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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Grant & Sons Ltd & Ors v Glen Catrine Bonded Warehouse Ltd & Ors [1999] ScotCS 195 (18 August 1999)
URL: http://www.bailii.org/scot/cases/ScotCS/1999/195.html
Cite as: [1999] ScotCS 195
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OUTER HOUSE, COURT OF SESSION
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088/16/92
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OPINION OF LORD CAMERON OF LOCHBROOM
in the cause
WILLIAM GRANT & SONS LIMITED and OTHERS
Pursuers;
against
GLEN CATRINE BONDED WAREHOUSE LIMITED and OTHERS
Defenders:
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Pursuers: Dean of Faculty, Woolman, Q.C.; McGrigor Donald
Defenders: Davidson, Q.C.; McClure Naismith
18 August 1999
On 19 February 1999 I pronounced an interlocutor appointing this cause to call by order following the issue of my opinion of even date. In terms of the interlocutor the pleas-in law for the defenders were repelled. The purpose of the by order roll hearing was to determine the form of the order sought by the pursuers in the light of my opinion. Thereafter the defenders sought to reclaim the interlocutor in the Inner House but their motion was refused as incompetent. The case was then put out for hearing on the by order roll.
At the further hearing two substantive matters were debated by the parties. These related to the form of the order and to the basis upon which an award of expenses fell to be made in favour of the pursuers, it being conceded by the defenders that the pursuers were entitled to an award of expenses so far as not already dealt with.
The pursuers submitted a draft for a form of order which, the Dean of Faculty suggested, was appropriate and conform to the findings in fact made in my opinion. This draft incorporated both of the interdicts concluded for in the pursuers' pleadings.
The draft order submitted was in the following terms:
"The Lord Ordinary....
(1) interdicts the defenders or any of them and their servants, agents
and all others acting under their authority or on their instructions
from passing off or enabling others to pass off:
(a) as and for the business of the pursuers. the business of the
defenders, et separatim
(b) as and for the pursuers' products, any gin, vodka or other
alcoholic beverage not of the pursuers' blending or
merchandise;
and in particular from carrying on or attempting to carry on business
in Scotland in connection with the distilling, blending, bottling,
labelling, packaging, marketing, exporting, wholesaling or retailing
of gin, vodka or any other alcoholic beverage not of the pursuers'
blending or merchandise under the name "Grant's" or other name
colourably similar thereto, or otherwise calculated to deceive or
confuse the public or to induce the belief that (i) the business;
and/or (ii) the products of the defenders are in any way connected with that (sic) of the pursuers.
(2) ordains the defenders to deliver up to the pursuers within 14 days all
stocks of alcoholic beverages (including, without prejudice to the
foregoing generality gin and vodka) held by them, or anyone on
their behalf in Scotland, which bear a label or cap or which are
otherwise supplied or are to be supplied under the name "Grant's"
or other name colourably similar thereto and likely to deceive and
cause confusion with the business or products of the pursuers."
The European Point
It is convenient at this point to deal with a submission made for the defenders on what counsel termed "the European point". The submission was founded on Articles 28, 29 and 30 of the Treaty of Amsterdam (formerly Articles 30, 34 and 36 of the EC Treaty). It was asserted that any order to be made by this court in the terms proposed, so far as it prohibited the marketing, exporting, wholesaling or retailing of the defenders' products under the name of Grant's or other name colourably similar thereto in any Member State of the European Union, would constitute "a measure" which had "equivalent effect" to a quantitative restriction on exports and that the making of such an order was prohibited by Article 29 (formerly Article 34).
It has to be said that this submission was in no way foreshadowed or even hinted at in the pleadings in this case nor at the proof, which was before answer, or in the final submissions made by parties after proof. It was in response to those submissions that the interlocutor issued with my judgment amongst other things repelled a general plea to relevancy and specification stated by the defenders. Indeed I was informed by the Dean of Faculty that the first intimation of the scope of the submission was given to him verbally by counsel for the defenders three days before the by order roll hearing and then only in general terms. For that reason I adjourned the hearing following counsel for the defenders' submission, to enable the Dean of Faculty to prepare his reply fully. As he pointed out prior to the adjournment, the submission was made without any attempt to seek amendment of the defenders' pleadings to incorporate the issue raised in the submission. It also raised a preliminary point as to whether this court should entertain the submission at such a late stage and in particular after the pronouncement of an interlocutor repelling the defenders' pleas-in-law.
