England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		No. HC05CO2965 Royal Courts of Justice
		Friday, 11th August 2006

MR. JUSTICE MANN:

1. There are two applications before me today. They are competing applications for the stays of, on the one hand, these High Court proceedings, and on the other what I will call matching Trade Mark Registry proceedings arising out of a registration of trade marks by the claimant, Jules Rimet Cup Ltd. ("Jules Rimet"). Jules Rimet is a company which describes its business as development of brands and licensing. In fact, as I understand it, the marks in question in this action are its only attempt at business in that respect. The defendant is the Football Association Ltd. which is the Football Association, the governing body of football in this jurisdiction.
2. In the applications before me Mr. Cuddigan appeared for the claimant and Miss Lane appeared for the defendant.
3. The trade mark applications in question in this case were made by virtue of two applications: one dated 25^th February 2005, and the other dated 23^rd May 2005. The marks were respectively a word and a sign, the word mark being "World Cup Willy", and the sign being a dancing/kicking cartoon lion.
4. In 1966 World Cup Willy appeared as a mascot and/or as a sign but at that time the mark and such rights as there are associated with it were (and so far as they still exist still are) vested in the defendant. World Cup Willy, in the claimant's version, put in an appearance last year with a view to the claimants being able to exploit the idea for the purposes of this year's World Cup. To that extent, timing was crucial. The claimants having identified that as a marketing opportunity, they sought to register their marks. If the registration had been unopposed and allowed an exploitation, such exploitation would have occurred before the World Cup and would, no doubt the claimants would say, have maximised exploitation. Who knows, it might even have led to greater success for the English team in the World Cup if they had had the old mascot. However, that was not to be. The claimants entered into various arrangements with inter alia Granada, and indeed entered into a contract licensing the rights in May 2005 but got no further.
5. As I have indicated, the Football Association have their own World Cup Willy marks. They also claim goodwill in the name, and they claim copyright over a competing design. By letters of 12^th May and 17^th June they informed the claimant of their intention to oppose the claimant's marks if the application to register them was not withdrawn. The claimant did not withdraw its applications, and the claimant alleges that in the summer of 2005 the defendants contacted Granada and induced Granada to cancel the agreement reached between Granada and the claimant, and to break that contract, by threatening to sue Granada. As a result, Granada cancelled or purported to cancel the agreements in September 2005.
6. Up to that stage there had been no formal challenge to the claimant's mark. The claimant wished to take the matter up. However, the defendant had not yet lodged any formal opposition in the Trade Mark Registry and did not take any steps, by way of proceedings or otherwise, in order to resolve the dispute which was inevitably going to have to be determined as between the claimant and the defendant.
7. Faced with that position, and, as Mr. Cuddigan tells me, desiring to put in train steps to have the position resolved, the claimant commenced the present action. The present action sets out the basis on which the Football Association had sought to challenge the registration of the marks, and seeks a declaration that those challenges cannot be maintained. It also claims damages for wrongful interference with its business and for wrongfully inducing breach of contract, and claims an injunction in relation to that. The action was commenced on 20^th October 2005.
8. On the last possible day on which it could be done in the Trade Mark Registry (that is to say, 25^th November 2005) the Football Association gave notice of opposition. The basis of opposition was ss.3(6), 5(2)(b), 5(4)(a) and 5(4)(b) Trade Marks Act 1994. Distilling those matters and distilling the complaints as set out in correspondence, they were in essence that the use of the claimant's mark could amount to passing off the claimant's business as the Football Association's, infringement of copyright, and (so far as it is now still live) a similarity to the Football Association's own mark.
9. The claimant's riposte to those claims (which are actually largely set out in its particulars of claim in the present action) are that there was no copying; that the Football Association's goodwill does not exist, or if it did ever exist it has been abandoned; and that the relevant marks are not similar. There is also a complex technical argument based on various statutory provisions including various design right Acts, and rules of various vintages. I was not treated to an analysis of those provisions and I do not need to detail them here.
10. A Defence was filed and served on or about 16^th December 2005. In para.31 of that document it was pleaded that this court does not have jurisdiction to grant the declarations sought in the particulars of claim where applications were pending in the Trade Mark Registry. It adds a counterclaim which repeats the copyright and passing off claims, and seeks injunctive relief in respect of the threatened conduct of the claimant. A Reply was served on 6^th February 2006.
11. The action thus constituted has all the ingredients of two actions. First of all, a passing off and copyright action in reverse, with the alleged infringer and passer off being in fact the claimant. Secondly, the common law wrongful interference claims. There the action largely rested. I am told that there was a stay for a month while there were attempts to settle it. This was in February and March 2006. Those attempts were unsuccessful. The action was then not pursued further at that time.
12. However, in May and June 2006 there was a flurry of activity. On 30^th May the Football Association sought a stay of the trade mark proceedings pending the outcome of this action. That act can be contrasted with the pleading in para.31 of its defence which asserted that this court did not have jurisdiction to determine matters while they were the subject of the Trade Mark Registry proceedings. The Trade Mark Registry has given a preliminary non-binding and non-determinative indication that a stay of its proceedings should not be granted, but nothing turns on that.
13. On 7^th July the Football Association issued an application in this action for security for costs. On the same date, the claimants sought a stay of these proceedings on the footing that the issues in these proceedings would in fact more appropriately be decided in the Trade Mark Registry. Then, to complete the hands of the parties, the Football Association on 21^st July 2006 applied in this court for an order that the Trade Mark Registry proceedings be stayed, or that the claimant be enjoined from pursuing its applications for its marks on the footing that the High Court was indeed the appropriate forum for determining the copyright and bad faith issues which are the effect of the passing off issues that arise. Thus have the positions of the parties been reversed.
14. In that manner, the questions of stay come before me. The claimant is seeking a stay of proceedings that it started itself. The defendant is seeking to promote proceedings which they originally pleaded would not and could not determine the central questions while the Trade Mark Registry proceedings were pending. One could be forgiven for thinking that something tactical is going on. If one were to think that, one would find that impression very much strengthened by a late change of position on the part of the claimant to which I will come in due course.
15. There were originally disputes as to the extent to which determinations of one or other of the tribunals in this matter (that is to say, this court and the Trade Mark Registry) on the trade mark related issues would bind the other. But by virtue of a combination of an appreciation of the operation of the law of estoppel and undertakings or indications given by each party as to their accepting that they would be bound by the decisions of each tribunal, those points no longer arise.
