England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		26th October 2007

MR JUSTICE NORRIS:

1. The claimants in the intended actions are the owners of the UK and community trademarks in the pharmaceutical products described as "the infringing goods" in the intended order. By Council Regulation 1383 of 2003 provisions are made concerning Customs actions against goods suspected of infringing certain intellectual property rights. The Regulation sets out the conditions for action by Customs authorities when goods are suspected of infringing an intellectual property right in defined situations.
2. In the instant case Her Majesty's Revenue & Customs on 26th September seized at Birmingham Airport a consignment of seven boxes weighing 145 kilogrammes of 103 different pharmaceutical products. Amongst them are products of which the claimants are the proprietors of the relevant marks, (being the products described as "the infringing goods").
3. The procedure contemplated by the Regulation is (under Article 9, paragraph 2) that the Customs Office shall inform the right holder of the actual or estimated quantity and actual or supposed nature of the goods which have been detained by Customs. When so informed, the right holder is given the opportunity to inspect the goods with a view to seeing whether they are counterfeit or genuine goods. That process has been undertaken. The goods so examined are all prescription pharmaceuticals and are all genuine Pfizer products, not counterfeit. But the inspection has revealed that in relation to six of the relevant cases the packaging does not contain any relevant patient information so as to secure the safe use of the pharmaceutical. In two further cases patient information is included, but it is in the Turkish language. It is apparent from the inspection, in particular from the packaging (which discloses the lot details, the artwork design codes, the box codes and the label artwork) that all of the relevant infringing goods have been produced for the Turkish market; and it is a fair inference that Turkey is the origin of the consignment detained at Birmingham Airport.
4. Although the goods are not counterfeit it is the claimant's case that they are nonetheless infringing goods and the claimants seek to prevent their distribution within the European economic area and/or. The concern which lies behind this attitude is that it would appear that the products are to be distributed without any safety information and, furthermore, that in one case, that of Zaltin, the goods may have been in transit for so long that they are beyond their 'safe to use' period.
5. In these circumstances the claimants seek an injunction requiring HM Revenue and Customs to deliver up to the claimant's solicitors, for preservation until return all of the infringing goods. They also seek Norwich Pharmacal relief, requiring Customs to disclose the identity of the consignor in whose alleged wrongdoing Customs have become involved.
6. The first question is whether the claimants have established before me an arguable case. The case is founded on section 10 of the Trademarks Act 1994. This provides that a person infringes a registered trademark if he uses it in connection with the supply of goods or services which are identical to those for which the mark is registered. By section 10(4) a person uses a mark or sign if he imports or exports goods under that sign. The nature of the claim is that, by importing goods from Turkey into the United Kingdom for the purpose of onward transmission to the United States or elsewhere, the unknown consignor is infringing the claimant's mark.
7. The claim so advanced seems relatively straightforward, but in the performance of his duty counsel has drawn to my attention three potential defences. The first is a procedural defence. It is suggested that the unknown consignor might argue that the provisions of Council Regulation 1383 prevent the use of any information discovered as a result of the inspection which has taken place under the provisions of that Regulation for the purpose of mounting a trademark action. The argument is founded upon the terms of Article 12 of the Regulation which says that a right holder receiving the particulars mentioned in the first sub-paragraph of Article 9.3 of the Regulation may use that information only for the purposes of supporting claims relating to counterfeiting. The first sub-paragraph of Article 9.3 provides for the Customs authority to inform the right holder of the names and addresses of the consignee, consignor, the holder of the goods and the origin and provenance of goods suspected of infringing an intellectual property right. Whilst it must be said that there are arguments which can be mounted on the terms of Article 12, they are not of such strength to cause me to say that the claimants do not have an arguable case in support of their trademarks claim. The present draft particulars are formulated in such a way that it appears that scrupulous regard has been had to avoiding using any information provided by Customs under the terms of Article 9.3. The trademark claim can be mounted using information derived simply from the inspection of the goods under provisions of the Article other than the first sub-paragraph of Article 9.3.