Counsel for the defenders submitted that the effect of the order as proposed was to impose a ban on the export of a product, namely Grant's vodka or gin, on the basis that there had been unlawful passing off proved in Scots law. But where there had been such a finding in relation to events in Scotland, it required an equivalent finding of passing off in other Member States for exporting to those States to be the subject of a ban ordered by this court. The effect of the order would be to apply to the territories of other Member States what might be a more rigorous finding in fact and law in relation to what constituted passing off in fact and law in those Member States. Thus the ban would be discriminatory as between the various jurisdictions.
Article 28 (formerly Article 30) provides as follows:
" Quantitative restrictions on imports, and all measures having equivalent effect, shall be prohibited between Member States."
Article 29 (formerly Article 34) provides as follows:
"Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States."
Article 30 (formerly Article 36) provides as follows:
"The provisions of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States."
Counsel for the defenders referred to Allen and Hanburys Ltd. v Generics (UK) Ltd. 1988 E.C.R. 1245 in which it was held that the terms of the former Articles 30 and 36 of the EEC Treaty precluded the courts of a Member State from issuing an injunction prohibiting the importation from another Member State of a product which infringed a patent endorsed 'licences of right' against an importer who had undertaken to take a licence on the terms prescribed by law where no such injunction might be issued in the same circumstances against an infringer who manufactured the product in the national territory. This case, counsel said, made clear that in certain circumstances an injunction or interdict pronounced by a national court might constitute a measure having equivalent effect to a quantitative restriction and that whether it related to the import or the export of products between Member States. The proposed order was such a measure. The court was precluded from granting it in the terms sought since the relevant Article, Article 29, denied power to the national court to impose such a restriction on the export of the defenders' products, not least because of the discriminatory effect upon the defenders. Thus it would prevent export of such products where resale of the products in other Member States might be legitimate or had not been shown to be unlawful in the same way as it had been held to be in Scotland. The effect was discriminatory since it would apply a like measure to unlike circumstances in all Member States in that it applied a finding of unlawful passing off in Scotland where there was no such equivalent finding in relation to other Member States. Article 30 (formerly Article 36) provided for protection of industrial or commercial property, Thus a derogation from the prohibition under Article 29 could conceivably arise if there had been shown to be infringement of the property rights of the pursuers in other Member States. But no such evidence had been adduced by the pursuers. In the absence of such material, the national court was precluded from making any order of the kind proposed. In any event it was disproportionate to hold that because it was unlawful to market such products in Scotland, it was likewise unlawful to do so in all other Member States. Article 30 only enabled the court to depart from the dominant principle explicit in Article 29, which imposed a prohibition on measures which constituted an export restriction, if the derogation was a measure proportionate to the circumstances. There was no justification in the jurisprudence of European law for applying a remedy which extended beyond the boundaries of the national court where the infringement took place within the jurisdiction of the national court. There was nothing before this court to show that the actions which were sought to be prohibited were not permitted in other Member States. No evidence had been given in relation to other Member States in general and such evidence that had been adduced for the pursuers had not dealt with passing off in relation to all Member States. It had not been demonstrated that any other national court of a Member State would apply the same rules of passing off as applied in this jurisdiction. It was not for the defenders to prove that what they were restrained from doing in Scotland was not contrary to the jurisprudence of the national courts in all other Member States. It was submitted that it was contrary to the approach adopted in European law for a national court to make a remedy available in intellectual property law matters effective beyond the jurisdiction of the state where the national court was sited.