16. The common law claims of the claimant for wrongful interference can only be litigated in this court, but putting those on one side, it is now accepted that both the High Court and the Trade Mark Registry could determine the copyright and passing off issues that arise, and, if necessary, the similar mark issues (though I think that issue may have subsided) in a way which would determine the result for the purposes of the other tribunal. The question before me became which was the appropriate forum for deciding the IP disputes: the High Court or the Trade Mark Registry?
17. At this point, and in order to determine that question, the debate before me centred around the following points.
18. Cost. The claimant said Trade Mark Registry proceedings would be very much cheaper. In that forum the proceedings would be dealt with less expensively on each side, not only because that is how it is done in the Trade Mark Registry, but also because each side has an inducement to do so because only a very small part of the successful party's costs can be recovered there by means of an adverse costs order. Contrast this court, where a substantial part of adverse costs can be recovered. Overall, said Mr. Cuddigan, the net cost to the Football Association would be less in the Trade Mark Registry, even if the Football Association won, because it would have incurred a much lower level of costs and that those costs would be unlikely to exceed the Football Association's irrecoverable costs in a successful High Court action.
19. The Football Association challenged the assertion that proceedings are cheaper in the Trade Mark Registry and said in any event it is no ground for preferring a tribunal that an effective adverse costs order cannot be made against the unsuccessful party. If anything, that aspect favours the tribunal which can make an effective adverse costs order.
20. Speed. Mr. Cuddigan said that Trade Mark Registry proceedings could be heard earlier than a trial in this court. He suggested they could be heard by May 2007. The Football Association is sceptical as to whether that is the case. There was a lot of evidence to be produced in this matter which would lead to delay in the Trade Mark Registry. In any event, it is the fault of the claimants that this case is not more advanced than it is, because the claimant has not progressed these proceedings; it did not even apply for a case management conference.
21. The complexity of issues and the techniques necessary to resolve them. While accepting that the Trade Mark Registry had experience of resolving passing off and copyright issues when they arose in a trade mark context, the Football Association's case was that the copyright and passing off issues that arise in this matter were not the sort of "straightforward" or "normal" issues that hearing officers were used to resolving. They were more complex than would normally be encountered in the Registry. They also required extensive cross-examination, which was unusual in Trade Mark Registry proceedings. Furthermore, disclosure would be required, and that too was not usually ordered in the Trade Mark Registry.
22. Mr. Cuddigan responded that the sort of issues that arose in this case were indeed those which one would normally expect a hearing officer to encounter, and that hearing officers had the necessary expertise to tackle copyright and passing off matters generally. The Act does, after all, leave open the possibility that those would have to be determined in the Trade Mark Registry. They were not so complex as to require a High Court hearing.
23. Security for costs. The Football Association has applied for security for costs in this action. The claimant avers that it cannot afford the sums referred to. It is said by the defendant that its costs of the action will be £120,000. It says that the defendant is seeking to stifle this whole matter and may succeed in doing so if it proceeds in the High Court, if security for costs is ordered, and if the claimant cannot pay. The claimant has indicated at the moment that it may well not be able to do so.
24. It is also said that the reason that the claimant is or may be in difficulty in paying security for costs is because it is the defendants who have stopped the claimant's income stream. While there is jurisdiction to order security for costs in the Trade Mark Registry, that could not be used to stifle this dispute in the same way because the lower level of recoverable costs meant that an order for security for costs in the Trade Mark Registry could be more readily complied with because it would be related to that lower level of recoverable costs.
25. The defendant, for its part, says that it is not yet apparent that there will be any stifling if security is ordered, because there is no evidence that the claimant cannot provide the security that it seeks, and that in any event, it should not be deprived of the benefit of a valuable security order, and the benefits of being able to obtain one in the first place, if the circumstances are such that security for costs should be ordered.
26. The level of tribunal and appeals. The Football Association urged on me that there was a likelihood of an appeal from the Trade Mark Registry and that such an appeal would be to this court. It would be more helpful and appropriate to avoid that sort of situation arising by conducting the determination of the issues in this court in these proceedings without the stage of a first go in the Trade Mark Registry. It would save costs, and no doubt time, to cut out the original layer.
27. The claimant says that for its part it can only finance one level of hearing anyway, so an appeal is unlikely so far as it is concerned. There is only going to be one layer, and the lower tribunal, the Trade Mark Registry, is perfectly good enough, and, as it has already submitted, cheaper.
28. That outlines the principal submissions of each party on the question of whether I should stay these proceedings or make an order which has the effect of staying the Trade Mark Registry proceedings. There was more detail, but I need not refer to it. Both parties relied on various remarks of Lindsay J. in Sears plc v. Sears Roebuck [1993] RPC 388 as demonstrating the relevance and significance of various factors they relied on respectively.
29. After the oral hearing in this case, I received a further written submission from Mr. Cuddigan suggesting a further, and, as he put it, fairer way forward. I have no doubt that the suggestion that he made flowed from remarks made by me in the course of argument in which I challenged his assertion that a striking out for failure to provide security for costs would bar his client from resisting the opposition grounds in the Trade Mark Registry on res judicata grounds. I suggested that if the Trade Mark Registry proceedings had been stayed, and this claim was then struck out on the basis of non-compliance with an order for security for costs, it by no means followed that the issues would not be litigated in the Trade Mark Registry, or that the Trade Mark Registry proceedings could not be revived. As I pointed out, there was in any event the Football Association's counterclaim which raised the same copyright and passing off issues as the claim, and they would have to be litigated. There would be no issue estoppel because nothing had been decided. And unless it would be an abuse of the process to resist the counterclaim, or to revive the Trade Mark Registry proceedings (and it was not obvious to me that it would be) then the issues would be decided somewhere.
30. Mr. Cuddigan now proposes a stay of the trade mark proceedings and proposes directions that the counterclaim be prosecuted, and that the whole claim be stayed pending a resolution of the counterclaim. Under that scheme, the issue that would not be decided at this stage would be the claimant's claim based on the interference with the relationship with Granada. The Football Association has not had a chance of dealing fully with this suggestion. Miss Lane managed to get a letter responding to it to me some forty minutes before I sat to deliver this judgment, but it has still not had a fair opportunity of dealing with the sort of points that arise. Nevertheless, I confess that Mr. Cuddigan's late submissions to me reflect, at least in part, a view of my own at which I had provisionally arrived before I had received that letter.
31. My conclusions on the forum, without the benefit of Mr. Cuddigan's letter, are as follows:

