JBC Distributors Inc. (a company incorporated under the laws of the State of Florida) v Peter Mudahy Trading as Pak Cosmetic Centre
| Jurisdiction | England & Wales |
| Judge | Treacy |
| Judgment Date | 23 June 2023 |
| Neutral Citation | [2023] EWHC 1480 (IPEC) |
| Court | Intellectual Property Enterprise Court |
| Docket Number | Claim No: IP-2022-000092 |
[2023] EWHC 1480 (IPEC)
Ms. Pat Treacy
(sitting as a Deputy High Court Judge)
Claim No: IP-2022-000092
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY AND ENTERPRISE COURT
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Jamie Muir Wood (instructed by Reed Smith) appeared for the Claimants.
Denise McFarland (instructed by in-house solicitor at Pak Cosmetic Centre) appeared for the Defendants.
Hearing date: 9 June 2023
APPROVED JUDGMENT
This judgment was handed down remotely at 10.30 am on 23 June 2023 by circulation to the parties or their representatives by email and released to the National Archives .
DEPUTY JUDGE
Introduction
This judgment relates to the Claimants' application dated 13 March 2023 (the ‘Application’).
The Claimants are referred to as ‘JBC’. The Application sought summary judgment on the claim and/or strike out of the Defence and Counterclaim. In the alternative, in the event of failure of the Application (in part or in whole) JBC sought directions to a combined trial of liability and quantum.
The First Defendant, Mr Mudahy, and the Second Defendant, Mr Hussain, are together referred to as the Defendants unless the context requires otherwise.
The Defendants resist the Application on the basis that there is a genuine dispute of fact between the parties for which disclosure, witness evidence and possible expert evidence is required, and which should be determined at trial. A point is also made by counsel for the Defendants, Ms McFarland, about their position as individuals and my attention was drawn to the cautionary note under CPR 3.4.2:
“ The ECHR art 6(1) right of access to a court may require caution on the part of courts in exercising the r. 3.4(2)(a) power to strike out a statement of case which appears to disclose no reasonable grounds for bringing or defending a claim …”
During oral submissions, Ms McFarland made clear that there was no suggestion that ECHR rights differ for individuals, while also referring to the reputational damage that the Defendants as individuals would suffer if their defence was not permitted to proceed to trial and a full hearing.
The Claim and procedural history
The procedural background is, in brief:
• the litigation was commenced by claim form dated 31 October 2022;
• the Defence and Counterclaim was served on 13 December 2022;
• the Claimants' Reply and Defence to Counterclaim was served on 11 January 2023;
• the Application was issued on 13 March 2023.
The Claim is summarised below:
• JBC manufactures and distributes products made from Jamaican black castor oil sold under the sign ‘SUNNY ISLE’;
• JBC has trade mark registrations for “ hair oils; castor oil for cosmetic purposes; body oils”;
• JBC claims that its trade marks have a reputation and that it owns goodwill in the UK for the goods for which those trade marks are registered;
• JBC alleges that the Defendants have sold goods bearing JBC's trade marks which are in fact counterfeit and claims that they have infringed its trade marks and passed off those goods as genuine goods;
• JBC alleges that Mr Mudahy and Mr Hussain are jointly liable for the alleged acts.
The Defendants' position is, in summary:
• That JBC must prove that it purchased the alleged counterfeit goods from them;
• That all allegedly counterfeit goods were originally bought from JBC or its authorised suppliers;
• That the differences between the allegedly counterfeit goods and those accepted to be genuine goods arise from JBC varying its packaging.
The Defendants deny that trade mark infringement or passing off has taken place. Their Counterclaims seek damages arising from:
• unjustified threats; and
• compensation for unsold stock and/or stock returned by Sainsbury's.
The legal issues
Mr Muir Wood referred me to Part 3 and Part 24 of the CPR and the accompanying notes. No bundle of authorities was provided, but Ms McFarland's written skeleton referred to and quoted from various relevant authorities.
To summarise, CPR 3.4(2)(a) enables the Court to strike out the whole or part of a statement of case which discloses no reasonable grounds for bringing or defending a claim. This may be:
• where the pleading consists of a bare assertion (for example, in the case of a defence, a bare denial) or sets out no coherent statement of facts; or
• where the facts it sets out, while coherent would not, even if true, amount in law to a defence or the basis for a claim because they disclose no reasonable grounds for bringing or defending a claim.
CPR 24.2 empowers the Court to give summary judgment against a party which has no real prospects of succeeding on its claim or defence.
I have had in mind these tests and the relevant guidance on both CPR 3.4 and CPR 24.2 as discussed during the hearing. I am grateful to both counsel for their submissions.
Of the many judicial formulations of the correct approach, it is convenient to set out as a guide the portion of the judgment from EasyAir Ltd. v Opal Telecom Ltd. [2009] EWHC 339 (Ch) at [15], approved by the Court of Appeal in AC Ward & Son Ltd. v Catlin (Five) Ltd & Ors. [2009] EWCA (Civ) 1098 to which I was referred by Ms McFarland.
While it refers to claims by defendants for summary judgment against claimants, the test is the same for both parties:
“ … the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman [2001] 2 All ER 91;
ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]
iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.”
The conduct of the hearing
During the hearing, both parties provided sample bottles for examination. This had been agreed in advance between the parties and the samples were described at Tabs 42 and 43 of the Bundle for the hearing.
JBC produced one example of a bottle of 4fl oz Jamaican Black Castor Oil bearing its trade marks, supplied by it and accepted by it as authentic. It also produced one bottle of the alleged infringing product said to have been purchased from a store connected to the Defendants by an agent acting on behalf of JBC. Mr Muir Wood explained that these two bottles were the bottles (or the same as the bottles) used to prepare Annex 5 to the Particulars of Claim which sets out the differences identified by JBC between the genuine product and the alleged infringing product.
The Defendants produced seven bottles in assorted sizes and for various products as well as two magazines.
During the process of producing and inspecting these products, it was said that...
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