In these circumstances counsel submitted that the proposed order went too far in seeking to prohibit the marketing and sale of the defenders' products bearing the name Grant's or any name colourably similar thereto in other Member States and that the order should be restricted to exclude these States from its ambit. Alternatively, in the absence of clear guidance from the European Court of Justice as to the limits within which a national court was entitled to operate in terms of Articles 29 and 30, a reference should be made to that Court.
In his response to the submissions on the European point, the Dean of Faculty accepted that the proposed interdict constituted a measure to which the provisions of Articles 28 and 29 could be applicable. But though the provisions of Articles 28 and 29 bore to be absolute, there were significant qualifications to their ambit. In the jurisprudence of the European Court of Justice a distinction was made between "distinctly applicable measures", that is to say, measures which made an explicit distinction between domestic products and others, and "indistinctly applicable measures", that it to say measures which applied without distinction to domestic and other products alike. In the case of Article 29, in contradistinction to the case of Article 28, the Court of Justice has held that national measures which impede exports will fall foul of the article only if they are distinctly applicable. Reference was made to Edward and Lane: An Introduction to European Community Law (2nd ed) paras. 184-190: Groenfeld v Produktschap voor Vee en Vlees 1979 E.C.R. 3409: Holdijk 1982 E.C.R. 1299: Oebel 1981 E.C.R. 1993. The interdict proposed did not have as its object or effect a restriction upon the pattern of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade in such a way as to provide a particular advantage for national production or for the domestic market of the State in question at the expense of the production or trade of other Member States. The prohibition was applied objectively and generally to the production of the defenders' goods without drawing a distinction depending on whether such goods were intended for the national market or for export ( cf. Groenfeld's case at p.3415: also the European Commission's Observations in Oebel's case). Nor was it to be held contrary to the principle of non-discrimination to apply national measures merely because other Member States allegedly applied less strict rules (cf. Oebel's case p.2007: the Advocate General's Opinion in Holdijk's case). In any event it was to be borne in mind that the interdict proposed related only to the use of the name "Grant's" and its purpose was to prevent a form of trading which was calculated to deceive and mislead consumers world-wide, that is to say, to secure consumer protection, to promote fair trading and to restrain unfair trading. The acts which gave rise to the order and which were struck at by the order, were acts done in Scotland. In this regard the Court of Justice had held in the Cassis de Dijon case that obstacles to movement within the Community resulting from disparities between the national laws relating to the marketing of the products in question must be accepted in so far as those provisions might be recognised as being necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer. An illustration of the operation of this so-called rule of reason derived from the Cassis de Dijon case in the field of commercial transactions, was to be found in the decision in B.V.Industrie Diensten Groep v J.A.Beele Handelmaatschappij BV 1982 E.C.R. 707. That decision fell to be contrasted with that in Allen and Hanburys Ltd. v Generics (UK) Ltd. where the point at issue was whether the national measure applied without distinction to both domestic and imported products. This last case was concerned with imports and with the provisions of what was then Article 30. It was pointed out by the European Court of Justice that it was only where the national rules applied without distinction to both domestic and imported products that they did not fall within the prohibition laid down
In my opinion, the submissions for the pursuers are to be preferred. I begin by noting that it is not in dispute that the present case is concerned with the provisions not of Article 28 but of Article 29. That is to say, it is dealing with a producer who is located only within the jurisdiction of this court and with the products of this producer. It is not concerned with products produced elsewhere in other Member States and imported into this country to be marketed here. The action which gives rise to the order proposed is concerned with commercial property, namely the goodwill of the pursuers. It is proper, in my opinion, to take account of the purpose of Articles 28,29 and 30. In Edward and Lane supra para. 184 it is put as follows:
"Having established a common tariff wall vis-a-vis goods coming from countries outside the Community, the Treaty goes on to deal with national measures which limit trade within the Community. The aim is:
'The elimination of all obstacles to intra-Community trade in order to merge the national markets into a single market bringing about conditions as close as possible to those of a genuine internal market.'"
