High Court: Injunction granted restraining the infringement of trademarks relating to State-owned airline company



Killian Flood BL
Killian Flood BL

The High Court has granted an interlocutory injunction restraining the use of a trademark by a defendant which was alleged to infringe the trademark of a State-owned airline company. In reaching the decision, Ms Justice Nuala Butler considered that the balance of justice heavily favoured granting the injunction.

The court considered several issues arising in the proceedings, including the adequacy of damages, the risk taken by the defendant in launching a similarly-named business and delay by the plaintiff. Applying the principles set out in Merck Sharp and Dohme Corporation v Clonmel Healthcare Ltd [2019] IESC 65, the court was satisfied that it was appropriate to grant the reliefs.

Background

The plaintiff, Aviareto Limited, was a joint venture between SITA SC and the Irish government. Following a tender competition, the plaintiff became the registrar of the International Registry of Mobile Assets in Aircraft Equipment. The Registry was established pursuant to a Protocol to the Cape Town Convention on International Interest in Mobile Equipment, 2001.

The registration of an interest under the Registry afforded priority for that interest over unregistered interests for the same equipment. This was particularly important because aircraft often had multi-layered financing arrangements. For example, an aircraft’s engine may be owned separately to the plane itself.

Accordingly, the plaintiff developed a digital system called the Closing Room, which allowed for the pre-positioning of transactions prior to registration to ensure the correct sequencing of interests in the Registry. The trademark “Closing Room” was registered in a number of jurisdictions including the EU for six classes.

The defendant, Global Closing Room Limited, was incorporated in August 2019 and began trading in May 2020. The defendant was closely related to AIC Title Agency LLC, an American company that used the trademark Aircraft Closing Room. The plaintiff objected to the defendant’s attempt to register Global Closing Room as an EU trademark under the same six classes as its Closing Room mark.

In September 2020, the plaintiff launched proceedings seeking to prevent the defendant from trading under the name Global Closing Room, stating that it infringed their EU trademark. The plaintiff also brought an interlocutory injunction seeking to restrain the use of Global Closing Room.

The defendant opposed the interlocutory injunction on a number of grounds. It was claimed that a prior settlement agreement between the plaintiff and AIC allowed it to use the Global Closing Room mark. It was also alleged that there was delay by the plaintiff in bringing the proceedings, which caused the defendant extra losses from setting up the business.

Further, the court was required to consider whether the defendant should have attempted to “clear the path” by ensuring its mark was acceptable prior to establishing the business. The parties also disputed whether the balance of justice lay in granting the application on the basis of the adequacy of damages and the interference with the plaintiff’s property rights.

High Court

In a 35-page judgment, Ms Justice Butler granted the injunction against Global Closing Room Limited. The court applied the principles outlined by the Supreme Court in the Merck Sharp and Dohme case. It was not disputed by the defendant that there was a fair issue to be tried in the proceedings.

In considering where the balance of convenience lay, the court held that serious weight had to be attached to the fact that the plaintiff was seeking to enforce a property right that was protected as a matter of EU law. The court noted that it should be slow to find that an award of damages could adequately compensate the plaintiff for an infringement of its intellectual property. Despite the plaintiff failing to show that there was any actual confusion over the two brands, the court held that damages were not an adequate remedy for the plaintiff.

The court also considered that damages would be an adequate remedy for the defendant if the plaintiff’s proceedings did not succeed. It was held that the damage would be “largely financial” because the defendant would have to rebrand its company. The court accepted that it was difficult to quantify the potential damage to the defendant’s brand if the injunction was granted, but held that the defendant had taken a deliberate commercial risk when it established the business. The court said that the defendant should have anticipated that the plaintiff would regard Global Closing Room as an infringement of its trademark.

Turning to the previous settlement agreement between the plaintiff and AIC, Ms Justice Butler held that the settlement allowed AIC to use the mark “Airline Closing Room” for its own services. The court rejected the defendant’s submission that the existence of this settlement provided a basis for believing that the plaintiff would accept the co-existence of the Global Closing Room mark. Having regard to the close links between AIC and Global Closing room, the defendant should have been aware that the plaintiff would take actions to protect its trademark, the court said.

The court held that the defendant was not obliged to “clear the path” for its trademark by securing the Global Closing Room mark prior to trading, but said that the principles of “commercial common sense” applied. As such, the defendant had to bear responsibility for the plaintiff taking actions to protect its trademark.

Finally, the court considered the submission by the defendant that the injunction should be refused owing to delay by the plaintiff in bringing proceedings. The court accepted that the plaintiff was aware of the defendant’s mark by early Spring 2020. As such, the plaintiff was guilty of delay up until the issuing of proceedings in September 2020. While the court held that the progression of proceedings was “sedate”, it was noted that negotiations occurred between May and July 2020 and, further, the plaintiff required approval from the ICOA who appointed it as registrar over the International Registry.

In the absence of evidence of financial expense incurred by the defendant due to the delay, the court held that the delay was not such to disentitle the plaintiff to the reliefs sought. Further, the court held that the delay was largely set off by the defendant’s deliberate decision to use a similar mark to the plaintiffs.

Conclusion

Having regard to the findings in the case, Ms Justice Butler granted the interlocutory injunction restraining the use of the Global Closing Room mark.

© Irish Legal News Ltd 2021



Other judgments by Ms Justice Nuala Butler