09 Jun 2020

In a recent case involving the globally-renowned energy drinks manufacturer, the High Court held a director jointly liable for acts of trade mark infringement committed by his company. Whilst the Court was prepared to assist the director in his case (where appropriate) as he acted mainly as a litigant in person, his failure to engage properly in the proceedings and file sufficient evidence and legal arguments to challenge the claim ultimately led to a decision against him and his company on the basis that use of the logos, on competing energy drinks, rode on the coat-tails of Red Bull's reputation.[1]

Background

In 2016, a Bulgarian company, Voltino, applied for a European Union ("EU") trade mark for its depiction of two rams charging and about to collide with each other, in front of a sun, together with the words "Big Horn" (the "Sign"). In use, the Sign was set against a symmetrical light blue and silver background, on the front of energy drink cans manufactured for Voltino or its UK distributor, Big Horn UK Limited ("Big Horn").

Although Red Bull GmbH ("Red Bull"), the global manufacturer of canned energy drinks, had opposed Voltino's application to register the Sign at the EU Intellectual Property Office, Big Horn nevertheless went ahead with selling its energy drink products bearing the Sign in the United Kingdom ("UK"). The sole director of Big Horn (named as third defendant in the proceedings), accepted that he was the controlling mind of Big Horn and that he was also in charge of Big Horn's domain name, website and social media presence.

Red Bull issued proceedings in the High Court in 2018, claiming that Big Horn had infringed three of Red Bull's EU trade marks, depicting:

  • two charging bulls in front of a circular (sun-like) shape
  • a blue and silver parallelogram pattern with a circular (sun-like) shape at the centre
  • a single charging bull.

The above trade marks shall be referred to collectively as the "Marks" – all of which are used on Red Bull's well-known canned energy drinks.

Red Bull complained, in particular, about Big Horn's use of the Sign (in a yellow/black/white and a white/blue/yellow combination), as well as the blue and silver geometric background, and a further depiction of a lone ram, as appeared in the Sign (collectively, the "Offending Signs").

Further, Red Bull submitted evidence that Big Horn's director had advertised Big Horn products on Facebook. The pictures showed Big Horn energy drink cans as identical in shape and size to Red Bull's products, stocked immediately next to each other in retail outlets.

The liability trial proceeded in January 2020 against Big Horn and its director only, as Red Bull had successfully obtained judgment against Voltino in October 2019.

Defendants' conduct during proceedings

For some time during the proceedings and at trial, Big Horn's director represented himself and Big Horn, and his engagement was described as "patchy".

Although the Court made various allowances to assist him – including giving him the opportunity to amend his defence (rather than face a strike out or summary judgment), and adjourning the trial by one day as he had travelled abroad for treatment for a long-standing back problem and thereafter allowing him to appear at trial by video- or telephone-conference – it was noted that the director repeatedly failed to follow court process. Neither he nor Big Horn had complied with the requirement to provide disclosure (of evidence upon which they sought to rely), nor did they serve any witness evidence ahead of the trial, nor did they appear (or seek to be represented) at the pre-trial review.

As a result (at least, in part) of the conduct of Big Horn and, more specifically, its director throughout the litigation, by the time of the trial, it was not disputed that: Big Horn had used the Offending Signs in the course of trade within the EU (and UK) without the consent of Red Bull; the Offending Signs had been used in relation to goods and services; and Red Bull's marks had the reputation to satisfy the requirements of Article 9(2)(c) EU Trade Mark Regulation 2017/1001 (the "Regulation"). The Court therefore identified only three outstanding issues:

  1. Whether the Offending Signs are similar to the Marks, used on similar goods, and therefore give rise to a likelihood of confusion.
  2. Whether the Offending Signs are similar to the Marks, give rise to a link between the Offending Signs and the Marks in the mind of the average consumer, and thereby lead to unfair advantage being taken of the Marks without due cause.
  3. Whether Big Horn's sole director is personally liable for any infringement as a joint tortfeasor.

