Juul Labs, Inc & Anor v Quickjuul Ltd & Ors

Sentencing for contempt requires assessment of the contemnor’s culpability and the harm caused, intended or likely to be caused. The court must then consider whether a fine is sufficient; imprisonment is justified only where it is not. Relevant considerations include prejudice, pressure, deliberateness, culpability, responsibility for the breach, appreciation of its seriousness, co-operation, responsibility, apology, remorse and any reasonable excuse. A technical breach before knowledge of the order may carry no sentence, but deliberate non-compliance after knowledge can justify immediate imprisonment. The court imposed two months’ imprisonment for knowingly and obstructively failing to sign documents required to transfer a domain name and close a website.

The claimants applied to commit Gary Wilson, the fourth defendant in trade mark and passing off proceedings, to prison for breach of an order made by Snowden J on 3 December 2018. The order required him to sign documents transferring control of the domain name quickjuul.com and taking down its website.

The order had been validly served. Earlier committal proceedings resulted in findings of contempt, but the claimants confined the final application to the technical breach and Wilson’s knowing non-compliance from January 2019 onwards. The judgment records an earlier liability decision, [2019] EWHC 59, and subsequent procedural steps. The central issue was the appropriate sanction for Wilson’s deliberate failure to comply after he knew what the order required.

1. Contempt established. The order had been validly served, but Wilson’s initial breach was technical because knowledge of the order had not been proved. By 21 January 2019, and certainly by 24 January, he knew that the order required him to sign specified documents. His continuing failure thereafter was knowing and culpable.
2. Sentencing principles. The court applied the guidance discussed in Sellers v Podstreshnyy [2019] EWCA Civ 613, McKendrick v Financial Conduct Authority [2019] EWCA Civ 524 and Liverpool Victoria Insurance Company v Zafar [2019] EWCA Civ 392. It considered culpability and harm, whether a fine would suffice, and whether imprisonment should be suspended. The maximum sentence on any occasion was two years.
3. Relevant factors. The court considered the prejudice caused, whether Wilson acted under pressure, whether the breach was deliberate, his degree of culpability, whether others had placed him in breach, his appreciation of the seriousness of the breach, his co-operation, and any acceptance of responsibility, apology, remorse or reasonable excuse. The breach was not imposed by others. Wilson chose to follow Jason Juul’s instruction not to sign the correct documents, returned different documents in a misleading display of compliance, and thereby obstructed implementation of the order.
4. Sanction. The coercive element had largely disappeared because Wilson eventually signed the documents, but the punitive element remained substantial. His conduct caused the claimants significant prejudice by depriving them of the possibility of using the documents effectively. A fine was insufficient. His conduct was serious but lacked the calculated sophistication of the worst cases. The court imposed an immediate sentence of two months’ imprisonment and declined to suspend it.

This was a first-instance committal and sentencing decision. The judgment records earlier orders and decisions in the same proceedings, including an earlier liability judgment at [2019] EWHC 59, but no appeal.