Lyle & Scott Ltd v Primark Stores Ltd

MR. JUSTICE LINDSAY:

1. I have before me an application notice in the matter Lyle & Scott Limited, claimants, and Primark Stores Limited, the defendants. Ms. Heal appears for the claimants and Mr. Wyand QC for the defendants.

2. A preliminary issue arises as to the admissibility of a particular class of evidence. The case before me is mounted under heads (a) (b) and (c) of the regulation at 9.1. The case concerns the use of an eagle mark by Lyle & Scott, who apply it to high quality clothing. Primark, it is said by the claimants, apply an identical or similar mark to a very much cheaper class of clothing. I do not at this stage need to go into the case any further than that.

3. Confusion becomes material, both under (b) and (c) of the three separate ways in which the case is put, and confusion is asserted by the claimants by reference to one dealing only, I apprehend, made, I think, by the managing director or certainly a senior officer of Lyle & Scott, who walked into Primark and noticed what he took to be similar goods marked with similar or identical marks to the Lyle & Scott mark, and therefore the claimant asserts a degree of confusion relevant both to (b) and (c).

4. The matter came before Mr. Justice Blackburne at an earlier stage, not very long ago, when the evidence had only recently been received by the defendants and Mr. Wyand asked for time to put in further evidence. He explained to the learned judge that two classes of evidence were sought to be added. An important class was as to when the disputed marks were first used by Primark and the second class of evidence, the one material to what I am now considering, concerned time to be afforded in which more responses from members of the public could be put in evidence than the eight or so cases which were already in evidence and which therefore were already available to the learned judge. Mr. Justice Blackburne took the view that the defendant ought to be given more time in which to complete its evidence and Mr. Wyand tells me, and Ms. Heal does not query this, that at that stage the claimant made no objection to the addition of more evidence of the class consisting of more responses from members of the public.

5. I think there is force in Mr. Wyand’s point that if the claimant had had any intention to object to the admissibility of the “more responses” class of evidence, that was the time to have made the objection, but it was not made. Accordingly the defendants collected yet more of the evidence and quite a number of assistant solicitors were sent to Primark Stores in Hammersmith, I think it was, and Manchester and approached actual purchasers of Primark goods bearing the disputed mark and asked them a number of questions which were in common form, and I apprehend were the same questions answers to which had been put before Mr. Justice Blackburne in the examples which had been put in front of him on the earlier occasion.

6. Ms. Heal relies on O2 Holdings Limited v Hutchinson [2006] RPC 30, a decision of Mr. Justice Lewison, as illustrative of the court’s distaste for this kind of evidence. But there are significant differences between the O2 case and the case before me. The O2 case was a trial and it does not necessarily follow that that which is declined at trial, where there has been opportunity to produce evidence in its best form, is necessarily applicable to the hurly-burly approach of the applications court. Moreover, in O2 there had been an order of the court which Mr. Justice Lewison indicated had not been abided by the claimants, who had sought to put in evidence of the kind, or possibly not quite of the kind, with which I am concerned. At para.15 of Mr. Justice Lewison’s judgment he said:

“In my judgment, the claimants have not abided by the spirit of that order and, indeed, I do not think that, properly construed, they have abided by the letter of it either. I do not therefore [and I would underline the word ‘therefore’] propose to allow Mr. Mumford to be called”.

That would seem to suggest that at least the principal ground for not allowing the evidence in that case was that it had been adduced in a way that had not abided with either the spirit or the letter of an earlier order. Of course there is no such feature before me. On the contrary, the earlier conduct of the case rather suggests that, time having been afforded for the collection of the evidence, it was evidence of a character that could be expected to be admitted at a later hearing.

7. There were other features in O2 and certainly the learned judge commented on the fact that what was there being sought to be introduced purported to be expert evidence, but was being produced in a way that had not complied with the provisions of Part 35. I would be surprised if Mr. Justice Lewison thought that he was laying down, or was purporting to lay down, a rule of universal applicability when he simply refused the evidence of Mr. Mumford in that case. I do not regard O2 as barring the admissibility of the evidence with which I am concerned.

