• JBC case against Pak Cosmetic Centre will go to trial following a rejected application for summary judgment
• Pak maintained that the alleged counterfeit goods had been bought from JBC, and thus were genuine
• The decision highlights the high threshold of success in applying for summary judgment, and the importance of the consideration of factual dispute when making such an application

The UK Intellectual Property Enterprise Court has dismissed a summary judgment application lodged in respect of allegedly counterfeit goods sold bearing JBC's trademarks in JBC Distributors Inc v Mudahy (t/a Pak Cosmetic Centre) ([2023] EWHC 1480 (IPEC)), highlighting the high bar required to succeed on summary judgment in the United Kingdom.

Background

JBC manufactures and distributes products under the brand name SUNNY ISLE, for which it has obtained trademark rights in the United Kingdom. In an application filed on 13 March 2023, it claimed that Pak Cosmetic Centre had sold counterfeit goods under the SUNNY ISLE mark. The defendants argued that the alleged counterfeit goods were genuine. However, JBC applied for summary judgment after initial proceedings were lodged by both parties and asked for the defendants' counterclaims to be struck out.

Decision

Application for summary judgment

Civil Procedure Rules 24.2 and 3.4(2)(a) enable a court to grant summary judgment by striking out a statement of case that would not amount to a claim in law.

The court upheld the test set out in EasyAir v Opal Telecom, which held that a court must:

• consider whether the claim has realistic prospects of success;
• consider whether the claim carries a degree of conviction;
• not conduct a mini-trial;
• consider whether submissions are substantial;
• take into account both the existing evidence and additional evidence that can be reasonably anticipated.

Even where a trial is ultimately unnecessary, the court should be reticent to grant summary judgment.

In the hearing, the court held that there were differences between the sample bottles of SUNNY ISLE. JBC argued that the only question before the court was whether the offending bottles were counterfeit, given the following:

• The offending goods were purchased from the defendants.
• The complaint pertained to a single product.
• There were clear differences between the products.
• The changes exceeded standard packaging conventions.

The defendants alleged that all SUNNY ISLE products sold over the relevant period had been purchased from JBC, which JBC rejected as implausible, unsupported and irrelevant to the question of counterfeiting. The defendants argued that this amounted to a dispute of facts, which, along with their attestations that the offending goods were genuine, could only be adjudicated at trial.

In considering the parties' positions, the court held that the defense carried a degree of conviction and was not merely perfunctory, even if ultimately misplaced. The court concluded that a factual dispute was present, which required a more thorough investigation and additional evidence than that led by either party. Given the high burden of proof in summary judgment applications, the court concluded that it could not hold with certainty that the defense would fail.

Submissions on counterclaims

The defendants counterclaimed for loss and damage caused by:

• JBC's unjustified threats;
• unsold JBC stock; and
• JBC stock returned to it by Sainsbury's.

The court upheld the defendants' first counterclaim, which could succeed if the offending stock was genuine, but struck out the remaining two counterclaims, holding that neither disclosed a valid legal basis.

Comment

This case confirms the high bar required to succeed on summary judgment. Whilst courts are discouraged from conducting mini trials, they must consider evidence raised by both parties as well as the likelihood of additional evidence being led at trial. Additionally, the manner in which the applicant engages with the defendant's arguments is significant, as is whether a true dispute of fact has been presented. If so, a high onus remains to shift the burden of proof.

Going forward, claimants seeking to succeed at summary judgment should consider whether real disputes of fact have arisen and, if so, whether they can be adjudicated through a Part 18 request for additional evidence.

Reprinted with permission from the August 21, 2023 edition of “World Trademark Review”© 2023 Law Business Research. All rights reserved.