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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Bargain Busting Ltd v Shenzhen SKE Technology Co Ltd & Ors [2025] EWHC 1239 (Ch) (21 May 2025)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/2025/1239.html
Cite as: [2025] EWHC 1239 (Ch)

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Neutral Citation Number: [2025] EWHC 1239 (Ch)
Case No: IL-2024-000148

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST

Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
21/05/2025

B e f o r e :

MR JUSTICE MILES
____________________

Between:
BARGAIN BUSTING LIMITED
Claimant
- and -

(1) SHENZHEN SKE TECHNOLOGY CO. LTD
(2) SKE E-CGIS UK LTD
(3) PHOENIX WHOLESALE & DISTRIBUTORS LTD
(4) TESCO STORES LIMITED
(5) BOOKER LIMITED
(6) WM MORRISON SUPERMARKETS LIMITED
Defendants

____________________

Michael Edenborough KC and Thomas St Quintin (instructed by Brandsmiths) for the Claimant
Jonathan Moss and Laura Adde (instructed by Stobbs (IP) Ltd) for the First Defendant

Hearing dates: 30 April and 1 May 2025
Further documents: 6 May 2025
Draft sent to parties: 8 May 2025

____________________

HTML VERSION OF APPROVED JUDGMENT
____________________

Crown Copyright ©

    This judgment was handed down remotely at 10.30am on 21 May 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

    Mr Justice Miles :

  1. This is an application dated 21 January 2025 by the first defendant for an interim injunction to restrain the claimant ("BB") from making threats of proceedings for infringement of trade marks. The first defendant is a Chinese entity. The second defendant is its UK trading subsidiary. I shall refer to them collectively as SKE, save where they need to be distinguished.
  2. SKE is a manufacturer of e-cigarettes and vaping devices. It has achieved success marketing such devices under the name "CRYSTAL BAR" and other signs including the word "CRYSTAL". For simplicity I shall use the general term "vapes" for these products.
  3. There are several sets of proceedings between BB and SKE in the High Court and the UK Intellectual Property Office ("the IPO") relating to the parties' registered trade marks and other rights and the alleged infringement thereof. All of the claims relate to rights in or associated with vapes sold under or by reference to the sign (or signs containing) "CRYSTAL".
  4. SKE's position is that it was the earlier owner of unregistered rights in the sign "CRYSTAL" and that BB's application for and acquisition of various trade marks, as well as its issuance of various High Court and registry proceedings, have been carried out in bad faith and vexatiously in response to SKE's rejecting the Claimant's request to become a distributor of SKE's vapes.
  5. The present proceedings relate to a claim by BB for alleged infringement under s. 10(2) of the Trade Marks Act 1994 ("TMA") of a registered trade mark for "CRYSTAL CLEAR VAPOURS ELECTRONICS CIGARETTES" ("CCVEC") and (following the subsequent acquisition thereof and resultant amendment of the Particulars of Claim) of a registered trade mark for a stylised form of "CRYSTAL ADDICT".
  6. Specifically, BB is the proprietor of registered trade mark 3235344 (the "344 Mark") for the CCVEC mark. That mark is registered for (inter alia) e-cigarettes and e-cigarette liquid, with a filing date of 5 June 2017. BB also contends that it has been the proprietor since 28 January 2025 of a registered mark 3534551 ("the 551 Mark") for a stylised mark "CRYSTAL ADDICT" in respect of vapes.
  7. SKE's position is that:
  8. i) the 344 Mark is liable for revocation for non-use and/or invalid on the basis of being descriptive and/or devoid of distinctive character and/or deceptive pursuant to ss. 3(1)(b), 3(1)(c) and 3(3)(b) of the TMA respectively; and

    ii) the 551 Mark is invalid under s. 3(3)(a) as contrary to public policy or to accepted principles of morality pursuant because it refers to an addicted user of crystal meth.

  9. The present action was issued against the first defendant on 18 September 2024. BB alleges that SKE has infringed the 344 and 551 Marks. Complaints are made about various vapes bearing the word "Crystal", often in combination with other words or signs (including "Crystal Bar").
  10. BB is also the proprietor of trade mark application 3786148 (the "148 App") for "CRYSTAL BAR", for (inter alia) e-cigarettes. Registration was applied for on 10 May 2022.
  11. SKE opposed registration of the 148 App in the IPO. Its opposition was based on the grounds, first, that the first defendant could prevent the use of "CRYSTAL BAR" for vapes under the law of passing off, alleging that it had built up a trading goodwill in the UK before 10 May 2022 and, secondly, that the 148 App was made in bad faith. The bad faith allegation was not pursued at the hearing of the opposition proceedings. By a decision of 8 November 2024 the IPO rejected SKE's opposition. On 29 November 2024 SKE appealed the rejection of the passing off allegation (but not the bad faith allegation) to this court. The appeal is due to be heard in June 2025. If it is dismissed the 148 App will proceed to registration and BB will then allege in the proceedings that it has been infringed, dating back to 10 May 2022.
  12. In October 2024 BB's solicitors wrote letters to a number of distributors and retailers of SKE's goods, bringing the 344 Mark and the 148 App to their attention. Before sending those letters they informed the solicitors for SKE that they intended to do so, but did not share a copy of the draft. They said that they would send the letters unless SKE agreed to mediate. SKE in fact agreed to mediate but BB sent the letters anyway. SKE accepts that the letters were permitted communications for the purposes of the statutory provisions concerning unjustified threats (see further below).
  13. An unsuccessful mediation then took place.
  14. On 23 and 24 December 2024 BB's solicitors wrote to eleven distributors and retailers. They stated that the distribution and sale of the identified SKE goods amounted or would amount to an infringement of the 344 Mark and the 148 App. The letters sought an undertaking to cease distributing or selling the allegedly offending goods and stated that, absent such an undertaking, BB would bring proceedings for trade mark infringement.
  15. The evidence served by BB did not state in terms precisely to whom the December 2024 letters were sent. The evidence identified eleven distributors and retailers. The evidence did not expressly state that there were no other recipients, but given what was expressly said, it would have been surprising had there been other (unidentified) recipients. Counsel for BB confirmed on instructions that this was indeed the correct reading of the evidence. This should to my mind have been spelt out more clearly earlier.
  16. There was further correspondence between BB and those eleven parties. None of them gave the undertakings sought by BB.
  17. On 14 January 2025 BB's solicitors stated in correspondence with the eleven parties that they would be brought into the litigation.
  18. In the event, in March 2025 BB applied to join four out of the eleven recipients of the letters into this action. They became the third to sixth defendants by a consent order dated 24 March 2025.
  19. BB has not brought infringement proceedings against the remaining seven threatened distributors or retailers. By letters to each of them dated 6 March 2025 BB's solicitors stated that BB did not currently intend to join them but reserved its rights and asked them to preserve documents.
  20. In a letter dated 11 March 2025 BB's solicitors said that it "does not intend to add any further Defendants to the Proceedings at present". BB repeated at the hearing that it has no present intention to bring proceedings against any other defendants. BB has not however given any undertakings not to make further threats. Counsel for BB explained that it was possible that it would discover other suppliers or retailers who it might wish to pursue in the future. (I record that BB offered during the hearing to undertake to notify SKE before making any further threats of proceedings but only on condition that SKE agreed to be liable for the costs of this application. That condition was not acceptable to SKE so the conditional offer came to nothing.)
  21. By its application, the first defendant seeks an order preventing BB from making further threats of trade mark infringement against distributors or retailers in respect of the allegedly offending goods supplied to them by SKE. It also seeks information about the parties BB has threatened to sue.
  22. The statutory unjustified threats provisions