8. Ms. Heal also relies on the PepsiCo. case [2006] ETM R 63, where the court was faced with very different responses, as it seemed, to serve a type of evidence, but there, as Mr. Wyand points out, one could more accurately describe what was being carried on as an experiment and, moreover, an experiment in which very different stimuli were put in front of the persons who, on the face of things, had answered in so very different ways. I do not find PepsiCo . as indicative of an absolute bar to the evidence with which I am concerned.

9. However, a point that does concern me is that Mr. Wyand accepts that it is not part of his case that the claimants have no arguable case. He says that the evidence which he proposes to rely upon merely fleshes out, so to speak, what he would hope to be the judge’s natural reaction on seeing the material which is claimed to be the cause of the confusion. He accepts that the questions put (although I have not explained them but they are in common form) could perhaps have been criticised; they almost always can. He accepts that the survey is not full in number and perhaps not the best that could possibly be devised. But nonetheless, he says, it goes a little way, leaving the weight entirely to the judge, to reinforce and bolster what he says should be the judge’s natural reaction, namely that there is no real confusion likely on the facts of this case.

10. I see a lot of force in Mr. Wyand’s argument but I am encountering difficulty with Ms. Heal’s very powerful point, as it seems to me, that if Mr. Wyand does accept that he is not putting the argument that the claimant has no arguable case, what is relevant today is the wide spectrum described as the balance of convenience, and how, asks Ms. Heal, can this evidence speak to that? I think she is right. Once it is accepted that no case is made that there is no arguable case, it seems to me right to exclude this additional class of evidence because it, as it seems to me, has no weight at all on the balance of convenience, which is what is in front of me. Ms. Heal says that it is incapable of being tested. That, of course, is quite often the case at interlocutory stages, but it is material that what is sought to be put in does not go to the balance of convenience, cannot be tested and would be expensive to respond to; for those reasons, notwithstanding that until it was accepted that Mr. Wyand was not putting that there was no arguable case against him I would have been in his favour, once he accepts that, it seems to me I ought to reject it, and so I do.

LATER:

11. I have before me an application notice of 30 ^th April of this year in the action Lyle & Scott Limited against Primark Stores Limited. Ms. Heal appears for the applicant, Lyle & Scott Limited, and Mr. Wyand QC leading Mr. Malynicz appears for the defendant, Primark Stores Limited.

12. The relief is sought because it is said that, unless immediately restrained, the respondent’s activities will cause serious and irreparable harm to the applicant. The applicant, Lyle & Scott, is a well known manufacturer of high quality wear, mainly for men but not, I think, exclusively for men by any means. It once had a reputation chiefly for producing quality knitwear for golfers but more recently has expanded its range to seek to attract a wider and perhaps younger market, but still is dedicated to quality. Primark Stores Limited is a more youthful company. It seeks to excite great numbers of sales at low profit margins and at a different end, I think it would be fair to say, of the clothing market. It certainly does not attempt to reach only golfers or even chiefly golfers, but sells very many goods at cheap prices.

13. The relief that is asked for by Lyle & Scott is this, that until the trial of the action the defendant must not sell or cause to be sold any clothing, footwear or headgear bearing the eagle device, and it then sets out four separate trademark numbers all of which concern the use of an eagle of one kind or another. Secondly, the defendant must not produce or cause to be produced any clothing, footwear or headgear bearing the eagle design, and again four numbers are set out, and, of course, they ask for costs. The application notice sets out four versions of eagles which have come to be referred to as A, B, C and D. I have had handed to me four separate Primark garments, each bearing some form of mark that might or might not be an eagle and might or might not be identical to Lyle & Scott’s eagle (that is one of the issues) but, just to identify them, I have version A of the registered mark, and that is handed to me alongside a “hoody”, as it is conveniently called, which is green, white and grey in stripes (I will return to that later); as for version B, I have some shorts with a creature on them and a separate version B registered mark; version C - I have some cargo trousers and yet another Lyle & Scott registered mark, and, finally, version D on a light blue, brown and dark navy checked shirt with a creature on the breast pocket of the shirt that is handed to me alongside version D, the fourth of the marks to which I need to refer.

