Champagne Louis Roederer (CLR) v J Garcia Carrion S.A. and Others
| Jurisdiction | England & Wales |
| Judge | Master Bowles |
| Judgment Date | 23 February 2017 |
| Neutral Citation | [2017] EWHC 289 (Ch) |
| Court | Chancery Division |
| Date | 23 February 2017 |
| Docket Number | Case No: HC-2010-000030 |
[2017] EWHC 289 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, London EC4A 1NL
Master Bowles
Case No: HC-2010-000030
Simon Malynicz QC (instructed by Reynolds Porter Chamberlain LLP) for the Claimant
The Defendants did not appear and were not represented
Hearing date: 22 nd November 2016
Judgment Approved
By her order dated 19 th November 2015, Rose J declared that the Claimant, Champagne Louis Roederer (CLR) (Roederer) was entitled, at its option, to either an account of profits, or an inquiry as to damages, in respect of the infringement by the first defendant, J Garcia Carrion S.A. (JGC) of its UK and EU trade marks for the word CRISTAL. JGC is a very substantial Spanish producer of wines and other beverages.
The facts, circumstances and reasoning giving rise, inter alia, to that declaration are set out in the judgment of Rose J handed down on 6 th October 2015, [2015] EWHC 2760 (Ch), and are not repeated here. It is to be noted, however, that Rose J found JGC to be liable both on the basis that JGC's product, a cava marketed and sold under the name Cristalino, was likely to be confused with Roederer's, well known prestige champagne, Cristal and also upon the basis that the use of the Cristalino name, in infringement of Roederer's trade marks, had the effect of diluting and taking unfair advantage of those marks.
To facilitate Roederer in making its election pursuant to the declaration, Rose J ordered JGC to give what is usually termed Island Records v Tring disclosure, namely disclosure of the number and value of sales within the UK of Cristalino products since 19 March 2004 (being the date six years prior to the issue of these proceedings), together with the sums received by JGC in respect of those sales. That disclosure was ordered to be provided within 28 days of the 19 th November 2015 order. It was not, however, complied with.
That non-compliance by JGC, even in the face of orders, such as the 19 th November 2015 order, issued with a penal notice, has been a feature of this Claim from a relatively early stage. At its inception, JGC was represented by solicitors and counsel in the UK. From about February 2013, however, JGC ceased to engage with the litigation and, by order dated 15 th August 2014, solicitors previously instructed were removed from the record. Since and, indeed, prior to that date, JGC, although fully informed as to every stage of the litigation, has elected to take no part.
In this regard, it is to be noted that an order for an alternative mode of service was granted to Roederer, by my order of 26 th November 2014, and that further orders for alternative methods of service have been made from time to time throughout the proceedings, including in respect of the directions order, dated 11 th August 2016 giving rise to the current hearing.
Initially, service was to be by way of service to two addresses of JGC, as well as by way of email to JGC's email address. Those two addresses are the address of JGC's headquarters in Madrid and the address of its major manufacturing plant in Jumilla, said by its solicitors, when coming off the record, to be its last known address.
Subsequently, by my order of 28 th January 2015, I directed that service by email, alone, would constitute an appropriate alternative mode of service and that alternative mode of service was reiterated in my order of 11 th August 2016.
In point of fact, however, as well as email service, Roederer has continued to serve, or send, all material documents to JGC at the Jumilla address.
I am in no doubt but that these modes of service have been effective to bring all matters to the attention of JGC. On the evidence before me there is no record of any emails having been returned as undeliverable. Likewise, no postal correspondence has been returned as undelivered. Following service of JGC, by email and post, with Rose J's order of 19 th November 2015, Mr Fontaine, a partner in a French law firm that acts for Roederer in respect of trade mark matters and is based in Alicante, received a telephone call from JGC's Madrid office apparently emanating from JGC's legal director, who informed Mr Fontaine that the order would be raised with JGC's management and would be complied with. As already stated, however, there has, in fact, been no compliance with any part of Rose J's order.
Notwithstanding that non-compliance, by letter and email dated 15 th April 2016, sent and served as explained above, Roederer elected an account of profits. That election, given JGC's non-compliance, was made without the benefit of any Island Records v Tring disclosure and upon the basis of evidence that Roederer was, itself, able to obtain as to JGC's sales of and profit from the infringing Cristalino products. In order to procure that evidence it was necessary for Roederer to seek and obtain from Rose J an extension of time within which to make its election.