  23. The first defendant bases its application on the provisions in ss.21 to 21F of the TMA. These restrict the making of unjustified threats of trade mark infringement.
  24. Threats provisions in intellectual property law date from 1883 when the first threats provisions were introduced for patents. The essential reason was that traders could easily use threats of suing customers to drive them from the products of their competitors. They could do this without taking the more serious step of taking proceedings in which alleged infringement would actually be decided. Absent statutory protection there was little protection against groundless threats.
  25. Simon Brown LJ said in Unilever Plc v The Proctor & Gamble Co [2000] 1 WLR 2436 at 2451,
  26. "Essentially, therefore, in its earliest manifestation this provision was designed to stop those patentees who were willing to wound but afraid to strike from hanging a Damocletian sword above any trader's head."
  27. After 1883 the original provisions for patents were extended to trade marks, designs and other rights.
  28. The current provisions in the TMA were brought about by the Intellectual Property (Unjustified Threats) Act 2017. This act followed a long process of consultation. It was passed to give effect to the recommendations of the Law Commission's final report of October 2015 called "Patents, Trade Marks and Designs: Unjustified Threats". The 2017 Act also introduced amendments governing threats of infringement proceedings concerning other intellectual property rights.
  29. For present purposes the material provisions are these:
  30. 21 Threats of infringement proceedings
    (1) A communication contains a "threat of infringement proceedings" if a reasonable person in the position of a recipient would understand from the communication that—
    (a) a registered trade mark exists, and
    (b) a person intends to bring proceedings (whether in a court in the United Kingdom or elsewhere) against another person for infringement of the registered trade mark by—
    (i) an act done in the United Kingdom, or
    (ii) an act which, if done, would be done in the United Kingdom.
    (2) References in this section and in section 21C to a "recipient" include, in the case of a communication directed to the public or a section of the public, references to a person to whom the communication is directed.
    21A Actionable threats
    (1) Subject to subsections (2) to (6), a threat of infringement proceedings made by any person is actionable by any person aggrieved by the threat.
    (2) A threat of infringement proceedings is not actionable if the infringement is alleged to consist of—
    (a) applying, or causing another person to apply, a sign to goods or their packaging,
    (b) importing, for disposal, goods to which, or to the packaging of which, a sign has been applied, or
    (c) supplying services under a sign.
    (3) A threat of infringement proceedings is not actionable if the infringement is alleged to consist of an act which, if done, would constitute an infringement of a kind mentioned in subsection (2)(a), (b) or (c).
    (4) A threat of infringement proceedings is not actionable if the threat—
    (a) is made to a person who has done, or intends to do, an act mentioned in subsection (2)(a) or (b) in relation to goods or their packaging, and
    (b) is a threat of proceedings for an infringement alleged to consist of doing anything else in relation to those goods or their packaging.
    (5) A threat of infringement proceedings is not actionable if the threat—
    (a) is made to a person who has done, or intends to do, an act mentioned in subsection (2)(c) in relation to services, and
    (b) is a threat of proceedings for an infringement alleged to consist of doing anything else in relation to those services.
    (6) A threat of infringement proceedings which is not an express threat is not actionable if it is contained in a permitted communication.
    (7) In sections 21C and 21D "an actionable threat" means a threat of infringement proceedings that is actionable in accordance with this section.
    21B Permitted communications
    (1) For the purposes of section 21A(6), a communication containing a threat of infringement proceedings is a "permitted communication" if—
    (a) the communication, so far as it contains information that relates to the threat, is made for a permitted purpose;
    (b) all of the information that relates to the threat is information that—
    (i) is necessary for that purpose (see subsection (5)(a) to (c) for some examples of necessary information), and
    (ii) the person making the communication reasonably believes is true.
    (2) Each of the following is a "permitted purpose"—
    (a) giving notice that a registered trade mark exists;
    (b) discovering whether, or by whom, a registered trade mark has been infringed by an act mentioned in section 21A(2)(a), (b) or (c);
    (c) giving notice that a person has a right in or under a registered trade mark, where another person's awareness of the right is relevant to any proceedings that may be brought in respect of the registered trade mark.
    (3) The court may, having regard to the nature of the purposes listed in subsection (2)(a) to (c), treat any other purpose as a "permitted purpose" if it considers that it is in the interests of justice to do so.
    (4) But the following may not be treated as a "permitted purpose"—
    (a) requesting a person to cease using, in the course of trade, a sign in relation to goods or services,
    (b) requesting a person to deliver up or destroy goods, or
    (c) requesting a person to give an undertaking relating to the use of a sign in relation to goods or services.
    (5) If any of the following information is included in a communication made for a permitted purpose, it is information that is "necessary for that purpose" (see subsection (1)(b)(i))—
    (a) a statement that a registered trade mark exists and is in force or that an application for the registration of a trade mark has been made;
    (b) details of the registered trade mark, or of a right in or under the registered trade mark, which—
    (i) are accurate in all material respects, and
    (ii) are not misleading in any material respect; and
    (c) information enabling the identification of the goods or their packaging, or the services, in relation to which it is alleged that the use of a sign constitutes an infringement of the registered trade mark.
    21C Remedies and defences
    (1) Proceedings in respect of an actionable threat may be brought against the person who made the threat for—
    (a) a declaration that the threat is unjustified;
    (b) an injunction against the continuance of the threat;
    (c) damages in respect of any loss sustained by the aggrieved person by reason of the threat.
    (2) It is a defence for the person who made the threat to show that the act in respect of which proceedings were threatened constitutes (or if done would constitute) an infringement of the registered trade mark.
    (3) It is a defence for the person who made the threat to show—
    (a) that, despite having taken reasonable steps, the person has not identified anyone who has done an act mentioned in section 21A(2)(a), (b) or (c) in relation to the goods or their packaging or the services which are the subject of the threat, and
    (b) that the person notified the recipient, before or at the time of making the threat, of the steps taken.
    21E Supplementary: pending registration
    (1) In sections 21 and 21B references to a registered trade mark include references to a trade mark in respect of which an application for registration has been published under section 38.
    (2) Where the threat of infringement proceedings is made after an application for registration has been published (but before registration) the reference in section 21C(2) to "the registered trade mark" is to be treated as a reference to the trade mark registered in pursuance of that application.

