Shoe stoppers

The opinion in Schuh Ltd v Shhh… Ltd [2011] CSOH 123 provides useful clarification of the circumstances in which the Court of Session will entertain an ex parte application for interim interdict.

Schuh Ltd is a well known shoe retailer, with 75 stores UK-wide. It specialises in casual footwear aimed at the youth market. Schuh owns a number of registered word and logo trade marks for “SCHUH”.

Shhh… Ltd was incorporated in April 2011 with the intention of opening a number of exclusive ladies’ shoe boutiques under the brand “Shhh…”, selling to customers by appointment/invitation only. “Shhh…” is intended to conjure up an image of exclusivity, suggesting the idea of luxury goods being made available only to those in the know.

Schuh’s claim

Schuh applied for interim interdict to prevent the defender’s use of “Shhh…”, based on infringement of their “SCHUH” trade marks, and passing off. They claimed infringement of s 10(2) of the Trade Marks Act 1994, alleging that because of the similarity between the brands “Shhh…” and “SCHUH”, and the goods being sold by the parties, there was a likelihood of confusion on the part of the public that the defender’s products originated from the pursuer. In addition, in terms of s 10(3), which protects trade marks with a reputation, they claimed that the proposed use of the “Shhh…” brand would cause unfair advantage or detriment to the distinctive character or repute of the “SCHUH” trade marks.

No prima facie case

Lord Glennie, as IP judge, concluded that Schuh had failed to make out a prima facie case of trade mark infringement or passing off. Applying the relevant tests, he found that the “Shhh…” brand was not similar to the “SCHUH” trade marks, being visually and aurally different, and conceptually very different. Furthermore, there was no likelihood of confusion. Neither was there any likelihood of unfair advantage or detriment. Similarly, in the absence of any real likelihood of confusion on the part of the public, there was no passing off either.

Balance of convenience

Lord Glennie also considered whether the balance of convenience would have favoured granting the interim interdict. He noted: “The starting point is usually to maintain the status quo ante, which would mean restraining the defenders by interim interdict”. However, he advised that he would not have granted an order here. The differences between the respective parties’ businesses meant that it was unlikely that Schuh would suffer any damage if the defender continued to use the “Shhh…” brand. In contrast, if interdict was granted, Shhh… Ltd’s business would be rendered “still born”. If the “Shhh…” brand could not be used pending a proof, expenditure on stock and advertising to date would be wasted. Moreover, the grant or refusal of interdict in this case was likely to be the end of the matter and, as Lord Glennie noted, “It is permissible in such circumstances to have regard to the likely outcome of the case, at least where the merits fall heavily on one side rather than the other.”

Ex parte orders?

Schuh had applied for interim interdict ex parte, but Lord Glennie continued the motion to allow the defender to be heard. He observed: “although the pursuers were entitled in the absence of a caveat to apply ex parte, the court should be slow to grant interdict without affording the defenders an opportunity to be heard except in the (probably rare) case where the pursuers can demonstrate a real risk that, if the defenders were given notice of the application, they might take steps before the hearing of the motion which would irretrievably prejudice the pursuers’ position… This approach is not only one of elemental fairness… the question on an application made ex parte is not only whether the balance of convenience lies in favour of granting interdict but also whether that balance of convenience lies in favour of doing so without giving the defenders an opportunity of being heard, a question which can seldom be answered in the affirmative unless such a risk can be demonstrated.”

This suggests that in most IP cases, the Court of Session will give the defender an opportunity to be heard even where no caveat has been lodged.

Comment

This decision reflects the increasingly commercial approach taken by the specialist IP judiciary in the Court of Session. The willingness of these judges to take prompt and effective decisions at the outset of a case allows the speedy resolution of disputes, thus freeing up businesses from potentially costly and protracted litigation.