Article 29 insofar as it places limits upon the power of a national court to impose a ban, only does so with that aim in view. Thus it does not absolutely prevent a national court granting an interdict which has an effect in relation to products exported from the jurisdiction of the national court. Furthermore, as the Dean of Faculty pointed out, the difference in the jurisprudence of the European Court of Justice in its application to Article 28 and to Article 29 is because they are to be perceived as prohibitions against protectionist measures taken by a Member State which gives their own domestic products an advantage as against other products. But as was decided in Groenfeld, in relation to what is now Article 29, the prohibition in that Article, in contradistinction to the prohibition in what is now Article 28 in relation to imports, only strikes at national measures which impede exports if they establish a difference in treatment between the domestic trade of that Member State and its export trade in such a way as to provide a particular advantage for national production or for the domestic market of that State at the expense of the production or trade of other Member States. It was objected by Mr. Davidson that the effect of the proposed order was to preclude the defenders from selling their products in other Member States though there was no finding that what would be done there was unlawful in the absence of any findings that in selling their products in those Member States there would be passing-off or indeed a remedy equivalent to passing-off. This, he said, would be to apply like measures to unlike circumstances. It was not a question of disparity between the laws of the Member States of the kind in contemplation in Cassis de Dijon. Rather it was a question of remedy available in other Member States. It could not be said that that there were analogues to the passing-off action in this court to be found in the jurisprudence of other Member States as to make the sale of the defenders' products in those States unlawful. But I do not consider that these are pertinent or relevant considerations in relation to the scope of the prohibition in terms of Article 29. The effect of the interdict sought, so far as it touches the use of the name "Grant's" by the defenders on their products, does not establish any difference in treatment between the domestic trade of the United Kingdom and its export trade in any way which provides a particular advantage for national production or for its domestic market as against the production or trade of any other Member State. The interdict applies equally and without distinction to both aspects of trade, domestic and export, and thus does not offend against the principle set out in the cases of Groenfeld and Oebel. It does not serve to place the production or trade of other Member States at a disadvantage. Accordingly I agree with the Dean of Faculty that the interdict sought upon the use of the name does not offend against the prohibition contained in Article 29.
Even if it were to do so, contrary to my opinion, then it would be saved by the application of Article 30. In a single market it would be expected that the rules in relation to fair competition would be common. In the BV Industrie Diensten Groep case the Court of Justice was concerned with an injunction which was in principle caught by what is now Article 28 which prohibits all measures having an effect equivalent to quantitative restrictions on imports. The Court made reference to its judgments in the Cassis de Dijon case and in Commission v Ireland 1981 E.C.R. 1623 and then said:
".. in the absence of common rules relating to the production and marketing of products, obstacles to movement within the Community resulting from disparities between national legislation must be accepted in so far as such legislation, applying without discrimination to both domestic and imported products, may be justified as being necessary in order to satisfy mandatory requirements relating in particular to the protection of consumers and fairness in commercial transactions ... National case-law prohibiting the precise imitation of someone else's product which is likely to cause confusion may indeed protect consumers and promote fair trading: these are general interests, which .... may justify the existence to obstacles to movement within the Community resulting from disparities between national laws relating to the marketing of products. That such a rule does meet mandatory requirements is moreover borne out by the fact that it accords with the principle underlying Article 10 bis of the Paris Convention for the Protection of Industrial Property, as revised on 14 July 1967 at Stockholm, which prohibits inter alia all acts of such a nature as to create confusion with the goods of a competitor, and by the fact that this rule is recognised in principle in the case-law of most Member States."