    Evidence before the court

  31. SKE's application was supported by witness statements of Ms Teichmann (a solicitor), Wancheng He and Xuan Ji. In answer BB served witness statements of Parmeet Singh Kukreja, Tarlochan Singh Bindra and Mr Lee (a solicitor).
  32. On 24 April 2025 SKE's solicitors served the third statement of Mr Rebling (a solicitor). This addressed the history of assignments of the some of the marks.
  33. BB objected to the admission of this evidence. It submitted that the evidence was not served in accordance with the directions for evidence given by the court. It contains evidence which was available to SKE at the time of its first round of evidence. Rebling 3 did not explain the relevance of the evidence about the assignments. It was only in the skeleton for this hearing that an argument was advanced that the course of conduct described in it demonstrates abusive or collateral conduct. There was then no opportunity for BB to put in contrary evidence or seek to justify the conduct described in the statement. There has been no explanation offered for the late introduction of this evidence.
  34. In an application seeking the late admission of the evidence SKE contended that its solicitors had only recently come into possession of the evidence, that its contents were known to BB, that it was short and that the statement was intended to provide further background facts. The application notice did not explain that the evidence would be relied on to allege a course of abusive or collateral conduct.
  35. I agree with the submissions of BB that this evidence should not be admitted. It was too late. Its admission would be unfair in that BB has not had a chance to address the allegation of abusive conduct. No proper explanation has been given for its lateness. The fact that SKE's current solicitors have only recently come into possession of some of the documents referred to in the statement is no excuse as SKE had them all itself. The description of the evidence as background material suggested that it would be relied on as part of the history but not as the foundation of an allegation of abuse. SKE did not comply with the order of the court and it is part of the overriding objective that the court should give effect to orders of the court.
  36. SKE's position in summary

  37. The December 2024 letters constituted threats to bring proceedings within the scope of s. 21 of the TMA. It is strongly arguable that they were unjustified. The purpose of the December 2024 letters, which were sent to a wide range of distributors and retailers, was to cause maximum commercial pressure and seek to persuade the recipients to cease distributing or selling SKE's goods. The purpose was to cause damage to SKE's business. The letters were sent just before Christmas 2024 and sought written undertakings by 6 January 2025. This was calculated to be as disruptive as possible. There was no other reason for the letters, since BB had already notified the recipients of their rights in October 2024.
  38. Following the December 2024 letters, some of the distributors and retailers contacted SKE, including threatening to withdraw its products from sale. In an attempt to mitigate that risk and reassure its supply chain, SKE had to offer to indemnify distributors and retailers in connection with this matter and place relevant funds in escrow. No indemnity agreements have actually been concluded.
  39. The mischief of threats against parties other than the primary producer or importer (who may be thought of as "the primary party") is that they can be used to clear the way to market at little cost to the threatening party. Retailers and other customers of primary parties ("secondary parties") who are threatened with infringement actions may well take their custom to other suppliers, particularly where there are multiple suppliers of goods. The damage to the primary party may be rapid, significant and severe. There is no real mischief where the threatening party follows through and takes proceedings because at that stage it has skin in the game in the form of potential costs liabilities.
  40. The history shows that BB has been willing to make threats of this kind without following through with actual proceedings. BB threatened all eleven distributors or retailers with proceedings if they did not give undertakings. BB stated on 6 January 2025 that it would imminently join all of them to the proceedings. In the event it joined only four of the eleven. Indeed two of the four are commercially related, so in substance it has joined three.
  41. While BB has said that it has no current intention of making further threats, it may change its mind at any time. Its past conduct suggests that it may well threaten other secondary parties with infringement proceedings with no intention of following through by taking proceedings.
  42. Moreover BB has not been forthcoming in identifying the parties it has already written to. This again suggests a tactical, disruptive, approach.
  43. The court's approach to this application should be as follows:
  44. i) The starting point for interim injunctions of this kind is American Cyanamid v Ethicon [1975] AC 396.

