Cowshed Products Ltd v Island Origins Ltd & Ors

I have before me an application notice dated 26^th November 2010 seeking an order restraining the defendants from using the brand “Jersey Cow” for a range of beauty and other products pending trial. It arises in the circumstances set out below.

The claimant (“Cowshed”) is part of the Soho House group of companies. Soho House operates a range of hotels, private clubs and spas, including amongst others a hotel called Babington House in Somerset. As part of the facilities at Babington House, a former cow shed was turned into a spa in 1998. This led to the development of a range of beauty and “lifestyle” products such as soap, shampoo, shower gel, lip balm, candles and fragrances all under a general brand “Cowshed”. Although they started at the spa at Babington House, today Cowshed products are sold much more widely. There is a Cowshed website, a number of dedicated Cowshed shops and the products are available in department stores such as Harrods, Harvey Nichols and Fenwicks. Cowshed products are also available in the Boots chain but only in 16 specific shops which include goods at the upper end of the market. The defendants suggested that Cowshed was a mass market product, using mass market in a pejorative sense. In my judgment that is not accurate. Cowshed is clearly a very successful brand of luxury beauty and skin care products.

A common theme associated with Cowshed is said to be their high quality and attractive packaging. This packaging often involves high contrast black and white images of flowers. Apparently some of the imagery derives from wall paper at Babington House. The brand is described as “quirky and innovative”. A particular characteristic of the Cowshed family of products is that the mark “Cowshed” itself is used as an umbrella mark and then a series of subsidiary brands are used which differentiate various Cowshed product ranges. These include “Lippy Cow” for lip balm, “Knackered Cow” for products designed to uplift a tired user, “Cheeky Cow” moisturiser, “Grumpy Cow” shower gel and “Horny Cow” aphrodisiac oil. Ms Moulton, Beauty Director at Vogue UK said in her witness statement that “the Cowshed and cow themed products are unique”. Ms Moulton draws attention to the predominantly black and white packaging and what she calls “the humorous cow themed product names (such as ‘knackered cow’, ‘lippy cow’ etc.)”.

Explaining a joke is rarely a good idea and a judgment is a poor place in which to do it; however it bears recording that a significant element to the claimant’s overall image involves a play on the idea that referring to a woman as a cow would usually be rude. The claimant’s branding exploits this joke.

Direct images of cows feature rarely in the claimant’s branding. The website is the one exception. There is a picture of a cow’s head visible on the site and the site’s “favicon” is a small cow. A “favicon” is an icon which appears on the list of favourite sites an internet user compiles on their own browser so that the user can easily visit them again. Thus anyone who adds the Cowshed site to their personal list of favourite websites will have a cow head icon visible in their favourites list to remind them of Cowshed at all times. The floral images in the claimants branding also chimes with the cow theme at least to some extent since many of the plants depicted are the kind found near a cow’s pasture – ferns, cow parsley, teasels and clover.

Today the claimant plainly has a substantial goodwill and reputation in the United Kingdom related to toiletries and beauty products. The key elements are the name “Cowshed” and the subsidiary brands associated with cows. There is also a floral element to the packaging, usually in black and white.

The claimant has about 30 registered trade marks in class 3. Class 3 is the relevant class for soaps, perfumery, essential oils, cosmetics and hair lotions. The trade marks include a registration for COWSHED dating back to 1999; marks such as CHEEKY COW, COW PAT, CURVY COW, DIRTY COW, DOZY COW, FILTHY COW, FRISKY COW, GRUMPY COW, HORNY COW, KNACKERED COW and LIPPY COW all generally filed in 2007; and some other cow related marks (e.g. BULLOCKS, COWLICK, JOIN THE HERD, UDDERLY GORGEOUS) also generally dating from 2007. Finally the claimant has a registered trade mark COW Number 2199598 filed in June 1991 and registered on 11 May 2001

The first defendant company was set up by the second and third defendants (Mr and Mrs O’Conner). The company has two employees in addition to Mr and Mrs O’Conner. Despite the name of the company (Island Origins Limited) the first defendant trades under the name “The Jersey Cow Company”. How this came about and the history of the relationship between Mr and Mrs O’Conner and Cowshed is set out below.