(1) The issues arising in relation to the opposition to the mark (that is to say, the copyright and passing off issues) have to be decided somewhere.

(2) The Trade Mark Registry is certainly a possible forum. What is ultimately at stake here is the registration of the trade mark.

(3) However, looking at the nature of the dispute, the real dispute between the parties is a copyright and passing off dispute. The nature of that dispute is that it is not such as one would expect the Trade Mark Registry to conduct in the normal run of things. It involves running a full action on the point, and while intending no disrespect whatever to the experienced Trade Mark Registry hearing officers, it is not the sort of dispute or level of dispute which they are so experienced in conducting. It is, in my view, the sort of dispute which is more appropriately resolved by a judge in High Court proceedings. Mr. Cuddigan suggested that the copyright dispute was straightforward. He said that cross-examination in it would be relatively short. It would be basically one question: did you copy? I think, with respect to him, that is a completely unrealistic view as to how a proper conduct of the copyright action would go. There would be more than one question, and it cannot be expected that the answer to that question would be accepted. I give that as merely one example of how Mr. Cuddigan seeks to over-simplify the issues that arise in relation to his original case, that the Trade Mark Registry was the appropriate venue. The resolution of that copyright dispute, and the passing off dispute, is likely to involve an investigation in terms of disclosure and witnesses which is meat and drink to this Division, but much less so to the Trade Mark Registry. That makes this court the more natural and, in my view, the more appropriate forum. It is actually the only forum appropriate to determine the common law aspects of the dispute. But it is true that were it necessary or appropriate to do so, those aspects could be left on one side while the IP aspects are sorted out, whether in this court or the Trade Mark Registry. Mr. Cuddigan accepted that if he failed on the IP aspects, then the common law claims would fall away anyway.

