Lumos Skincare Ltd v Sweet Squared Ltd & Anor

JUDGMENT

Lord Justice Lloyd

1. This is the judgment of the court.

2. The Claimant’s appeal in this case was allowed for reasons set out in the court’s judgment given on 6 June 2013. The court was not then able to decide on the terms of the order appropriate to give effect to its allowing the appeal, though it did then state that the Defendants’ application for permission to appeal to the Supreme Court of the United Kingdom was refused. The court has now been able to consider the written submissions made as to the terms of the order. Its order will be made with effect from today, and this judgment is given in order to explain, briefly, the court’s reasons as regards the points that were in dispute between the parties.

The injunction to be granted

3. The Claimant sought a general injunction against passing off in the United Kingdom by the use of the trade name LUMOS or any trade name confusingly similar to it. The Defendants relied on the fact of their having obtained the registration of a Community trade mark for the mark LUMOS, for specific classes of goods, and argued that the injunction should not restrain them from doing anything which would be the subject of the trade mark registration.

4. We grant an injunction in general terms. The Defendants’ trade mark registration is not a defence to the claim for passing-off.

5. The Defendants also sought the suspension of the injunction for a period of months to allow them to adapt their business so as to avoid breaching the injunction and, separately, a suspension pending an application to the Supreme Court of the United Kingdom for permission to appeal. We deal with the latter aspect below as it affects other parts of the order as well.

6. We will suspend the effect of the injunction in any event so that it will not be breached by anything done on or before 31 July 2013. We consider that this should allow the Defendants sufficient time to make the necessary adaptations. The order does not require the Defendants to recall stocks already supplied to and owned by purchasers from them. The order also does not affect the sale of goods under the mark LUMOS to purchasers in the Republic of Ireland. Mr Sweet, a director of two of the Defendants, made a witness statement in which he referred to problems which the Defendants might incur if they could not supply goods under the LUMOS mark to a particular distributor which features the Defendants’ LUMOS nail care products in its catalogue, which is not due to be reprinted until next March. It does not seem to us that this is a sufficient reason for suspending the injunction for a longer period. The time allowed should also be sufficient for the Defendants to organise re-branding and reprinting of their own catalogues and other marketing materials.

Delivery up of goods

7. The Claimants would in the normal way be entitled to an order for the delivery up of goods the sale of which would infringe the injunction. However, the Defendants rely on the fact that they can lawfully sell their LUMOS branded products in the Republic of Ireland, and the Claimant accepts that they should not have to deliver up goods which they retain for such sale, subject to their giving proper evidence of the items and quantities retained on this basis. We so order.

Damages or an account

8. There is no substantial dispute between the parties as to the order to which the Claimant is entitled in this respect, save as to timing. The Defendants will be required to provide the appropriate evidence by 31 July.

Publication

9. The Defendants proposed that the publicity statement should be on their website. The Claimant is content with that, subject to the details of the order. We so order.

Costs

10. A number of points arise on this. In principle the Claimant is entitled to its costs below and of the appeal, to the return of the sum of £55,524.50 which it was required to pay, and did pay, under the order below, to an interim payment on account of its own base costs, and to interest on the base costs.

11. The Defendants relied on open offers, but the Claimant has undoubtedly done better than these offers, and they do not provide any reason not to regard the Claimant as the successful party, or not to follow the normal rule in that respect.

12. The Claimant made an application by application notice dated 28 February 2012 as regards the Defendants’ evidence. This was successful only to a very limited extent. Floyd J who dealt with the application reserved the costs to the trial judge. The trial judge allowed the Defendants £2,500 in respect of these costs. It seems to us that the Defendants are entitled to retain that amount in respect of those costs, and the Claimant should not recover any of its costs attributable to that application.

13. The Defendants applied for security for the costs of the appeal on 24 January 2013. This application was dealt with by agreement in the end, costs being costs reserved to the appeal. It seems to us that the Defendants should have their costs of this application. The Defendants claimed some £10,000 in that respect. We assess those costs summarily at £8,000. The Claimant should therefore pay that amount and should not recover anything in respect of its own costs of that application.

14. For these reasons, the order as regards repayment by the Defendants of the sum paid to them by the Claimant under the order below will be subject to the deduction of £10,500 so as to give credit to the Defendants for these two sums. The Defendants must therefore pay back to the Claimant £45,024.50, rather than the full sum paid of £55,524.50.

15. The order for costs in the Claimant’s favour, as regards costs below and on the appeal, will exclude the costs of those two items. It provides for interest on the base costs (not the additional liability) at 8%, the judgment rate.

16. The Claimant seeks an interim payment of £69,250 on account of its base cost items. Its costs schedules show the following sums by way of base costs: (1) at first instance, in the High Court, before transfer to the Patents County Court, £32,070; (2) in the Patents County Court, £37,275 (the maximum amount under the applicable costs limits); (3) in the Court of Appeal £69,155. These three sums give a total of £138,500. If £10,500 is deducted, so as to reflect the disallowance of the two aspects of the case on which the costs liability lies the other way, the net amount is £128,000. It seems to us appropriate, against that overall estimate, to order the payment of £60,000 by way of an interim payment on account of these base costs.

Stay pending appeal

17. The Defendants also seek the suspension of the injunction and the stay of other provisions of the order pending an application to the Supreme Court for permission to appeal and, if permission is granted, pending the appeal. We are prepared to grant such a stay and suspension, but on terms which are designed to ensure that the application can be considered by the Supreme Court as soon as possible.

18. The Defendants would have 28 days to put in such an application under the rules, and further time in which to lodge some of the necessary documents. It seems to us that, if the injunction is to be suspended and other provisions are to be stayed pending the application, the Defendants must be required to act with much greater expedition. Therefore the suspension and stay will have effect only if the Defendants file their application for permission to appeal by 4pm on 21 June, and if they lodge with it all documents required to be lodged under the Supreme Court Rules and Practice Directions, including those which the Practice Direction allows to be lodged later, and if they apply for expedition at the same time. The details are set out in the order; this is only a summary.

19. If they do so, then the injunction will not have effect until the application has been determined and, if permission is granted, then not until the appeal is determined. This suspension is concurrent with the suspension until 1 August 2013 already mentioned. If the application for permission to appeal is made in due time and is refused, the Defendants will not be entitled to a further period of suspension beyond the later of (a) the determination of the application and (b) 31 July 2013.

20. In addition, if the Defendants comply with the stipulated timetable, the orders for delivery up and for the provision of information about sales will be stayed on the same basis, and the sum payable on account of costs (but not the sum repayable in respect of the costs paid below, as to which no such provision was sought by the Defendants) will be paid into a joint account in the names of the parties’ solicitors to await the outcome of the application for permission to appeal.