Wednesday 17 April 2019

Enforcing Intellectual Property Rights: Interim Injunctions

Cardiff Law Courts
Author Ham II
Licence Creative Commons Attribution-Share Alike 2.0 unported
Source Wikipedia Cardiff Crown Court

Jane Lambert

It can take several months and often longer for a claim to come to trial and a lot of harm can be done in that time.  If the harm can be compensated in damages and the wrongdoer is good for the money then all well and good.  The injured party can claim back everything that is owed to it in proceedings known as "an inquiry as to damages". But what if it can't put an accurate figure on its loss for any reason or the person on the other side is a man of straw?  In those circumstances, the applicant may be entitled to an interim injunction.

As I said in Enforcing Intellectual Property Rights 16 April 2019, an injunction is an order by a court to stop or refrain from doing something or, occasionally, to do something.   In Wales and England, disobedience to an injunction is punishable with a fine or spell in prison.  In other countries, it is punishable by a periodic payment known as an astreinte.   There are two kinds of injunctions, namely final injunctions, which are granted after a trial when the parties' rights and obligations are determined, and interim injunctions which are granted from the until the end of the trial.

Interim injunctions can be granted by the High Court or the County Court but not by IPEC's small claims track.  To get one an applicant has to satisfy a judge that he or she could win, that the loss or damage that the applicant will sustain between the date of application and trial if the other side is not stopped cannot be compensated properly in damages and that the applicant can compensate the other side adequately if it transpires that he ort she should never have been awarded the injunction.   Interim injunctions do not come cheap. They can easily double the cost of the litigation,   But if they are granted appropriately they can bring the litigation to a head and lead to an early settlement.

An application should be made for an interim injunction as soon as the injured party becomes aware of the wrongdoing.  If it waits too long the court will assume that it can live with the wrongdoing until trial. Unless there is a good reason for not doing so, a request should be made for the wrongdoing to stop with a warning that an application will be made for an injunction if the request is not complied with.

if such a request is ignored or refused the applicant needs to issue its claim form, an application notice in N244, a draft of the order that it wants the court to make and witness statements in support of the application.  It can issue those documents in London or out of a Chancery district registry of which there are three in Wales, namely Cardiff, Caernarfon and Mold.  The witness statement should state among other things:
  • the claim the applicant is making
  • reasons why it thinks it will win
  • reasons why the other side cannot compensate it adequately in damages attaching documentary evidence wherever possible and appropriate: and
  • evidence that the applicant can compensate the other side in damages should it lose the action or otherwise not be entitled to the relief.
It should serve copies of those documents on the other side. 

Unless the application is extremely urgent, service should take place not less than 3 whole working days (not counting the date of service or the date of the hearing) before the applicant applies to the judge for the order.   If it makes its application in London, the hearing can take place almost any day.   If it makes the application anywhere else it should make it on a day (known as an application day) when a chancery judge appointed to hear applications of this kind is sitting in the court for or near the district registry out of which the applicant issued its claim form and application notice.  Interim applications judges sit regularly in Cardiff.  If the applicant issues the claim out of Caernarfon or Mold district registries, it may have to travel to Liverpool or Manchester to make the application.

if the respondent can live with the order that the applicant seeks until trial it may be prepared to give undertakings in accordance with the draft order in exchange for cross undertakings from the applicant to compensate the respondent in damages should the claim fail.   If not, the respondent will file evidence in answer to the applicant's.   The court will consider both parties' evidence on the application day.   If it can deal with the application on the day it will make an order.   If not, it will order it to heard on a later date at a hearing known as an "application by order." Usually, it will set a timetable for the service of further evidence by each party and may make a temporary order to protect both parties' interests to the date of the hearing.

After the hearing, the court will usually order the unsuccessful party to compensate the successful party for the costs or legal fees and other expenses that it may have incurred.  A day before the hearing each party serves on the other schedules (or details) of the costs that it wishes to recover.   There is usually a heated discussion as to how much of the successful party's costs should be allowed.

There is a right of appeal to the Court of Appeal against the decision of the applications judge with the permission of that judge or of the Court of Appeal.  As injunctions are an exercise of the applications judge's discretion the appellant has to show an error of law leading to injustice in order to disturb the decision of the court below.

There are two special injunctions that are made in intellectual property disputes.   One is a search order where a respondent is ordered to open his or her premises and allow a team consisting of a supervising solicitor (a neutral solicitor appointed by the court) and a team of experts and solicitors form the applicant's law firm to search his or her computer, phone and paper records for relevant evidence.  The other is a freezing injunction where the respondent is ordered to disclose all his or her bank accounts and other assets and restrained from touching them except for normal business or living expenses and paying for legal services to defend the action.   Examples of a freezing injunction and a search order appear in the Annex to Practice Direction 25A - Interim Injunctions.

Search orders are made where the court has reason to suspect that the respondent would hide or destroy relevant evidence and freezing injunctions where it fears that the respondent would transfer abroad, hide or dissipate its assets to avoid a judgment.  Applications for such orders are made in secret and without notifying the other side.  As the respondent is absent from the hearing, the applicant has a duty to dislcose to the judge every fact or matter within its knowledge that could be relied upon by the respondent.  Should it fail to do so any order that the court may have made can be dissolved and the applicant ordered to compensate the other side.

Anyone wishing to discuss this article or injunctions generally should call me on 020 7404 5252 during office hours or send me a message through my contact form,

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