England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		19 December 2007

MR JUSTICE BRIGGS:

1. This is an application for interim injunctive relief in a trade mark and passing off action begun on 16 November 2007. The facts are briefly as follows. The claimant, Oven Clean Limited, has at all material times carried on a substantial business of the cleaning of ovens and other domestic cooking appliances via a network of more than 200 territorially-based franchisees. The claimant claims to be the largest such business in the United Kingdom.
2. The claimant has throughout enjoyed the benefit as a registered trade mark of the logo Ovenclean, a single word where the right arm of the "v" in oven extends as a flash across the top of the whole word ending in a starburst over the "a" in clean.
3. Although its two-word company name, Oven Clean, occasionally appears in single line entries in telephone directories and in articles in the trade press, it is clear that the claimant's goodwill in the minds of the oven-owning public is associated with its single-word logo and that the claimant has deliberately so arranged its affairs, for example, in its advertisements through franchisees and, for example, on its own and its franchisees' vans to produce that result.
4. The defendant, Jerry Gilbert, was one of the claimant's franchisees from November 2003 until at least July 2006. The franchise agreement in question included an obligation on the defendant on termination to procure the transfer of all telephone lines and numbers used in the business to such person as the claimant may direct. In that phrase 'the business' was a defined term, meaning the defendant's business as an oven cleaning franchisee of the claimant.
5. There is a triable issue whether the franchise agreement was terminated by breach by the claimant or by the defendant and as to whether it was always void or unenforceable. That issue is more generally the subject of intended group litigation between, on the one hand, a number of franchisees, including the defendant, and the claimant on the other hand, which is about to take the form of proceedings. That aspect of it, so far as concerns the particular franchise agreement between the claimant and the defendant, was recently introduced into this claim as a result of an amendment to the particulars of claim seeking contractual relief, which I allowed yesterday.
6. While a franchisee of the claimant, the defendant made and used leaflets incorporating the claimant's logo and a telephone number 0800 328 8950 ("the 0800 number"). He circulated them within his allocated postcode territory of HA2, HA5, HA6, UB5 and UB6. He also used the telephone number 01494 872 822 ("the 01494 number"). The claimant does not allege that it was unaware of the use of either of those numbers by the defendant.
7. On 8 November 2006 the claimant demanded that the defendant transfer the 0800 number to the claimant as a result of the termination of the franchise agreement. No demand was made in relation to the 01494 number. The defendant did not comply and the claimant did nothing more about it at the time.
8. By early 2007 the defendant had taken the following steps to distance his continuing oven cleaning business from that of the claimant.

1. He sent standard form letters to his customers describing his business as "the Ovencleaners" with his name and address underneath. The letters used the 01494 number and another number about which nothing turns in these proceedings. They included the passage:

"I am writing to tell you that I have now started a new company called 'The Ovencleaners'. I am no longer part of the Ovenclean Group."

2. He stripped the claimant's logo off his van but retained the 0800 number conspicuously on it.

3. He destroyed all the Ovenclean logo leaflets ("the old leaflets") that he could find.

4. He had 10,000 new leaflets printed and he copied a further 5,000 of those. Those described his business as "Jerry the Oven Cleaner doing the chore you love to hate". At the bottom it states: "To book your Oven Clean call 01494 872822". The claimant makes no complaint about the form of the defendant's new leaflets.

5. The defendant gave up using the claimant's working overalls.

6. The defendant schooled himself to answer telephone enquiries as "the Oven Cleaner" as the claimant, making a discrete enquiry of its own, accepts.

9. By late 2007 the defendant was doing a modest business on his own account making, according to his evidence, a profit in the region of about £14,000 a year.
10. On 20 August 2007 a franchisee of the claimant, named Tony Gore, attended to do a pre-arranged oven clean for a customer called Mrs Green in Pinner. She and a neighbour both showed Mr Gore copies of the defendant's old form of leaflet and they claimed the benefit of an offered £5.00 discount which appeared in that leaflet, which Mr Gore felt obliged in the circumstances to honour. Understandably he then reported the incident to the claimant.
11. On 25 September the claimant's solicitors wrote a letter before action alleging passing off, seeking undertakings to desist and deliver up the offending leaflets, and to disclose the identity of the persons to whom leaflets had been sent and threatening proceedings, including an interim injunction if satisfactory response was not forthcoming.
12. Meanwhile, and before any response had been forthcoming, the claimant discovered a one-line advertisement in an August 2007 edition of the Yellow Pages as follows: "Oven Clean, Berbus House Back Lane, Chalfont St-Peter" which then used the 01494 number.
13. On 2 October the claimant, through its solicitors, sent a fresh letter before action alleging a deliberate passing off, seeking removal of the Yellow Pages advertisement and a transfer of both telephone numbers.
14. On 10 October the defendant responded through solicitors by letter saying, first, that he had no intention or desire to associate his business with that of the claimant. Secondly, it referred to the new leaflets which he had caused to be made and distributed. Thirdly, it sought to explain as an accident the distribution of the old leaflets, explaining that they must have been picked up in error by his son who, for pocket-money, was accustomed to make leaflet distributions on his behalf. Fourthly, saying he had placed the Yellow Pages advertisement years earlier while still a franchisee of the claimant. On 12 October, in a letter in reply, the claimant, by its solicitors, expressed disbelief in that explanation.
15. Also on 12 October the defendant offered the following undertakings.