The Court of Justice had regard to the fact that the case-law referred to by the national court applied without distinction to national and imported products. Furthermore it noted in paragraph 11 of the judgment that the products which the national court intended to prohibit from being marketed were for no compelling reason practically identical to the products imitated and that the trader concerned needlessly caused confusion between the two products. The Court of Justice also noted that the judgment of the national court showed that the question whether or not such an imitation was necessary was considered not only from the technical point of view but also from the economic and commercial point of view. In those circumstances, the Court of Justice held that a body of case-law prohibiting precise imitation of someone else's product may not be regarded as exceeding the scope of the mandatory requirements which the protection of consumers and the fairness of commercial transactions constitute. In the Cassis de Dijon case Advocate General Capotorti pointed out that exceptions to what was then Article 30 which appeared necessary for the purpose of protecting producers and consumers against commercial fraud were legitimate. At p. 673 he said :
"As regards the repression of frauds, in my view it is important to avoid the sale of products which are passed off for that which they are not or which wrongfully appropriate a designation which should not be applied to them or in relation to which doubt is maintained as to the place of production or in respect of which no indication is given of the substances of which they are composed. I therefore believe that from the point of view of Community law it is perfectly lawful for each Member State to resolve in an appropriate manner the problem of the identification of each product, its designation, its origin and the indication of the substances of which it is composed".
In the present case the principles underlying the case-law in relation to passing off and unfair competition to which the pursuers have applied and upon which the decision of this court is based, makes no distinction between domestic products and those produced elsewhere and imported into this country. In this regard the present case differs from the Allen and Hanbury case in which the legislation underlying the proposed injunction did differentiate between the domestic and imported products. The interdict presently sought has been objectively justified by reference to evidence which relates to confusion amongst consumers both at home and abroad. As was observed in the Deutsche Renault AG case, Community law does not lay down any strict interpretative criterion for the concept of risk of confusion. While national law is subject to the restrictions set out in the second sentence of Article 30, the courts in this jurisdiction do not on the one hand interpret the concept of confusion broadly where the protection of a producer in Scotland, or indeed the United Kingdom, is at issue but on the other hand interpret the same concept strictly where the protection of a producer established in another Member State is concerned. I consider that in such circumstances the jurisprudence of the European Court of Justice allows that national laws may be exercised to protect a producer against a risk of confusion such as would enable third persons to take unlawful advantage of the reputation of the goods of the proprietor of that reputation. The interdict presently sought seeks to promote fair competition throughout the internal market by restraining a producer located within this jurisdiction from passing-off his products within the internal market as those of a competitor already established within the internal market. As a remedy it is proportionate to the protection of commercial property which it seeks to secure, more particularly since it does not affect the content of the defenders' products themselves, e.g. by introducing some minimum alcohol content, and thus the substance of their business as distillers, blenders or bottlers. The defenders already export the same products using labels which carry other names on them. Moreover, the defenders will require only a limited time to re-arrange their production schedule to meet the terms of the order. Accordingly, in so far as Article 30 saves only certain measures as set out in Edward and Lane supra para.191, the interdict to be granted is not a means of arbitrary discrimination or a disguised restriction on trade between Member States, nor is it pre-empted by Community legislation but is objectively justified and proportionate.
I reach this conclusion without hesitation but in any event I am fortified in doing so by a further consideration. It appeared from the defenders' submissions that a lynchpin of the argument was that the pursuers had failed to lead evidence and thus to prove that the same remedy was available in all other jurisdictions within the Community. I do not read the jurisprudence of the Court of Justice as requiring that for the purposes of Article 29 the pursuers must do so. The Advocate General in the Holdijk case, Sir Gordon Slynn, was concerned with an argument that if rules in one Member State were different from or stricter than those applicable in another, then this led to the conclusion that the former were prohibited by what was then Article 34 since their effect was to limit production and hence exports. He pointed out that it followed from the judgments in the Groenveld and the Oebel cases that different treatment between domestic products and those originating in another Member State was not a relevant criterion for the application of Article 34. It was only when the different treatment was applied as between national products intended for the domestic market and those intended for export that the prohibition applied. That seems to me to make clear that a national court when considering the terms of an order which is to apply to a national product, such as the defenders' products, intended both for the domestic market and also for the export market, must make no distinction in the form of the order so far as it applies to the products for the domestic and those for the export market. It is not in point whether the order is stricter or less strict than one which might have been obtained in another Member State in relation to the same products. As the Court of Justice said in the Oebel case, it cannot be held contrary to the principle of non-discrimination to apply national legislation merely because other Member States allegedly apply less strict rules. More particularly is this so if the rule in the law of passing off and unfair competition to which the present action applies, is to prohibit all acts of such a nature as create confusion with the goods of a competitor which is a rule recognised in principle in the case-law of most Member States (see Industrie Diensten Groep case).
