The maker of whiskey glasses and its licensee (Glencairn) brought an action in the UK against another glass manufacturer (Dartington) for the infringement of its registered design rights in its "Whiskey Experience Glass". Glencairn applied for an interim injunction, as it feared that the ongoing sales of the alleged infringing product would irreparably damage its business.
Hacon J applied the principles set out by Lord Diplock in American Cyanamid v Ethicon, as explained by Lord Hoffmann in National Commercial Bank of Jamaica v Olint Corporation, which state that for an interim injunction to be granted, two requirements must be satisfied:
- There must be a serious question to be tried.
- The harm caused by the defendant's actions during the period up until the final judgement would not be adequately compensated by damages.
As to point (1), the judge distinguished a straightforward claim from one that is "neither frivolous nor vexatious" (Lord Diplock's words). Even if a claim of infringement of a registered design could be decided relatively quickly, it still does not make it frivolous nor even vexatious. Therefore, it was a "serious question".
Regarding point (2), Glencairn pointed out that the above glass was its most important product and its sales would be eroded as a result of the continuous alleged infringement. Hacon J did not doubt that but he did not equate it to irreparable harm: damages would cover that loss of profit. Dartington could provide the number of glasses sold.
Glencairn also suggested that Dartington's continuous ability to sell such a similar glass would damage Glencairn's monopoly, to the extent that Dartington would thus gain access to Glencairn's customers and gain a foot in the door to sell its other products. The judge saw no reason why Dartington, a large supplier of glasses of other designs, would not have already had access to those customers before it started selling those glasses.
The last argument to support the claim of irreparable loss was that Dartington's actions would encourage other businesses to "jump on the bandwagon". The judge treated this as pure speculation, and even if it were true, the harm caused would just be the deprivation of more sales, which could also be remedied with legal proceedings against those theoretical infringers.
Additionally, Dartington stated that it predicted sales of 30,000 of such glasses in the next year: a small amount in comparison to the three million anticipated by Glencairn, suggesting that the extent of the commercial damage would not be that large. In any case, Hacon J pointed out that he did not have to take into account the scale of the damages that would be awarded to Glencairn (if successful) in his assessment: if they were to be high, Dartington would be able to pay.
Separately from the Cyanamid analysis, Hacon J also considered the situation if Glencairn were to be granted an interim injunction, but Dartington would be successful after the main trial and awarded compensation by Glencairn as a result.
Dartington argued that it could not be adequately compensated for three reasons.
While it is relatively easy to estimate damages to Glencairn in the absence of an injunction in the earlier scenario, Hacon J agreed with the claim that it would be much harder to estimate the loss of sales to Dartington and its clients and also the subsequent impact on its ability to grow subsequent sales over time.
On the other hand, the loss of marketing expenditure ahead of the launch of the glass by Dartington could be compensated financially.
However, the judge agreed that granting such an order may damage the relationships of Darlington with its customers and harm to a greater extent its broader reputation with the public (who may not understand the difference between an interim injunction and one granted at the end of a trial).
Thus, when balancing the possible level of irreparable harm to either side and also considering the balance of convenience, Hacon J deemed an interim injunction unnecessary.
Were all the factors evenly balanced, Lord Diplock stated that measures should be calculated to preserve the status quo in American Cyanamide. Because there is no such even balance here, Hacon J highlighted that it would not be appropriate to assess the status quo.
The application for the grant of an interim injunction was therefore dismissed.
This case is not only a good reminder that "a serious question" can still cover a straightforward claim, but also that the irreparable harm to a defendant is one important factor that a judge will considering when deciding whether to grant an interim injunction.
Case Ref: Glencairn IP Holdings Ltd v Dartington Crystal (Torrington) Ltd [2018] EWHC 769