    ii) SKE however accepted that the injunction sought would (to a very limited extent) affect the rights of BB under Art. 10 of Schedule 1 to the Human Rights Act 1998 ("the HRA") and that s. 12 of the HRA is therefore engaged.

    iii) The extent of any infraction of Art. 10 is very limited because BB is seeking to advance its own commercial position and the unjustified threats provisions have various exceptions, including the ability to threaten primary parties and the right to make permitted communications. Moreover there is a balance to be struck between any alleged infraction of Art. 10 and SKE's own contention that it is the owner of relevant intellectual property rights (while accepting that those rights remain subject to adjudication).

    iv) For these reasons, the test of likelihood in s. 12, as explained by Lord Nicholls in Cream Holdings v Banerjee [2004] UKHL 44, [2005] 1 AC 253, should be given a flexible interpretation and the court should not require the applicant to establish that it is more likely than not to succeed in obtaining an injunction at trial.

    v) In this kind of case the court should apply the guidance of Lord Hoffmann in National Commercial Bank of Jamaica v Olint [2009] 1 WLR 1405 at [17], "The basic principle is that the court should take whichever course seems likely to cause the least irremediable prejudice to one party or the other".

  45. As to the potential for injustice, damages will not adequately compensate SKE if there are further threats. Damages are likely to be difficult to assess and to occur quickly. There is no evidence about the ability of BB to meet any damages.
  46. On the other hand, BB would be unlikely to suffer any material damage if restrained. SKE does not seek to prevent it making permitted communications (as allowed under the TMA), and BB would not be prevented from bringing proceedings for infringement. BB might conceivably face a costs liability if it brought proceedings without writing a letter before action, but that is unlikely and the amount of any such costs would be limited. Any infringement of BB's Art. 10 rights is very limited for the reasons already given. Both the first and second defendant have agreed to give a cross-undertaking in damages. In reply submissions SKE offered to pay £100,000 into court to support this.
  47. There was no significant delay in bringing this application. The offending letters were written just before Christmas last year. There was inter-solicitor correspondence about this from 8 January 2025 and the application was issued on 21 January 2025.
  48. BB's position in summary

  49. BB emphasised that it was only unjustified threats which were actionable under the statute. BB contended that all of its threats were justified because it would make out its case of infringement against both the primary party and the secondary ones at trial.
  50. BB was justified in threatening proceedings against distributors and retailers because it would be able to seek damages and/or an account of profits from them by reason for their infringements. The profits earned by those secondary parties would be additional to the profits earned by the primary parties. Moreover the primary parties might not be good for the claims and BB was justified in seeking to join secondary ones. The December 2024 letters were justified and were not written for the purpose of seeking to damage SKE.
  51. As to the suggestion that BB had not followed through the threats, it had in fact taken proceedings against four of the eleven recipients. It had notified the other seven that it had no current intention to take further legal action against them but might seek relief from them depending on the outcome of the present case and had asked them to preserve documents. This was a sensible and proportionate approach as it avoided overloading the present case with too many parties and legal teams. There was good reason to think that the outcome of the present case would operate as a reasonable template for the claims against the other parties. This was akin to an informal stay. Moreover it was in accordance with good practice to notify these other seven parties of BB's stance so as to avoid any concerns that might later arise from their not being joined into the proceedings at present.
  52. Any harm that might have occurred by reason of the December 2024 letters would already have occurred. There is no proper basis for a quia timet injunction now as BB has already joined the parties it wishes to join into the action and it has no current intention of bringing proceedings against others or threatening them with proceedings. On the other hand, it should not be restrained by injunction from doing what it would otherwise be allowed to do. Moreover, it may in due course learn of other distribution channels and need to take steps to protect its trade mark rights.
  53. As to the proper approach to this application:
  54. i) The injunction sought would interfere with BB's rights under Art. 10.

    ii) Accordingly s. 12(3) of the HRA applies. There is no basis for departing from the general rule that a court will be very slow to grant an interim injunction in such a case unless the applicant shows that it will probably succeed at trial. This case is analogous to comparative advertising where such an approach has been adopted by the Court of Appeal: see Boehringer Ingelheim v Vetplus [2007] ETMR 67.

    iii) Hence there is a higher merits threshold than under the American Cyanamid case. SKE needs to show that it is more likely than not to win at trial.

  55. SKE is unable to meet this higher merits threshold. The case is best tested by reference to the 148 App (concerning CRYSTAL BAR). The application has already been considered in detail by the IPO, which concluded that SKE was unable to establish that it had established any material goodwill in goods sold under the CRYSTAL BAR name before 10 May 2022. The reasoning of the IPO was based on a careful review of the evidence. Indeed the evidence served on this application serves to undermine the evidence relied on by SKE in the IPO proceedings. Moreover SKE raised but did not pursue its case of bad faith before the IPO. It has referred to the prospect of a bad faith case in its evidence for this application but has not given any adequate detail.
  56. The approach proposed by SKE is also contrary to the terms and spirit of the CPR and the pre-action protocols. Parties are encouraged to seek to resolve their disputes before taking proceedings. This involves the pre-action exchange of documents and other information. The injunction sought by SKE would require BB to sue first and write later. It would therefore force BB to infringe one of the important principles of the CPR.
  57. SKE delayed for four months before first complaining that BB's correspondence would amount to unjustified threats and the issue of its application.
  58. A further three months have now passed, but there are still no examples of the irreparable harm that D1 complains BB's correspondence will cause. That indicates that D1 has not, and will not, in fact suffer serious harm from any threats.
  59. To the extent that any suffered might be suffered by SKE it will be compensable in damages.
  60. The cross-undertaking was originally offered only by the first defendant. Though the second defendant belatedly offered a cross-undertaking there is no proper evidence about its financial standing.
  61. The order sought is too broadly drafted: it would prevent communications expressly allowed by the TMA (including permitted communications). It would also prevent without prejudice communications, despite the decision of the Court of Appeal in the Unilever case, which held that a party could not plead such a communication in support of a claim for unjustified threats.
  62. Common ground