But even if I had been wrong in taking this view, I am of opinion that the point on which the defenders found their submission is one of which under our rules of pleading, the defenders required to give proper notice. It was plain on the face of the defenders' pleadings that they have not sought to do so at any time up to the present. Even if Article 29 was applicable and, that being so, was of direct effect so that this Court required to take cognisance of it in the making of any order, the defenders have not taken the point until now. It is accepted to be a point of both fact and law. In that event, the defenders come too late to complain that the pursuers have not proved that which they ought to have proved, when they have been held to have proved all that they sought to prove in their pleadings as regards confusion in support of the remedy that they seek. In the case of Thomson v Corporation of Glasgow Lord Reid referred with approval to the dictum of Lord Dunedin in Oswald v Fairs 1911 S.C. 257 when Lord Dunedin said of a proposed amendment:
"It simply meant that the pursuer was allowed to lead the whole of his proof in utter ignorance of the case that was being made against him, and it is impossible, as I have said, that no prejudice was done him".
That dictum seems to me to be in point in the present case. While it did not constitute the whole defence proffered, the submission, as became clear when it was put forward, did not simply bear on the powers of this court to issue an interdict affecting acts in relation to export of the defenders' products. It did so because it was said that the pursuers were precluded from obtaining the remedy sought in the conclusions of the summons because no evidence had been led by them to justify the interdict sought. But it was plain on any fair reading of their pleadings that the pursuers were not offering to lead such evidence. I can imagine no greater prejudice than to raise such a point of mixed fact and law not just at the end of evidence in a proof before answer but after the court has been invited to give and has given its judgment on the facts and the law as presented to it during and at the conclusion of the proof. As it was the submission had about it a strong smell of the lamp. No reason was offered, let alone given, as to how it came to be made so late. In my opinion, the time was long past in which it could ever have been fair and just to receive it. The prejudicial effect of delaying the taking of the point becomes more apparent in relation to another matter put forward by counsel for the defenders in the course of his submission. While I accept that neither the case of Prince nor Lansing Bagnall is directly apposite, by the defenders' failure to take the point during the course of the pleadings or throughout the proof, this court cannot find clear facts or developed arguments to support the submission for the defenders such as would, for instance, be necessary if any consideration were to be given to making a reference to the Court of Justice.
In the whole circumstances, I reject the defenders' submissions that the order sought offends against the prohibition in Article 29 of the Treaty of Amsterdam.
Order to be granted
In relation to the draft order, the Dean of Faculty accepted that the precise form of any order fell to be determined after proof (Lang Brothers Ltd. v Goldwell Limited 1980 SC 237). He further submitted that the form of the order was one which should be most appropriate in relation to the facts and circumstances of the particular case and that there was a need for caution in applying the same form of order employed in relation to one case to another case (Montgomery v Thompson 1891 AC 217). In cases such as the present, the relevant confusion might relate not only to the products or goods themselves but also to the parties' respective businesses in that members of the public might be induced to think that there was a connection between the business of the pursuers and the business of the defenders. Reference was made to the speeches of Lord Diplock and Lord Fraser in the Advocaat case and to the judgment of Lord Justice Slade in Stringfellow and Another v McCain Foods (G.B.) Limited 1984 R.P.C. 501 at p.534. In the present case the complaint which gave rise to the action and which had been substantiated in the evidence was that because of the unfair and unlawful use of the name "Grant's" by the defenders, the public thought that the defenders were associated with the pursuers. For the proper protection of the pursuers the order should be directed not only against passing off and confusion in respect of the pursuers' brand name "Grant's" but also use of the name to suggest a connection between the businesses of the parties. In these circumstances, it was appropriate that the order should extend to cover the areas which were defined in conclusions first and second of the summons. Reference was also made to the form of order pronounced in each of Montgomery v Thompson: Eastman Photographic v Griffiths (1898) 15 R.P.C. 105: Annabels (Berkeley Square) Ltd. v Schock 1972 R.P.C. 838 and Chelsea Man Menswear v Chelsea Girl Ltd. 1987 R.P.C. 189. In addition the Dean of Faculty also pointed to the width of interdicts and injunctions granted in relation to the use of a name, amounting to an absolute bar on its use in the Advocaat case and in John Haig and Company Limited v John D.D. Haig Limited 1957 S.L.T.(Notes) 36.
