Factual and Procedural Background
The appellants ("Company A") sought an interim injunction to restrain certain publicity proposed by the appellee ("Company B"). Both parties manufacture and sell nutritional supplements for dogs, with Company A's product named Seraquin and Company B's product named Synoquin, both purported to benefit canine joint health. Company B conducted tests on Company A's products, alleging that certain batches did not contain the chondroitin sulphate levels claimed on their labels. Following these tests, Company B threatened to publish a comparative advertisement suggesting that Company A's product did not meet its label claims.
Company A applied for an interim injunction to prevent this publication, relying on claims of malicious falsehood, libel, and trade mark infringement. The trial judge refused the injunction, and Company A appealed with permission granted by Lord Justice Jacob.
Legal Issues Presented
- Whether the rule against prior restraint established in Bonnard v Perryman applies to claims of trade mark infringement arising from comparative advertising.
- Whether an interim injunction should be granted to restrain Company B's proposed comparative advertisement under trade mark law, defamation law, or the Human Rights Act 1998.
- The appropriate legal test to apply when considering interim injunctions in cases involving comparative advertising and trade mark infringement.
- The scope and requirements of the defence of "honest practices" under the Trade Marks Directive in the context of comparative advertising.
Arguments of the Parties
Appellant's Arguments
- Company A contended that no reasonable person could honestly publish the proposed comparative advertisement as it was not objectively justifiable.
- They argued that the only reliable evidence was that relating to the raw materials used in the product batches, not the final tablet tests relied upon by Company B.
- Company A submitted that the rule in Bonnard v Perryman does not apply to trade mark infringement claims, and the court should instead apply the American Cyanamid test for interim injunctions.
- They sought to restrain the use of their registered trade marks in association with statements alleging that their product contained less chondroitin sulphate than claimed on packaging, on the basis that such use infringed their trade marks.
Appellee's Arguments
- Company B submitted that the rule in Bonnard v Perryman extends to trade mark infringement claims, particularly where the gravamen is defamation.
- Alternatively, they argued that the court should apply the flexible approach under section 12(3) of the Human Rights Act 1998, as explained in Cream Holdings v Banerjee, giving significant weight to freedom of expression.
- Company B contended that their comparative advertising was made in good faith, with an honest belief in the truth of their claims, which should constitute a defence under the Trade Marks Directive.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Bonnard v Perryman [1891] 2 Ch 269 |
Rule against prior restraint in defamation and malicious falsehood claims; injunctions generally refused if defendant intends to justify. |
Court held that this rule does not apply to trade mark infringement claims; thus, prior restraint is not automatic in such cases. |
| Bestobell v Bigg [1975] FSR 421 |
Extension of Bonnard rule to malicious falsehood claims. |
Confirmed that prior restraint is generally not granted for malicious falsehood; relevant to refusal of injunction in defamation context. |
| Greene v Associated Newspapers [2004] EWCA Civ 1462, [2005] QB 972 |
Continued application of Bonnard rule post Human Rights Act 1998. |
Supported the principle that freedom of expression limits prior restraint in defamation and malicious falsehood cases. |
| American Cyanamid v Ethicon [1975] AC 396 |
Standard approach for granting interim injunctions based on balance of convenience and serious issue to be tried. |
Appellant argued this test should apply to trade mark infringement; court recognized its relevance but modified by Human Rights Act considerations. |
| Cream Holdings v Banerjee [2005] 1 AC 253 |
Interpretation of section 12(3) of the Human Rights Act 1998 regarding injunctions affecting freedom of expression. |
Court applied this flexible approach, requiring a likelihood of success higher than the American Cyanamid standard before granting injunctions restraining expression. |
| O2 Holdings Limited v Hutchison 3G [2006] EWCA Civ 1656 |
Trade mark infringement in comparative advertising and the scope of exclusive rights conferred by registration. |
Confirmed that use of competitor's trade mark in comparative advertising can prima facie infringe trade mark rights without causing confusion or jeopardising origin indication. |
| Reed Executive v Reed Business Information [2004] EWCA Civ 159, [2004] RPC 767 |
Defence of "own name" and the requirement to compensate if damaging statements later prove false. |
Supported the court's view that honest belief alone does not suffice if no compensation is offered for damage caused by false claims. |
| Microdata v Rivendale [1991] FSR 681 |
Distinguishing defamation claims from other causes of action in relation to injunctions. |
Used to argue that trade mark claims are not merely disguised defamation claims and should not attract the Bonnard rule. |
| Service Corporation v Channel Four [1999] EMLR 83 |
Clarification that injunctions in defamation are treated differently from other claims. |
Supported the principle that the Bonnard rule applies only to defamation and not to other causes of action like trade mark infringement. |
| Harrods v Harrodian School [1996] RPC 697 |
Nature of goodwill as property protected by passing off. |
Clarified that trade mark infringement protects property rights distinct from reputation alone, supporting the distinct treatment of trade mark claims. |
| Consorzio del Prosciutto di Parma v Marks and Spencer [1990] FSR 530 |
Balance between free speech and passing off claims in injunction applications. |
Confirmed that free speech is a factor in balance of convenience but does not provide an absolute bar to injunctions in passing off cases. |
Court's Reasoning and Analysis
The court began by considering the applicability of the Bonnard rule, which prohibits prior restraint of defamatory statements if the defendant intends to justify them at trial. It concluded that this rule does not extend to trade mark infringement claims, which protect property rights rather than reputation alone. The court distinguished trade mark infringement from defamation and malicious falsehood, emphasizing that the former involves protecting exclusive rights and goodwill associated with the mark.
The court recognized that comparative advertising engages freedom of expression under the Human Rights Act 1998. It applied the test from Cream Holdings v Banerjee, which requires a claimant seeking an interlocutory injunction restraining expression to show a likelihood of success at trial that is generally higher than the usual "real prospect" standard.
Applying this framework, the court found that Company A had not demonstrated it was more likely than not to succeed at trial on the trade mark infringement claim, given the conflicting evidence about the accuracy of Company B's testing methods and the honest belief defence raised by Company B. The court rejected the argument that an honest belief in the truth of the comparative advertisement absolves liability if the statement later proves false, reasoning that honest practices require willingness to compensate if the statement is untrue and damaging.
The court also noted that damages would be an adequate remedy and that the balance of convenience did not favour granting the injunction. It thus upheld the refusal of the interim injunction and dismissed the appeal.
Holding and Implications
The court DISMISSED THE APPEAL, affirming the refusal of the interim injunction sought by Company A.
The holding clarifies that the rule against prior restraint in defamation cases (Bonnard v Perryman) does not apply to trade mark infringement claims arising from comparative advertising. Instead, the Human Rights Act 1998 framework governs such injunction applications, requiring a higher likelihood of success at trial before restraining expression. The decision underscores that trade mark infringement claims protect proprietary rights distinct from reputation and that honest belief in a statement's truth does not provide an absolute defence if the statement is ultimately false and damaging.
The direct effect is that Company B is permitted to publish the comparative advertisement pending trial, subject to the risk of damages if Company A ultimately prevails. No new precedent beyond the application of existing principles to this context was set.