  63. The following points were common ground before me.
  64. First, the December letters constituted a threat of infringement proceedings within s. 21 of the TMA.
  65. Secondly, SKE may be treated as a person aggrieved by such threat within s. 21A.
  66. Thirdly, a threat to join a party to existing proceedings is a threat of infringement proceedings.
  67. Approach to the application in light of s. 12(3) of the HRA

  68. Section 12 provides materially as follows:
  69. "12 Freedom of expression.
    (1) This section applies if a court is considering whether to grant any relief which, if granted, might affect the exercise of the Convention right to freedom of expression.
    […]
    (3) No such relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed.
    (4) The court must have particular regard to the importance of the Convention right to freedom of expression and, where the proceedings relate to material which the respondent claims, or which appears to the court, to be journalistic, literary or artistic material (or to conduct connected with such material), to—
    (a) the extent to which—
    (i) the material has, or is about to, become available to the public; or
    (ii) it is, or would be, in the public interest for the material to be published;
    (b) any relevant privacy code.
    (5) In this section—
    "court" includes a tribunal; and
    "relief" includes any remedy or order (other than in criminal proceedings)."
  70. Art. 10 of Schedule 1 to the HRA provides as follows:
  71. "FREEDOM OF EXPRESSION
    1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises.
    2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary."
  72. BB submitted that if it was prevented from sending letters to secondary distributors of goods threatening infringement proceedings it would be prevented from imparting information to possible defendants to such proceedings. This would also interfere with the right of such parties to receive notice that they might be sued by BB for infringement.
  73. BB accepted that such letters would be commercially motivated. However the decision of the Court of Appeal in Boehringer Ingelheim v Vetplus [2007] ETMR 67 at [48] to [52] showed that Art. 10 applies to communications made with a view to protecting a party's commercial interests.
  74. BB also contended that if Art. 10 was engaged to any extent, s. 12 was engaged: see Birmingham City Council v Afsar [2019] EWHC 1560 (QB) at [60]. SKE did not take issue with this proposition.
  75. SKE did not seek to contend that an injunction would not affect BB's exercise of its rights to impart information. SKE contended however that any adverse impact on the exercise of those rights would be minimal, given the range of activities otherwise available to BB. SKE emphasised that it did not seek to restrain BB from making "permitted communications" as defined by s. 21B of the TMA. Nor would BB be prevented from actually bringing infringement proceedings against secondary parties.
  76. In my judgment the analysis should start with the authoritative discussion of s. 12(3) of the HRA in Cream Holdings. Lord Nicholls discussed the test from paragraphs [16] to [23]. He concluded:
  77. "[22] … Section 12(3) makes the likelihood of success at the trial an essential element in the court's consideration of whether to make an interim order. But in order to achieve the necessary flexibility the degree of likelihood of success at the trial needed to satisfy section 12(3) must depend on the circumstances. There can be no single, rigid standard governing all applications for interim restraint orders. Rather, on its proper construction the effect of section 12(3) is that the court is not to make an interim restraint order unless satisfied the applicant's prospects of success at the trial are sufficiently favourable to justify such an order being made in the particular circumstances of the case. As to what degree of likelihood makes the prospects of success 'sufficiently favourable', the general approach should be that courts will be exceedingly slow to make interim restraint orders where the applicant has not satisfied the court he will probably ('more likely than not') succeed at the trial. In general, that should be the threshold an applicant must cross before the court embarks on exercising its discretion, duly taking into account the relevant jurisprudence on article 10 and any countervailing Convention rights. But there will be cases where it is necessary for a court to depart from this general approach and a lesser degree of likelihood will suffice as a prerequisite. Circumstances where this may be so include those mentioned above: where the potential adverse consequences of disclosure are particularly grave, or where a short-lived injunction is needed to enable the court to hear and give proper consideration to an application for interim relief pending the trial or any relevant appeal.
    [23] This interpretation achieves the purpose underlying section 12(3). Despite its apparent circularity, this interpretation emphasises the importance of the applicant's prospects of success as a factor to be taken into account when the court is deciding whether to make an interim restraint order. It provides, as is only sensible, that the weight to be given to this factor will depend on the circumstances. By this means the general approach outlined above does not accord inappropriate weight to the Convention right of freedom of expression as compared with the right to respect for private life or other Convention rights. This approach gives effect to the parliamentary intention that courts should have particular regard to the importance of the right to freedom of expression and at the same time it is sufficiently flexible in its application to give effect to countervailing Convention rights. In other words, this interpretation of section 12(3) is Convention-compliant."
  78. In reaching a view as to whether the applicant's prospects of success at the trial are sufficiently favourable to justify an order being made in the particular circumstances of the case, the court must therefore consider the extent to which the exercise of any Art. 10 right is affected as well as the potential impact on the convention rights of others. Where the restriction on the respondent's Art. 10 rights is comparatively minimal and contained, the court will more readily conclude that the case is sufficiently strong to justify an injunction.