14. Ms. Heal draws my attention to Council Regulation 40/94 of 1993 Article 9.1 and the relevant passages are (a) (b) and (c).

“A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent [and there is no question here of consent] from using in the course of trade:

(a) any sign which is identical with the Community trade mark in relation to goods or services which are identical with those for which the Community trade mark is registered;

(b) any sign where, because of its identity with or similarity to the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; and likelihood of confusion includes the likelihood of association between the sign and the trade mark;

(c) any sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the community and where the use of that sign without due cause takes unfair advantage of or is detrimental to the distinctive character or the repute of the Community trade mark”.

The reference to dissimilarity in 9.1(c) has since been, in effect, for all real intents and purposes, taken out, at any rate for the time being.

15. Ms. Heal’s principal argument, the one she advances most strongly today, is under (a) and hence she needs to make an arguable case of identity between the Lyle & Scott mark and the mark found on the four goods that have been handed up to me. There is some learning on identity. One might have thought that it was self-explanatory but it proves not to be. I have been particularly referred to two cases, one which is conveniently called Sadas [2003] FSR 34 608, which can be taken from the headnote. It is a case in the European Court of Justice. In this report, under the “held” sign, it says:

“(1) Criterion of identity had to be interpreted strictly. The very definition of identicality implied that the two elements should be the same in all respects. The absolute protection in the case of a sign which was identical with the trade mark in relation to identical goods and services for which the trade mark was registered, which was guaranteed by Article 5.1(a) of the Directive, could not be extended beyond the situations for which it was envisaged, in particular to those situations which were more specifically covered by Article 5.1(b).

(2) The perception of identity between the sign and the trade mark had to be assessed globally with respect of an average consumer who was deemed to be reasonably well informed, reasonably observant and circumspect. Since the perception of identity between the sign and the trade mark was not the result of a direct comparison of all the characteristics of the elements compared insignificant differences between the sign and the mark might go unnoticed by the average consumer. Article 5.1(a) of the Directive had to be interpreted as meaning that a sign was identical with a trade mark where it reproduced without any modification or addition all the elements constituting the mark [that is one limb, so to speak] or where [and this is the other limb] viewed as a whole it contained differences so insignificant that they might go unnoticed by an average consumer”.

That seems fairly accurately to reproduce the judgment. So here, under this main part of Ms. Heal’s case, she has to satisfy me that she has an arguable case of identity within that description of what is required of identity. In particular, the most easy form for her to prove is “viewed as a whole that it contains differences so insignificant that they might go unnoticed by an average consumer”, bearing in mind that the consumer, as has been pointed out, does not have the ability to compare in great detail in the way that a judge, having both the mark and the goods in front of him and assisted by counsel, and spending some time on the matter, has.

16. It is, as I have understood Ms. Heal’s case on 9.1(a), so plain a case of identity, she says, in all four classes of goods - that is not using that word “classes” in the technical sense, but the four types of goods that I have been handed - that Mr. Wyand and Primark are left without any arguable case at all, and that is what I first should look at.

17. I pick up Version A and the “hoody” top. Even bearing in mind that I am comparing a relatively sharp print on paper with something embroidered on clothing, I find them by no means identical. Version A has, it is true, an eagle. It has raised wings, it has its feet down, it has an attitude that is flying from right to left and so on, but it has around it a large black or coloured outline which is not to be found on the “hoody”. Indeed, on the “hoody” the work is so little detailed that unless one was assured first that it was an eagle I am not at all sure one would describe it as being one. I do not find them literally identical at all. I shall come on a little later to whether that is the test.

18. Version B, the shorts, is a different eagle from Version A. It is not a solid colour but has an outline, and it seems to me to differ from the emblem found on the shorts. Again the emblem on the shorts is far from detailed in its delineation. It is not at all easy even to make out whether the bird has a head and, if it has a head, whether it has a beak and, if it has a beak, whether the beak is open. The curving of the wings is quite different and the tail is quite different from the registered mark in Version B, and there just is not an identity between them.

