MONTRES BREGUET S.A & Ors. v SAMSUNG ELECTRONICS CO. LTD & Anor

An injunction should ordinarily be granted for trade mark infringement unless the defendant establishes special reasons, including disproportionality or an unfair balance. Uncertainty about the scope of an injunction is not ordinarily sufficient, particularly where declaratory relief is available. A stay pending appeal requires assessment of irremediable prejudice and the balance of hardship, with the burden resting on the infringing party to prevent further infringement. Substantive quantum steps may properly be stayed where they would require disproportionate work and are unlikely to promote settlement before the appeal. In assessing interim costs payments, the court should distinguish incurred, budgeted and out-of-budget costs, while recognising the importance of costs budgeting and the requirement for good reason before departing from a budget.

The judgment determined consequential matters following an earlier infringement judgment in favour of the claimants, a group of watch businesses, against Samsung concerning apps and watch faces made available through Samsung’s app store.

The court considered whether to grant the conventional injunction, whether to stay it pending a proposed appeal, whether quantum steps should proceed, the appropriate costs order and payment on account, and permission to appeal on points concerning Article 14 of the e-Commerce Directive and use in the course of trade.

1. Injunction. Applying Article 130 of the EU Trade Mark Regulation and the proportionality requirement in Article 3(2) of the Enforcement Directive, the court granted the conventional injunction. Samsung had not shown special reasons why an injunction would be unfair or disproportionate. Its evidence about remedial steps did not establish an Article 14 defence, because the earlier judgment decided that Samsung had not acted as a diligent economic operator and had not decided that correcting identified deficiencies would necessarily establish the defence.
2. Uncertainty about what conduct would infringe was not a sufficient reason to withhold an injunction. Samsung had control of the system and screened apps. In any event, inadvertent breaches would not realistically result in contempt proceedings where Samsung acted diligently, and declaratory relief remained available, as explained in Lifestyle Equities CV & Anor v Amazon UK Services Ltd & Ors (Consequential Issues) [2022] EWCA Civ 634.
3. Stay. Applying the usual principles concerning irremediable prejudice and the balance of hardship, the court refused a stay. A stay would expose the claimants to the risk of further infringement, whereas Samsung could maintain the improvements it said it had already implemented. The burden lay on Samsung to ensure that infringement did not occur.
4. Quantum. Further substantive steps on an inquiry or account were stayed pending appeal. Clarifying the claim would require disclosure, possible election, points of claim and expert input, particularly for a notional royalty. The work was disproportionate and unlikely to promote settlement while the parties remained far apart and the appeal grounds concerned more fundamental issues.
5. Costs. The claimants were awarded 85% of their costs on the standard basis. The payment on account was calculated by allowing 65% of incurred costs, 90% of budgeted costs and 20% of out-of-budget costs, each subject to the 85% award. The court treated the costs budget revision mechanism in CPR 3.15A as relevant and anticipated that departure would require good reason under CPR 3.18.
6. Permission to appeal. Permission was granted on reframed points concerning Article 14 and use in the course of trade. Permission was refused on the pleading issue and the challenges concerning identity of mark and sign.

The judgment followed an earlier infringement judgment in the same litigation. The court granted permission to appeal on specified points concerning Article 14 and use, but refused permission on the pleading and identity-of-mark-and-sign grounds.