  79. As to this, as shown above, the unjustified threats provisions of the TMA are calibrated to protect the intellectual property rights of aggrieved persons on the one side and the rights of parties seeking to allege infringement of their own rights on the other.
  80. First, the provisions are directed at a competitor threatening proceedings for infringement without actually bringing infringement proceedings against the threatened party. Taking proceedings is a serious step, which engages a potential costs liability in the event that the case fails. The provisions do not prevent a party from taking infringement proceedings against any alleged infringer.
  81. Secondly, the provisions are only concerned with unjustified threats of infringement proceedings. It is a defence to an action under them that the act in respect of which proceedings were threatened constitutes an infringement of the registered trade mark (s. 21C(2)).
  82. Thirdly, the provisions do not prevent threats against the parties carrying out the primary activities alleged to infringe a registered trade mark. These include applying an allegedly infringing sign to goods or their packaging or importing for disposal such goods (s. 21A(2).
  83. Fourthly, the provisions allow "permitted communications". These include giving notice of the existence of a registered trade mark; seeking to discover whether or by whom there have been primary activities infringing of a registered trade mark; giving notice that a person has a right in or under a registered trade mark where another person's awareness is relevant to proceedings that may be brought (s. 21B(2)). Moreover the court may treat other purposes of communications as a permitted purpose if it considers it is in the interests of justice to do so (s. 21B(3)).
  84. Fifthly, there are, however, some purposes of communications which are not to be treated as a permitted purpose, including seeking an undertaking to cease using, in the course of trade, a sign in relation to goods, or requesting the delivery up or destruction of goods (s. 21B(4)).
  85. Sixthly, one of the remedies available in respect of an actionable threat is an injunction against the continuance of the threat (s. 21C).
  86. Hence, as already noted, the provisions strike a balance between the rights of different potentially interested parties. They are designed to protect the interests of holders of registered trade marks but also to restrict their ability to make some threats of infringement. Owners of marks enjoy a significant area of unrestricted ability to protect themselves. They are not prevented from threatening proceedings for primary activities said to constitute infringement. Such threats are not actionable. Trade mark holders are also permitted, without fear of suit, to make permitted communications. This allows them to notify persons who are not carrying out the primary activities (who may be called secondary parties for convenience) of the existence of a registered mark, ownership and other interests in it, and information enabling the identification of the goods or their packaging in relation to which it is alleged that the use of a sign constitutes an infringement. This allows the holder of a mark to inform secondary parties of the nature of its rights and of the goods the use of which is said to infringe. But the mark holder may not in its communications seek an undertaking from the secondary party in relation to the use of the mark or delivery up or destruction of the goods.
  87. Trade mark holders are therefore permitted, without restriction, to convey a substantial amount of information about their rights and alleged activities said to constitute an infringement, but there is some limit: in summary what they are not allowed to do is seek to require the cessation of use or such things as delivery up or destruction.
  88. It is also open to a person with a registered trade mark to bring actual proceedings for infringement.
  89. For these reasons, the respondent to an application of the present kind (where the applicant does not seek to prevent the respondent from communicating with primary infringers or from making permitted communications) has a number of available avenues to impart information to allegedly infringing secondary parties.
  90. On the other hand, it is a feature of cases of unjustified threats to secondary parties that the damage to parties aggrieved will often be sudden and grave. It may be hard for the aggrieved party to demonstrate actual damage, but there is an obvious danger that their route to market will be damaged by unjustified threats to customers.
  91. Drawing the threads together, it appears to me that applications for injunctions in respect of allegedly unjustified threats will often fall within the exceptional category of cases identified by Lord Nicholls in Cream Holdings. The key question as far as the merits threshold is concerned is whether the court is satisfied the applicant's prospects of success at the trial are sufficiently favourable to justify such an order being made in the particular circumstances of the case. To require the higher threshold to be met in all such cases would to my mind undermine the protection intended by Parliament in enacting the unjustified threats provisions. A party may need to move quickly to seek such an injunction as losses can be rapid as the market is cleared. It would to my mind generally place too high a barrier in the way of applicants in such cases to require them to show that they will probably win at trial.
  92. BB relied on the Vetplus case at [48] to [52], where the Court of Appeal held that "the more likely than not" general approach identified in [22] of Cream Holdings should apply to cases where a party seeks to injunct comparative advertising by another. I do not think that comparative advertising is properly analogous. The use of a registered mark in comparative advertising is (subject to various qualifications and limitations) not a trade mark infringement. The unjustified threats regime is entirely separate. It is not concerned with the question whether a communication is itself a trade mark infringement. The purpose of the regime is to stop competitors seeking to clear their route to market without proper justification. The questions are very different.
  93. It approaching the exercise I also find it helpful to have in mind Lord Hoffmann's words in Olint cited in paragraph 38.v) above. It seems to me that the court should be seeking to minimise the risks of injustice to the parties respectively from the grant or refusal of an order.
  94. Assessment and conclusions

