WWF & Anor v World Wrestling Federation Entertainment Inc

A settlement agreement defining the competing use of trade marks and initials is normally presumed to represent a reasonable allocation of the parties’ interests where it resolves a genuine dispute. A party seeking to escape the agreement must identify a sufficient justification, such as a contrived dispute, lack of a reasonable basis for the rights claimed, or restraints extending beyond the legitimate purpose of avoiding confusion or conflict. The restraint of trade doctrine is not excluded, but must be applied in the factual context of the settlement. Clear breaches are not converted into technical breaches merely because compliance has become commercially costly. A party cannot rely on its own breach to establish changed circumstances under Article 81.

The Fund brought proceedings against the Federation to enforce a 1994 English-law agreement regulating the Federation’s use of the initials WWF worldwide. The Federation admitted substantial breaches, particularly through its website, but argued that the restrictions were void as unreasonable restraints of trade and under Article 81 of the Treaty, and sought to limit injunctive relief.

Jacob J granted summary judgment and ordered an injunction. The Federation appealed, challenging the interpretation of the agreement, its enforceability, and the scope of relief. The central issues were whether the agreement covered the Federation’s Scratch Logo and whether any principle of public policy justified departure from the settlement.

1. Appeal dismissed. The Federation had clearly breached the agreement through its website and use of the Scratch Logo. The agreement covered the Scratch Logo because it was a visual form of the initials. The express exclusion of the Block Logo reinforced that conclusion.
2. The restraint of trade doctrine was not excluded merely because the agreement concerned intellectual property. It had to be applied through a broad and flexible rule of reason, taking account of the context in which the agreement was made.
3. Where a settlement resolves a genuine dispute and defines the boundaries of the parties’ trading rights, the agreed restraints are presumed reasonable. The party seeking to avoid the agreement must show a sufficient justification, such as a contrived dispute, no reasonable basis for the rights claimed, or restraints going beyond the legitimate purpose of avoiding confusion or conflict. The court declined to prescribe an exhaustive threshold test.
4. The parties had faced genuine and uncertain disputes across several countries concerning confusion, reputation and possible dilution or association. Those uncertainties strengthened, rather than weakened, the case for enforcing the settlement. The Federation’s commercial pressure during negotiations did not invalidate the agreement, which had been negotiated between substantial commercial parties with legal representation.
5. The Article 81 argument did not assist the Federation. Any increased burden arose from its own subsequent breaches, particularly its development of the WWF website. A party cannot rely on its own breach to escape contractual obligations.
6. Article 10 of the European Convention on Human Rights and section 12(4) of the Human Rights Act 1998 added nothing material. The website and Scratch Logo breaches were not technical, and the costs of rebranding resulted from the Federation’s own decision to build its business on a risky use of WWF.

The judge’s order was upheld. The appeal was dismissed with costs, an interim payment of £40,000 was ordered, and leave to appeal to the House of Lords was refused.

• High Court of Justice, Chancery Division: Jacob J granted summary judgment and ordered an injunction enforcing the 1994 agreement.
• Court of Appeal (Civil Division): The appeal was dismissed with costs and the order was upheld. Leave to appeal to the House of Lords was refused.