L'oréal (UK) Ltd and Another v Johnson & Johnson (a Corporation Organised Under the Laws of the State of New Jersey, USA) and Another
| Jurisdiction | England & Wales |
| Judgment Date | 07 March 2000 |
| Judgment citation (vLex) | [2000] EWHC J0307-7 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | HC 1999 No 03120 |
| Date | 07 March 2000 |
[2000] EWHC J0307-7
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Lightman
HC 1999 No 03120
Mr Richard Arnold (Instructed by Messrs White & Case, 7–11 Moorgate, London EC2R 6HH) appeared on behalf of the Claimants.
Miss Denise McFarland (Instructed by Messrs Ashurst Morris Crisp, Broadwalk House, 5 Appold Street, London EC2A 2HA) appeared on behalf of the Defendants.
Judgment Approved by the Court
Hearing: 24th February 2000
Judgment: 7th March 2000
GAVIN LIGHTMAN
INTRODUCTION
This is the Claimant's appeal from an Order of Master Bragge by which he struck out the Claimants' claims for unjustified threats of trade mark infringement proceedings and for a declaration of non-infringement of the Defendants' registered trade marks on the ground that there was no threat and no sufficient grounds for seeking the declaration. The issues raised are what is sufficient to constitute a threat and what are sufficient grounds for this purpose.
BACKGROUND
The First Defendant is the registered proprietor of three UK Registered Trade marks consisting of the marks JOHNSON'S NO MORE TEARS and NO MORE TEARS registered in respect of baby shampoos. The First Defendant is also the registered proprietor of two Irish Registered Trade marks consisting of the marks JOHNSON'S NO MORE TEARS and NO MORE TEARS registered in respect of baby shampoos. The Second Defendant is a United Kingdom subsidiary of the First Defendant and its licensee in the United Kingdom.
The Claimants manufacture and supply hair products in the United Kingdom and the Republic of Ireland. In April 1999 the Claimants launched a range of children's hair products in the UK and Ireland under the Name L'ORÉAL KIDS. The range included L'ORÉAL KIDS Extra Gentle 2-in-1 shampoo and L'ORÉAL KIDS Extra Gentle Conditioner. The packaging of both products bears the statement "No Tears! No Knots!". The relevant part of the statement for the purpose of these proceedings is the words "No Tears" and I shall refer to them as "the Words".
On the 25th May 1999 Irish solicitors acting for the First Defendant wrote to the First Claimant alleging that the First Claimant's use of the Words on the L'ORÉAL KIDS Extra Gentle 2-in-1 Shampoo was an infringement of its Irish NO MORE TEARS registration. The letter threatened the First Claimant with proceedings for infringement unless the First Claimant agreed to cease use of the words and gave an undertaking not to do so in the future. On the 4th June 1999 the First Claimant by its Irish solicitors replied denying infringement and calling on the First Defendant to withdraw the allegation. On the 11th June 1999 the First Defendant and its Irish subsidiary Johnson & Johnson (Ireland) Ltd brought proceedings in the High Court of Ireland against the First Claimant alleging infringement of its Irish NO MORE TEARS registration. On the 15th June 1999 the Irish claimants launched an application for an interlocutory injunction. After the service of affidavit evidence the application for an interlocutory injunction came before the Irish High Court on the 13th October 1999. At that hearing the judge effectively stood over the application to trial and ordered a speedy trial. The matter is presently due to be tried on the 28th March 2000.
Meanwhile on the 4th June 1999 the Claimants' English solicitors wrote to the First Defendant referring to the allegation of infringement of the Irish registration and requesting confirmation that proceedings for infringement of the First Defendant's UK registrations would not be brought by reason of the sale in the United Kingdom of the L'ORÉAL KIDS range of products bearing the Words. In the absence of a reply, a chaser was sent on the 21st June 1999. The substantive reply to this letter was contained in a letter from the Defendants' English solicitors to the Claimants' English solicitors dated the 23rd June 1999 ("the Letter") which reads as follows:
"NO MORE TEARS
Richard Biribauer of our clients, Johnson & Johnson, has asked us to respond to your letter of 4 and 21 June 1999.
