Lifestyle Equities CV & Anor v Sportsdirect.Com Retail Ltd & Ors

A final injunction is an equitable remedy and its terms depend on the circumstances. Once an injunction is justified in principle, intellectual property cases ordinarily require broad wording protecting the claimant against future infringements that cannot be precisely anticipated. An honest and reasonable defendant may rely on the recognised protection against breach of a broadly framed order. An inquiry into damages should address issues of quantum, including reputational damage, which were unnecessary to determine liability. Where liability and quantum have been split and a Part 36 offer may affect costs, costs should ordinarily be determined after quantum. Publication of a judgment under CPR PD 63 is exceptional and should not be ordered where it would be disproportionate. Vicarious liability depends on identifying the company responsible for the unlawful act and the capacity in which the human actor performed it.

The judgment determined outstanding issues following a contested intellectual property trial between the claimants and Sports Direct companies and related defendants. The court addressed the liability of Sports Direct International plc, the scope of final injunctions, the permissible scope of a future damages inquiry, costs, dissemination of the judgment, applications for permission to appeal, and a stay.

The principal questions were whether the second defendant was liable because it employed a senior manager working across the group; whether injunctions should be confined to the particular goods proved at trial; whether reputational damage could be considered at the quantum stage; when costs should be decided in light of Part 36 offers; and whether publication and permission-to-appeal orders were justified.

1. Liability of the second defendant. The claim against Sports Direct International plc failed on both inducement of breach of contract and trade mark infringement. The pleaded and trial case identified Republic as the company alleged to have induced the breach. The infringement findings concerned the first defendant’s activities. Although Mr Nevitt was employed by the second defendant, he acted in relation to the relevant conduct as an agent or commanding mind of the company responsible for that conduct, not of the holding company merely because it employed him.
2. Final injunction. Whether to grant an injunction, and its terms, was discretionary because the remedy was equitable. Applying Specsavers v Asda [2012] FSR 20, Spectravest Incorporated, and Coflexip SA v Stolt Comex Seaway MS Ltd [2001] RPC 9, the injunction should not be confined to the precise infringements proved. Broad wording was justified by the several types of infringement and was no wider than the claimants’ statutory rights. The protection available to an honest and reasonable defendant against breach of such an order supported that conclusion.
3. Damages inquiry. The issue of reputational damage arose only in relation to an issue that had become academic after the liability findings. It was therefore unnecessary to determine it at trial. The claimants were not barred from advancing reputational damage at an inquiry as to damages or an account of profits.
4. Costs and dissemination. Because Part 36 offers might depend on the outcome of the quantum stage, costs should be left until liability and quantum had both been resolved. Dissemination under paragraph 26(2) of CPR PD 63 was refused. Public judgment and ordinary publication of the judgment were sufficient; the case disclosed no exceptional or proportionate basis for requiring further publication.
5. Permission and stay. Permission to appeal was refused to both sides. The proposed challenges were not realistically arguable, including the challenges concerning construction, knowledge, intention, damage, exhaustion, consent, and reputation. A stay concerning financial information was granted until the earlier of expiry of the time for seeking permission from the Court of Appeal or determination of any such application.

First-instance judgment. The judgment records applications for permission to appeal by both claimants and defendants, each of which was refused.