England and Wales Patents County Court

IN THE HIGH COURT OF JUSTICE
IN THE PATENTS COUNTY COURT

		St. Dunstan's House 133-137 Fetter Lane London EC4A 1HD
		11th October 2010

1. This is an application for summary judgment by the claimants (Nike) under CPR Pt 24. The claim relates to the importation of trainers branded with the well known Nike trade marks. The case comes before me as one of three actions all arising the same way.
2. On various dates at the end of 2009 the UK Border Agency (UKBA) notified Nike's brand manager that they had detained shipments of trainers at Coventry International Hub under Article 9 of the Regulation 1383/2003 (known as the Counterfeit and Pirated Goods Regulation). The goods had been shipped from unknown exporters in China and were to be imported into the United Kingdom. The UKBA had stored the goods at the Associated British Ports storage facility in Finningley. The UKBA passed on to the brand owner the names and addresses of the persons named as consignees of the goods. Nike's brand manager Mr Houston inspected the goods shortly afterwards and determined that in his view they were counterfeit within the meaning of Art 2 of the Regulation. There is no reason to doubt his assessment.
3. Nike therefore began trade mark infringement proceedings against the various named consignees. The first Claimant is a Bermuda registered company and the registered proprietor of the marks; the second Claimant is a Dutch company and holds the UK licence under the marks and the third Claimant trade in the UK under the marks and acts as an agent for the second Claimant. I will refer to the Claimants as Nike.
4. The first case OCL 70012 named 8 defendants. Nike settled with one and does not need to proceed against 4 other defendants. Earlier today I gave judgment in default against the remaining 3 defendants in that action. None of them acknowledged service, served a defence or took any part in the case. The second case PAT 09209 named a single defendant, Shujon Miah. Nike did receive a communication from Mr Kabir at the relevant address who said he did not know who Shujon Miah was. Nonetheless since Shujon Miah was the named consignee at that address it seemed to me that Nike were entitled to proceed. Shujon Miah did not acknowledge service, serve a defence or take any part in the case. Mr Kabir attended court and repeated his explanation that he did not know who Shujon Miah was nor what Shujon Miah's address might be. In the circumstances I gave default judgment in that case as well.
5. In this case the defendant is E Bateman. It is different because the defendant has filed a "defence". The defence states:-

"I ordered the training shoes over the internet believing them to be authentic. I had no idea they were counterfeit. I have never received any goods and will not be ordering any more.

This is my previous address as I am no longer with my partner. I have no fixed address at the moment."

6. I should note in passing that despite the Defendant's comments about having no fixed address, later materials sent to the originally used address have clearly reached the Defendant.
7. Manifestly Nike cannot apply for judgment in default and so they have brought an application for summary judgment. That seems to me to be the right course. Nike contends that the Defendant has no real prospect of successfully defending the claim and there is no other compelling reason why the case should be disposed of at trial.
8. A first issue which arises (see below) is application to transfer this case to the "local county court" of the defendant. I refuse that application. It seems to me this is the right court for this case to be heard and determined. It would simply increase costs and introduce substantial delay to transfer the matter and I decline to do so. A separate reason is that the Patents County Court is a designated court under article 9(2) and 9(6) of the Goods Infringing IP Rights (Customs) Regulations 2004 SI 2004/1473 to deal with counterfeit goods whereas other county courts are not.
9. Under CPR Pt 24.2 (a) (ii), to give summary judgment I must be satisfied that the Defendant has no real prospect of successfully defending the claim and there is no other compelling reason why the case should be disposed of at trial.

The Law

10. Section 10(1) of the Trade Marks Act 1994 provides that:

A person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered.

11. Section 10(4) of the 1994 Act provides that:

For the purposes of this section a person uses a sign if, in particular he-

…

(c) imports or exports goods under the sign

…

12. Article 9 of the Community Trade Mark Regulation 40/94 is in corresponding terms.
13. Section 17(2) (c) of the 1994 Act also defines "infringing goods" such that goods are infringing goods if they or their packaging bear a sign identical or similar to that mark and the goods are proposed to be imported into the United Kingdom and the application of the sign in the United Kingdom to them or their packaging would be an infringement of the registered trade mark.

