High Court of Ireland Decisions

1. The Plaintiff is a company incorporated in England and is part of the HP Bulmer group, the world's largest cider maker. The Plaintiff and its predecessors have been making cider for sale under the trade mark "Scrumpy Jack" since at least the early 1980's in England and have been selling that product in cans and bottles and on draught throughout the United Kingdom. The Plaintiff has about 7.4% of the canned cider market in the United Kingdom and overall has about a 4.9% market share in cider in the United Kingdom.

2. Since 1991 "Scrumpy Jack" has been marketed and sold in Ireland in a gold coloured 500 ml can. The get-up of the can was refined twice in the period between 1991 and 1996. The features of the can which was on the market in June 1996, which, for the sake of clarity, I will refer to as "the Plaintiff's old can", were as follows:-

3. Since March 1991 the Plaintiff has been the registered proprietor of the following trade marks in Ireland:-

4. The Defendant is a company incorporated in this jurisdiction and is part of the Cantrell & Cochrane group, which is one of the largest drinks groups in Ireland. The Defendant is the market leader in cider in Ireland. In the year ended 30th April, 1996 it had a 50.5% market share in the off-trade in its brands "Stag", "Linden Village", "Strongbow" and "Bulmers" (the trade mark in which it owns in Ireland). During the five years prior to 1996 the Defendant developed four additional brands of cider, which it classifies as tactical brands, to complement its established brands. The dispute the subject of these proceedings concerns one of these tactical brands which has been called "Annerville Golden Scrumpy" in the affidavits filed on behalf of the Defendant in these proceedings. For the sake of brevity I will refer to this product as "Golden Scrumpy", but it is not to be inferred from this that I have formed any view as to the name by which this product is commonly known in the market. In accordance with its policy in relation to tactical brands, the Defendant did not advertise "Golden Scrumpy".

5. These proceedings were initiated by Plenary Summons which issued on 11th July, 1996. On 12th July, 1996 the Plaintiff issued a Notice of Motion seeking interlocutory injunctive relief framed in broad terms restraining the Defendant from infringing the Plaintiff's Irish registered trade marks Nos. 143341 or 150918 or either of them and from passing off goods not of the Plaintiff's manufacture as and for the Plaintiff's goods and, more specifically, orders restraining the Defendant -

6. The Motion was grounded on the affidavit of Peter Winters (Mr Winters), the manager of the Plaintiff's business in Ireland, which were sworn on 11th July, 1996. On 30th July, 1996 the Defendant issued a Notice of Motion claiming, inter alia, a declaration pursuant to Section 24 of the Trade Marks Act, 1996 (the 1996 Act) that the threats of infringement of trade mark proceedings by the Plaintiff against the Defendant were unjustifiable and an injunction against the continuation of such threat. This Motion was grounded on the affidavit of John Keogh, (Mr Keogh) the marketing director of the Defendant, which was sworn on 28th July, 1996 and which also responded to the Plaintiff's Motion and the affidavit which grounded it.

7. Both Motions came on for hearing on 15th October, 1996 and were heard over four days. In the interim a very considerable number of affidavits were filed by both parties. In all, at the hearing there were twenty-nine affidavits before the Court, which including exhibits, comprised approximately six hundred pages. In addition to four further affidavits from Mr. Winters and three further affidavits from Mr. Keogh, there were affidavits from experts (three from graphic designers, five from trade mark agents, two from market research specialists and one from a linguistics expert) and from lay witnesses (seven on the issue of confusion and two on the issue of the use of the word "scrumpy" in Ireland). The affidavits are replete with conflicting evidence of fact and conflicting opinions and with accusations and counter accusations which, having regard to the issues which arose on the application, had no purpose other than to discredit the opponent.

8. In his grounding affidavit sworn on 11th July, 1996, Mr Winters disclosed that it had been the Plaintiff's intention to update the get-up of the "Scrumpy Jack" can and to launch a new can in or about September 1996. The evidence establishes that cans with the new get-up were available in retail outlets from mid-July 1996 in six packs. The can with the new get-up, which, for the sake of clarity, I will refer to as "the Plaintiff's new can", was put on the market in August 1996. There is uncontroverted evidence that by the weekend of 5th October, 1996, of the thirty-four off-licences in the Dublin area selling "Scrumpy Jack" monitored by the Defendant, the Plaintiff's old can was on sale along side the Plaintiff's new can in two off-licences and the old can only was on sale in one. The remaining thirty-one off-licences selling "Scrumpy Jack" displayed the Plaintiff's new can only.