1. To destroy the old leaflets, which he said had already been done.

2. To remove the Yellow Pages advertisement.

3. To terminate the 0800 number.

On 17 October the claimant rejected these offers solely on the ground that the 01494 number was not also offered to be discontinued.

16. On 23 October the defendant did, notwithstanding there had been no agreement in the meantime, instruct Yellow Pages to remove the advertisement complained of by the claimant. That had an immediate effect on Yellow Pages online materials, but it would only have a delayed effect in published telephone directories.
17. By 1 November the claimant discovered that the defendant had set up a website advertising his business. The claimant makes no complaint about the content of the website itself which does not suggest any association with the business of the claimant. It complains of the domain name www.ovenclean.info, which is alleged to constitute a passing off of the claimant's business by reference to the claimant's domain name www.ovenclean.com. The defendant's case is that he was offered this and another non-offending domain name by a website company after a cold call and chose both, not realising he was doing anything wrong.
18. On 1 November the claimant's solicitors sent a final letter before action rejecting the defendant's explanation of events and seeking within three days a response to the following demands: Firstly, the termination of both telephone numbers. Secondly, an undertaking to destroy all the old leaflets and an affidavit confirming how many were delivered and where to and when. Thirdly, an undertaking to remove the Yellow Pages advertisement. Fourthly, an undertaking to provide a copy of his new leaflet to enable the claimant to print new leaflets to assist the defendant in the context of discontinuing his telephone numbers. Fifthly, an offer to accept nominal damages of £750 plus a contribution of £500 towards the claimant's costs, containing a promise to distribute up to 15,000 new leaflets to reduce the difficulty of losing his telephone numbers. Finally, an undertaking immediately to discontinue the Ovenclean domain name. There was no response to that letter when, on 16 November, the claimant issued the present proceedings.
19. On 23 November an application for interim relief was adjourned by Mr Justice David Richards with directions for evidence to be heard as an application by order. It is that application that now comes before me.
20. The relief originally sought by the application was as follows: That the defendant should forthwith take all necessary steps to procure the discontinuance of both telephone numbers and the assignment of the Ovenclean domain name and all similar domain names to the claimant. Secondly, that the defendant should not pass off or attempt to pass off, or cause or enable others to pass off, services, not the services of the claimant, as and for such services of the claimant by the use or in connection therewith in the course of trade of the words "Oven Clean" or any words including the words "Oven Clean" or the mark "Ovenclean" or the trading style containing the words "Oven Clean" or any colourable imitation thereof without clearly distinguishing such services from the services of the claimant, or by any other means. Secondly, that he should not use the "Ovenclean" domain name or operate a website as that domain name. An affidavit of disclosure in relation to the use of the old leaflets was sought and as to whether there were any other registered domain names, including the word "Ovenclean".
21. Meanwhile, before the matter came before me yesterday, on 12 December the defendant offered to assign his Ovenclean domain name to the claimant. That offer was accepted on 13 December. In the course of preparation for this hearing the defendant has lodged evidence as to the destruction of the old leaflets and the discontinuation of the Yellow Pages advertisement.
22. As the result, the relief which the claimant now seeks is as follows. Firstly, an injunction restraining the defendant from distributing or parting with the possession of any of the old leaflets, as I have defined them. Secondly, an injunction restraining the defendant from using the names or marks Ovenclean, Oven Clean or the registered trade marks or any of them, or any colourably similar names or marks so as to pass himself off as or for, or as connected in the course of trade with the claimant, or so as to pass off his services as or for those of the claimant. Thirdly, an injunction restraining him from attempting to do so or causing or enabling others to do so by a any of the aforementioned acts. Fourthly, in paragraph 2, an order requiring the defendant to discontinue the two telephone numbers which I have described.
23. Originally the claimant's case was the defendant had deliberately set out to pass off his business as that of the claimant and to infringe the claimant's trade marks and then sought to cover his tracks by false explanations. Now, through counsel, Mr Silcock, the claimant says in the light of the defendant's evidence, that the passing off and trade mark infringements of which they complain may have been the result of gross carelessness or recklessness rather than nefarious intent, but that having occurred in three respects – the leaflets, the Yellow Pages advertisement and the domain name – the claimant is entitled to protection by injunction from the risk that further infringements of its goodwill and trade marks may occur in the future.
24. The defendant's case in brief is as follows. Firstly, the defendant's evidence, including his offers of undertakings, and his conduct in discontinuing the Yellow Pages advertisement and the domain name assignment show that there is no arguable case of any continuing threat or an interference of the claimant's rights. Secondly, that in any event neither the Yellow Pages advertisement nor the domain name amounted to passing off let alone trade mark infringement. Thirdly, that the general passing off injunction was framed in terms which were too wide and expressed in terms which were so uncertain that in order to avoid risking committing a contempt the defendant would have to cease using his name, the Oven Cleaner, and cease from offering to clean ovens for fear of contempt. Fourthly, that to hand over his working telephone numbers would wreck his business and cause, therefore, an injustice out of all proportion to the legitimate benefit sought by the claimant from that relief. Lastly, and this was a general legal objection, that the injunction sought would involve an interference with the defendant's freedom of expression guaranteed under Article 10 of the European Convention on Human Rights, such that the claimant must show at this stage that it is likely to succeed at trial under Section 12(3) of the Human Rights Act 1988.
25. I turn to the relevant law. No legal issue arises in relation to the case of trade mark infringement. Distribution of the old leaflets in 2007, if it is proved at trial, was a clear infringement. By contrast, the Yellow Pages advertisement and the domain name were not, since the defendant did not use the claimant's logo and a trade mark did not protect mere use of the name separately from the logo.
26. As for passing off, the claimant's trading name, Ovenclean, is a typical descriptive name, in other words, a combination of words in common use which are purely descriptive of the claimant's business and to which, first, by its use, the claimant takes the risk of confusion which must be run unless it is allowed unfairly to monopolise those words. Secondly, small differences in a name used by a rival trader will be sufficient to avoid passing off (see the decision of the House of Lords in Office Cleaning Services Limited v Westminster Window and General Cleaner Limited [1946] 63 RPC 39). In my judgment, the analogy between "Office Cleaning", the phrase in issue in that case, and "Oven Cleaning" in the present case is precise.
27. Secondly, whether the use by a defendant of an identical or similar word or getup amounts to passing off depends on a consideration of the whole of the defendant's getup, thus, for example, the risk of passing off by the use of a similar name may be dispelled by some other clear indication by the defendant that its business or product is unconnected with that of the claimant.
28. I turn to the legal principles arising from the fact that this is an interim application. First, it is true that the flexible probability requirement which arises where an interim injunction would affect freedom of expression, as explained in Cream Holdings v Banerjee [2005] 1AC 253 has been applied by the Court of Appeal to a particular type of trade mark infringement case in Boehringer Ingelheim v Vetplus Limited [2007] EWCA Civ 583. That case concerned comparative advertising where the defendant compared the claimant's product with his own in terms disparaging the claimant's product. Lord Justice Jacobs said this at paragraph 48:

"The general 'threshold' which must be crossed by the claimant is that he will probably succeed at the trial. I do not see why that should not be the general rule for trade mark infringement in a comparative advertising case. Indeed there is every reason why it should. A man who finds his trade mark disparaged by a rival trader in a comparative advertisement can obtain a prior restraining order only if he can show that it is more likely than not that the disparagement is wrong and misleading. Unless he can do that, then his rival, both for his own commercial interests and in the interest of the public, ought to be free to say that which he honestly believes."

Lord Justice Longmore said this at paragraph 55:

"There can be little doubt that the right of freedom of expression is engaged even though the dispute is, strictly speaking, a commercial dispute. Comparative advertising within the scope of the European Directive is a permissible activity and such advertising necessarily entails the expression to others of matters of either fact or opinion or both. It is, therefore, inappropriate to adopt the American Cyanamid approach."

29. The difference between the Cream Holdings and the American Cyanamid approaches and the passing off case may not be as wide as it first appears because the strength of the parties' cases may be relevant to the balance of convenience. In that context the observations of Jacob LJ at paragraph 38 of the Vetplus case are material. He said:

"No one has ever suggested or reasonably could suggest that the rule in Bonnard could operate to prevent the granting of an interim injunction to restrain an ordinary passing off. It is no good the defendant saying 'The representation which I made is true and I intend to justify it at trial'. The Court normally considers who is actually likely to win and grants or refuses an interim injunction on that basis. For if the plaintiff is likely to win, damage will be irreparable, if not, not."

