Juul Labs, Inc & Ors v MFP Enterprises Ltd (t/a 'Smoke Nation' & Ors)

Default judgment may be entered on properly pleaded, unopposed allegations where those allegations disclose legally proper claims. Summary judgment requiring permission may proceed where service and jurisdiction are established and a legitimate reason for a reasoned judgment is shown.

Declaratory relief remains discretionary. The court should ordinarily require a real dispute, proper argument on both sides, and a useful determination affecting the parties. It should proceed particularly cautiously where the defendant is absent and the declaration is intended to influence unidentified third parties. Declarations should not be used to pre-determine future disputes on generalised facts.

The claimants, companies in the Juul group, brought claims for infringement of trade marks and registered designs and for passing off concerning vaping products. The defendants did not acknowledge service, serve a defence, or participate in the proceedings.

The claimants sought default judgment for substantive relief and permission to seek summary judgment for declarations concerning whether compatibility statements using the Juul mark could benefit from the Article 14 defence in the EU Trade Marks Regulation. The central issue was whether declaratory relief should be granted in circumstances where the defendants had not contested the issue and the declarations were intended for use against others.

1. The claimants were entitled to default judgment. The pleaded allegations disclosed proper claims for registered design infringement, passing off and trade mark infringement, and supported appropriate injunctive and financial relief. The precise form of the injunctions was left for a further hearing.

2. Permission to make the summary judgment application was granted. Proper service and jurisdiction were established, and the claimants had a legitimate reason for seeking a reasoned judgment, including the potential enforceability of summary judgment in other jurisdictions and the practical value of a judgment concerning counterfeit goods.

3. The declarations were refused. Declaratory relief is discretionary and requires careful consideration of justice to the parties, whether there is a real and present dispute, whether all sides of the argument have been properly put, whether the declaration serves a useful purpose, and whether it is the most effective means of resolving the issue. These principles, drawn from Bank of New York Mellon, London Branch v Essar Steel India Ltd [2018] EWHC 3177 (Ch), were expressly adopted.

4. The defendants had not raised an Article 14 defence, so there was no active dispute between the parties on the proposed declarations. The issue was academic as between them, while the claimants principally intended to deploy the declarations against unidentified sellers, online marketplaces and HM Customs and Excise. That would risk pre-determining disputes involving absent parties on generalised facts. The court therefore adopted a conservative approach against granting declarations.

5. The judge made no final determination on the Article 14 merits. He observed that arguments based solely on refillable pods, lawful non-nicotine products, or the absence of a warranty warning were far from obvious and appeared unlikely to justify declarations without a proper contest. The case concerning unlawful nicotine concentrations and other plainly unlawful conduct appeared materially stronger, but was not decided.