Artcrafts International SpA v MOU Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bryan |
| Judgment Date | 21 June 2024 |
| Neutral Citation | [2024] EWHC 1558 (KB) |
| Court | King's Bench Division |
| Docket Number | Case No: KB-2023-004735 |
[2024] EWHC 1558 (KB)
THE HON. Mr Justice Bryan
Case No: KB-2023-004735
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Adam Tolley KC and Christopher Monaghan (instructed by Rowel Genn Solicitors) for the Claimant
Philip Coppel KC and Olivia Davies (instructed by Wiseman Solicitors) for the Defendant
Hearing dates: 11 and 12 June 2024
Approved Judgment
This judgment was handed down remotely at 3pm on 21 June 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
A. INTRODUCTION AND BACKGROUND
The parties appear before the Court on the return date hearing in respect of the application of the Claimant, Artcrafts International SpA (“Artcrafts”), for continuation of interim injunctive relief until trial restraining the Defendant, MOU Limited (“MOU”), from committing breaches of a written Licence Agreement between Artcrafts and MOU dated 8 April 2011 (the “Licence Agreement”) and Artcrafts' exclusive licence in respect of specified territories thereunder (the “Interim Injunction Application”), an interim injunction to a return date having been ordered by Stacey J on 4 January 2024.
Artcrafts has made two subsequent applications against MOU which the parties accept can also be accommodated on this return date, namely:-
(1) Artcrafts' application for summary judgment in respect of a new allegation on the part of MOU that the Licence Agreement was terminable on reasonable notice, and to strike out various other parts of MOU's Defence and Counterclaim which are said to be irrelevant and/or untethered to any claim for relief (the “Summary Judgment/Strike Out Application”).
(2) An application for a judgment on an admission (made in the first witness statement of Shelley Tichborne (“Ms Tichborne”) on behalf of MOU), together with an associated declaration, Ms Tichborne having admitted that, with effect from 1 January 2015, the USA became included in the list of Artcrafts' exclusive territories (the “USA Application”).
There are a number of witness statements before me in relation to the applications. Specifically, on behalf of Artcrafts, the first, second and third witness statements of Simone Ponziani, the CEO of Artcrafts (“Ponziani 1”, “Ponziani 2” and “Ponziani 3”), the first witness statement of Eric Barreveld (“Barreveld 1”), the first witness statement of Emee Olarte-Foussard (“Foussard 1”), the first witness statement of Stefano Collini, (“Collini 1”), the first witness Statement of Katiuscia Baccani (“Baccani 1”) and the first and second statements of Rowel Genn (“Genn 1” and “Genn 2”). Whilst, on behalf of MOU, there has been served the first witness statement of Ms Tichborne (the founder and sole owner of MOU). I confirm that I have had careful regard to all such statements and the evidence contained therein.
The parties have also provided me with no less than 98 authorities occupying 4 lever arch files. Such over citation of authority is to be deprecated (see Keystone Healthcare Ltd v Parr [2019] EWCA Civ 1246 at [26] per Lewison LJ and Practice Direction [2012] 1 WLR 780). The applicable principles in relation to interim injunctions, implication of terms including as to termination on reasonable notice, and when a declaration should be made, are well established, and well-known, and were ultimately common ground before me. To the extent that there were any differences between the parties they related to the application of established authorities to the facts.
These proceedings (the “Present Proceedings”) concern the Licence Agreement made on 8 April 2011 between Artcrafts (an Italian company) and MOU (an English company). The subject of the Licence Agreement is the commercial exploitation of intellectual property rights in “Mou” footwear (referred to as the “Products”). Mou is a luxury brand, founded by Ms Tichborne, and most well-known for its footwear (although the brand extends to other items that are not the subject matter of the Licence Agreement). The name “Mou” means ‘soft to the touch’ in French and denotes both the tactile softness of materials used in the products the feminine spirit.
Under the Licence Agreement, MOU granted Artcrafts an exclusive licence to manufacture, distribute, sell, advertise and promote the Products throughout what was defined as the “Territory” and a non-exclusive licence to undertake the same activities elsewhere in the world. The “Territory” for the purposes of the Licence Agreement comprises the countries listed in its Schedule 2 and also, by subsequent variation (in the circumstances set out below), the United States of America (the “USA”).