30. I would only observe as a first instance judge that I wish the balancing of convenience test could be so easily applied as Jacob LJ suggests is the routine method of application in intellectual property cases. But his point that the relative strength of the parties' cases is material to the balance of convenience is unmistakable and well supported by other authorities.
31. I my judgment, the question whether the Cream Holdings test applies to trade mark or passing off cases beyond the field of comparative advertising is by no means clear. The question in any particular case must be whether the conduct sought to be restrained falls within the purview of the free expression protected by Article 10. The mere use of a business name or the name of a product cannot, in my judgment, sensibly do so. It involves no expression of matters of fact or opinion as Mr Chadsfield, for the defendant, readily accepted. By contrast, an injunction preventing the defendant describing his business services to potential customers might well do so.
32. Next, where a mandatory injunction is sought a special application of the Amercian Cyanamid test is required as explained by the Court of Appeal in Zockoll Group v Mercury Communications [1998] FSR 254, citing with approval the following passage from the judgment of Mr Justice Chadwick in Nottingham Building Society v Eurodynamic Systems [1993] FSR 468 at 474:

"In my view the principles to be applied are these. First, this being an interlocutory matter, the overriding consideration is which course is likely to involve the least risk of injustice if it turns out to be wrong in the sense described by Hoffmann J…

Secondly, in considering whether to grant a mandatory injunction, the court must keep in mind that an order which requires a party to take some possible step at an interlocutory stage may well carry a greater risk of injustice if it turns out to have been wrongly made than an order which merely prohibits action, thereby preserving the status quo.

Thirdly, it is legitimate, where a mandatory injunction is sought, to consider whether the court does feel a high degree of assurance that the plaintiff will be able to establish this right at a trial. That is because the greater the degree of assurance the plaintiff will ultimately establish his right, the less will be the risk of injustice if the injunction is granted.

But, finally, even where the court is unable to feel any high degree of assurance that the plaintiff will establish his right, there may still be circumstances in which it is appropriate to grant a mandatory injunction at an interlocutory stage. Those circumstances will exist where the risk of injustice if this injunction is refused sufficiently outweigh the risk of injustice if it is granted."