9. The Plaintiff's new can is a 500 ml can of the same shape as the Plaintiff's old can and the Defendant's can, which is the standard shape for 500 ml beverage cans. Its features are as follows:-

10. It was submitted on behalf of the Plaintiff that the principles by which this Court should be guided in determining the Plaintiff's application for interlocutory injunctions are the principles set out by the House of Lords in American Cyanamid v. Ethicon Limited (1975) AC 396, as adopted by the Supreme Court in Campus Oil Limited v. Minister for Industry and Energy (1983) I.R. 88 and subsequently frequently applied by this Court in applications for interlocutory injunctions in passing off actions, for example, by Costello J., as he then was, in Mitchelstown Co-Operative Agricultural Society Limited v. Golden Vale Food Products Limited (an unreported judgment of 12th December, 1985) and McCracken J. in B & S Limited v. Irish Auto Trader Limited (1995) 2 I.R. 142. Having regard to the submissions made on behalf of the Defendant as to the applicability of these principles, I think it would be useful to outline them. The first step in applying the American Cyanamid principles is to determine whether the Plaintiff has shown that there is a fair issue to be tried. If it has, then the following criteria, adopting the summary set out by McCracken J. in B & S Limited v. Irish Auto Trader Limited at page 145, fall to be applied:-

11. Counsel for the Defendant submitted that the American Cyanamid principles have been considerably refined since 1975, particularly in the field of intellectual property. In support of this contention he relied on the following passage from the judgment of Lord Diplock in NWL Limited v. Woods (1979) 3 All E.R. 614 at page 625:-

12. Counsel for the Defendant adopted the commentary in Drysdale and Silverleaf on Passing-Off Law and Practice , Second Edition (1995), at page 142 that in a passing off action the outcome of the interlocutory proceedings often determines the final outcome of the whole proceedings and that the Court in such circumstances is justified in considering the substantive case. He further relied on the judgment of Laddie J. in Series 5 Software Limited v. Philip Clarke and Others (1996) FSR 273 as to the approach to be adopted in weighing the strength of the respective positions of the Plaintiff and the Defendant. In that case, having quoted a passage from the judgment of Lord Diplock in the American Cyanamid case to the effect that assessing the relative strength of the parties' cases should be done only where it is apparent upon the facts disclosed by the evidence as to which there is no credible dispute that the strength of one party's case is disproportionate to that of the other party, Laddie J. went on to say:-

13. The decision of the House of Lords in NWL Limited v. Woods was referred to in argument before the Supreme Court in Westman Holdings Limited v. McCormack (1992) 1 I.R. 151. In his judgment, Finlay C.J. stated as follows:-

14. Counsel for the Defendant submitted that the evidence establishes that to grant interlocutory injunctions to the Plaintiff would determine the final outcome of the whole proceedings. In his affidavit sworn on 28th July, 1996, Mr Keogh averred that if "Golden Scrumpy" was taken off supermarket and off-licence shelves in obedience to injunctions, there would be no reality in attempting to reintroduce the brand if the injunctions were discharged after a plenary hearing. Further, Counsel for the Defendant submitted that as a matter of common sense, the Defendant's product must die if injunctions are granted. That being the case, it was submitted, the Plaintiff must satisfy the Court that it has a real and substantial and forceful case to make at the trial of the action.

15. I am satisfied that, having regard to the decision of the Supreme Court in Westman Holdings Limited v. McCormack , it is not open to this Court, assuming the Plaintiff has established that there is a fair and bona fide question to be tried, to express any view on the strength of the contending submissions on this issue. In any event, even if it were open to the Court at this interlocutory stage to evaluate the likely outcome of the trial, in my view it would be impossible to do so in this matter, which is bristling with difficult issues of fact arising from conflicting affidavit evidence and difficult issues of law.