Decision on infringement

Addressing point 2, Ms Kelyn Bacon QC (sitting as a deputy judge) found there were both visual and conceptual similarities between the Offending Signs and the Marks. As the issue of the global reputation and highly distinctive nature of the Marks was not in dispute (see above), the judge held that use of the Offending Signs would be likely to cause the average consumer to form a link with the Marks. Although there is no requirement of intention, the judge pointedly remarked that it "is quite evident that Big Horn's [Offending Signs] have been designed so as to enable Big Horn to free-ride on the reputation of Red Bull".

No evidence was presented to suggest that Big Horn's use was with due cause, so the judge determined that Big Horn had taken unfair advantage of the distinctive character of the Marks, thereby infringing under Article 9(2)(c) of the Regulation. As a result, the judge was prepared to grant an EU-wide injunction in Red Bull's favour.

Interestingly, it was held that, although the use of the Offending Signs would likely cause the average consumer to make a connection (or form a link) between Big Horn's and Red Bull's products, there was no likelihood of confusion, and therefore no finding of infringement under Article 9(2)(b) of the Regulation.

Decision on tortfeasorship

In respect of the director of Big Horn, Red Bull sought that he be found jointly liable for the acts of infringement, due to his control of the advertising undertaken by Big Horn on social media and his use of Big Horn as a means of importing into, and marketing the products in, the UK.

A defendant will be liable as a joint tortfeasor if the following two requirements are met:

  1. The defendant has acted in a way that assisted the commission of the tort (infringement) by the primary tortfeasor.
  2. The defendant did so pursuant to a common design to do or assist with the acts that constituted the tort (infringement).

Although the test is a fact-sensitive assessment – and it does not necessarily follow that being a director of a company will make that person a joint tortfeasor with the company – the judge stated that there was "no doubt" that Big Horn's director fulfilled the requirements: he accepted that he was the sole director and was the controlling mind of the company; he was in control of the domain, the website and the social media accounts on which Big Horn's products were advertised; and he had set up the company as a vehicle for importing and marketing the branded energy drinks.

Comment

This case is a reminder that a litigant in person – being an individual, company or organisation that participates in legal proceedings without representation from a solicitor, barrister or other legal professional – is likely to be supported by the court in the preparation and presentation of their case. In particular, the court may be prepared to make certain allowances in enforcing case management decisions, in granting relief from sanctions and in conducting hearings. Here, despite the director's failure to follow prescribed procedures (see above), the Court still assisted him where it was reasonable to do so.

When faced with a litigant in person, represented parties should carefully consider what prejudice they have suffered by the counter-party's failure to act in accordance with the court's orders or directions, before hastily making any applications to the court. Seeking disproportionate or harsh penalties for missed deadlines which cause no adverse impact are unlikely to be welcomed by the court, and some failings – such as filing no documentary or witness evidence – could prove beneficial at trial.

Judges cannot make the counter-party's case on their behalf should they fail to sufficiently understand or engage with proceedings; for example, the judge could not accept Big Horn's director's "misunderstanding" of the law – when he suggested it was lawful for him to use the Offending Signs, pending the outcome of Red Bull's oppositions at the EUIPO – in defence of his and Big Horn's actions.

Nevertheless, possible indulgence by the courts to litigants in person, is not limitless. The judgment also serves as a reminder that potential wrong-doers cannot ignore the process in its entirety and cannot escape personal liability simply by hiding behind a limited company. The courts are willing to find a director to be jointly liable where there exists active co-operation and intention to bring about the act of the primary tortfeasor – facts which, in this case, Big Horn's director freely admitted.

A prospective claimant, in considering whether to add any specific individual(s) to claim (as the company's "controlling mind"), needs to investigate the overall structure of the company, the level of management and the decision-making powers of any such individuals – including their connection with the infringing acts about which complaint is made. It may be that such information comes to light during the proceedings in which case amendments may be needed to the statements of case to account for the director's participation in the infringement. However, potential claimants should also remember that being a director does not establish (nor exclude) liability – what matters is who is responsible for the infringing activities, and whether they acted to bring about those activities via the relevant entity.

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[1] [2020] EWHC 1214 (Ch)