Scottish Court tells Schuh to Shush

A Shhh ...

While the Louboutin litigation against Yves Saint Laurent (here) has captured the soles of the American nation, back in Europe there is also something afoot, if news from Scotland is anything to go by.  From the Land of the Glens comes the judgment of the Glennie in the form of Schuh Limited v Shhh... Limited, a decision of the Court of Session in which the IPKat's friends Susan Snedden and Gill Grassie (Maclay Murray & Spens LLP) acted for the victorious party.  Explains Susan:

"Last week, while the English courts were busy issuing copyright judgments, the Scottish Court of Session was focusing on a trade mark and passing off dispute between two shoe retailers -- Schuh Limited (the pursuer: that's the Scottish term for 'claimant') and Shhh… Limited (the defender: that's the Scottish term for 'defendant').  Shhh… successfully defended an application by Schuh for interim interdict (the Scottish term for 'injunction') which, if granted, would have prevented Shhh… trading under the “Shhh…” brand.

Background 

Schuh are a well known shoe retailer with over 75 stores in the UK. Catering for the "casual athletic and footwear" market and enjoying a core customer base of 15-24 year olds, Schuh hold a number of registered trade marks including (i) a UK word mark for SCHUH”in various classes, including footwear in Class 25, and (ii) a Community trade mark for logo comprising the word “schuh” in green lower case stylised font against a black and grey oval. Schuh claimed that their name is frequently mispronounced as “shush”. 

Shhh… is a new shoe retail business run by Steven Moffat, an internet entrepreneur (you find out more if you visit www.shhh-oohs.co.uk). Shhh… planned to open a series of “secret” boutiques in both Scotland and England, selling exclusive couture shoes to a select number of female customers. The concept behind the brand is “Shhh... it's a secret”, the boutiques being in exclusive, unobtrusive locations. Customers will be permitted entry to the boutiques by invitation or appointment only. 

Moffat began preparing to trade as Shhh… as far back as November 2010; his company had. been carrying out marketing activities in relation to the brand for some time, and a Shhh… Facebook group has already attracted over 2,300 members. 

Court proceedings 

Schuh became aware of Shhh… in May 2010. After their trade mark agents sent Moffat a letter before action, they raised proceedings for an interim interdict against Shhh… on an ex parte basis. However the judge, Lord Glennie, decided that Shhh… should have an opportunity to defend the action; the case was continued for a few days to allow Shhh... to prepare a defence. 

Schuh based their case on sections 10(2) [= similar marks, same goods + likelihood of confusion] and 10(3) [similar marks + detriment to repute or distinctive character without due cause] of the Trade Marks Act 1994, and on passing off. They also claimed that the balance of convenience favoured granting the interim interdict, on the basis that Shhh… had not yet started trading, Shhh… had had early warning of Schuh’s concerns about their trading name and damages would be impossible to quantify. Shhh… argued that the marks were not similar. In any event, there was no likelihood of confusion, unfair advantage or detriment, and no passing off. Further, the balance of convenience favoured refusing the interim interdict. 

Lord Glennie’s Decision 

Lord Glennie found against Schuh in respect of almost every aspect of its case and refused to grant the interim interdicts sought. 

First, as regards both s10(2) and s10(3), although he found the parties’ goods to be similar, he concluded that the pursuers had not made out a prima facie case that Shhh’s sign was similar to either of Schuh’s trade marks:

“Not only are they spelt differently but they give a different impression, [Schuh's] mark being closed in contrast to the open-ended expectancy suggested by the "..." at the end of the “Shhh". Aurally they sound different, even if account is taken of the frequent mispronunciation of their name adverted to by [Schuh]. Conceptually they are very different. As Mr Moffat put it, “SHHH is a secret. SCHUH is a shoe.” …I can see no reasonable prospect of [Schuh] establishing that the signs or marks should be regarded as similar.”

Schuh had not made out a prima facie case in terms of s10(2). Even if the court had been persuaded the marks were similar, "...it is difficult to see what confusion is likely to arise in the mind of the reasonably well-informed, circumspect and observant average consumer...”, having regard to the factors to be considered in the overall global assessment set out in previous authorities. 

Schuh’s claim based on s.10(3) also failed. Had the marks been found to be similar, Schuh would have failed to establish that the use by the defenders' of the mark "Shhh..." would be "detrimental to the distinctive character or repute of the pursuers' mark". The pursuers did not plead or lead any evidence of any (serious) likelihood of an alteration to consumers’ economic activity. As regards unfair advantage, Lord Glennie stated that the pursuer’s case was supported by only the “barest” of pleadings, and his findings in respect of similarity and confusion meant that it must fail. 