As you say, proceedings have now been commenced in Ireland and, unless the issues can be resolved, they will no doubt be adjudicated upon by the Irish Courts taking into account not only Irish law but also local factors, such as the market (as Mr Justice Mummery said was appropriate in LA Gear -v—Whelan 1991] FSR 670).
The position in the UK is that whilst local UK management do consider L'Oréal's use of 'NO TEARS!' as an attempt to benefit unfairly from the enormous equity that has been built up in 'No More Tears', no decision has yet been made on whether to make a claim of trade mark infringement. You should, however, be aware that, at the same time as L'Oréal is commencing use of the mark, others in the UK market who had been using the mark in the recent past have now agreed to respect Johnson & Johnson's position and are stopping their use.
Johnson & Johnson are not a company that enters litigation lightly and, in accordance with the spirit of the new Civil Procedure Rules, further investigative work and analysis is needed to take account both of the UK's somewhat complex market and the current state of English and European law before a decision can be sensibly taken as to what to do. Our clients do, after all, have six years in which they could commence proceedings if they were so minded. Your threat of seeking a declaration of non-infringement is noted, but we believe it to be premature and that a Court should not grant any such relief. No claim of infringement has been made of our client's UK registration and we can see no exceptional reasons for your clients to be granted any such declaration —your clients are, after all, continuing to sell. If, as we suspect, it has something to do with the Irish litigation that would be, in our opinion, both irrelevant improper. We respectfully refer you to the cases of Guaranty Trust Company of N.Y. -v—Hannay 1915] 2 KB 536, Prince PLC -v—Prince Sports Group Inc 1998] FSR at p.40–42 and In re Clay 1919] 1 Ch 66.
Bearing this in mind, we cannot give L'Oréal comfort at this stage and accordingly we must reserve all of Johnson & Johnson's rights. Any proceedings of the nature set out in your letter will be vigorously resisted. We would also note in passing that you have not given any indication as to why you think our client's registration may be invalid-revocable."
The Claimants contend that the Letter constitutes a threat to bring infringement proceedings against them or at least an adverse assertion of right sufficient to found an application for a declaration of non-infringement.
On 21st July 1999 the Claimants commenced these proceedings seeking (1) revocation of the Defendants' UK registration for NO MORE TEARS, (2) relief for unjustified threats of trade mark infringement proceedings pursuant to Section 21 of the Trade Marks Act 1994 and/or (3) a declaration of non-infringement of the First Defendant's UK registrations under the Court's inherent jurisdiction.
On the 2nd September 1999 the Defendants applied to strike out, alternatively for summary judgment in respect of, the claims for threats and a declaration of non-infringement. That application came before Master Bragge on the 19th October 1999. In a full and careful reserved decision dated the 15th November 1999 the Master ruled in favour of the Defendants. The Claimants now appeal.
PROCEDURE
Appeals from Masters continue to be governed by RSC Order 58 as part of Schedule 1 to the CPR. Accordingly the appeal is to be dealt with by way of actual rehearing as if the matter was coming before this Court for the first time: Civil Procedure (2nd ed) para R58.1.3. The application to strike out can be ignored since it adds nothing to the application for summary judgment under CPR Part 24. The correct test to be applied under CPR Part 24 is whether the Claimants have a realistic as opposed to a fanciful prospect of success. Furthermore the proper disposal of a Part 24 application does not involve the judge conducting a mini-trial: ( Swain v Hillman The Times, 4th November 1999, CA). The Court should proceed upon the basis that all the facts pleaded in the Particulars of Claim are true.
PRELIMINARY OBSERVATIONS
The issue on this application by the Defendants focuses on the preconditions for commencing proceedings for declaratory relief, most particularly in relation to trade marks. There are two bases for this jurisdiction, namely the inherent and perfectly general jurisdiction of the Court to grant declarations to resolve disputes and questions, and the statutory jurisdiction conferred by Section 21 of the Trade Marks Act 1994 to grant relief in cases of groundless threats of infringement proceedings. It is important to bear in mind that, whilst the inherent jurisdiction is procedural only and enables the Court to declare what are the existing rights of the parties, Section 21 of the Trade Marks Act 1994 creates a new statutory tort and a new substantive cause of action, not merely for a declaration, but for an injunction and damages if the necessary ingredients of the tort specified in the section are present. Both in case of the inherent and the statutory jurisdiction, the grant of a declaration is at all times...
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