19. Version C, on the cargo trousers, the registered mark has, I am not sure what the ornithological term is for them, but the legs of the eagle have, so to speak, a trailing edge which is not to be found on the cargoes, which have legs rather as a chicken would have rather than as an eagle might have. The feet are different, the tail is different, the angle between the wings is quite different, the layout of the feathers on the wings are quite different, and the eagle in Version C is looking, if anything, a little upwards and has an eye whereas on the cargoes it is, if anything, looking down and does not seem to have an eye.

20. In Version D, the checked shirt, the mark here is very distinctive in the sense that it is quite an angular design. The bird’s right-hand wing has a white line going up it signifying, I think, feathers, as indeed, in a different way, does its left-hand wing. It has an eye, it has a visible beak, it has a gap between the bird’s body and its right-hand leg, it has a tail that sweeps upwards but has feathers delineated at the rear, whereas on the checked shirt, there is what I think Mr. Wyand called a “blob”; it is better than a blob but it is certainly not identical to Version D.

21. If strict identity, complete identity, in all respects was required under 9.1(a) then it seems to me that one could not hope to say that there was complete identity. To that extent Lyle & Scott would have no arguable case on identity. But, notwithstanding the language of the provision to which I have referred, and, indeed, that of the headnote of Sadas , it has been the case that there has been a degree of relaxation which has been also commented on in our domestic Court of Appeal in Reed Executive plc v Reed Business Information Limited [2004] RPC 40 in March 2004. The Court of Appeal, in which the reasoned judgment was delivered by Lord Justice Jacob, commented on the “opaque” guidance given in the Sadas case and indicated that there had been a degree of relaxation, as is apparent from the headnote in Sadas , and at para.27 one finds Lord Justice Jacob saying:

“As a matter of policy there is no reason to suppose that the court meant to soften the edges of ‘strict identity’ very far, as even if a sign and mark are not identical for the purposes of Article 5.1(a), if there is a likelihood of confusion it would be caught by 5.1(b)”.

So there is a degree of relaxation but not a relaxation that goes very far. To my mind, the differences that are so far referred to may go beyond the limited degree of relaxation to which Sadas and Reed speak. To that extent it seems to me that Primark has an arguable case under 9.1(a) and Mr. Wyand accepts that Lyle & Scott also has an arguable case under 9.1(a). So there, so far as concerns 9.1(a), I shall later have to come on to the position that is appropriate where both sides demonstrate a serious question to be tried.

22. As for 9.1(b) and 9.1(c), I do not think I am required at this stage to deal with them separately because, as I have understood the argument, each side acknowledges that the other has an arguable case under (b) and (c). I should say that the reference in (b) to a likelihood of confusion on the part of the public generated a body of evidence, some of which, indeed quite a substantial part of which, Ms. Heal opposed even as to its admissibility. I ruled in favour of her on that subject on the footing that, once it was agreed that each side had an arguable case under 9.1(b), all that remained at this stage was a consideration of what can broadly be called “the balance of convenience”. So far as concerned 9.1(b), I could not see the relevance of the confusion evidence, as such it was, on the balance of convenience. But I ought to mention, if only in passing, that Primark has put in a body of evidence that it would characterise as indicating that there is little or no likelihood of confusion; I have not ruled on the weight to be given that because it has been excluded altogether at this stage.