Through a former web design company of theirs called Ominor, Mr and Mrs O’Conner worked successfully with the claimant to redesign the Cowshed website in 2008. Mr O’Conner is member of the Soho House chain of clubs and has been described as a “fan” of Babington House. Both Mr O’Conner and his wife are members of the Cowshed website and receive Cowshed newsletters.

Although he was born in Jersey, Mr O’Conner moved to London 10 years ago after meeting his wife. In May 2009 they decided to move to Jersey and did so between September – December 2009. Mr O’Conner explains that he and his wife were inspired by Jersey in many ways. Their aim was to use local ingredients to create a range of bath and body products and to showcase the best Jersey has to offer, exporting “their” Jersey around the world. He explains that the couple’s passion for Jersey, its ingredient and producers was the ethos of their brand from the outset.

In July 2009 Mr and Mrs O’Conner registered what Mr O’Conner has called a temporary name for a non trading company. The name was Gorgeous Cow Limited. It seems to me to be plain that the mark Gorgeous Cow, if it were applied to beauty products of the kind in issue here would run a high risk of passing off having regard to Cowshed’s overall goodwill and reputation. Very sensibly the defendants have offered an undertaking in relation to Gorgeous Cow pending trial and I will accept that undertaking (subject to any details which need to be resolved).

Following registration of the company name Gorgeous Cow, Mr and Mrs O’Conner did register a corresponding internet domain name and for some time in 2009 into 2010 that website consisted of a single page image of a cow silhouette beneath the words “Gorgeous Cow” and “Jersey”. This image has been taken down as I understand it but in any event would be covered by the undertaking above.

The substance of the matter before me does not relate to Gorgeous Cow.

In March 2010 a new company name was registered. Mr O’Conner tried to register a number of putative names in Jersey but they were refused by the Jersey Companies Register. Refused names include Jersey Origins and The Jersey Cow Company. The name “The Jersey Cow Company” was refused on the ground that the name is a breed of cow. The name which was permitted was Island Origins Ltd, nevertheless “The Jersey Cow Company” was obviously the name the defendants had decided they wished to use. Mr O’Conner explains that Jersey has what he calls an enviable product export pedigree, including Jersey milk, cream, Jersey Royal potatoes and tomatoes and he says that Jersey cow is “an internationally known iconic breed that symbolises both purity and provenance”.

In July 2010 the first defendant registered a UK trade mark “The Jersey Cow Company” in respect of goods in class 3. In August 2010 the internet domain “thejerseycowcompany.com” was registered and the defendants started trading over the internet. I gather that since August the defendants have sold a modest amount of “The Jersey Cow Company” goods via the website (worth about £7,000). Also in August the defendants started trading in Jersey and attracted attention in the local Jersey press. In that month Jersey attracted some 162,000 visitors, mostly from the UK.

In September the defendants exhibited their range of products at a trade show in London called Top Drawer, a trade show for the gift market. They picked up a number of retail distributors. The Jersey Cow Company goods started being sold through shops in the UK in October 2010.

The Jersey Cow Company’s products include toiletry products of the same general type as the claimant’s but also other things like some pottery and deck chairs. The range is intended to consist of Jersey origin products and the defendants marketing places considerable emphasis on this Jersey element. However cows also play an important part in the defendants’ marketing efforts. Mrs O’Conner’s initial concept related to cow silhouettes which include striking 1960s style floral wall paper print. For example a box of the defendants hair conditioner is a pale cream colour with the name at the top and then a silhouette of a cow underneath. The cow silhouette consists of a block of floral wall paper style print. A description of the product itself is under the cow. The name appears in the following manner (for the purposes of reproducing it in this judgment I have scaled the relative sizes of the text by eye.):

The colours used in the defendants’ range tend to consist of browns and creams with the floral print being more colourful. The Jersey Cow Company products include beauty and lifestyle products of the same general kind as the claimant’s Cowshed products (such as shampoo, body lotion, moisturiser, body wash, lip balm as well as scented candles).

In addition to the prominent cow silhouette on the packs, the evidence shows that the defendants use a more or less life size cardboard cow silhouette as well. It appears to be available at least in some shops selling their goods.

The claimant took the view that the defendants activities amounted to trade mark infringement and passing off and a letter before action was sent on 16^th November 2010. The claim form was issued on 26^th November, the same day that the application notice for an interim injunction was issued. The matter came before Vos J on 3^rd December when directions were agreed to bring the application to a hearing. I heard the application on 13^th and 14^th December.

