Cadbury UK Ltd v The Comptroller General of Patents Designs And Trade Marks

I handed down judgment dismissing this appeal on 18 April 2016 and am now asked to deal with costs. The Appellant (Cadbury) has agreed to pay the costs of the Respondent (the Comptroller), estimated to be about £13,000, but there is a dispute regarding the costs of the Intervener (Nestlé). The parties requested that their submissions be put forward in writing and that the issues be determined without a hearing and I agreed to that course.

Nestlé asks for its costs (including the costs of its application to intervene) and its bill is some 5 times greater than that of the Comptroller. Its submissions are simple. It says that the appeal was dismissed, that its application to intervene should have been consented to at the outset, that its arguments were accepted by the Court and that it should have its costs in accordance with the usual principles, i.e. in the normal course the winner gets his costs.

Furthermore, it points to the correspondence prior to its joinder in the appeal. For example, there is a letter of 14 October 2015 wherein the Comptroller indicated that his position in relation to Nestlé’s application to intervene was neutral, that if the application were granted he would consider that the appeal would, in effect, become an inter partes dispute between Cadbury and Nestlé and that he would seek directions that his skeleton argument be filed and served within 14 days of Nestlé’s. He went on to observe that his role in appeals to the Court was to seek guidance on the law and to act in the public interest and that, in these circumstances, there may be no need to add significantly to the position set out by Nestlé in its skeleton.

The Comptroller reserved the right to rely on additional or alternative arguments and, in fact, what happened was that the Comptroller presented a detailed skeleton argument and counsel on his behalf made the main argument for the Respondents on the appeal.

Nestlé also drew attention to the fact that, prior to Cadbury’s application to the Comptroller in suit (which was premised on the assumption that the relevant registration was for a series of trade marks), Nestlé had invited Cadbury to surrender its registration (following the Court of Appeal decision in Société des Produits Nestlé S.A v Cadbury UK Ltd [2013] EWCA Civ 1174, which was in relation to a mark with the same description as that in suit).

Nestlé also submitted that it had a direct interest in the appeal, the mark having been relied upon in infringement proceedings brought against it, and that direct interest justified its intervention. It also pointed out that Cadbury originally resisted the application to intervene, only consenting at the 11^th hour which, alone, it says led to the expenditure of over £20,000 by way of costs.

Finally, Nestlé observed that its submissions had been of assistance to the Court and this should be taken into account.

Cadbury has a different approach. It submitted that there was no obvious reason why it should pay Nestlé’s costs since this was an application that it had made, ex parte, to the IPO to rectify the registration of its own UK trade mark. It submitted that Nestlé's intervention had resulted in little more than a substantial increase in the costs of the whole proceedings. In this latter respect Cadbury’s counsel referred to a witness statement (which was said to contain a number of inaccuracies and, therefore, had to be replied to) with hundreds of pages of exhibits to which no reference was made at the hearing. He also drew attention to the fact that the application to intervene was not made until after the date for the appeal had been fixed, with the consequence that the hearing date had to be adjourned for several months with inevitable extra costs occasioned thereby.

Cadbury submitted that in circumstances where the Comptroller can be relied upon to defend its decisions competently and thoroughly, there was no need for any intervention and that any such should be at the cost and risk of the intervener. Cadbury drew attention to what it submitted was the analogous situation in judicial review proceedings where the legislature has provided that an applicant shall not be ordered to pay an intervener’s costs save in ‘exceptional’ circumstances (Criminal Justice and Courts Act 2015, section 87).

In this context my attention was also drawn to the practice of the Competition Appeals Tribunal and the decision in Ryanair Holdings Plc v Competition and Markets Authority, Aer Lingus Group Intervening [2015] CAT 15 where the issue of an intervener’s costs was considered. The Tribunal said this:

My attention was not drawn to any established practice with respect to interventions in ex parte applications to the IPO and, had there been any such practice, I am confident that counsel would have reminded me of them. Nestlé merely commented that costs are always in the discretion of the Court and that cases from other areas of the law are unlikely to assist, the issues being fact- sensitive to the particular case.

In my judgment some certainty in this area is desirable and I am much attracted to the rationale of the practice in the CAT as explained in the Ryanair decision. It seems to me that there are good reasons for adopting this practice in cases such as that before me, particularly when, as now, it is widely recognised that the Comptroller is usually represented by highly competent counsel with relevant expertise.

Nestlé had a commercial interest in intervening in Cadbury’s application to delete one of a series of trade marks but there is no supervening public interest involved and it is a very well-resourced party. With respect to the three elements referred to in paragraph 6 of Ryanair, the first and third were clearly satisfied and the second just about (since the Comptroller’s submission were more than adequate for the purpose). However, there is nothing more of substance to go into the balance. There was no suggestion that Nestlé will be materially disadvantaged if it does not recover the costs of its intervention. I think the right decision is that I should make no order with respect to Nestlé's costs.