23. Accordingly, both as to (a) and (b) and, indeed, as to (c) of Article 9.1, the chief matter that I have to rule on today is the effect of the so-called “balance of convenience” in relation to the granting or withholding of an injunction. No one has, as it seems, explored whether a speedy trial would be appropriate and, if so, how soon it could come on, and so I am concerned with what could be a not insubstantial gap between now and the trial. What then are the chief factors under the “balance of convenience” heading? As I say, each side has raised a serious question to be tried on each of the headings (a), (b) and (c). Ms. Heal says that irreparable harm will be done to Lyle & Scott if no injunction is granted. The harm that she refers to is, she says, of a particularly insidious kind, a kind hard to measure and that may have an effect enduring for a long period. Lyle & Scott, as I mentioned earlier, sells goods at relatively high prices, quality goods bearing in many, many cases, if not all the cases for practical purposes, one or other of their eagle marks. She says that in a quite deliberate way Lyle & Scott have gone up market, so to speak, and have been very successful in doing so and have come to be recognised as what I think she called the “in brand”. If ordinary consumers saw the goods on sale at Primark and took the Primark eagles to be, as she said they would, suggestive of Lyle & Scott’s goods in some way, those consumers might begin to say, “Why pay an average of £65 for Lyle & Scott goods when I can have the kudos of the well known eagle Lyle & Scott badge for an average of £4 at Primark?”, and there would be a lowering of reputation of Lyle & Scott. It might be thought that Lyle & Scott were producing the very goods that Primark were selling, for example, and that would do Lyle & Scott no good.

24. It is, it seems to me, a somewhat theoretical kind of loss but I cannot say that it is wholly improbable. But in assessing how likely loss to Lyle & Scott generally is, there are a number of factors that I need to take into account. Lyle & Scott are pricey by comparison with Primark. Unlike Lyle & Scott, that sells chiefly through other people’s shops, Primark sells either entirely or almost entirely only through its own shops. Primark, in all the goods that are laid in front of me, fixes its own labels to the goods concerned and uses the mark or brand “Cedarwood State”, not a description that Lyle & Scott uses on its goods. The goods are at very different ends of the market. In the sense that both of them, for example, aim to sell shirts to men, plainly there is in theory a degree of overlap, but they are at very different ends of the market both as to quality and as to price. There is, in Lyle & Scott’s evidence, the somewhat bald assertion that damage will be caused - damage including the types of irreparable loss to which I have referred - but there is no concrete example to which reference was made. The evidence is exclusively that of Lyle & Scott’s own Chief Executive Officer and Chairman who, finding himself in a Primark shop, discovered what he took to be the offending articles to which I have referred. So on that side of things there is at least the possibility of loss, at least the possibility of irreparable loss, but it does, it seems to me, have a somewhat theoretical basis and is supported only by the Chief Executive Officer of Lyle & Scott himself.

25. On the other hand, there is a great deal of evidence put in by Primark as to the nature of the loss which it would suffer were a considerable body of goods to be taken off the market because they bore a disputed mark. One is talking of literally very many goods indeed, and I have a table which has been referred to as “page 89” simply because it appears on that page, which has been put in on behalf of Primark and which gives indications, partly as to goods sold earlier (and I will have to come back to that) but partly as to stock on hand at the moment and goods to which a commitment of purchase has already been made by Primark. I can leave aside the goods as to which a commitment has been made because Mr. Wyand tells me that, without thereby intending to make any concession to Lyle & Scott, they will be able to arrange, or have arranged (I am not sure which it is) that the 134,655 goods there referred to will be able to be produced without any eagle on at all, hence they can drop out of consideration. But there are 333,850 units which are stock on hand and which are intended to be sold on the spring/summer 2007 season, and if they are embargoed in some way then there will undoubtedly be some loss which is much more readily quantifiable but the goods would have to be taken out of the shops, stored and then, depending on the outcome of the trial, would either never be capable of sale or would be capable of sale but only, of course, late and possibly, having missed the spring/summer 2007 season, might not find themselves readily saleable within some later season. One could be talking about a large sum of money.