Very little was said by Lord Glennie in respect of Schuh’s passing off claim. Due to the reality of the absence of similarity between both marks and thus, an absence of any real likelihood of confusion, it was stated that “...the pursuers cannot show a prima facie case [of passing off] either.” 

The Kats' favourite footwear

Lord Glennie added that he would in any event have refused the interim interdict on the balance of convenience.There was very little chance of Schuh suffering any damage. In contrast, the granting of an interim interdict would have "...render[ed] [Shhh…’s] intended business stillborn" as a result of the resultant wasted expenditure on preparations to trade. Further, “...in any event, the grant or refusal of interdict in this case is likely to be the end of the matter, certainly if interdict is granted since [Shhh…’s] business will collapse” As such, even if Schuh did in fact have a prima facie case, it was “...so weak that it would be wrong to impede and risk destroying [Shhh…’s] business” by granting the interdict. 

The willingness of the court to give such a decisive judgment at a very early stage in the case is a clear sign of the Scottish courts’ proactive commercial approach to IP enforcement".

Hush Puppies from Schuh here
Shhh ... you know who here
The King's Speech here

Even Wiser, rule the three wise women

Back in March, the IPKat wrote:

"If you search the Scottish Courts website under "intellectual property" you won't find this -- which is why the IPKat missed it on his prowl -- but Wise Property Care Limited v White Thomson Preservation Limited and others [2008] CSOH 46, a passing-off decision of Lord Matthews (Outer House in the Court of Session), was posted on the Scottish Court website this morning. ... In this action the Pursuer [says the IPKat: that's the Scottish term for 'claimant' or 'plaintiff'] White Preservation, a trading division of Wise Property Care, successfully defended an application for recall of interim interdict (interim injunction) which had been granted without notice against White Thomson Preservation Limited and others. ...

... the surname of the brothers involved was 'White'. The Pursuer successfully argued that the Defenders' use of the name White Thomson Preservation Limited was confusingly similar to their trading division 'White Preservation' and that the Defenders' use of that name passed off their business and services as those of the Pursuer.

As ever it's the facts that make the case quite interesting, with the Defender trying to pick up and run with goodwill which, he was effectively saying, had been lying dormant. The suggestion that this somehow gave him a defence to passing off which is assessed on an objective basis was quite rightly rejected by the judge...."

This information came from the IPKat's valued Scottish friend Gill Grassie of Maclay Murray & Spens, who has now informed him that a three-woman court of appeal has dismissed the Defender's appeal.

Right: it seems the Kat has something to "grouse" about ...

Once again, the decision is not to be found among the IP cases on the Scottish Courts website, but you can read it here. Says Gill:

"The three judges unanimously rejected the appeal and agreed that the first instance judge was entitled to reach the view that he did in granting the interim interdict. Whilst there is no new point of law here it provides a useful reminder of how difficult it can be to challenge a first instance decision on interim interdict successfully, given that it is a discretionary one and that it is therefore necessary to show essentially that the decision was based on a error of law or was an unreasonable one. It seems to me that the approach taken here by the Appeal Court was the correct one and that the first instance judge exercised his discretion appropriately in granting the interim interdict".

The "bazaar" tale of "tartan tat"

The Scottish Courts website hasn't yet posted the decision, but The Scotsman reports on a decision of the Court of Session, Edinburgh, with regard to allegedly inauthentic Isle of Skye tartan [thanks, Thorsten Lauterbach, for this lead]. This episode was sparked off by a raid on a warehouse in Fife which revealed hundreds of metres of the suspicious cloth. According to the newspaper,

"Lady Dorrian granted an interim interdict to Rosemary Samios, who holds copyright in the Isle of Skye tartan, against Gold Brothers, banning the firm from making, marketing, importing or exporting goods made in the design. The firm is operated by Surinder, Galab and Dildar Singh, of Edinburgh. ...

Lawyers for Mrs Samios, who is also claiming £150,000 damages, said she was tipped off that wool scarves in the Isle of Skye design and described as "Skye Isles" tartan were being sold in the Royal Mile, Edinburgh, by Gold Brothers.

... Inquiries had established that Gold Brothers was also selling "Skye Isles" and "Bright Skye" scarves, rugs, kilts and hats.