Notwithstanding these submissions I remain of the view which I tentatively expressed in my earlier Opinion. It seems to me that Mr. Davidson was in general well founded in suggesting that it is sufficient for the purpose of the present action that as regards part 1 of the proposed order the defenders should be restrained only by reference to the use of the name "Grant's" or a colourably similar name on their products and thus the order should be restricted rather to paragraph (b) and what follows so far as it is relevant to that paragraph. It is the use of the name "Grant's" on the bottle labels that has been productive of the real element of confusion amongst consumers. On the other hand, I do not agree with his criticism that in the introductory passage to the interdict the phrase "authorising or instructing" should be substituted for word "enabling". The latter word is directed not only against positive actions but also against passivity such as might be constituted by turning a blind eye to well known activities by others which involve deliberate infringement of the interdict. The only other criticism of the language put forward by Mr. Davidson was that the restriction should be simply to use of the name "Grant's" and nothing else. However I consider that the court requires to make clear that no attempt should be made to get round the prohibition by having resort to the use of a name which is little more than a repetition of the original.
In the circumstances I will restrict part 1 of the order to one to the following effect:
"interdicts the defenders or any of them and their servants, agents and all others acting under their authority or on their instructions from passing off or enabling others to pass off as, and, for the pursuers' products any gin, vodka or other alcoholic beverage not of the pursuers' blending or merchandise and in particular from labelling, packaging, marketing, exporting, wholesaling or retailing gin, vodka or any other alcoholic beverage not of the pursuers' blending or merchandise under the name "Grant's" or other name colourably similar thereto or otherwise calculated to deceive or confuse the public or to induce the belief that the products of the defenders are in any way connected with those of the pursuers".
As regards part 2, the form of the order will be that agreed between parties as follows:
"ordains the defenders to deliver up to the pursuers within 14 days all bottles, labels, caps, cases, cartons and other similar items held by them or anyone on their behalf in Scotland which bear the name "Grant's" or other name colourably similar thereto."
Expenses
The remaining point at issue was whether the defenders are to be found liable in expenses on the basis of a concession for the pursuers that the defenders were entitled to an additional fee under heads (b) and (c) of Rule of Court 42.14, together with certification of the three skilled witness led for the pursuers, namely Mr. Burns, Mr. Birkin and Dr. Piggott, or whether, as the pursuers submitted, the circumstances of the action have been such as to entitle them to payment of expenses on an agent and client , client paying scale. It was accepted for the pursuers that the choice was one for the discretion of the court. However, there was ample authority to vouch the proposition that it was open to the court to select the agent and client, client paying scale to mark something unreasonable in the conduct of the opposing party. Reference was made to Macphail - Sheriff Court Practice (2nd ed.) paras. 19.33, 19.43 and 19.45: British Railways Board v Ross and Cromarty County Council 1974 S.C. 27: Walker v McNeil 1981 S.L.T.(Notes) 21. It was submitted that the defenders had acted unreasonably since before the litigation had begun. This was demonstrated by the unreasonable attitude on the part of the defenders' management to the use of the name "Grant's" which was exemplified by reference to passages at pp. 132-3, 141-2 and 198-9 in my earlier Opinion. Further there had been a reckless refusal to contemplate the risk of confusion on the part of consumers as was exemplified at various stages of the proof. As to the conduct of the litigation itself, the defenders had refused to face up to the problem created by their own unreasonable attitude to use of the name. They had refused to admit anything at all and had put the pursuers to proof on every single aspect of the case. The only agreement as regards the evidence to be led at the proof related to the most formal of matters, as set out in the Joint Minute No. 73 of process. The defenders had pursued specious lines of defence at various points during the proof. These included suggestions that there was no reputation in the name "Grant's" available to the pursuers, that the use of the word "Standfast" and the reference to "William Grant" and "Family Reserve" on the pursuers' whisky labels together with