Pursuant to its election and by application notice, served and sent as already explained, Roederer sought directions as to the taking of the account and, by my order, dated 11 th August 2016 directions were given as to points of Claim and Defence, disclosure, evidence, including expert evidence, and the hearing of the account. This judgment is the judgment in respect of the account.
Although duly served, there has been a total non-engagement by JGC with my directions order, including a total non-compliance with my directions as to disclosure. Reflecting the likelihood of continued non-engagement, I directed, as had Rose J, that, in the absence of a request by JGC to cross examine Roederer's witnesses, their evidence would stand as unchallenged evidence at the hearing of the account. No such request having been made, Roederer's factual and witness evidence stands, therefore, as unchallenged evidence before me in respect of the account.
The evidence before me is to be found, primarily, in and exhibited to the witness statement of Mr Jeremy Drew, a partner in Reynolds Porter Chamberlain LLP (RPC), Roederer's solicitors, in the witness statement and exhibits of Mr Fontaine and in the expert report prepared by Mr Matthew Geale FCA, a partner and head of forensic accounting at Armstrong Watson, Accountants. Mr Geale has expertise in forensic accounting over a period in excess of twenty six years, including, relevantly, in a number of intellectual property cases where accounts of profits have been taken.
As explained by Mr Drew, Roederer has been able to obtain information as to JGC's sales in the UK from a number of sources, perhaps most materially, from information put forward by JGC in other proceedings and in other jurisdictions.
In proceedings before the Commercial Court in Brussels (R.G A/06/7444) JGC filed an exhibit (referred to before me as the Villaverde Exhibit) setting out the worldwide sales of Cristalino, in the years 2004 and 2005 and showing UK sales of 429,168 units of Cristalino in 2004 and 641,394 units in 2005.
In proceedings in the UK Intellectual Property Office (O-150-09) (IPO), in which, at that date (2006), JGC were applying to register the trade mark 'Cristalino Jaume Serra', Mr Villaverde, the Financial Director of JCG, filed a witness statement and exhibit, dated 30 th July 2008, in which he disclosed invoices showing the extent of UK sales of Cristalino in the years 2006 and 2007.
In proceedings before the United States District Court of Minnesota (the Minnesota Court), brought by Roederer, in protection of its Cristal mark, the transcript of the court proceedings indicates that JGC estimated the 'contribution margin of a bottle of Cristalino' to be €0.4647. That estimate emanated from a sworn declaration, dated 15 th April 2008, made by Mr Villaverde in those proceedings.
That declaration was filed under a Protective Order of the Minnesota Court, but, by order of the Minnesota Court, dated 7 th November 2016, released to this court, for use, on a confidential basis, in these proceedings. By my direction, the declaration was further released to Mr Geale, in order for him to take it into account in giving his expert evidence. Although, JGC's document, I further directed that, as part of the evidence in the account, the declaration be served on JGC.
By my order, made at the outset of the taking of the account, I gave permission for Roederer to rely upon the addendum to his report, prepared by Mr Geale, as part of his expert evidence. The addendum had been served on JGC on the day prior to the taking of the account.
Under my directions order, as varied by a subsequent order, dated 19 th October 2016, expert evidence should have been filed by 8 th November 2016. The declaration was, however, only released by the Minnesota court to this court on 7 th November 2016 and my direction that it be made available to Mr Geale was, of necessity, subsequent to that. In those, circumstances, no criticism could attach to Roederer for the late presentation of Mr Geale's addendum and, given JGC's wholesale failure to provide the disclosure ordered by Rose J and the necessity, therefore, for Roederer to acquire and present information for the account from where it could, I had no hesitation in allowing the addendum into evidence.
In addition to the information as to sales (and margin) derived from the materials provided by JGC in other proceedings, Roederer has also made enquiries of and procured a quantity of information from those to which JGC provided Cristalino products. Two such entities were Asda Stores Limited (Asda), the Second Defendant, and WM Morrison Supermarkets PLC (Morrisons), the Third...
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