Ms Denise McFarland appeared for the claimant instructed by Olswang and Ms Fiona Clark appeared for the defendants instructed by Hansel Henson.

By the hearing the parties had filed a substantial body of evidence including witness statements (long and short) from a total of 17 witnesses (10 from the claimant, 7 from the defendants). As well as evidence explaining the background and the matters in dispute the evidence included trade witnesses giving conflicting opinions about how the public would or would not react, a brief form of survey and a comparison of how the rival parties web sites look and operate. The parties put before the court every conceivable point which one tends to see in interim injunction applications.

In summary the claimant says that the merits of the claim “are so strong that there is no credible or sustainable defence” (claimant’s main skeleton paragraph 46). It says it seeks the interim relief “in order to protect the innocent third parties and members of the public and business community who are being (or are likely to be) ‘duped’ and misled by the actions of the defendants” (claimant’s main skeleton para 47). Interim relief is sought because the damage to the claimant would be irreparable but also because the defendants could not pay damages even if a financial assessment was made. The claimant relies heavily on the contention that the defendants have engaged in passing off and trade mark infringement “on an apparently deliberate basis to cause the claimant harm and damage” (claimant’s main skeleton para 39) and refers to the previous relationship between the personal defendants and the claimant. This is an allegation of fraud.

The defendants deny these allegations. They do not accept that their branding involves passing off or trade mark infringement at all. They contend the two sides’ product ranges are in different segments of a very crowded market. Jersey is a key concept underlying the defendants’ branding and no-one would associate that with the claimant. They also contend that the risk of real confusion on the part of the public is slight and that there is no warrant for an interim injunction. Moreover the defendants submit strongly that an interim injunction now would simply destroy their business. In the six months since they began they have built up very valuable business contacts and established relationships with prestige clients. They have more than £400,000 worth of stock at wholesale prices all labelled, packaged and ready to go, mostly in a warehouse in the UK for distribution here. They say that re-labelling and repackaging would not be commercially viable and even if they had the funds to hand to do it, they would not be able to procure new stock in the time available. The defendant also says that an injunction now would mean they had no established pattern of trade against which to estimate what their loss might be to be recovered on a cross-undertaking in damages.

The stock issue gives rise to a lively dispute between the parties. The claimant says that the stock level is too high and is a sort of self generated prejudice. The claimant says the defendants went into this with their eyes open and cannot now complain if they are enjoined and their business destroyed.

On the merits a specific point of trade mark law is taken by the defendants. The most prominent part of the claimant’s case is based on the registered trade mark COW. Indeed the claimant goes as far as to allege that JERSEY COW is to be regarded as identical to COW for the purposes of trade mark law (s10(1) of the Trade Marks Act 1994). At this interlocutory stage I will record simply that I do not accept that submission as free from doubt and the claimant also relies on infringement under s10(2) and 10(3) of the 1994 Act. To answer this case the defendants contend that the claimant does not use the word mark “COW” at all. While there is undoubtedly a bovine theme to the claimant’s products, the word “COW” alone does not appear. Part of the defendant’s defence is to seek to revoke the COW mark for non-use under s46 of the Trade Marks Act 1994. In response the claimant relies (so far) on its use of terms like “baby cow” and “pocket cow” on the footing that this amounts to use of the mark in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered under s46(2).

The defendants submit that the real complaint on the facts of this case is one of dilution. They note that the claimant has specifically pleaded and relies on a case of infringement under s10(3) of the 1994 Act (Directive 89/104, Art 5(2)) which includes the possibility of infringement by a similar mark on identical goods “where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of or is detrimental to the distinctive character or repute of the trade mark.”

Dilution or blurring of a brand is a problem which trade mark owners are astute to guard against. A mark which has lost its distinctiveness has lost its most important characteristic. However cases based on allegations of “taking unfair advantage” under s10(3) of the 1994 Act have to be treated with care. In L’Oreal v Bellure (Case C-487/07) (para 50) the ECJ said:

“50 […]Article 5(2) of Directive 89/104 must be interpreted as meaning that the taking of unfair advantage of the distinctive character or the repute of a mark, within the meaning of that provision, does not require that there be a likelihood of confusion or a likelihood of detriment to the distinctive character or the repute of the mark or, more generally, to its proprietor. The advantage arising from the use by a third party of a sign similar to a mark with a reputation is an advantage taken unfairly by that third party of the distinctive character or the repute of the mark where that party seeks by that use to ride on the coat-tails of the mark with a reputation in order to benefit from the power of attraction, the reputation and the prestige of that mark and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark’s image.”