  95. The first question is whether SKE has satisfied the requirement to show a sufficient prospect of success at the trial to justify the relief sought. The parties were agreed that this issued turned on whether there was a serious argument (to whatever threshold was required) that BB's registered marks would be found to be invalid (including here the "validity" of the 148 App).
  96. BB accepted that SKE had done enough to raise a serious issue to be tried under the standard American Cyanamid test, but argued that SKE had failed to overcome the need for a heightened threshold (and had certainly not established a greater than evens probability of success).
  97. BB concentrated its submissions on the application for the CRYSTAL BAR trade mark, no doubt because it considers this to be its best case. However, as SKE contended, there are several marks (registered or applied for) in play, including the two registered ones which are the basis of the present proceedings. I return to this point below.
  98. I start by considering the CRYSTAL BAR application. As noted, SKE has opposed registration of the mark on two grounds.
  99. The first point raised by SKE is that it already had an established goodwill in the use of the sign by 10 May 2022. The IPO considered the evidence about this and found against SKE. BB contended before me that SKE's opposition on this ground is weak. In this regard, as BB submitted, the evidence served on this application serves further to weaken an aspect of SKE's evidence placed before the IPO. At that stage SKE contended that it had decided to use the CRYSTAL BAR brand in 2021. The evidence of SKE on this application accepts that it only decided to do so in January 2022.
  100. It is not appropriate for me to determine the point finally. This was a short interlocutory hearing and I was not taken through the details of the evidence that was before the IPO. While SKE was able to show a serious issue to be tried, I cannot properly conclude on the limited materials before me on this application that SKE has a better than evens chance of success on this argument.
  101. I turn to the allegation of bad faith. In its evidence SKE has raised the prospect of a case based on bad faith, but has given no real details. It initially raised a case of bad faith before the IPO but did not pursue it in its evidence in opposition. Its pleaded case in one of the High Court proceedings was that the application for the CRYSTAL BAR mark dated 10 May 2022 was only made after BB had sought (but failed) to become SKE's UK distributor. That case was based on a WeChat message. However it has become clear on the evidence served in relation to this application that any conversation took place at a trade fair on 27-29 May 2022, some weeks after the application of 10 May 2022. The WeChat messages were sent on 2 June 2022.
  102. At the hearing before me, counsel for SKE advanced a different argument. He relied on the evidence of SKE that it had applied to the Medicines and Healthcare products Regulatory Agency ("MHRA") for authorisation for relevant vaping products. The relevant passage in the witness statement described these as "the CRYSTAL BAR product" but did not say that the application was made actually using that name. The evidence stated that MHRA authorisation was given on 9 May 2022 and published on the MHRA website. Counsel said that this supported the allegation of bad faith. He suggested that someone must have seen the authorisation and immediately applied to register the CRYSTAL BAR name. This case was not advanced in the witness statements served by SKE. Moreover the only evidence about what appeared on the MHRA website is set out in of the decision of the IPO. The relevant page of the website is reproduced. It contains numerous authorisations for flavours of vape liquid using the name CRYSTAL. It does not however contain the name CRYSTAL BAR. For these reasons I am not satisfied on the evidence that SKE would be more likely than not to succeed at trial in establishing that the threats were unjustified in relation to CRYSTAL BAR. SKE has established no more than a standard serious issue to be tried.
  103. As already noted, BB concentrated its fire on the CRYSTAL BAR application. However, as counsel for SKE observed, the December 2024 letters referred also to the 344 Mark and any further letters are likely to refer also to the 551 Mark, since that has been brought into these proceedings. SKE has sought the revocation of the 344 Mark for non-use. There was no direct evidence before the court of the use of the 344 Mark by BB. All that BB could point to was that there was an allegation made by SKE in related passing off proceedings that BB had sold some goods with the CRYSTAL name. There was no evidence from BB itself about the extent or timing of such sales. I would have expected BB to serve some evidence on this aspect of the case if it wished to suggest that SKE's case about non-use lacked merits. In the absence of any evidence about use of the 344 Mark by BB, I am satisfied that SKE has a realistically arguable case, which may well succeed at trial. Neither side addressed me concerning the merits of the case concerning the 551Mark and I can conclude no more than that there is at least a serious issue to be tried in relation to it.
  104. I shall return to the issue whether the case advanced by SKE is sufficient to justify the interference with BB's Art. 10 right after addressing other issues concerning (in shorthand) the balance of the risks of injustice of granting or withholding an injunction.
  105. I turn next to the question whether damages would adequately compensate SKE for any losses arising from unjustified threats.
  106. I start by addressing BB's submission that there is no realistic risk of damage and therefore no justification for any order.
  107. BB argued, first, that it had no present intention of joining other parties or making threats of proceedings against them. I do not consider that this is an answer to the application. It is no more than a statement of present intent. It has to be seen in the light of BB's earlier conduct. In January 2025 BB's solicitors informed all eleven recipients of the December 2024 threatening letters that BB intended to join them into the proceedings. In the event only four, or on one view three, were joined. BB made clear during the hearing that it wished to preserve the right to threaten further parties without giving advance notice of its intention to do so to SKE.
  108. I also take account of the fact that the December 2024 letters were written after BB had already made permitted communications to the same suppliers/retailers in October 2024. BB's evidence did not explain or seek to justify the decision to ratchet things up by expressly threatening proceedings and seeking undertakings to cease trading. BB had already informed the suppliers/retailers of its intellectual property rights. The December 2024 letters were written after the failure of the mediation and after SKE had lodged its appeal against the decision of the IPO concerning App 148. In the absence of any explanation the obvious inference is that BB wrote the further letters with the commercial motive of seeking to disrupt SKE's route to market. This inference is supported by the timing of the letters, written on 23/24 December 2024 and seeking undertakings by early January 2025.
  109. It is also material that, since making the threats, BB has chosen to join only a limited number of the threatened parties to the proceedings. I was unable to accept BB's submissions that it had reasonably decided to join a representative sample of suppliers and retailers and reserve its position against the others until the conclusion of the existing proceedings. As SKE pointed out, on BB's argument it would have needed to include one wholesaler/supplier and one retailer. But it has joined both Tesco and Morrisons as defendants. BB did nothing to explain this. I conclude that BB took a broad, scatter-gun approach in making the threats and did not intend to include all of the threatened parties in the proceedings. No convincing explanation has been given for the selection of parties it chose to threaten but not sue. This supports the view that the December 2024 letters were commercially motivated.
