The High Court has awarded remedies for infringement of the registered trade mark GLEE, including an interim payment of damages.
The IP Enforcement Directive (2004/48/EC) provides that EU member states must provide for fair and equitable measures, procedures and remedies to ensure the enforcement of intellectual property rights.
A court may, at the request of a successful claimant whose IP right has been infringed, order appropriate measures for the dissemination and publication of the judgment to be taken, at the defendant’s expense (Civil Procedure Rule 63).
A claimant who succeeds in establishing copyright infringement can elect for either an account of profits or an inquiry into damages. Damages are intended to put the claimant in the position it would have been in if the infringing act had not occurred, while an account of profits is based on the defendant’s profit as a result of the infringing act. Before making this choice, the claimant is entitled to seek certain outline commercial information (Island Records Ltd v Tring International Plc, www.practicallaw.com/6-100-3170).
In 1999, a comedy club operator, C, registered two UK figurative trade marks incorporating the words “the glee club”.T produced a widely promoted television show entitled “glee” that was broadcast in the UK in 2009.
C brought trade mark infringement proceedings against T. T counterclaimed for partial invalidity and partial revocation for non-use.
The court held that T had infringed C’s trade mark under sections 10(2) and 10(3) of the Trade Marks Act 1994. C sought various remedies including an interim payment of damages. T applied for a stay of relief pending its appeal to the Court of Appeal.
The court granted remedies to C, but stayed the effect of the final injunction until T’s appeal had been heard.
It dismissed T’s argument that the grant of an injunction forcing it to stop using the word “glee” would contravene the IP Enforcement Directive as it would have a disproportionate effect on its business; for example, the cost involved in re-branding would be significant. The court considered that it would be fair and equitable to grant an injunction against further infringement. The injunction would allow T to refer to the fact that the show was previously called “Glee”.
Account of profits was an appropriate remedy. T was an innocent infringer with neither actual nor constructive knowledge of C’s rights, although it had continued its infringing activities even after C had informed it of the existence of the registered GLEE mark. C’s two-year delay before issuing proceedings also did not bar the equitable remedy of an account. C was a small company, whereas T had substantial resources, and it was reasonable for C to wait to see whether T’s show would affect its business before issuing a claim. C had not encouraged T to believe that it was justified in using the “glee” name, nor had T pleaded laches or acquiescence.
Although the choice of name might be one small factor in the show’s overall success, it should still be possible to assess its influence as a percentage of the profits. Following Island Records, the court ordered disclosure of documents.
A publicity order was also an appropriate remedy, as no publicity had so far been expressly directed at viewers of the show.
It would be difficult to assess the amount ultimately payable to C, whether as damages or profits. There had been possible substantial damage to C’s trade mark, despite the fact that there had been little confusion in the minds of the public between T’s programme and C’s business. With little information to guide the court on quantum, it awarded interim damages of £100,000.
The court stayed the injunction but not the publicity order. A stay of relief would cause damage to either party that could not be made good by a later award of money. C continued to suffer erosion of the distinctive character of its mark and the injunction would cause T substantial losses. However, most of the damage to C’s mark had already occurred, and further damage could be limited by the publicity order.
Damages inquiries and accounts of profits are unusual in trade mark infringement cases because where infringement is found an injunction is usually granted. Settlements are also frequently reached at this stage. So, there is limited guidance from case law as to how to calculate financial compensation for trade mark infringement, particularly where, as here, the goods or services are not competing brands, and the trade mark has not been licensed, so that damages cannot be readily calculated as a notional royalty. The situation is even more difficult where the damage is caused by more complex and less easily quantifiable harm; for example, dilution or tarnishment.
Assessing how much of an infringer’s profits are attributable to the infringing mark is likely to be tricky, and this is the reason that trade mark owners usually opt for an inquiry as to damages, although here the court indicated that it should be possible to calculate this. In these circumstances the court’s award of an interim payment of damages, not stayed pending the appeal, is an interesting development.
Case: Comic Enterprises Ltd v Twentieth Century Fox Film Corporation  EWHC 2286 (Ch).
First published in the December 2014 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200