This is the sort of approach which the claimant urges on the court and it may be well founded on the facts but the boundary line between illegitimate dilution and legitimate competition can be a difficult one to draw.

Finally there is a dispute about the status quo. The claimant says the status quo is the point before the defendant came onto the market. The defendant challenges that, arguing that the claimant must have or ought to have been aware of the defendants sooner and yet took no action – so there has been delay in taking action and the status quo has shifted to include the defendants being present on the market.

This case illustrates the difficulty of applying the American Cyanamid approach to cases about trade marks and passing off. The House of Lords in American Cyanamid [1975] AC 513 deprecated the approach of deciding interlocutory injunctions based on a mini-trial on affidavits (see Lord Diplock at 541 line 15). Rather the correct approach is to see that the claimant has a sufficiently arguable case to merit a trial (and for that matter to check that there is a sufficiently arguable defence on the same basis) and then leave the merits to one side and decide the case balancing the risk of injustice. This involves looking to see if damages would be an adequate remedy for the claimant – if so then no injunction is granted – and then asking the converse question about the defendant. Damage may be financial in nature but hard to quantify and/or may be damage of a less tangible kind which cannot readily be compensated in money such as a tarnishing of a reputation. If both sides risk uncompensatable harm then other factors are considered. It is a counsel of prudence to preserve the status quo.

It is a feature of trade mark infringement and passing off cases that assessing the risk of damage pending trial by the use of the defendant’s chosen mark in effect often involves asking the same likelihood of confusion question which goes to the merits of the underlying case. The reason a defendant’s mark may have a low likelihood of risk of damage may be because there is a low likelihood of confusion with the claimant’s mark, i.e. a weak case of infringement or passing off. See for example a pair of decisions by Aldous J as he then was in Financial Times v Evening Standard [1991] FSR 8 and then Blazer v Yardley [1992] FSR 501. The White Book (Volume 2) contains a detailed analysis of the question of whether passing off (and trade mark) cases are a special case in relation to interim injunctions, but starts by noting that in County Sound v Ocean Sound [1991] FSR 367 the Court of Appeal “purports to give an emphatic negative to this question”.

In the course of argument it was clear that both sides were making submissions which elided the merits of the underlying causes of action and the risk of irreparable harm. The claimant submitted that the injunction should be granted because it was highly likely the public would be misled and that represents irreparable harm while the defendants submitted there was a low likelihood of “origin confusion” and little chance that anyone would actually think one of the defendant’s products was a product of the claimant’s. So the risk of irreparable harm was low.

Having heard these submissions for a day and a half it seemed to me that this case appeared to show the difficulties which arise in trade mark and passing off cases at the interlocutory stage. Each side had spend the majority of their time urging the underlying merits of the case and so I asked the parties whether they would be prepared for the court to simply go ahead and decide the case on the merits and on the material before the court here and now. I made it clear that I would only do so if both parties wished me to do so. The defendants were prepared to have the court take that course, they said that the most important thing for them was certainty. Despite the submission in the claimant’s skeleton that there was no credible defence, the claimant was not prepared to go that far. Accordingly I will approach the matter on a conventional American Cyanamid basis.

The claimant has a good arguable case. It seems to me that an ordinary consumer who was aware of the claimant’s goodwill and reputation would be familiar with the way in which the claimant uses a general cow theme and branding consisting of the word cow plus another descriptor (lippy cow, moody cow etc). It is a prominent and striking aspect of the claimant’s trading. The defendants pointed out that the extra word often describes a mood, which is true, but it is not always so – e.g. dirty cow for soap. The defendant emphasise that their brand is “The Jersey Cow Company” but it is plain that a key part of it is “Jersey Cow”. There is a real possibility that a consumer who encountered Jersey Cow might think this was an extension of the claimant’s range. A consumer who was aware of the claimant’s connection with the hotel Babington House might conclude that Jersey Cow represented a move by Cowshed to open a spa in Jersey.