26. I need to remind myself, although American Cyanamid is not the be all and end all in this part of the law, as to what it said about status quo, because the status quo, it seems to me, is here a very important consideration. I have got a case in which both sides, if restrained in a way that at trial proves to have been inappropriate, will suffer some loss. Both will suffer some loss of a kind which is by no means wholly quantifiable. Even though Primark’s loss, of the kind that I have just explained, is readily enough quantifiable, Mr. Wyand points out, and I have accepted it is the case, that there will be a knock-on effect in the sense that a person who goes in for one type of goods at Primark finding it is not there because it has been taken off the market because of the litigation, fails also to buy the other goods which might well have been bought with them together. The company, Primark, could begin to get a reputation for not having things in stock which earlier experience would have suggested would have been likely to have been in stock, and there is there a margin of unquantifiable loss, or at least loss extremely difficult to quantify. So on both sides it seems to me there is the possibility of unquantifiable loss. I do not have sufficient material to hold that either side would be unable to pay whatever damages might be awarded to the other. But an important consideration, when reverting to the status quo, is what is that status quo. I remind myself of American Cyanamid , where, at p.408, one finds:

“Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo. If the defendant is temporarily enjoined in doing something that he has not done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the date at which he is able to embark upon a course of action which he has not previously found it necessary to undertake; whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at a trial”.

This throws up the question of how long it has been since Primark has been using forms of eagle marks on its goods.

27. Ms. Heal has made a careful analysis and raised a number of doubts about the information given on p.89, to which I have referred. I have no doubt that, put under the most detailed of scrutiny, there are questions to be raised as to which goods shown on p.89 bore which marks, and whether they therefore could properly be disputed as falling within 9.1(a), (b) or (c) alongside versions A, B, C and D to which I am referred. But, taken as a whole, it seems to me that the evidence does suggest that eagle marks on a kind very likely to be disputable by Lyle & Scott have been in use since October 2005. I say “in use” in the sense that p.89 gives details of when particular goods arrived in store and they do not give details of when they first began to be sold, but I accept Mr. Wyand’s response that a firm like Primark depends upon, and prides itself upon, the shortest possible gap between arrival in store and the beginnings of sales. In the 2005 season, from October 2005 down to November 2005, there were some 47,644 eagle-bearing goods sold by Primark. In the 2006 season there were 358,650 units bearing eagles put on the market and actually sold by Primark. In the spring/summer 2007 season, in other words bringing it as closely as possible up-to-date, from December 2006 downwards to late April 2007, one is talking here of units already sold of 263,354 and, as I mentioned, in the stores already, as stock, a further 333,850.

28. The status quo, it seems to me, is one in which great bodies of eagle-bearing Primark goods have been put on the market, and the status quo, if I am to prefer it in the absence of truly commanding features, does seem to me to point to there being no injunction granted. True it is, as I have mentioned, that in a highly detailed way it may be that one cannot be entirely sure exactly which Lyle & Scott mark has been offended by use of the Primark eagle, but all of them derive from one source and it seems to me that, given that Lyle & Scott failed to notice anything at all until very recently, not only does the status quo point against an injunction but one has to recognise that the failure to notice such commanding numbers of eagle-bearing sales serves to add to the doubts that one has about the real likelihood of loss and whether it is merely theoretical rather than real. It must surely be expected that if the numbers of goods put on the market in the way that Primark speaks of were likely to cause harm to Lyle & Scott it would have come to notice far sooner than it has done. There is almost an added teasing point that arises out of that, because it is Lyle & Scott’s own evidence that their sales have burgeoned in recent years, their profitability is superb, their reputation is at its highest, they are, as Ms. Heal indicated, the “in brand” over a fairly recent period, and it is almost exactly that recent period over which Primark has been making the p.89 sales to which I have referred. In other words, the surge in the reputation or financial success of Lyle & Scott has coincided with the sales by Primark of which p.89 gives details.

29. I do not think I need go into the law any more deeply than I have. If I am right in thinking that there are arguable serious points to be tried on all of (a), (b) and (c) in 9.1 then the matter does come down, it seems to me, to the balance of convenience, once I have also decided, as I have, that on both sides there exists the possibility of damages (which could be afforded to be paid) and unquantifiable loss. So relying, as I have done, chiefly on the status quo, to which I have referred, it seems to me that at this stage it would not be right to grant the injunction. Whether either side wishes me to give any directions that might accelerate trial remains to be seen.

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