  110. Indeed, in my judgment BB's own explanation of its conduct has the following consequence. It says that it has now joined a representative retailer, supplier and wholesaler in the existing proceedings. BB has not suggested that there was any other category of secondary infringer. Hence, on its own argument, it has no reason for joining anyone else into the proceedings themselves – it has joined each kind of representative defendant it needs. This suggests that if it does choose to threaten any further secondary parties it will do so without the intention of joining them into proceedings.
  111. BB argued that SKE had not advanced any evidence that the December 2024 letters had led to actual losses. The evidence suggested that the threatened parties had carried on using the allegedly infringing goods. There was therefore no reason to think that any further threats of infringement proceedings would lead to losses to SKE. I am unable to accept this submission. Suppliers and retailers may be more or less robust and have varying appetites for risk and for ignoring threats of the kind made in December 2024. Moreover the evidence shows that SKE has had to offer indemnities to suppliers/retailers to ensure continuity of supply. It is possible that if further threats are made to suppliers or retailers they will lead to the threatened parties no longer using goods supplied by SKE. I do not think that it is safe to assume that all such parties will have the same apparently sanguine reaction as the original threatened parties.
  112. I also take account of the fact that the sales made by SKE in the UK are very substantial. They have increased from $40.8m in 2022 to $405.6m in 2024. If even one significant customer were to cease trading with SKE the damages could be material.
  113. I am also satisfied that if further threats were to lead to threatened parties to cease taking goods from SKE damages would be difficult to assess. While SKE would have information about its levels of sales to distributors or retailers, it would not readily be able to determine whether a falling off of sales through particular channels was the result of threats or of other market conditions. Other suppliers may gain market share through ordinary competition. The evidence shows that the vape market is very large and highly competitive. Unless customers who had been threatened by BB told SKE why they had decided to cease or reduce their purchasers from SKE, it would find it hard to establish their claim for damages. Still more basically, SKE might not even learn that BB had threatened particular customers with infringement proceedings. For these reasons it is likely to struggle to find evidence of the link between threats and losses.
  114. There is no evidence before me about the ability of BB to meet any claim for damages. BB has chosen not to exhibit any financial statements or even described its own financial position. I am unable to conclude that it would be good for any significant damages.
  115. I therefore conclude that damages would not adequately compensate SKE.
  116. I turn to whether damages would adequately compensate BB in the event that it turns out at trial that an injunction should not have been granted.
  117. In this regard, the only potential loss BB was able to identify was a potential liability for costs for bringing infringement proceedings against parties without having been able to write a letter before claim in accordance with the CPR pre-action protocol regime. There is no difficulty about the amount of any such loss. It would be measured by the additional costs liability. I also note that the courts are aware of the tension between the pre-action provisions of the CPR and the unjustified threats provisions. Judges dealing with costs in infringement proceedings recognise the difficulties faced by claimants. Moreover, there would in my judgment be nothing in the TMA to stop a claimant issuing proceedings and at the same time send a letter explaining why they had issued the proceedings but proposing that the parties follow steps akin to the pre-action processes under the CPR.
  118. SKE's own evidence about the cross-undertaking was unsatisfactory. It was also unclear until the hearing that the second defendant was offering to join in the cross-undertaking. At the hearing SKE offered to pay £100,000 into court. BB did not suggest that this amount was inadequate.
  119. For these reasons I consider that damages would adequately compensate BB.
  120. I turn to the other factors raised by the parties.
  121. As to the argument that SKE's approach is contrary to the letter and spirit of the CPR, there is an obvious tension between the unjustified threats provisions and desirability, reflected in the CPR, of a letter before claim. This was recognised by Laddie J in Reckitt Benckiser UK v Home Pairfum Limited [2004] EWHC 302. When Parliament enacted the 2017 Act it must have been aware of this tension. In any case I do not think that this can be a good answer to an application for an interim injunction to prevent arguable unjustified threats where it would otherwise be justified.
  122. I reject BB's argument that SKE has unduly delayed in bringing the application. I agree with the submission of SKE that it could not have sought an injunction in relation to the October 2024 letters, as it would have been met by the argument that they were permitted communications. The December 2024 letters represented a step-change, as BB threatened proceedings and sought undertakings to desist from selling the allegedly infringing goods. SKE's solicitors complained in early January 2025 and the application was issued later in January 2025.
  123. As to the scope of the order sought, there is force in the submission that it is too wide as currently drafted. SKE accepted that it should (a) only apply to customers in respect of goods supplied by SKE; (b) include the various qualifications and exceptions provided for in the unjustified threats provisions of the TMA (including being able to threaten primary infringing activities and to make permitted communications). Changes are required to the drafting of the order to comply with those requirements. A further qualification should be included to cover genuinely without prejudice communications (to cover the Unilever issue).
  124. I am satisfied that any impact of such an order on the rights of BB under Art. 10 would be very limited and proportionate and would represent an appropriate balance with the competing rights of SKE. As explained earlier, BB would still be able to impart information; what it would not be able to do is make further threats of proceedings. Returning to the requirements of s. 12(3) of the HRA, I am satisfied that the applicant's prospects of success at the trial are sufficiently favourable to justify such an order being made in the particular circumstances of the case.
  125. For these reasons, I am satisfied that the court should grant an interim injunction to restrain BB from making further threats of infringements proceedings. Its terms will require significant amendment as explained above. The parties should seek to agree a draft and I will decide any remaining disputes.
  126. As to the application for disclosure of information about the parties to whom letters were written in December 2024, BB's counsel confirmed the identity of those to whom letters were written and that they were in substantially identical terms. For this reason I do not consider that it is necessary to require BB to provide a witness statement. Nor do I think it is necessary to require disclosure of further documents at this stage.
  127. BB made an application for SKE to produce any indemnity agreements between SKE and its customers and surrounding emails. SKE said that it had negotiated such agreements but had not in fact entered any to date. BB submitted that in the absence of disclosure of any underlying documents the evidence about the indemnity arrangements was vague and unparticularised and that SKE could not establish that it had lost or stood to lose anything by reason of negotiating them. In the event SKE placed very little reliance on any indemnity agreements other than to seek to explain why existing customers had not ceased taking their goods. The application for disclosure was not pressed in the course of the hearing and I do not consider it is necessary to say more about it.

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