NVidia Corporation & Ors v Hardware Labs Performance Systems Inc

A trade mark threats letter must be construed by asking what a reasonable recipient, possessing the relevant surrounding circumstances, would understand it to mean. In an appropriate case, the recipient may be treated as having the benefit of legal advice where legal technicalities affect the extent of the threatened proceedings. A demand for pan-European restraint does not necessarily threaten proceedings in every Member State. The letter must be read as a whole, including the acts identified and the relief said to be available. Summary judgment is appropriate on a short construction point where the court has the necessary evidence and the claim has no realistic prospect of success.

The claimants brought trade mark proceedings concerning the defendant’s letter demanding a pan-European cease-and-desist undertaking in relation to the use of the signs GTX, GTS and GTR. They claimed relief for groundless threats of infringement proceedings and a declaration of non-infringement.

The defendant sought summary judgment or strike-out of the groundless threats claim, contending that the letter threatened proceedings in Germany only. The claimants sought a stay pending invalidity and revocation proceedings before the EUIPO. The defendant also sought transfer to the Intellectual Property Enterprise Court or allocation to the shorter trial scheme.

1. Groundless threats claim. The court applied the summary judgment and strike-out guidance in Mellor v Partridge [2013] EWCA Civ 477. The claim had to have a realistic, rather than fanciful, prospect of success. The court should avoid a mini-trial, but should decide a short point of law or construction where the evidence was sufficient.
2. The letter was to be construed according to what a reasonable recipient, with knowledge of the relevant circumstances, would have understood the writer to intend. Following Best Buy Co Inc v Worldwide Sales Corporation Espana [2011] FSR 742, the letter had to be read as a whole. The court also accepted, following Tech 21 UK Ltd v Logitech Europe SA [2016] FSR 14, that legal advice could be relevant where legal technicalities affected the extent of the threat. That did not permit a threatener to hide behind technical language where the meaning was otherwise clear.
3. The letter referred specifically to use on German websites, by the parent and its German subsidiary, and relied on German domestic legislation. The pan-European cease-and-desist undertaking described the activities sought to be restrained, but did not convert the German proceedings threatened by the letter into a threat of proceedings in the United Kingdom. The groundless threats claim therefore had no realistic prospect of success. Summary judgment was granted, or the claim was struck out.
4. The claimants’ application for a stay was refused. Having commenced and advanced the proceedings, they had not provided a credible reason for changing position. Proportionality and court resources did not justify keeping proceedings pending, potentially for several years, against the defendant’s wishes.
5. Transfer to the Intellectual Property Enterprise Court and allocation to the shorter trial scheme were refused. The surviving proceedings were substantial and complex, involved significant evidence and potentially substantial value, and could not presently be fitted appropriately into the shorter trial scheme.