It all started when a former cowshed was turned into a spa in a Somerset hotel and inspired a range of “Cowshed” lifestyle products. Subsidiary brands “Cheeky Cow”, “Knackered Cow” etc. followed and then a cow “favicon”. But then “Jersey Cow” beauty products popped up. Passing off? Nadine Seymour doesn’t bet the farm on Cowshed.
Topic: Brands
Who: Cowshed Products Ltd v. Island Origins Ltd
Where: Patent Court, Royal Courts of Justice
When: 17 December 2010
Law stated at: 1 February 2011
What happened:
The claimant, Cowshed Products Ltd ("Cowshed") first launched the COWSHED brand in 1998 and by 2010 was using it on a range of luxury beauty and "lifestyle" products. Cowshed also had subsidiary brands associated with cow jokes (e.g. "Lippy Cow" for lip balm). The Cowshed packaging included a floral black and white element. As of 2010 Cowshed owned about 30 trade marks in class 3 for various beauty products, most of which were filed for in 2007.
The defendants decided to move to Jersey in 2009 to learn about local ingredients to inspire bath and body products. In July 2009 they registered a company and domain name "Gorgeous Cow", but in March 2010 the company name was changed to "Island Origins Ltd" ( as a result of not being allowed to use "Jersey" in the names applied for in Jersey and opting not to trade as "Gorgeous Cow" for fear of a passing off claim).
They registered a UK trade mark in class 3 for THE JERSEY COW COMPANY and the domain name "thejerseycowcompany.com" and began trading over the internet in August 2010 and in shops in the UK in October 2010. The product range was broader than just beauty products, for example some pottery and deck chairs. Their emphasis was on the Jersey origins of the products and the packaging was in white and brown with cow and colourful floral elements.
Cowshed was not impressed with this and in November 2010 sought an interim injunction to prevent trade mark infringement and passing off by the defendants in trading with use of "The Jersey Cow Company".
HHJ Birss QC's judgment:
HHJ Birss (as High Court judge) refused to grant the interim injunction, stating that both parties had a good arguable case and that in deciding whether to grant an injunction he had to consider the status quo. The market for the products was already crowded and the defendant had commenced trading. In the short period before a speedy trial date, an injunction would be likely to put the defendant out of business, whereas the claimant would experience modest damage in comparison.
A speedy trial was ordered to take place in April 2011. The defendant offered two undertakings and HHJ Birss ordered: (i) the defendant would not offer to discount their products more than 15% of their current trade prices to prevent their goods are not dumped on the market; and (ii) a cross-undertaking for 15% of the defendant's net profits in a designated escrow account to ensure that they can pay any award of damages or an account of profits which may be ordered.
Why this matters:
HHJ Birss QC's judgment highlights the importance for brand owners to proactively defend their brand in the face of possible dilution or blurring of a brand. In this case, the Court held that the status quo was that the defendant had commenced trading. Had Cowshed acted at the time of the defendant's trade mark application and delayed the defendant's commencement of trading with the name 'The Jersey Cow Company" it may have obtained the interim injunction. Further, the defendant's highlighted to the court that Cowshed had to date of the hearing prevented other lower quality competitors in the same market from using COW in their trading, for example "The Pink Cow" bath products.
Therefore, brand owners should: (i) carefully monitor trade mark applications and newcomers to their key markets, including surveying lower quality products that may dilute the brand more slowly; and (ii) act quickly where they oppose use to prevent the third party from changing the status quo.
Secondly, HHJ Birss QC pointed to the need to review the interim injunction test (American Cynamid [1975] AC 513) to reflect the reality that in trade mark and passing off cases whether or not the interim injunction is awarded often requires consideration of the underlying merits of the case, which are not supposed to be considered by the court at the interlocutory stage.
Conclusion
This judgment was only at the interlocutory stage and the final outcome will not be until after the speedy trial set for April 2011. However, the judgment highlights the importance of the brand owner monitoring and proactively protecting its brand against potential dilution or blurring of a brand, before an infringer commences trading.
Case:
Cowshed Products Ltd v Island Origins Ltd and others [2010] EWHC 3357 (Ch), 17 December 2010.
