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Injunctions and Passing Off: Au Vodka Limited -v- NE10 Vodka Limited and Leon Hogan 2022 EWHC 2371 (Ch)

There are a number of different types of intellectual property rights (IPRs), with the traditional forms of IPRs including trade marks, design rights, copyright and patents. Depending on what a proprietor is seeking to protect will affect whether they have to register with the Intellectual Property Office (IPO) to register their rights or whether they are afforded automatic rights by operation of law.

In the event that IPRs are breached, alongside compensatory relief, parties will often apply for an injunction in order to (either immediately or following success at trial) restrain the infringing activities. In September 2022, the High Court considered an application for an interim injunction in Au Vodka Limited -v- NE10 Vodka Limited and Leon Hogan [2022] EWHC 2371 (Ch).

Background

Au Vodka Limited was launched in 2015 for the purpose of selling a premium brand of unflavoured vodka. After a couple of years, it expanded its product range by selling flavoured variants of its product. Au Vodka's products are sold in distinctive gold coloured bottles which contain two plates, a square plate near the top of the bottle containing the brand name "Au79 VODKA" and the other nearer the base of the bottle with the description of the product.

In 2019, Leon Hogan was actively exploring creating a brand of spirits which centred on the idea of an illuminated bottle. Following his idea, Mr Hogan allegedly met with Au Vodka in February 2021 with a view to them working together. The events of this meeting are contested between the parties, however at the meeting it became clear that there was little prospect of the parties working together, and both parties went their separate ways.

In September 2021, NE10 Vodka Limited began selling their own brand of vodka. NE10 Vodka's products are sold in distinctive metallised bottles in a range of colours, dependent on flavour. They contain two plates, a escutcheon plate containing the brand name "NE10 VODKA" and the other closer to the base of the bottle with the description of the product.

The Claim

On noticing the similarities, Au Vodka instructed their solicitors to send a letter of claim to NE10 Vodka alleging, amongst other things, that NE10 Vodka had infringed AU Vodka's registered figurative trade mark "Au79" and that they had committed the common law tort of passing off in using elements similar to the Au Vodka's branding, namely:

• Au Vodka's figurative logo;
• the shape of the bottle used by Au Vodka; and
• the 'get-up and composition' of the bottle, including the two plates.

Following the letter of claim being sent to NE10 Vodka on 23 August 2022, a further letter of claim was sent to NE10 Vodka on 25 August 2022, which adopted the earlier claims and reserved the right to bring a claim against Mr Hogan personally for conspiracy to injure by unlawful means, but removed any extraneous claims.

On 30 August 2022, solicitors acting for NE10 Vodka responded to Au Vodka's solicitors defending the claims in their entirety. In the absence of a satisfactory outcome for Au Vodka, on 2 September 2022, AU Vodka issued court proceedings against NE10 Vodka claiming that they had infringed Au Vodka's IPRs and was therefore liable for passing off. It is interesting to note that the particulars of claim no longer allege infringement of Au Vodka's figurative logo.

For completeness, a side-by-side comparison of both products is as follows:

What is passing off?

Passing off is a common law tort (or wrong) that is based on the premise that a business cannot sell their own goods under the pretence that they are the goods of a third party.

In order to make a claim for passing off, it is widely accepted that a claimant must prove that:

1. a goodwill or reputation attaches to the goods or services that they provide;
2. the defendant made a misrepresentation to the public (whether intentional or not) which led the public to believe that the goods or services offered by the defendant are the goods and services of the claimant; and
3. damage was suffered by reason of the incorrect belief that the defendant's goods or services are the same as those offered by the claimant.

In alleging passing off, Au Vodka claimed that since trading, a significant goodwill and reputation attached to its product, that the design of NE10 Vodka's product was calculated to deceive the public into the belief that their product was associated with the rival products of Au Vodka, and as such, Au Vodka had suffered and was likely to suffer ongoing damage. To support their position, Au Vodka highlighted a number of comments where members of the public believed that NE10 Vodka's product was linked to that of Au Vodka.

Owing to the ongoing nature of the alleged misrepresentation, Au Vodka submitted an application for an interim injunction to prevent any promoting, offering for sale or selling bottled alcohol which adopts the same features.

What is an injunction?

Generally, there are two types of injunctions:

1. Mandatory injunctions - which require a party to carry out a specified act; and
2. Prohibitory injunctions - which require a party to refrain from doing specific acts.

Injunctions are a common remedy sought where IPRs have been infringed, as the affected party will most likely want to prevent the infringing party from using a product or sign that is the same in style or nature to that of the affected party, which would in turn prevent further damage being suffered or incurred.

In order to obtain an interim injunction, a claimant must prove (in addition to other matters) that:

1. it is just and convenient for the court to grant an injunction;
2. there is an underlying claim, and therefore is a serious question to be tried;
3. damages would be an inadequate remedy; and
4. on a balance of convenience, greater damage would be caused to the claimant if the court decided not to grant an injunction than would be caused to the defendant if the court decided to grant an injunction.

Therefore, in seeking an injunction, Au Vodka was seeking to prevent NE10 Vodka from selling its product until the final determination of their passing off claim.

Injunction Application

On 21 September 2022, the Court decided whether grant Au Vodka's application for an interim injunction to prevent NE10 Vodka from selling its product.

The Court weighed up whether damages would be an adequate remedy for Au Vodka if no injunction was granted, whether damages would be an adequate remedy for NE10 Vodka if an injunction was granted where it ought not to be, and on a balance of convenience, the damage to the parties in granting or not granting an injunction.

In declining to grant an injunction, Mellor J found that:

1. although Au Vodka may suffer irreparable damages if instances of deception occur, those instances will be small in number and would easily be corrected by an injunction at the final trial of the passing off action and an award of damages;
2. if NE10 Vodka was prevented from selling its product and were subsequently successful at trial, damages would not be an adequate remedy, as it would be difficult for it to re-launch its products; and
3. the events leading to the claim do not favour Au Vodka or NE10 Vodka, save for NE10 Vodka's products being available for sale, therefore on balance of convenience, greater harm would be caused to NE10 Vodka in granting an injunction than would be suffered by Au Vodka if an injunction were not to be granted.

Therefore, the Court refused to grant an injunction in this matter, and ordered that the final trial of Au Vodka's claim for passing off will be heard in January 2023. It is also interesting to note that there was an allegation that Mr Hogan's had personally committed tortious wrongdoing, however the Court struck out those allegations (albeit finding that whether or not Mr Hogan was jointly responsible for NE10 Vodka's actions was a matter to be determined at the final trial).

You can find further information on passing off claims here.

For more information contact Daniel Fletcher in our Intellectual Property department via email or phone on 0333 207 1145. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Intellectual Property department here

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