the employment of the triangular bottle were key elements in the pursuers' reputation and that because there were other Grants in the market place, this took away from the pursuers any protectable reputation. The defenders had persisted in claiming that no confusion had resulted from their activities notwithstanding the lodging of their own survey evidence which indicated that there was confusion which was beneficial to the defenders' trading interests. They had presented as plausible justification for use of the name "Grant's" the connection with John Grant (Wines and Spirits) Limited, notwithstanding the change of name subsequent to its purchase, as well as the change of labels. All these matters had required a very considerable amount of evidence to be led both as regards the home market as well as the market world-wide. A further feature was that a cross-action at the instance of the defenders seeking interdict against the use by the pursuers of the name "Grant's" had been abandoned on the morning of the proof originally set down for the action. By contrast throughout the course of a litigation which had already proceeded for over seven years and included a procedure roll debate, forty seven days of evidence and eight days of submission, the pursuers had acted reasonably. The defenders had been able during that period to increase production, build up their market and expand into other fields and so maximise profits. In these circumstances, it was appropriate that expenses should be charged on a solicitor and client basis wh
For the defenders, it was submitted that it was proper to have in mind that the pursuers' action had been directed at the defenders' principal product and that to a material extent it had placed the defenders' very survival in issue. It had been reasonable to seek to protect their products in these circumstances and to do so by reference to the various approaches taken on averment and in evidence. The evidence had not been all one way. It had been arguable that the defenders' products were different from those of the pursuers and were directed to different segments of the market. The plea of acquiescence was founded upon the meeting in June 1989. The evidence on that had been conflicting and it had been reasonable to put the plea forward. It was of note that the pursuers had likewise run what might be termed specious arguments, including the attack on the quality of the defenders' vodka and the attack upon the veracity of Mr. Bulloch and Mr. Taylor especially suggesting in effect that they had engaged in a deliberate fraud upon the public. The pursuers had not sought, let alone obtained, any interim order during the course of the proceedings to date.
I have reached the conclusion that the defenders' conduct during the litigation was not so unreasonable as to entitle the court to mark disapproval of it by an award of expenses of the nature sought on the pursuers' behalf. I do so for a number of reasons. In the first place, I do not consider that it can be asserted that the nature of the defenders' behaviour prior to the raising of the action was so outrageous as in effect to disentitle them from defending the action or to make their decision to defend this action wholly unreasonable. In the second place I do not consider that their conduct during the course of the proceedings was unjustifiable in whole or that their lines of defence whilst largely unsuccessful, were unreasonable in the main. In this regard I bear in mind that some of the strictures which the pursuers sought to place upon the conduct of the defenders, their management and their witnesses were not in the end of the day held to be well-founded. I also have in mind that the pursuers do not appear to have made any similar motion in relation to the abandonment of the defenders' cross-action, nor did they do so after the procedure roll discussion in which they were awarded expenses. As Lord Maxwell observed in Walker v McNeil it is well established that an award of expenses without qualification is an award of expenses on the basis of taxation as between party and party. While this last matter cannot in any sense be determinative of the issue which I am called upon to decide, it does cast some light upon the attitude of the pursuers to the litigation at that time, a litigation in which, as counsel for the defenders correctly observed, no interim order was sought at any time by the pursuers. There is no dispute that the pursuers are entitled to an additional fee.
In the whole circumstances I have reached the view that the proper finding is that in relation to those expenses which have not already been dealt with, the pursuers are entitled to an additional fee having regard to each of heads (a),(b),(c),(e) and (f) of Rule of Court 42.14, together with certification of the three skilled witnesses, Mr. Burns, Mr. Birkin and Dr. Piggott. I shall so order.