It was alleged the firm had imported from China substantial amounts of cloth in the Isle of Tartan design, and Mrs Samios complained of serious damage to the reputation of the genuine tartan by "its application to cheap products of inferior design, quality and materials".

... Both the Edinburgh Chamber of Commerce and the Federation of Small Businesses have urged the city council to intervene over the "tartan tat" shops on the Royal Mile.

The strongest critics include the Scottish Tartan Authority, which claims the Royal Mile looks "like an Eastern bazaar"."

Since acquiring the rights to the tartan in 1992, Mrs Samios had enjoyed "considerable commercial success" granting licences at an initial £12,000 plus a 10% royalty on sales. Owners of rights in tartans are nursing some hostility towards the "tartan tat" element, accusing them of "cultural rape".

Says the IPKat, the Scottish Register of Tartans Bill, due to be discussed this coming September, will provide an extra level of subject-specific protection, but in the meantime the existing IP rights -- with their various defences and pecularities -- will just have to do. Merpel adds, there seems to be an undertone of anti-Indian hostility in all of this, since Indian entrepreneurs have thrived in the "tartan tat" sector. Let's hope that this is not so and that, either as licensees of legitimate products or as innovators of new tartan designs, the Indians will make a valuable contribution to the commercial welfare of the Scottish economy.

Scottish tartans here
Indian tartans here

Arrow Generics v Akzo

It's not every day you find a Scottish patent revocation decision, but last Tuesday the First Division of the Inner House of the Court of Session (Lord President, Lord Kingarth, Lord Clarke) was in action in Arrow Generics Ltd v Akzo NB (represented in Scotland by Organon Laboratories Ltd), [2008] CSIH31. The patent in question (EP0389035) related to the steroid tibolone, in particular to a form of the drug having a high degree of crystalline purity, and claimed the following:

"1. A pharmaceutical composition which contains a pharmaceutically suitable solid carrier and the compound having the structure (7ά, 17ά) - 17 - hydroxy-7-methyl-19-nor-17-pregn-5(10)-en-20-yn-3-one, characterized in that the compound is crystalline pure, which purity is greater than 90%.

2. The pharmaceutical composition of claim 1, characterized in that the crystalline purity is greater than 95%.

3. The pharmaceutical composition according to claim 1, characterized in that the crystalline pure compound has the monoclinic P21 form.

4. The pharmaceutical composition according to claim 1, characterized in that the crystalline pure compound has the triclinic P1 form.

5. A method for the preparation of a crystalline pure compound for use in a pharmaceutical composition accordingly to claim 3, characterized in that the polymorphous compound is crystallized from mixtures of water and acetone or ethanol, or from ethyl acetate, acetonitrile, or acetone-hexane mixtures.

6. A method for the preparation of a crystalline pure compound for use in a pharmaceutical composition according to claim 4, characterized in that the polymorphous compound is crystallized from an apolar solvent."

Only claims 1-3 and 5 were in question, claims 4 and 6 not being in issue. The question was whether the Lord Ordinary at the first instance (noted previously by the IPKat here) had been correct in determining that the claims were not obvious in light of one particular prior art document disclosing tibolone in a crystalline form. The document (Declerq) did not disclose that tibolone occurred in more than one crystalline form, as the discovery that tibolone was in fact polymorphic was made only later on. The Lord President, in the leading judgment, considered that this did not make the claimed invention obvious:

"[T]he circumstance that following the experimental parameters described in Declercq the skilled person would ordinarily obtain crystals, some at least of which were monoclinic, does not entail that 'the invention' would thereby be performed. The invention, properly understood, was constituted by a pharmaceutical composition having a high degree of crystalline purity in the active ingredient. While the skilled person, following Declercq, might be expected to obtain a mixture of crystalline forms (including some monoclinic), from which a particular crystal might by some process under the laboratory microscope have been isolated, Declercq did not teach how to obtain a product of high crystalline purity for pharmaceutical use - even if the skilled person for some reason was alert to the need to isolate a particular form, notwithstanding his ignorance of polymorphism in tibolone.
In these circumstances, while Declercq enabled the skilled person to take certain steps, it did not enable him 'to perform the invention'" (paragraphs 106-107).

The Lord President considered that the use of tibolone to a high degree of crystalline purity as the active ingredient in a pharmaceutical composition was not obvious. Preliminary to that inventive step was the discovery by Akzo (not itself an invention, according to the Lord President) that tibolone was in fact polymorphous, i.e. with at least two crystalline forms. That discovery led in turn to the practical identification of the product, involving use in a pharmaceutical composition of crystalline pure tibolone having distinct advantages over a general mixture of forms, these advantages being stability and reproducibility. The skilled but unimaginative man would not have taken these steps or any of them.

