Haremi Ltd v Duran & Ors (Approved)

Factual and Procedural Background

On 6 March 2023, the Plaintiff commenced plenary proceedings claiming infringement of its registered trade marks. On the same day, the Plaintiff sought interlocutory injunctive relief against the three Defendants. The motion was adjourned for costs determination after acceptable undertakings were given by the Defendants. The proceedings settled except for the issue of costs related to the interlocutory motion.

The Plaintiff is a company operating an online clothing business under a registered EU Trade Mark for a premium leisurewear brand sold exclusively through its website. The Plaintiff alleged that its branded clothing was being sold in two boutiques operated by the first and second Defendants, contrary to its exclusive online sales model. The third Defendant was identified as the supplier of the goods sold in breach of the Plaintiff's trade mark rights.

Prior to proceedings, the Plaintiff’s solicitors wrote to the Defendants demanding cessation of infringing sales, disclosure of suppliers, undertakings against future use, delivery of infringing goods, and accounting for profits. The first Defendant acknowledged removal of infringing goods but did not provide full undertakings or supplier information. The third Defendant disputed the Plaintiff’s complaints regarding supplied goods and did not adequately respond to the trade mark infringement demands. No substantive responses were received from the Defendants thereafter.

The Defendants eventually gave undertakings on the return date of the interlocutory motion, including ceasing use of the trade mark, preserving infringing goods, and disclosing supplier and purchaser information. The dispute over costs remained unresolved.

Legal Issues Presented

1. Who should bear the costs of the interlocutory motion brought by the Plaintiff for trade mark infringement?

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff's registered trade mark was infringed by the Defendants selling goods bearing the mark without authorization.
• The Plaintiff communicated clearly through solicitors, demanding cessation and disclosure, but received inadequate responses.
• Proceedings and interlocutory relief were necessary to obtain appropriate undertakings and stop infringement.
• The only pre-action response from the first Defendant was insufficient, lacking undertakings and supplier disclosure.
• The Defendants delayed addressing the infringement and ignored repeated correspondence, necessitating court intervention.

Defendants' Arguments

• The Plaintiff’s pre-action demands were excessive and inappropriate for interlocutory relief, including requests for relief only available at trial.
• The Plaintiff did not clearly specify what was required to avoid interlocutory injunction, causing confusion.
• The Defendants argued no interlocutory injunction was threatened explicitly before proceedings.
• The primary relief sought (removal of goods) had effectively been achieved before the motion, making the motion unnecessary.
• The second Defendant claimed not to have received pre-action correspondence.
• The Defendants asserted the infringement was an innocent mistake caused by internal errors and lack of awareness of the trade mark dispute.
• The Plaintiff should have honored its order, and the Defendants’ conduct was linked to unresolved commercial disputes unrelated to infringement.
• The Defendants contended that the costs award should be limited given the small number of items involved.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court found that although some pre-action demands by the Plaintiff were broader than appropriate for interlocutory relief, it was evident that the Defendants understood the urgency and seriousness of the trade mark infringement claims. The Defendants failed to provide adequate or timely responses to repeated correspondence, delaying resolution until the commencement of proceedings and the interlocutory motion. The Court rejected the Defendants’ argument that no interlocutory injunction was threatened, noting the clear tenor of the Plaintiff’s correspondence and the common legal practice of seeking interlocutory relief alongside proceedings.

The Court also found the Defendants’ claim of innocent infringement unpersuasive, given the Defendants’ knowledge and the failure to disclose supplier information or undertakings prior to the motion. The Defendants’ internal explanations and commercial disputes did not justify the infringement or the failure to engage meaningfully with the Plaintiff’s solicitors. The Court noted that the undertakings given by the Defendants only followed the urgency of the motion, indicating that the Plaintiff’s action was necessary to secure compliance.

The Court further observed that the Defendants’ evidence was incomplete and at times misleading, particularly regarding the commercial transactions and invoicing related to the infringing goods. The Defendants’ failure to respond adequately to correspondence and their delay in providing undertakings justified awarding costs against them.

Holding and Implications

The Court awarded costs to the Plaintiff in relation to the interlocutory motion. The Plaintiff succeeded in obtaining the relief it sought, and the Defendants’ failure to engage adequately before proceedings necessitated court intervention. The decision directly affects the parties by requiring the Defendants to bear the costs of the interlocutory application. No new legal precedent was established by this ruling.