WWF & Anor v World Wrestling Federation Entertainment Inc

Factual and Procedural Background

This judgment concerns an appeal against an order granting summary judgment, injunction, and monetary relief in a dispute between two parties over the use of the initials "WWF." The claimants, collectively referred to as "The Fund," are a large international environmental conservation organization using the initials WWF and associated logos. The defendant, "The Federation," is a company engaged in wrestling entertainment that had agreed to limit its use of the initials WWF under a contract dated 20th January 1994 governed by English law.

The Federation admitted breaching the contract but argued the terms were void due to restraint of trade principles and European competition law. The judge below granted summary judgment for The Fund, staying the injunction pending appeal.

The Fund was founded in 1961 and is well-known worldwide for conservation efforts and merchandising consistent with its charitable image. The Federation, originally called Titan Sports, Inc., adopted the WWF initials in the 1980s and expanded internationally from the late 1980s onwards, focusing on wrestling entertainment and related merchandising.

Negotiations and disputes over trademark rights developed throughout the late 1980s and early 1990s internationally, culminating in the 1994 Agreement restricting The Federation's use of the initials WWF outside specified exceptions. The Federation initially complied but from 1997 began using the initials more freely, including adopting a new "Scratch Logo" and launching a website using the WWF initials, actions found to be breaches of the Agreement.

The appeal concerns whether The Federation can resist enforcement of the 1994 Agreement on grounds including restraint of trade, public policy, and other issues, with the court invited to consider the principles for summary judgment, breach of contract, public policy, injurious association, and appropriate remedies.

Legal Issues Presented

1. Whether The Federation breached the 1994 Agreement by using the initials WWF and related logos contrary to the contract terms.
2. Whether the contractual restrictions constitute an unreasonable restraint of trade and are therefore void at common law.
3. Whether the restrictions violate Article 81 (formerly Article 85) of the Rome Treaty as amended.
4. The proper interpretation of the Agreement, particularly regarding the use of the "Scratch Logo."
5. Whether injunctive relief should be granted or mitigated in light of the breaches and competing interests, including the impact of the Human Rights Act 1998.

Arguments of the Parties

Appellant's Arguments

• The Federation admitted breaching the Agreement but contended the relevant terms were void as an unreasonable restraint of trade at common law.
• They argued the restrictions were not justified and that the Agreement was unenforceable under Article 81 of the Rome Treaty.
• The Federation contended the Agreement did not cover the use of initials in "monogram/device form," specifically the Scratch Logo, asserting it was outside the scope of the prohibition.
• They claimed the use of the WWF initials on their website was a "technical" breach causing no real harm, given the different nature of their operations and the delayed complaint by The Fund.
• Invoked Article 10 of the European Convention on Human Rights and the Human Rights Act 1998 to argue for mitigation or refusal of injunctive relief due to commercial freedom of expression and disproportionate harm.

Appellee's Arguments

• The Fund maintained that The Federation had clearly breached the Agreement, especially since 1997, by extensive use of the initials WWF and related logos.
• The Fund argued the Agreement represented a compromise settlement of a genuine dispute and should be enforced as reasonable and necessary to protect their intellectual property rights and reputation worldwide.
• They emphasized the risk of confusion, dilution, and tarnishing of their well-known mark and the importance of avoiding injurious association with The Federation's wrestling entertainment activities.
• The Fund contended the restrictions did not constitute an unreasonable restraint of trade but rather a reasonable delineation of rights agreed upon by the parties.
• They rejected claims that the Human Rights Act or freedom of expression justified non-compliance with the Agreement or mitigation of injunctive relief.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by affirming the principles for summary judgment, requiring that the defendant have no real prospect of successfully defending the claim. Given the extensive evidence and admissions, the court found no realistic defense.

Regarding breach of contract, the court acknowledged the admitted breaches, particularly the use of the WWF initials on the internet and the Scratch Logo. It rejected the appellant's argument that the Scratch Logo was outside the scope of the Agreement, finding the Agreement clearly prohibited use of the initials in any visual form, including stylized logos.

On public policy and restraint of trade, the court recognized the tension between protecting intellectual property rights and avoiding unreasonable restraints on trade. It adopted a threshold test requiring the restraint to impose a real fetter on trade and to exceed the reasonable scope of intellectual property protection before being invalid. The court found the Agreement was a settlement of a genuine dispute and represented a reasonable division of interests. It rejected the appellant's contention that the Agreement was void as an unreasonable restraint of trade or contrary to competition law.

The court also considered injurious association, acknowledging the Fund’s legitimate interest in avoiding damage to its reputation and dilution of its mark through association with the Federation’s wrestling entertainment. It noted the complexity and uncertainty of such claims but found that the Fund’s concerns were genuine and supported by evidence from multiple jurisdictions.

Other issues raised, including the impact of pressures on the Federation during negotiations and human rights arguments related to commercial expression, were found insufficient to undermine the Agreement’s enforceability.

Finally, the court rejected arguments for mitigation of injunctive relief. It held that the breaches were not merely technical but deliberate and significant, with foreseeable risks. The Federation’s decision to build its worldwide internet presence on the WWF initials was a calculated risk, and the costs of rebranding were attributable to that choice.

Holding and Implications

DISMISSED the appeal and upheld the summary judgment and injunction in favor of The Fund.

The court ordered that the Agreement be enforced strictly, with no justification found for releasing The Federation from its contractual obligations. The decision emphasizes the enforceability of settlement agreements resolving genuine disputes over intellectual property rights and confirms that such agreements are presumed reasonable unless the party seeking to avoid them can show otherwise.

The judgment implies that parties should carefully consider the long-term consequences of trademark settlements and that breaches, especially deliberate and significant ones, will not be excused lightly. No new precedent was set beyond affirming established principles regarding restraint of trade, trademark disputes, and the enforcement of compromise agreements.

The court also refused leave to appeal to the House of Lords.