8. There are strong grounds for thinking that the draftsman of Article 12 had very good reasons for confining Article 12 to the first sub-paragraph of Article 9.3 and not to any other part of Article 9. In particular, the information which is provided under the first paragraph of Article 9.3 is information of a private and confidential nature (being so described in the sub-paragraph itself), which the consignor has been compelled to give in order to obtain the relevant Customs clearance that one can well see why this information is deserving of special treatment, whereas information which is readily apparent from an inspection of the goods themselves should not be so treated. I am clear that the first of the potential defences upon consideration still leaves the claimants with an arguable case.
9. The second potential defence is a substantive defence to the effect that the trademark case has no merit because the dealing by way of import and export is one that has taken place with the consent of Pfizer. I am satisfied on the basis of the material contained in paragraph 35 and following of Mr Mount's evidence that no express consent has been given by Pfizer to any Turkish consignor to indulge in the importation which has taken place in the instant case. I am also satisfied that any argument as to implied consent lacks sufficient substance to cause me to hold that the claimant's case has no arguable prospect of success. As was pointed out by Neuberger LJ in Roche v Kent Pharmaceuticals [2006] EWCA Civ 1775 at paragraph 25 when one is considering the concept of consent in this context one is looking for an unequivocal demonstration that the proprietor of the mark has renounced his rights in connection with the intended dealing. The mere fact that the goods may bear a mark which permits their use in the European economic area does not of itself mean that Pfizer has consented to the importation of the goods from Turkey into the United Kingdom, the mark indicating that it is the consent of the relevant authorities in the EEA which has been obtained, not the consent of Pfizer. That second defence, therefore, leaves the claimants with an arguable case.
10. I should also note under this head that by paragraph 12.2 of the Trademarks Act, even if Pfizer had given consent implicitly this does not deprive the claimants of the right to object to the type of dealing involved in this case, where the condition of the goods has been impaired after they have been put on the market as would appear to be the case in relation to some of the products produced for Turkey, but where the patient information and safety sheets have been removed.
11. The third conceivable defence which may be run is that there is no importation, but simply a transit of the goods through the United Kingdom to some further destination. This defence would not deprive the claimant's case of the character of being arguable. Its factual foundation is speculative. Whilst some of the relevant packages would appear to have been intended for onward transmission to the USA, this is by no means clearly the case in respect of all. Furthermore, it would appear from the nature of the consignments that it was intended that the large parcels should be broken down and re-posted to other destinations, one may speculate to make them more acceptable in the country of ultimate receipt. I therefore conclude that the claimant's trademark case has the necessary quality of arguability.
12. The next question is therefore what would be the consequence if I were to refuse to grant an injunction and leave the claimants to their remedy in damages? I am satisfied that in the instant case damages would not be an adequate remedy, for it would not be possible to calculate the damage suffered by the claimants in respect of the dissemination of their products without the appropriate safety information being attached and conceivably, in one case, beyond its "use by" date. Nor can I be confident on the information at present available that any claim against the Turkish consignor in damages would be met.
13. I should next consider whether if I grant an injunction and the respondents establish at trial that it ought not to have been granted then the loss they would thereby suffer is capable of compensation in money terms. I am satisfied that it would be. The consignment with which one is dealing is a defined, specific consignment. One knows exactly what products are contained in it. The respondent consignor will have the relevant invoices showing the amount for which the product was being sold. The Pfizer claimants are offering a cross-undertaking in damages and the evidence establishes that they can meet it. Furthermore, at this stage I am concerned only with what damage may be suffered by the consignor through a delay in the transmission of the products pending a hearing on the return date. That damage is on any footing small.
14. In the circumstances I, therefore, propose to grant the relief sought against the second respondent, requiring the second respondent to consent to the delivery up of the infringing products to the claimant's solicitors for safe keeping pending the determination of an application on the return date for longer term relief.
15. The draft order also seeks the granting of Norwich Pharmacal relief against the Revenue & Customs. This is not an order which the HMRC (having notice of it) seek to dispute. It seems to me plain that if I am satisfied that there is an arguable infringement case capable of pursuit by the claimants against the second respondent, then there is wrongdoing in which the Customs have been involved by reason of their use of the powers under Council Regulation 1383 of 2003 and there is nothing in the way of my granting an order that they disclose the identity of the current wrongdoer as sought in the draft order.
16. In relation to each of the orders I have stood back and asked myself whether as a matter of discretion there is any ground upon which I can refuse the relief to which the claimants seem otherwise properly entitled. I am satisfied there are no grounds in discretion for withholding relief and I accordingly make it.