16. The Plaintiff contended that there are fair issues to be tried in relation to the conduct of the Defendant of which it complains on two bases: for passing off and for trade mark infringement. In relation to passing off, the Plaintiff contended that it has shown that there is a fair issue to be tried that it has an established reputation in the get-up of the Plaintiff's old can and in the name "Scrumpy Jack" and that the adoption by the Defendant of a similar get-up for its can and the name "Golden Scrumpy" for its cider product has caused confusion and is likely to deceive prospective purchasers that "Golden Scrumpy" is the Plaintiff's product "Scrumpy Jack". Although the thrust of the Plaintiff's case is that the Defendant's wrong was and is that it has imitated the Plaintiff's old can, the Plaintiff contended that it has and will continue to have a residual and persistent reputation in the get-up of the Plaintiff's old can and in the name "Scrumpy Jack" which is sufficient to found an action for passing off and in this connection relied on Thermawear Limited v. Vedonis Limited (1982) RPC 44 and, in particular, the statement in the judgment of Whitford J. at page 67 to the effect that relief has not infrequently been given in passing off proceedings when only a residual reputation could be relied upon. In relation to the allegation of trade mark infringement, the Plaintiff contended that it has produced prima facie evidence of the validity of its registered trade marks and has shown that there is a fair issue to be tried - that the adoption by the Defendant of the name "Golden Scrumpy" on a gold can for its cider product is likely to deceive or cause confusion.

17. The Defendant contended that both bases of the Plaintiff's claim are without foundation and must fail in limine. The nub of the Plaintiff's complaint against the Defendant, it was asserted, is the use of the word "scrumpy" on the Defendant's cider product. The word "scrumpy", the Defendant argued, is part of the commonage of the English language. It is a descriptive term; a word used to denote rough dry cider. It cannot be monopolised by a trader and it cannot confer any exclusivity either under common law or statute law. Any manufacturer of "scrumpy" is entitled to describe his product as such with whatever emphasis he wishes and it cannot constitute a wrongful act to do so. In support of its argument that scrumpy has an ordinary and natural meaning, the Defendant relied on copious dictionary definitions, literary and journalistic references and on trade and other usage. The Plaintiff's answer was that the term "scrumpy" was only of dialectical significance in certain parts of England and that, prior to the launch of the Plaintiff's product "Scrumpy Jack" on the market in Ireland in 1991, it had not any particular meaning or the meaning contended for by the Defendant in Ireland.

18. The gravamen of the Defendant's case in relation to the alleged trade mark infringement is that the Plaintiff's trade marks are not validly registered. The 1996 Act came into force on 1st July, 1996. The alleged infringement commenced before 1st July, 1996 and continued after that date. It is common case that, in the circumstances, by virtue of the combined operation of Section 100 of and Article 3(3) of the Third Schedule to the 1996 Act, the Plaintiff's allegation has to be considered by reference to the question whether the Defendant's conduct would have amounted to an infringement under the Trade Marks Act, 1963 (the 1963 Act). The Defendant contended that the term "Scrumpy Jack" was incapable of registration as a trade mark under Section 17 of the 1963 Act without a disclaimer in relation to the word "scrumpy" because that word is not distinctive, in that it is incapable of distinguishing one person's scrumpy from another's and it is incapable of being "adapted .... to distinguish" within the meaning of Section 17(2) of the 1963 Act it being the only word available in the English language to describe rough dry cider. Further, Section 16(b) of the 1963 Act completely reserved the right of a manufacturer to manufacture scrumpy and describe it as such. In his affidavit sworn on 28th July, 1996, Mr. Keogh averred that the Defendant will be counter-claiming in these proceedings for rectification of the Register of Trade Marks under Section 40(1) of the 1963 Act in respect of the Plaintiff's registrations insofar as they did not contain a disclaimer of the word "scrumpy". The Plaintiff's answer was that, as proceedings for rectification had not been commenced before 1st July, 1996, any application for rectification will have to be brought under Section 52 of the 1996 Act and, on such application, it would be open to the Court to hold that, in consequence of the use of the Plaintiff's trade marks since registration, the word "scrumpy" has acquired a distinctive character in relation to the Plaintiff's product. The Defendant disputed this proposition.

19. The Defendant contended that, leaving aside the gold colour of both cans, for which the Plaintiff cannot and does not claim exclusivity in relation to cider, the only similarity between the Defendant's can and the Plaintiff's old can is the prominence of the word "Scrumpy" in the centre of the can. If the Plaintiff is wrong in claiming a monopoly on the word "scrumpy", which the Defendant asserted is the case, the Plaintiff's claims for passing off and trade mark infringement must fail.