In return for the granting of such exclusive licence to Artcrafts, Artcrafts pays substantial royalties to MOU (the “Royalties”) in accordance with the provisions of the Licence Agreement. Artcrafts' position is that it has made a tremendous commercial success of this venture. It has generated almost €19m in Royalties paid to MOU in the period to the end of 2023, with the payment for 2023 standing at over €2.4m (see Ponziani 1 at [33]), and it is said that the generation and payment of Royalties can reasonably be expected to continue in the same way throughout the remaining term of the Licence Agreement, and any renewal thereof.
However, in recent years, and to put matters as neutrally as possible, the relationship has become strained. In 2022, MOU served a number of notices of alleged material breach upon Artcrafts (with a view to seeking to terminate the Licence Agreement before the end of its term). MOU's conduct led Artcrafts to issue proceedings, in June 2022 against MOU under Claim No. QB-2022-001925 to protect its position and ensure the continuation of the Licence Agreement (“the Previous Proceedings”). On 30 January 2023, the Previous Proceedings were concluded by court order in Artcrafts' favour (consequent upon the judgment of Freedman J dated 7 December 2022 [2022] EWHC 3511 (KB)). In the Previous Proceedings MOU did not suggest that the Licence Agreement was terminable on reasonable notice, and such allegation was first made in the Defence and Counterclaim in the Present Proceedings which was served on 26 January 2024.
In the Present Proceedings it is Artcrafts' case that, in breach of the Licence Agreement: (1) MOU has recently been marketing, promoting and selling the Products through a third party in the Territory (specifically the USA), namely through Atallah International, a Canadian company trading under the name “SSENSE” (pronounced “essense”) which has a global e-retail business operating via its global online platform under the domain name ssense.com (SSENSE also having a single physical store in Canada which is not an exclusive Territory), (2) MOU has used its own website (mou.com) to advertise and promote the Products in the Territory generally and (3) MOU has placed Google Ads into the Territory.
MOU denies that it has committed breaches of the Licence Agreement and has not accepted that it should desist from such conduct, which led Artcrafts to issue the present proceedings and to make the Interim Injunction Application. In this regard Artcrafts made a number of attempts in correspondence, in November and December 2023, to persuade MOU to cease and desist from what it says was MOU's unlawful activity, but without success. MOU's stance was, and remains, that it has done nothing wrong.
B. THE INTERIM INJUNCTIVE RELIEF OBTAINED AND SOUGHT
As already noted, on 4 January 2024, on an interim “on notice” injunction application (the “Interim Hearing”) Stacey J granted Artcrafts injunctive relief in the form of paragraphs 1 and 2 of the 4 January Order until after judgment on the Return Date or further order (the “Interim Injunction”). The interim injunctive relief she ordered was narrower than that which was sought, or which is sought on the return date, and largely tracked the language of Clauses 2.1.1 and 7.1.1 of the Licence Agreement (as opposed to what Artcrafts submits were MOU's obligations under such Clauses as advanced in the Particulars of Claim and at the present hearing). The interim injunctive relief ordered by Stacey J was as follows:-
“(1) not directly or indirectly manufacture, distribute, sell, advertise or promote the Products anywhere in the Territory (which, without prejudice to either party's case, shall for this purpose be treated as including the USA);
(2) not knowingly fail to use all reasonable endeavours so far as permitted by law to safeguard the sole and exclusive licence granted to [Artcrafts] and in particular to promptly cease to supply any person, firm or company who [MOU] knows infringes [Artcrafts'] rights under the Licence Agreement and in particular, without limiting the foregoing, any such entity who seeks to sell or otherwise dispose of the Products in the Territory”
The interim injunctive relief that is sought before me on the return date is as follows:-
“(1) manufacture, distribute, sell, advertise or promote the Products anywhere in the Territory (including the USA);
(2) supply Products to any person, firm or company whom [MOU] knows to have distributed, advertised, promoted, sole or otherwise disposed of Products in the Territory (including the USA) or to have sought to or to intend to take any such step;
(3) supply a third party, who is acting in the course of business, with Products unless [MOU]:
(a) makes that person aware of [Artcrafts'] exclusive licence and authority to manufacture, distribute, sell, advertise and promote Products throughout the Territory (including the USA); and
(b) makes it a contractual term of any agreement with that person that they must not infringe [Artcrafts'] sole and exclusive licence and authority to...
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