I have put this analysis specifically in terms of passing off because this avoids the potentially difficult territory of the registered trade marks in this case. A case of trade mark infringement in relation to the various “cow plus” marks (CHEEKY COW, LIPPY COW, MOODY COW etc.) is not straightforward. Taken individually I doubt JERSEY COW would be confused with any of those individual marks (say CHEEKY COW). There is some evidence that the customers in this market are fairly careful. This is no doubt why the claimant relies on the mark “COW” itself and it does seem to me to be their strongest case. Moreover it may well be best characterised as a case of dilution under s10(3) of the 1994 Act (see above). However there is a challenge to that mark’s validity on the grounds of non-use. Even if JERSEY COW infringes the COW mark, there is a triable issue on its validity. Passing off also avoids the issue of whether the defendants have a defence to trade mark infringement under s11 of the 1994 Act arising from their own registration for “the JERSEY COW company”. I should note that the claimant obviously contends that this mark is invalid and the point is clearly arguable.

My conclusion that there is a good arguable case on the claimant’s side has been reached without getting to the vexed question of whether the floral print patterns would or would not play a part in the matter.

On the other hand I am quite satisfied that the defendants have an arguable defence. The striking element to the claimant brand is that the “cow” referred to is an allusion to the person who is going to use the product (Dirty Cow soap etc.). While Jersey Cow certainly uses the cow image – both by the words themselves and by reference to the cow silhouette – it is arguable that they do not do so in the same allusive way of the claimant. Although the claimant contends its usage of the “cow” theme is essentially unique, there is evidence before me that this may not be right. The defendants point to various cow related brands of toiletries in the UK. A particular one to draw attention to is “The Pink Cow” range of bath and shower gel. This appears to have been on sale in Boots since July 2009. The claimant opposed an application to register The Pink Cow as a trade mark but did not take any action against the products in sale until 25^th November 2010. This was clearly prompted by these proceedings. The defendants rely on other products including “Udderly Smooth” hand cream, “Au Lait” soap produced by Scottish Fine Soaps in a box carrying a picture of a cow as well as some more peripheral evidence.

Considerable evidence was filed on the merits by both sides. At the reply evidence stage the claimant put in evidence about a survey or “straw poll” conducted by a trainee solicitor at Olswang, Annette Carponen. Ms Carponen stood in the Selfridges store in central London and interviewed 15 shoppers at random. She showed them a gift set of the defendants’ and asked if it reminded them of anything. Of those 15, Ms Carponen explains that 3 said in clear terms that it reminded them of the Cowshed brand. The claimant sought to rely on this to support their case. The defendant submitted the survey had a number of serious problems, not least being that it came in reply. The claimant even objected to evidence from the defendants coming after the survey evidence, which seemed to me to be an unrealistic position to take. This kind of evidence used as part of an application for interlocutory relief is not helpful. The question “what does this remind you of” invites the individual to be reminded of something else and is exactly the sort of leading question which should not be asked. Another significant flaw is that the claimant recorded the details of the individuals which gave them a favourable answer (or an answer regarded as neutral (3 cases)) but did not record the details of the 9 people who said the product did not remind them of anything. This unbalanced approach means that the claimant can follow up individuals who gave an answer favourable to the claimant but deprives the defendants of the converse opportunity. I will place no weight on the survey.

There was trade evidence called by both sides. The defendants relied on witness statements from retail customers of theirs (Mr and Mrs Austin and Mrs McMillan) to say that these retailers had not seen any confusion since they started stocking the products, that the customers for these kinds of products were careful people and that in the retailers opinions the customers were unlikely to be confused. On the other hand the claimant relied on Ms Moulton of Vogue to say that Cowshed’s cow imagery was unique (and therefore, submits the claimant, confusion is inevitable).

The claimant relied on other evidence to support their case on the merits. The statements were from Shamsun Nahar, Siobhan O’Flaherty and Olivier Pierre Juste. Shamsun Nahar was a student doing work experience at Olswang who was shown the products on the desk of Mr Vertes, the claimant’s solicitor. They reminded her of Cowshed. Siobhan O’Flaherty and Olivier Pierre Juste were employees of Soho House (and therefore familiar with Cowshed) and encountered the defendants products. Initially each person thought it was a Cowshed product but then realised it was not on closer inspection.

