The William Grant & Sons v Lidl Court of Session action has again shone a light on the benefits of litigating in Scotland, not only for IP but for general commercial disputes.

Gin-terim interdict

I commented on the first instance decision in a previous blog post. In summary, the Court of Session found that there was evidence to suggest Lidl was riding on the coat-tails of William Grant's Hendrick’s trade mark and granted an interim interdict to stop the sale of the infringing bottles of Lidl's Hampstead gin in Scotland. Particularly the first instance judge held that, based on the evidence before them, the court could not make an interim order extending beyond Scotland in this case.

A-peel-ing

Both parties appealed the original decision to the Inner House of the Court of Session.

Lidl did so on the basis the IP judge had erred, as the Hendrick’s Trade Mark relied upon at first instance was of a clear or white bottle. They argued that sales in a dark bottle did not create a reputation in a trade mark which featured a white or clear bottle. This argument was rejected by the court as, if there is no colour specified in a trade mark, extensive use of a particular colour can result in that colour becoming associated with the trade mark. Use of this same colour by another may therefore be seen as taking unfair advantage of that mark. The appeal judges held that the first instance judge was entitled to find that there was a prima facie case of trade mark infringement.

More pertinently, William Grant appealed on the basis the interim interdict should have been extended beyond Scotland as it is in the court's power to do so.

In the spirit

In considering William Grant's appeal point the court acknowledged that jurisdiction over the defender can be created in at least two ways – either the defender is domiciled in the relevant jurisdiction or the infringement takes place there. Where the defender is domiciled in Scotland the Scottish court has jurisdiction over an infringement, wherever it occurs. If the infringement takes place in Scotland, but the defender is domiciled elsewhere, the court can interdict the infringing activities being carried out in Scotland but not those outwith.

As Lidl is domiciled in Scotland, William Grant was entitled to raise proceedings in Scotland and there was no need to raise parallel proceedings in England. Considering the approach of the English courts, the Inner House held that, where persons are domiciled in the jurisdiction, granting orders which have extra territorial effect are commonplace – which is the same for Scotland. William Grant's cross-appeal was therefore allowed, preventing the sale of Lidl's infringing bottles throughout the UK.

Litigating in Scotland is just the tonic

Although IP law is in essence the same in Scotland as in the rest of the UK, Scotland is an independent legal jurisdiction with its own court system, which offers an efficient venue to enforce IP rights and resolve IP disputes. As this case shows, there are many potential tactical and commercial advantages to enforcing IP rights in Scotland:

  • There are designated Scottish IP judges and distinct, commercially focussed IP court rules;
  • Obtaining an interim interdict can be quicker, easier and less costly to obtain than an interim injunction in England and can provide UK-wide protection;
  • There is no automatic discovery or disclosure of evidence;
  • There are specific case management rules for all IP court actions raised in the Court of Session, which aim to make litigation as swift and as cost efficient as possible;
  • Raising a court action in Scotland may take the infringer by surprise and force them to litigate in a court which is not familiar to them; and
  • The court fee of issuing a Scottish action in the Court of Session is approximately £300 no matter the value of the claim.

Our handy guide on why Scotland is a valuable dispute forum, can be found here.

This decision is of course an important one for Scottish IP litigation, but it also highlights the benefits of litigating in Scotland in a broader sense. The reasoning of the court, in granting a UK-wide interim order, is not restricted to instances of IP infringement but applies to commercial actions more generally.