Dispute Resolution

The distinctiveness and lure of a brand is of considerable value to a business. It is vitally important that businesses have a clear brand protection strategy in place to deal with infringers.

In most cases, the first step in addressing an infringement will not be court action. Some brand owners have found out to their cost that being too heavy-handed at an early stage can backfire badly. It is becoming common for an infringer to turn to the court of public opinion, or at least their social media followers, when they receive a formal cease and desist letter – it is not unknown for the mainstream media to pick up these stories. Quickly, a brand owner who was legitimately trying to protect their brand is accused of being a bully. This can be embarrassing and may cause additional damage to the brand, even where the owner has a strong infringement claim. Taking a softer approach, initially at least, can avoid any adverse public reaction.

One size does not fit all though. A more heavy-handed approach would be justified where time is of the essence. For example, where the brand owner is losing business or their reputation could become irreparably damaged.

If court action is the chosen route, then a UK brand owner is faced with a choice: should the action be raised in Scotland or England?

The specialist Intellectual Property and Enterprise Court in London has become very successful due to its specialist judges, proactive case management and the costs cap of £50,000. This cap provides brand owners with more certainty about the level of the opponent’s costs they may have to pay if they lose.

However, Scotland should not be overlooked as a place to pursue a brand dispute. One tactical advantage is that it is possible to apply for an interim interdict; the Scottish term for an injunction. To get an interim interdict, the brand owner must show that they have an arguable case and point to the damage that could be caused by allowing the infringement to continue.

A hearing on an interim interdict, whether opposed or unopposed, can happen within a day or so of the court papers being filed and the hearings, which do not involve the leading of evidence or witness statements, are usually relatively short. In certain circumstances, interim interdicts can be granted without notice to the infringer. This means that the first instance the infringer may know of the interim interdict is when they are served with it and must immediately stop or risk contempt of court.

A quick interim interdict gives the brand owner the upper hand at a very early stage and usually leads to a swift settlement. In contrast, in England, notice will usually need to be given to the infringer when seeking an interim injunction and the courts usually require witness statements in advance of a hearing. This can take time and increase legal costs.

The ideal position for any brand owner is a quick and relatively inexpensive commercial compromise that does not involve utilising the court system at all. It is also becoming increasingly common to make a softer initial approach to avoid any negative public reaction and allegations of bullying. However, where the valuable brand or good reputation of a business is at risk, court action may be necessary. Both Scotland and England have their own tactical advantages and it is important to carefully consider which forum is appropriate for a particular case.

This article first appeared in The Scotsman on 30 December 2019

Andrew McWhirter