Taking the various items of evidence referred to above into account, it is plain the case raises a triable issue on both sides. Following American Cyanamid I need to turn to the questions of unquantifiable harm and the balance of convenience.

The claimant’s case on the balance of irreparable harm is weak. An important point is the timescale. Both parties urged that this matter ought to be resolved at an expedited trial. I agree. They had made enquiries with the listing office and a trial could be accommodated in about April 2011. Expedition is plainly appropriate and I will give directions for that to take place.

The damage to the claimant caused by the defendants activity would, assuming it were found to be unlawful, not be trivial by any means but I very much doubt the claimant would suffer serious irreparable harm before an April or May trial. The defendants’ products are of a high quality and assuming in the claimant’s favour that some measure of confusion took place in the meantime, if the product stopped being sold in April or May after trial I doubt the claimants would even notice the effect a year from now. Any dilution of their distinctiveness would be minor and temporary. I also note that, as the defendants point out, there are other cow related products available in the UK of a similar kind albeit that the scale of them is unclear and many are of a more down market character. The fact that the claimant appears to have been able to live with toiletries called The Pink Cow since 2009 is telling. The claimant is taking steps to do its best to put a stop to The Pink Cow but from the point of view of an interim injunction it seems to me that this shows that the claimant will not suffer significant irreparable harm from Jersey Cow for the next 5 months or so.

A point arises on the packaging and delivery of the defendants goods. The claimant’s solicitors ordered various goods from the defendant for the purposes of evidence and the deliveries were delayed considerably. Furthermore the defendants’ boxes in one case were quite crumpled when they arrived. These episodes do illustrate the potential danger for a brand owner if they lose control of their reputation as a result of the use of a confusing brand by their rivals but, in the context of this case, they are minor matters.

The damage which would be caused to the defendants by an interim injunction at this stage is of a different order. The defendants submit (and I find) that an injunction now is very likely to put them out of business altogether. No damages could compensate adequately for that. The claimant’s answer to this is to take the point about “eyes open” and to say that the defendants have taken too much of a gamble on their stock levels and so if the injunction shuts them down then they only have themselves to blame. I do not accept either point. On the eyes open point it is striking that the defendants’ registered trade mark was published in July and yet the claimant did nothing about it. Apparently the claimant has a trade mark watch service but for reasons which have not been explained adequately, although the watch service picked up the defendants mark, nothing happened.

The defendant also seeks to rely on evidence that a Mrs Wilson – the claimant’s web designer – was at the Top Drawer trade show and saw the defendants stand, and yet there is no evidence from her that she thought there was a problem. I do not place any weight on that. The evidence about Mrs Wilson and the trade show is far too thin to support an inference against the claimant.

On stock levels, there is no evidence of some sort of deliberate stock piling or anything of that nature. In my judgment this is not a case in which the defendants have acted in such a way that it would be just to say that they only have themselves to blame if an interlocutory injunction shut down the business.

The claimant contends that the defendants could re-label their product pending trial. The defendants’ evidence dealt with the difficulties of that course and I do not regard repackaging pending trial as realistic. The claimant also submitted that stickers could be used on the defendants’ existing packaging but that would seriously undermine the quality of its appearance. There was an example of a sticker used on the back of one of the defendants’ boxes but that is a very different thing from a sticker on the front of the box bearing what would purport to be the brand of the product.

With unquantifiable harm on both sides one approach is to preserve the status quo. However in this case the parties cannot agree what the status quo represents. The defendants had clearly started their activity before the claimant complained about it. It seems to me that to decide this case based on trying to resolve a fine point about when exactly the claimant knew what the defendant was doing and how quickly they acted and for that matter to decide on the basis of disputed allegations about deliberate conduct by the defendants is no better than conducting a mini trial on affidavit on the merits. I decline to approach the matter on that basis.

In John Walker & Sons v Rothmans International [1978] FSR 357 Brightman J considered a motion for an interlocutory injunction. He held following American Cyanamid that there was a triable issue and unquantifiable harm on both sides. He was urged to preserve the status quo, i.e. to put a stop to the defendant’s new activity which the claimant complained of. He declined to do so on the basis that, on the facts before him there was only a risk of damage to the plaintiff if the injunction was refused, particular given their reputation and the relative short time to trial whereas there was a certainty of damage to the defendant if the injunction was granted.