20. In my view, the affidavit evidence adduced by the Defendant and the arguments advanced on its behalf do not answer the Plaintiff's contentions in a manner sufficient to lead to the conclusion that the Plaintiff has not shown that there is a fair issue to be tried. Indeed, as the above summary of the arguments advanced by the parties, which is by no means comprehensive, indicates, many fair issues arise for determination on the Plaintiff's claim and on the Defendant's proposed counter-claim. I consider that it is not necessary to outline those issues here, nor do I consider it necessary to pinpoint the evidence on the basis of which I conclude that there are fair issues to be tried save to state that I have not had regard to the market research evidence in relation to the likelihood of confusion, which the Defendant argued was inadmissible, because, adopting the test postulated by Blackburne J. in Dalgety Spillers Foods Limited v. Food Brokers Limited (1994) FSR 504 at page 527, I believe that my experience as an ordinary shopper or consumer enables me, just as well as any other, to assess the likelihood of confusion.

21. I turn now to the question whether damages would be an adequate remedy for the Plaintiff if interlocutory injunctions are refused and the Plaintiff ultimately succeeds in its claim. It is not contended that the Defendant would not be able to meet any award of damages made on the Plaintiff's claim. In Mitchelstown Co-Operative Agricultural Society Limited v. Golden Vale Food Products Limited , Costello J., as he then was, stated that it is axiomatic that in most passing off actions damages are an inadequate remedy for a successful plaintiff. Here, the Plaintiff advanced the arguments which are usually advanced by a Plaintiff in a passing off action on the inadequacy of damages as a remedy. It contended that it would be impossible to calculate in monetary terms the loss of or diminution in its reputation and its goodwill in "Scrumpy Jack" which it is alleged will ensue if interlocutory injunctions are not granted. While it was not contended that the product in the Defendant's can is inferior to the Plaintiff's "Scrumpy Jack", it was contended that, as the Plaintiff cannot exercise any quality control over the Defendant's product, the Plaintiff is at risk of long-term irreparable damage notwithstanding that its exclusivity is restored by the grant in due course of a perpetual injunction, if consumers of "Golden Scrumpy" are dissatisfied with its taste or quality and are "turned off" scrumpy generally. Further, the value of the Plaintiff's expenditure on advertising and promoting "Scrumpy Jack" has been and is being undermined in a manner which it is not possible to quantify in monetary terms. Despite the criticism of the foregoing arguments by Counsel for the Defendant, I am satisfied that damages would not be an adequate remedy for the Plaintiff.

22. Apropos of the position of the Defendant in the event of interlocutory injunctions being granted and the Defendant ultimately succeeding in its defence and/or proposed counter-claim, it was not contended that the Plaintiff would not be able to meet an award of damages in favour of the Defendant on foot of the Plaintiff's undertaking as to damages. However, it was contended by the Defendant that such an award would not adequately compensate the Defendant. In particular, it was contended that, by contrast with the Plaintiff which has an established market share, the Defendant's "Golden Scrumpy" product is in its infancy and if it is taken off the market in consequence of the grant of injunctions, it will be impossible to quantify the damage to the Defendant's reputation and goodwill and it's loss in terms of loss of market share and profits. In my view, an award of damages would not adequately compensate the Defendant.

23. Having determined that damages would not fully compensate either party, I must now consider where the balance of convenience lies having regard to all relevant matters. On this point I share the view expressed by McCracken J. in B &S Limited v. Auto Trader Limited at page 146 that, while Lord Diplock in the American Cyanamid case used the phrase "balance of convenience" when considering the position if damages were not an adequate remedy for either party, the entire test rests on the balance of convenience and the adequacy of damages is a very important element, and frequently the decisive element, in considering where the balance of convenience lies. It was submitted on behalf of the Plaintiff that the Court should take cognisance of the fact that the Defendant, the market leader in the cider trade in Ireland, regards "Golden Scrumpy" merely as a tactical brand, whereas the Plaintiff's canned "Scrumpy Jack" is a significant portion of its business. Having regard to the vigour with which the Defendant contested the Plaintiff's application for injunctions, I can only assume that protection of the "Golden Scrumpy" product is of considerable importance to the Defendant and I have given no weight to the Plaintiff's submission to the contrary. The Defendant submitted that the Court should have regard to reality and to the practical effect of granting interlocutory injunctions to the Plaintiff which, it was contended, would be to sterilise the word "scrumpy" and effectively exclude any new entrant into the scrumpy market from calling his product scrumpy without first challenging the validity of the Plaintiff's registered trade marks and without running the risk of having to defend passing off proceedings. That the Plaintiff may be able to raise a fair issue for determination against any person who wishes to market a cider product which he calls by a name which includes the word "scrumpy" in a gold can of a particular style and design, in my view, is not a factor which can determine where the balance of convenience lies between this Plaintiff and this Defendant.