(4) The other factors relied on do not point away from that conclusion. I am not convinced that this dispute, if conducted properly in the Trade Mark Registry, would be cheaper, but even if and to the extent that that is true, that is probably because the resolution would be achieved less satisfactorily. The non-availability of adverse costs orders in the Trade Mark Registry points in favour of the High Court proceedings if it points anywhere. I agree with Miss Lane that there is no reason in principle why protection from such an order is a reason for favouring the protecting tribunal. Nor is the availability (and I stress the word "availability") of a useful and strong security for costs order a reason in this case for favouring one tribunal over another. The timing question is neutral. If there is a difference in the potential trial dates for the hearing of the dispute, it is only a few months at most, and probably less. That is not significant in the context of this case. It might have been urgent last year in the light of the proximity to the World Cup, but that factor has gone now that the World Cup is over.

32. The jurisdiction to stay and to favour one forum rather than another, must be governed by the overriding objective and fairness to the parties and the need to achieve justice. Looking at all the relevant matters, I therefore find that the High Court is the better and more appropriate tribunal to determine the IP issues, and the only tribunal to determine the other aspects of the claim, if capable of arising after the IP issues have been determined.
33. In those circumstances, these proceedings should not be stayed and appropriate steps should be taken to stay the Trade Mark Registry proceedings. I do not close my eyes to the current state of this action, and the outstanding security for costs application. I think that Mr. Cuddigan's latest position betrays the fact that security for costs is his real concern. He now proposes that the IP issues be decided in the High Court, but in a way which avoids him being vulnerable to such an application. I am not so naïve as to believe that this is not deliberate. It demonstrates one aspect of what is clearly a tactical battle between the parties with their respective real agendas largely, although not entirely, unarticulated. I am sure that the claimant, having started its own proceedings, is now motivated in part by a desire to avoid having to provide security for costs, and by fear of stifling if it cannot provide it. I am equally sure that the keenness of the Football Association for these proceedings (whose basis was originally challenged by them) is not entirely unaffected by what it sees as the prospect of getting security for costs that would otherwise not exist, and the additional prospect (as it sees it) of potential stifling if security were awarded and not provided.
34. These points need to be grappled with, and so far as I can do so now, I do so as follows. First, I make it clear that I make my decision on the appropriate forum and its allied decision to stay the other proceedings based on the assumption that the High Court proceedings will remain available to determine the issue, not that the High Court proceedings will cease to be available. If tactical steps taken by one side or the other were to mean that these proceedings were no longer available to determine the issues, then there may well be a need to revive the Trade Mark Registry proceedings. Thus, and by way of example only, if a security for costs order had the ultimate effect that the claim was stayed, and if the counterclaim were then abandoned, it should not be assumed that the Trade Mark Registry proceedings would remain stayed. I can see a very strong case for them being revived, rendering the whole of the debate which has taken place before me otiose and academic.
35. Second, the shape of the present action in terms of what issues should be tried now, and what issues, if any, should be put on one side, should be determined next. I have decided that the present proceedings are the appropriate vehicle in which to decide the IP points which arise between the parties. It does not follow that the common law interference claims need to be tried at this stage. At the moment, there seems much to commend the view that that aspect of the action should be stayed, leaving just the IP aspects to go ahead. I am minded to make an order to achieve that. Whether both the claim and the counterclaim go ahead on the IP aspects is something that the parties can probably debate later. It probably only matters, if it matters at all, for the purposes of security for costs.
36. My present view is that one has to decide first what issues it is right to decide, in what order, in the action and then to work out the consequences for security for costs thereafter, and not let the security tail wag the "efficient conduct" dog. However, I will hear the parties further on this whole aspect of the matter after this judgment has been delivered. I repeat that the guiding principles should be to get the IP issues decided efficiently and effectively, and that that is best achieved in this High Court action. It would not achieve that objective if tactical manoeuvring meant that the High Court proceedings could not achieve that. This court will be astute to make sure that that is not allowed to occur.
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