In Management Publications v Blenhiem Exhibitions [1991] FSR 348 (353-354) Hoffmann J (as he then was) had to consider a motion for an interlocutory injunction designed to force a new magazine to change its name from Security Management Today to something else. He decided there was a triable issue of passing off under the American Cyanamid doctrine and then said as follows:-

“The motion must therefore be decided on what is usually called the balance of convenience, which is nowadays recognised as choosing the course which appears to involve the least risk of causing injustice, in the sense of causing uncompensatable damage to a party who is refused an injunction which should have been granted or injuncted when the injunction should have been refused. Mr. Sparrow submitted that the most important factor in such a choice was the desirability of preserving the status quo. The defendant had originally decided to call its publication Security Management or Security Management Magazine. It was then faced with objection from the publishers of an American publication called Security Management and decided to adopt the title Security Management Today. A “media pack” or prospectus for the magazine under the new name was sent out “at some considerable expense” to prospective advertisers early in September 1990. The plaintiff's letter before action arrived soon afterwards, but the defendants decided to make no further change and went ahead with publication. The magazine is now launched and some three or four issues have been published. Mr. Sparrow says, and I agree, that the defendants cannot put themselves in a better position by disregarding the plaintiff's warning and going ahead with the disputed name. There was nothing in the disputed name which made it peculiarly apt to the defendants' publication: it could just as well have been Security Management Journal or Monthly or News or, subject to the American objections, plain Security Management. Yet the defendants chose to proceed with a name very like that of the plaintiff. The status quo at the relevant time was that they were not yet embarked on publication. On the other hand, it is not the case that the defendants when challenged had not yet begun the course of conduct which the plaintiff is seeking to restrain. They had gone some of the way, but not so far as they have today.

In my judgment the question more material to the likelihood of causing injustice is whether one side or the other is more likely to suffer damage on account of the grant or refusal of an injunction. If I grant an injunction, the defendants will certainly suffer damage. Some, in the form of wasted expense, will be quantifiable. But their business will suffer a set-back through having to make the change. The consequences will be very difficult to quantify. On the other hand, if I refuse an injunction, I think, for the reasons I have explained, that the likelihood of the plaintiff suffering any damage between now and trial is very small. Furthermore, I think that in practice if I were to grant an injunction, that would be the end of the action. The defendants would have to change their name and build up a goodwill in the new name, after which there would be no point in reverting to the old one. They might continue the action merely to enforce the cross-undertaking in damages but this was not very likely. On the other hand, if an injunction was refused, the plaintiff would by no means be defeated. If it is right and proceeds to trial, the time at which the defendants are required to change their name will only have been delayed. And in the meanwhile, as I have said, I think it is unlikely to suffer any substantial damage. These considerations seem to me persuasive and bring down the balance against an injunction. The motion will therefore be dismissed.”

Hoffmann J’s decision was upheld in the Court of Appeal ([1991] FSR 550).

I will follow the same approach. Looking for a (disputed) status quo in this case is not the answer. If I grant an injunction then it will effectively decide the action. There is a real risk that the defendants’ business will be destroyed. On the other hand if I refuse an injunction, the claimant is by no means defeated. The matter can be taken to a speedy trial within a few months. Even of the claimant is right about the merits of its claim, the damage in the meantime will be modest albeit difficult to quantify or to compensate for in damages.

The defendants offered two further undertakings pending a speedy trial which I will accept. The first was an undertaking not to offer their beauty products and candles in the UK at a discount of more than 15% from its current trade prices. The point of this undertaking is to ensure that the defendant does not engage in dumping their product on the market. The second was an undertaking that the first defendant would pay 15% net profits on all sales of The Jersey Cow Company products into a designated escrow account so that they are in a position to pay any award of damages or account of profits which may be ordered.

The claimant offered a cross-undertaking supported by the parent company Soho House. The claimant sought to limit their exposure on the cross-undertaking first to £100,000 and then, following evidence from the defendants, to £500,000. Given that I am accepting undertakings from the defendants, a cross-undertaking should be given. I will hear counsel on whether in the circumstances as they now are, the £100,000 limit is sensible.