The Facts

14. Nike hold a number of registered trade marks. I will base myself on four marks as follows: UK trade mark 1352024 for the Nike mark including the "swoosh" device, CTM 278028 for the word Nike, 4288486 for the swoosh device and 277889 for Nike with swoosh.
15. Two other marks are also relied on but they do not mention footwear or shoes in their specifications of goods, only sports or leisure clothing. It is unnecessary to resolve any issues arising from those marks on this application (such as a case under s10 (2) of the 1994 Act) and I do not do so.
16. The defence consists of the following:

"I ordered training shoes over the internet believing them to be authentic. I had no idea they were counterfeit. I have never received any goods and will not be ordering any more.

This is my previous address as I am no longer with my partner I have no fixed address at the moment."

Summary judgment

17. The application for summary judgment was served on 26th August 2010 and was heard on Monday 11th October 2010. The Defendant did not attend in person although they did send a letter to the court and to the Claimant's solicitors which is addressed below.
18. Whether or not the defendant believed the goods were authentic is irrelevant to the question of trade mark infringement. Whether the goods are infringing goods or counterfeit goods is an objective question. The Defendant's state of mind does not matter. Equally the Defendant's state of mind is irrelevant to the question of importation.
19. The goods in question are training shoes branded with the Nike trade marks. Mr Thomson has inspected the goods and determined they are counterfeit. There is nothing before me to undermine that determination and I find that the Defendant has no real prospect of defending the claim. These goods are infringing goods within s17 (2) and counterfeit goods within Article 2 of Regulation 1383/2003. Importing these goods is an act of trade mark infringement. There is no other compelling reason why the case should be disposed of at trial and I given summary judgment for Nike.

The relief

20. The issue then turns to the relief which should be granted.
21. The first point that arises is that it seems to me that it is likely that this case arises from a single purchase by E Bateman of a single pair of trainers over the internet. There is nothing in the evidence to suggest that this is not such a case. It may be questioned whether the sledge hammer of these proceedings is necessary in order to crack this nut of this magnitude but Nike's representative Mr Elmslie explained, and I accept, that brand owners in this situation have no realistic alternative to enforcing their rights this way. Accordingly although this appears to be the smallest of cases, nevertheless the Claimant is entitled to bring proceedings.
22. Accordingly I will make an order in terms of the draft provided to me with certain adjustments discussed in court.
23. The final matter is the question of costs. On 15th July Nike's solicitors Hewitsons wrote to E Bateman pointing out the difficulties with the defence which had been filed. The letter stated that the Claimants were willing to settle the matter on terms. The terms were set out in a draft order with the letter. In essence the offer was to give an undertaking not to infringe in future, consent to destruction of the goods held by the UKBA and to provide details of where the goods had been purchased. The draft order provided that there would be no order as to costs. The letter continued by stated that if the Defendant did not agree then summary judgment would be sought and the Claimant would seek its costs.
24. It is not clear when E Bateman did do so but at some point they replied as follows:

"Could this action please be transferred to my local county court?

Unfortunately I cannot delver any goods as I have not received anything as these goods were seized on entry to the country.

I ordered these goods in good faith over the internet believing them to be authentic; I will not be ordering anything else.

This was a simple mistake. and the only information I can you give about the supplier is the msn contact I used this is Trademount.com

I undertake not to infringe the Claimants rights in the future and consent to the destruction of the goods.

Yours sincerely

E Bateman"

25. In substance the Defendant offered the Claimant all the relief it sought in the letter and it seems to me that the better course would have been for the Claimant to engage with the defendant to produce a consent order in appropriate terms. I understand from Mr Elmslie that the Claimant proceeded with this application for judgment because E Bateman had sought to transfer the case to another county court. While I can understand the Claimant's desire in a case like this not to devote undue resources to the matter that does not seem to me to be a cogent reason for avoiding doing so. Even if, which is unclear but may be the case, the letter was only sent after the application for summary judgment had been served, it still seems to me that some sort of engagement with the Defendant would have been preferable in the circumstances.

Accordingly I will make no order as to costs