IP and Temporary Injunctions - The Need for Speed

Two rulings in the last month have emphasised the need for swift action when a rights-holder discovers an infringement of its intellectual property rights. In the unreported High Court decisions BASF v. Agriguard and BlinkX UK Ltd v Blinkbox Entertainment, Mr. Justice Floyd dismissed applications for temporary injunctions to restrain infringement of intellectual rights pending trial because, in both cases, the rights holder had failed to make the application quickly enough. In both cases the failure of the application was compounded by a costs award in favour of the alleged infringer, not to mention damage to the rights-holders' negotiating positions. Temporary injunctions – the basics Temporary or ‘interim' injunctions to restrain IP infringements pending a full trial are a powerful weapon in a rights-holder's legal armoury. They serve to maintain exclusivity in the area covered by the right until a full trial can be heard and, in practice, frequently serve to put an end to the dispute all together. The basic principles governing the grant of interim injunctions are well-established. The rights-holder must establish that it has a ‘good arguable case' of infringement – a considerably easier task than establishing infringement definitively at trial. Once this threshold is passed, the Court will decide the application on common sense principles known as the ‘balance of convenience' or ‘balance of justice'. Because the final outcome of the case cannot be determined, the Court will weigh the likely effect on the parties if no interim injunction is granted pending trial against the likely effect if an interim injunction is granted. The court will then choose the outcome which it considers least unjust overall. To illustrate: imagine your business sell a patented product. You discover that a new competitor is undercutting you with arguably infringing products as a loss leader. In your particular market, if this is allowed to continue for a year before you can get the matter on for trial, you are likely to lose customers to your competitors who will never come back, even if you win at trial. A powerful option is to seek an interim injunction stopping your competitor in its tracks pending the outcome of the trial on the basis that the ‘balance of justice' favours you. In essence, you argue that you have an established business which will suffer irreparable harm if your competitor is allowed to carry on and you win at trial, whereas your competitor, a newcomer to the market, will suffer no harm, or at least harm which can easily be compensated if it is restrained and then wins. The need for speed The key to this common argument is the concept of ‘irreparable harm', i.e. harm which cannot easily be quantified or compensated by an award of damages. And it is in this context that any issue of delay becomes critical. A business which wishes to argue that the acts of a defendant will cause irreparable damage cannot credibly do so if it is seen to have delayed for any significant period before taking action to prevent those acts. In both BASF, which concerned infringement of a patent, and BlinkX, which concerned infringement of a trade mark, a delay of only four months before action was taken was fatal to the rights-holders' applications for interim injunctions. But for this delay, it appears that these applications would most likely have succeeded. In both cases, however, the delay critically undermined the argument that the ‘balance of justice' favoured the rights-holder. These decisions serve as a timely reminder that aggrieved rights-holders must be prepared to seek advice swiftly to preserve the option of obtaining an interim injunction to enforce their rights. And, given the many potential legal and commercial advantages of such injunctions, there is no question that it is an option worth having. Prepared in conjunction with Tom Alkin of 11 South Square Joshy Thomas Associate, intellectual property and technology 023 8083 1231

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