Cowshed Products Ltd v Island Origins Ltd & Ors

On an application for an interim injunction in a trade mark or passing off dispute, the court should not conduct a mini-trial on affidavit. Once there is a sufficiently arguable case, the court should assess the relative risks of injustice, including whether damages would adequately compensate either party.

The apparent likelihood of confusion may overlap with the merits of the underlying claim, but the court must retain the interlocutory focus on interim harm. Preserving the status quo is a factor of prudence, not an automatic rule. Where an injunction would probably destroy the defendant’s business, while refusal would cause only modest and temporary harm before an expedited trial, the balance may favour refusing the injunction. Appropriate undertakings can protect the claimant pending trial.

Cowshed Products Limited sought an interim injunction restraining Island Origins Limited and the individual defendants from using the brand “Jersey Cow” for beauty and related products. Cowshed relied on passing off and infringement of registered trade marks, including COW and several “cow” marks.

The defendants disputed infringement and passing off, relied on the Jersey character of their branding, and submitted that an injunction would destroy their newly established business and leave substantial stock unusable. The court also considered delay, the disputed status quo, evidence of possible confusion, and the parties’ proposed undertakings. The central issue was whether interim relief should be granted under the American Cyanamid approach.

1. Application refused. The claimant had a good arguable case in passing off. A consumer familiar with the claimant’s goodwill might regard “Jersey Cow” as an extension of the claimant’s cow-themed range. The defendants nevertheless had an arguable defence, including on the different allusive use of “cow” and the existence of other cow-related toiletries.
2. The court applied the approach in American Cyanamid [1975] AC 513. It was inappropriate to resolve the merits by a mini-trial. The court had to assess the risk of injustice, asking whether damages would adequately compensate the claimant and then undertaking the converse assessment for the defendants.
3. In trade mark and passing off cases, the assessment of interim harm may involve the same likelihood-of-confusion question as the underlying merits. That overlap did not justify abandoning the conventional interlocutory approach.
4. The claimant’s risk of serious irreparable harm before an expedited trial was weak. Any dilution or confusion was likely to be modest and temporary. By contrast, an injunction was very likely to put the defendants out of business, and damages would not adequately compensate that loss. Repackaging or relabelling was unrealistic.
5. The court declined to decide the application by resolving the disputed status quo or allegations that either side had acted deliberately. Those issues would risk turning the interlocutory hearing into a mini-trial. The reasoning in John Walker & Sons v Rothmans International [1978] FSR 357 and Management Publications v Blenhiem Exhibitions [1991] FSR 348 was followed. A speedy trial was directed, and the defendants’ undertakings concerning discounting and payment of 15% of net profits into escrow were accepted.
6. The claimant was required to give a cross-undertaking in damages. The question whether its proposed financial limit was sensible was reserved for argument.