COMBE INTERNATIONAL LLC v DR AUGUST WOLFF GMBH & CO. KG ARZNEIMITTEL

An injunction following a finding of trade mark infringement should ordinarily take effect immediately. Commercial inconvenience, stock losses, loss of goodwill and consumer preference do not generally constitute solid reasons for suspending it so that unlawful activity may continue.

Where an appeal is possible, the court must separately assess the risk of injustice if the order takes effect and is later overturned. A short stay may be granted to preserve the position while the appellate court considers permission and any continuing stay.

Indemnity costs require conduct taking the case out of the norm. Hard-fought commercial litigation, unsuccessful arguments, commercial bad faith without deliberate misleading, late documents and abandoned allegations do not necessarily meet that standard.

Following a trial in which the claimants established infringement of their registered trade marks, the defendants sought a 21-week suspension of the injunction to permit rebranding and continuity of supply. They also sought a stay pending an intended application to the Court of Appeal for permission to appeal.

The court additionally determined the claimants’ costs. The defendants sought a reduction because the claimants had abandoned passing off and section 10(3) infringement claims. The claimants sought indemnity costs, relying on the defendants’ conduct before and during trial and on post-judgment conduct.

The issues were whether the injunction should be suspended or stayed, what reduction should be made to recoverable costs, and whether the case was sufficiently out of the norm to justify indemnity costs.

1. Stay to permit rebranding. The court rejected a 21-week suspension intended to allow rebranding while the defendants continued marketing products already found to infringe. The defendants’ commercial losses, stock exposure, goodwill concerns and the fact that consumers relied on the products were not solid reasons for authorising continued unlawful activity. Alternative products were available.

2. Stay pending appellate consideration. The possibility of an appeal required a distinct analysis. The court balanced the potential injustice to the defendants if they rebranded and later succeeded on appeal against the potential injustice to the claimants if infringing products continued to be sold and the appeal failed. Having refused permission to appeal itself, the judge ordered a stay of execution pending determination by the Court of Appeal of the intended permission application and its consideration of any continuing stay. If permission were refused, the stay would fall away; if granted, the Court of Appeal would decide whether it should continue. The defendants were expected to act with reasonable expedition.

3. Costs. The recoverable costs payable to the claimants were reduced by 10%. Work relating specifically to the abandoned passing off and section 10(3) claims justified an allowance, although disclosure said to relate to section 10(3) was also relevant to the successful section 10(2) claim. The alleged narrowing of the VAGISIL marks and the unregistered licence caused no material further adjustment.

4. Indemnity costs. The claimants’ application was refused. The defendants’ commercial bad faith did not involve deliberate misleading. Their unsuccessful arguments, accumulation of points, late addition of documents and short-lived accusation of dishonesty were deprecated but remained consistent with hard-fought commercial trade mark litigation. Post-judgment conduct did not materially contribute to the trial costs.

The judgment records that the judge refused permission to appeal. The defendants intended to apply to the Court of Appeal for permission and for directions concerning any continuing stay.