24. In broad terms, the remainder of the factors which it was asserted determine where the balance of convenience lies are factors which fall for consideration in determining the adequacy of damages as a remedy, to some of which I have already referred. It seems to me that in this case the detriments which will accrue to the Defendant and the Plaintiff respectively in consequence of the grant or refusal of the injunctions sought are qualitatively the same, namely, damage to reputation and goodwill, and it has not been shown that they are disproportionate in degree. But for one factor, I would consider that the detriments are evenly balanced in terms of nature and degree and, but for that factor, I would consider that the status quo should be preserved.

25. The factor which, in my view, tilts the balance is the prevalence of the Plaintiff's new can on the market at the time the applications were heard. The argument advanced by the Plaintiff was that, far from alleviating the situation, the existence of the Plaintiff's new can on the market would heighten the risk of damage and confusion because consumers would be more inclined to view the Defendant's can as another variation of the Plaintiff's product. Counsel for the Defendant submitted that, having regard to the prevalence of the Plaintiff's new can, what the Plaintiff is seeking are injunctions for an indeterminate length of time on the basis of diminishing customer memory. It seems to me that that is the reality of the situation and that, in the unusual circumstances of this case, justice does not require that the injunctions sought should be granted. In reaching this conclusion, I am not overlooking the fact that the Plaintiff claims a proprietarial interest in the name and trade mark "Scrumpy Jack" under which the product in the Plaintiff's new can is marketed. However, the Plaintiff's case focused on the Plaintiff's old can and I am not satisfied that the Plaintiff has shown on the affidavit evidence now before the Court that there is a fair issue to be tried as to the likelihood of confusion between the Plaintiff's new can and the Defendant's can or that there has been actual confusion.

26. I will now consider the Defendant's motion, which is for interlocutory relief under Section 24 of the 1996 Act. That section is a new provision in our trade mark code. Subsection (1) of Section 24 provides as follows:-

27. Subsection (2) of Section 24 itemises the types of relief which may be applied for, namely, a declaration that the threats are unjustifiable, an injunction against the continuance of the threats, and damages. Subsection (3) of Section 24 provides:-

28. Subsection (4) of Section 24 provides that, notwithstanding the provisions of subsection (3), a plaintiff in an application under Section 24 shall be entitled to relief under subsection (2) if he shows that the registration of the trade mark is invalid or liable to be revoked in a relevant respect.

29. There was no common ground between Counsel for the Plaintiff and Counsel for the Defendant as to the effect of the three exclusions from the operation of subsection (1) and, in particular, at whom or at what activity they are directed. I find it is unnecessary to come to any conclusion as the effect of those exclusions and, in particular, whether the Defendant would have been precluded from invoking Section 24 before the Plenary Summons herein was issued because, in any event, I consider that at the time the Defendant initiated its application under Section 24 the jurisdiction conferred by Section 24 was spent. The jurisdiction conferred by Section 24 relates to threats of proceedings. When, as happened here, a threat of proceedings burgeons into an action in this Court against the party threatened, in my view, it is not open to the party against whom the action has been taken to retaliate by invoking Section 24. It is true that on this construction of Section 24 a party threatening proceedings may pre-empt an application under Section 24 by issuing a Plenary Summons. However, I believe that this is what the legislature intended in enacting Section 24. Once a Plenary Summons is issued, the matter is within the seisin of this Court and, if necessary, the party who was threatened can invoke the rules of procedure of this Court to ensure that the issue between him and the party who issued the threat is dealt with.

30. Accordingly, I refuse the Plaintiff's application for injunctive relief on its motion and the Defendant's application for injunctive relief on its motion.