hearing to establish the level of profits which would waste more court time, a valuable public resource.

The case is a comprehensive round up of the grounds and remedies for trade mark infringement and is a cautionary tale of the financial actuality of High Court litigation.

This case for trade mark infringement was launched in May 2015 and the hearing lasted 10 days in the Commercial Division of the High Court. The claim was that the use by Nualtra Limited (“Nualtra”) of the mark NUTRIPLEN infringed the rights of the owner of the registered European trade mark NUTRIPLETE who was seeking a permanent injunction against such infringing use. The plaintiffs were Nutrimedical B.V. and the subsequent proprietor of the mark Aymes International Limited.

The case was taken on the basis that the infringing mark and goods and services were confusingly similar to those of the registered trade mark, relying on Article 9 of Regulation 2015/2424 (the “European Trade Mark Regulation”). The issues had already been aired at the European Trade marks Office in successful opposition proceedings taken by the plaintiff to prevent the registration by the defendant of its NUTRIPLEN mark in Europe.

The plaintiff’s European mark was registered for goods in Class 5 and services in Class 32. The Class 5 goods are: “dietetic preparations adapted for medical use; nutritional supplements for medical use; the aforesaid goods as tube feeding and liquid food; the aforesaid for medical supervision”. The defendant’s offending mark was used on oral nutritional supplements (“ONS”) and the Court ultimately found the goods to be similar and the marks to be similar and infringement was made out.

Before the infringement proceedings were initiated, Nutrimedical wrote to Nualtra seeking an undertaking that it would withdraw products bearing the mark NUTRIPLEN and falling within Classes 5 and 32 from the market and undertake not to sell any such products under the NUTRIPLEN mark in the EU. The defendant would not give this undertaking, despite the fact that it had at that point rebranded and effectively abandoned use of the mark. Not having received the undertakings, the proceedings for infringement were issued. Some insight into the reason why a company would engage in High Court litigation in those circumstances were revealed by the CEO of the defendant who stated at the trial:

“I’m 100% convinced that we’re not infringing the NUTRIPLETE trade mark. I believe the appeals we submitted may not have been satisfactory and that OHIM may not have made their decision based on the full detail that ultimately the judge here today will hear”.

The defence was therefore mounted primarily on a point of principle.

The case took various twists and turns,  including  the separate hearing (and subsequent settlement) of a counterclaim by the defendant for defamation arising from the sending by Aymes International Limited of a “poison pen” letter to over 800 G.P.s in the UK. Aymes steadfastly denied all involvement in these defamatory activities until the truth was uncovered by a Norwich Pharmacal Order obtained by the defendant. These actions, branded “reprehensible” by the Court in this decision, were partially to be the reason that the equitable remedy of an account of profits of the defendant was denied to the plaintiff, as these actions prevented the plaintiff from having“clean hands” as required by the equitable maxim “he who comes to equity  must come with clean hands”.  

Damages were awarded finally in the sum of €35,000 based on notional lost licence fees. The Judge, in light of the glaring discrepancy between the level of damages awarded and the huge costs,  felt obliged to make comment as follows about the costs issue:

“There does seem to this Court something perverse about the fact that a damages claim by the plaintiff for a maximum of €260,000, which has led to an award of €35,000 in damages, could cost over €2 million in legal fees and almost put the defendant company out of business and which could have led to the loss of jobs. It appears to this Court that this is a classic example of the problem with a lot of litigation in the High Court, because of its considerable costs, where the original dispute between the parties (in this case a trade mark dispute) becomes a secondary issue once the litigation has commenced and the real dispute becomes one about which party will have to pay, not so much the damages, but the millions of euro in legal fees”.

The full decision can be read by clicking here.