33. Subject to those special considerations the well known American Cyanamid principles apply, including, if other matters are evenly balanced, the relative strength of the parties' cases for the reasons given by Jacob LJ, as I have already cited from his judgment in the Vetplus case.
34. Here, the primary factors arising under the balance of convenience are, in my judgment, evenly balanced. First, the claimant's loss, if an injunction were not granted, would be hard to quantify. Secondly, the defendant's loss caused by an injunction wrongly granted would also be hard to quantify and parts of the relief claimed, in particular paragraph 1.2 and 2 of the order sought, as I have described them, could destroy the defendant's business. Thirdly, each side can pay. That is the defendant can pay damages, if ordered at trial, from the equity available in his house. The claimant could well satisfy an order on the cross-undertaking of damages that would accompany an injunction from its own available funds. Therefore, the court's task is to fashion relief, if any, which will minimise the risk of injustice and in that context the strength of the parties' respective cases is, in my judgment, material at this stage of the analysis.
35. I turn to deal separately with each part of the orders which the claimant seeks. Firstly, in relation to the injunction seeking to restrain distribution of the old leaflets. Plainly there was a trade mark infringement and a passing off if the distribution alleged actually occurred and, in my judgment, there is a strong case that the alleged distribution did occur and that it was a distribution for which, albeit that he may not have done it personally, the defendant was responsible. The real question is whether there is a continuing threat of what is, on any view, a serious infringement of the claimant's rights.
36. It is no longer seriously suggested by the claimant that this infringement was deliberate in the light of the defendant's other conduct distancing his business from the claimant's business and his explanation how the offending distribution may have occurred. The claimant would have accepted an undertaking out of court in relation to the old leaflets had no other matters intervened, but those other matters, that is the Yellow Pages advertisement and the domain name, do not, in my judgment, significantly increase the risk. It is, therefore, not a strong case of a continuing threat.
37. On balance, even a low risk of a future infringement may justify an interim injunction if, but only if, no real risk of injustice is thereby caused to the defendant. Here, in my judgment, there is no risk of injustice if an injunction were ordered or undertaking to the court accepted. The defendant has offered, if the court takes the view that there is some continuing risk that might be proved at trial, as indeed I do, an undertaking broadly in terms of paragraph 1.1 of the order sought, and I propose to accept that undertaking.
38. I turn to the more general passing off injunction sought in paragraph 1.2. I am not persuaded that either the Yellow Pages advertisement or the domain name are likely at trial to be found to have amounted to passing off. As for the Yellow Pages advertisement, I studied the advertisement in its context where it lies just below large advertisement by franchisees of the claimant, which prominently use the claimant's logo. The separation of Oven Clean into two words seems to me likely to be found at trial to be a sufficient distancing from the claimant's logo, Ovenclean, to avoid confusion since the two separate words are purely descriptive of the business, both of the claimant and of the defendant, even though they are just like the claimant's company name. But in that context the claimant has not sought to use its company name as a significant focus of its goodwill.
39. As for the domain name, most users of websites know that separate words in domain addresses are often run together becuase you cannot use a space in an internet address. Thus, the words "Oven" and "Clean" might in any event in an internet address be run together as "Ovenclean", although I accept they could be separated by a dash or possibly even a dot.
40. The website itself, in my judgment, is likely to be found at trial sufficiently to distinguish the defendant's business from that of the claimant and to be part of that which a member of the public seeking oven cleaning services would be likely to see after accessing the defendant's website by the use of the allegedly offending domain name.
41. Nevertheless, this is not the trial and some very limited restriction may be appropriate if there is some risk of repetition and if the restriction causes no appreciable risk of injustice to the defendant if, as I consider likely, he succeeds on these points at trial. There is, in my judgment, a very low risk of repetition.
42. In those circumstances, I propose to accept, if proffered as an undertaking, a much more limited version of paragraph 1.2 of the minute of order which merely restrains the use as a trade mark or as a trading name, the name or mark "Ovenclean" or the registered trade mark, or either of them, and I would include no other provisions in paragraph 1.2, not accepting the colourably similar alternative, or the passing off condition which, in my judgment, is merely likely to give rise to triable issues as to whether there has been a breach of the undertaking. I do not regard the relief sought in paragraph 1.3 of the proposed minute of order relating to assistance to others as being necessary in the present circumstances.
43. I turn, therefore, finally to paragraph 2 which is the order sought for the discontinuation of both telephone numbers. This has, as far as I can ascertain from the party and party correspondence, been throughout the principal bone of contention between the parties and the reason why this matter has been so far incapable of resolution by agreement.
44. The claimant seeks discontinuation of the telephone numbers on two grounds, firstly, as a contractual right arising from the terms of the franchise agreement and, secondly, quite separately, as a means of cutting short any continuing loss which might flow from the leaflet distribution and the Yellow Pages advertisement. The former used the 0800 number and the latter used the 01494 number. The discontinuance of those numbers would cut short the continuing loss, so the claimant says, because it would prevent customers going to the defendant in reliance upon the leaflet or the Yellow Pages advertisement in such a way as to damage the claimant's franchise business.
45. I deal first with the 0800 number. Discontinuance or transfer of this number was demanded in 2006 and there is an arguable case that the franchise agreement is enforceable. But since demand there has been a long delay without any attempt at enforcement. The injunction not to use a telephone number referred to in an infringing advertising leaflet where its discontinuation may seriously affect the defendant's legitimate business is, in my judgment, draconian and may be unprecedented. The claimant does not suggest that all, or even a sizeable percentage, of the defendant's business derived from people using the 0800 number is illegitimate. For example, it is the number which the defendant uses on his van and it appears on a significant proportion of his advertisements about which no complaint is made. In my judgment the principle that the court should seek the solution which causes least risk of injustice clearly points against an order in relation to the 0800 number.
46. As for the 01494 number, transfer or discontinuation of this number was not even demanded in 2006 and the defendant may, in my judgment, fairly have thought – although this is a matter for trial – that the claimant had waived any demand for the return of that number and, therefore, built his business on it on that assumption. Otherwise the case depends upon a very weak claim that the Yellow Pages advertisement was a passing off. Again, therefore, even more clearly the principle of doing that which causes the least risk of injustice is achieved in the present case by refusing an order for the discontinued use of that number.
47. I should add, as I have indicated, the claimant did offer to pay for and distribute leaflets for the defendant with a new telephone number but that by no means reduces the risk of serious damage to the defendant's business by the discontinuation of the existing numbers as it seems to me customers may well have either the 0800 number or the 01494 number either in their address books or their mobile telephone number memories, or written somewhere near their oven as a convenient and handy way of getting in touch with their preferred oven cleaner and may simply throw away into the wastepaper bin any new leaflets which are hereafter distributed.
48. In those circumstances, I decline to grant any relief of the type sought by paragraph 2 of the order.