That was effectively the end of the story, as far as the patent was concerned, since Lord Kingarth agreed with the Lord President's conclusions. Lord Clarke, however, did not agree entirely and considered that claims 1-3 were not inventive:

"[U]pon discovery of the polymorphous character of tibolone, the patentee, no doubt, sought to address the consequences of that discovery. In my judgment, however, they did so by virtue of what is addressed in claims 4, 5 and 6. In claims 1-3, however, as they are worded, what was being claimed was the incorporation of monoclinic P21 form tibolone, up to a level of purity greater than 90%, which would include 100%. Claims 1-3 do not address the means (whether robust or otherwise) whereby a purity of more than 90% of monoclinic P2 tibolone is to be produced. They are, as previously noted, product claims, not process claims. They seek a monopoly in the product so described. My acceptance, shared by all members of this court, of Arrow's submission that these claims required to be read as embracing single crystal pharmaceutical compositions has to be kept in mind. The composition, tibolone, had been known since the 1960s. I accept that the skilled man would, at the priority date, have known that it was being developed by a drug company and was of particular interest in relation to the treatment of menopausal complaints. After Declercq, he knew also that the crystalline structure had been discovered as monoclinic form. Prior to the priority date tibolone had been put on the market in pill form. The question then comes to be, whether it would have been an inventive step to do what claims 1-3 embrace. [...] I repeat that the knowledge, or otherwise, of the discovery of the polymorphous character of tibolone seems to me to have bedevilled the discussion of this question and certainly led, in my view, the Lord Ordinary to misdirect himself when dealing with the matter. On this branch of the case, it seems to me that the question is, can it be said to be inventive to place a single crystal of monoclinic form 1 tibolone in a pill, tablet or capsule? Judging matters from the viewpoint of the skilled man who was aware of only Form 1 monoclinic tibolone as at the priority date, I agree with Arrow that, on the evidence, it cannot" (paragraph 162).

All this sounds very familiar to the IPKat, particularly after the recent Court of Appeal judgment in Lundbeck (see here for details). He can see the difficulty in distinguishing in cases such as these where the inventive step (if there is one) actually lies. The discovery itself is apparently not in itself enough, but the application of the discovery (even if this may seem quite obvious, at least to the non-specialist eye) may well be. Merpel would , however, like to know if Akzo would be happy with Arrow making and selling tibolone according to the pre-patent recipe. She suspects not...

Wise after the event

If you search the Scottish Courts website under "intellectual property" you won't find this -- which is why the IPKat missed it on his prowl -- but Wise Property Care Limited v White Thomson Preservation Limited and others [2008] CSOH 46, a passing-off decision of Lord Matthews (Outer House in the Court of Session), was posted on the Scottish Court website this morning. The Kat thanks his friend and fellow runner Gill Grassie of Maclay Murray & Spens for this vital piece of information).

In this action the Pursuer [says the IPKat: that's the Scottish term for 'claimant' or 'plaintiff'] White Preservation, a trading division of Wise Property Care, successfully defended an application for recall of interim interdict (interim injunction) which had been granted without notice against White Thomson Preservation Limited and others. Says Gill (you'll have to do the delightful Scottish lilt yourself when you read it out):

"You will see that the case has a complex background borne out of a family dispute where the surname of the brothers involved was 'White'. The Pursuer successfully argued that the Defenders' use of the name White Thomson Preservation Limited was confusingly similar to their trading division 'White Preservation' and that the Defenders' use of that name passed off their business and services as those of the Pursuer.

As ever it's the facts that make the case quite interesting, with the Defender trying to pick up and run with goodwill which, he was effectively saying, had been lying dormant. The suggestion that this somehow gave him a defence to passing off which is assessed on an objective basis was quite rightly rejected by the judge. It is good to see the Scottish courts (and in particular recently appointed Court of Session judge) taking such a firm approach at an early interim stage of an action".

The IPKat says, it's depressing to see that passing-off actions in Scotland are as wordy and as fact-specific as their counterparts in England and Wales. This suggests a universal truth that, where IP is protected at the level of unregistered names, the courts do not so much apply the law to the facts as determine the nature of the facts and thereby establish the parameters of the law. Merpel says, but itsn't "justice in the individual case" something we strive to achieve?