Civil proceedings
Most civil actions (for IP crime and illegal parallel imports) are based on trade mark, copyright and/or design infringement, as well as passing off – see tab 3 of this guide for more on the IP legal framework. UK targets tend to be importers or those further down the supply chain, rather than manufacturers. While civil litigation is usually the most expensive option, this is not always the case, especially if an early settlement is reached. Our Trade Mark Litigation 101 Guide provides more information on civil litigation.
Pros and cons of civil proceedings
The advantages of civil litigation are:
- A range of interim remedies are available, potentially on short notice, including:
- injunctions to restrain dealings in infringing goods
- search and seizure orders to secure goods and evidence
- freezing injunctions to prevent the defendant’s assets from being dissipated
- injunctions to prevent the defendant from leaving the jurisdiction.
- Applications for Norwich Pharmacal Orders – which compel third parties to disclose information such as the identity of an online seller or domain name owner – can also be made. These are particularly important for tackling online infringements.
- The civil courts can order a final injunction to cease the infringing activity, awards of damages or an account of profits and/or recovery of the claimant's legal costs (although the defendant may not be solvent).
- The burden of proof is lower (being on the balance of probabilities as opposed to beyond a reasonable doubt).
- There is the possibility of disclosure.
- Rights holders tend to have more control over the case.
The disadvantages of civil litigation are:
- It is generally more expensive and longer than a criminal action – although note the possibility of relatively fast and cost-efficient interim relief, which can often dispose of the whole case. For the likely costs of civil actions, see the costs and budgeting section in tab 10 of this guide.
- The threat of criminal action can sometimes be more dissuasive.
Types of civil proceeding
Procedure for main proceedings
Warning letter
Before initiating infringement proceedings in the UK, the claimant is obliged by court rules to exchange proportionate correspondence and information with the defendant, including:
- concise details of the claim
- the basis on which the claim is made
- a summary of the facts
- what the claimant is seeking from the defendant (usually undertakings).
The claimant must allow the defendant a reasonable timeframe in which to respond, namely 14 days in a straightforward case, and no more than three months in a complex case. Since many cases settle this way, sending a letter before action is advised, except where urgent interim relief is required. Care should be taken that the letter does not constitute an unjustified threat and that the right defendant(s) including potentially directors are cited (seek legal advice).
Negotiation
Depending on the defendant's response to the letter, claimants may wish to negotiate ‘without prejudice’, by telephone or in open correspondence – specialist advice should be sought on the implications.
Proceedings
If the alleged infringer remains unco-operative, and the size of the matter warrants it, you may need to issue proceedings to secure their full co-operation. It is important to keep your goals and the appropriate court in mind as costs in UK litigation can mount quickly. Offers to settle and/or mediate should be considered early and be reviewed regularly. Often parties will settle once proceedings have been issued.
Early judgment
Judgment can be sought early in proceedings in some cases, saving costs eg if the other side fails to file a defence (via an application for default judgment) or where there is no real dispute about the facts of the case and the defendant has no real prospect of defending the claim (via an application for summary judgment).
For detailed guidance on procedure and appeals, including the means and burden of proof, discovery/disclosure, time to judgment and claiming legal costs and remedies, see our Trade Mark Litigation 101 Guide.
Remedies
A party to a successful trade mark infringement claim in the High Court (general or STS cases) or IPEC will have the following remedies available to them:
- An injunction to restrain all future acts of infringement (usually ordered very soon after judgment is handed down).
- An inquiry as to damages or an account of profits.
- An order for delivery up or destruction of the infringing goods.
- Dissemination and publication of the judgment: the losing party can be forced to clearly display the outcome of a negative judgment, often in a prominent place on their website, for up to a month. This is a powerful tool and the risk of publication of a negative judgment alone is often enough to force some parties into early settlement.
- Legal costs.
For more on remedies, see our Trade Mark Litigation 101 Guide. For the likely costs of civil actions, see the costs and budgeting section in tab 10 of this guide.
Issues specific to civil actions for counterfeiting
Always try to obtain disclosure from counterfeiters
This allows you to take action against those up (and down) the supply chain. In order to obtain supplier evidence quickly, consider waiving/reducing some of your demands eg for costs and damages. If you can settle the matter promptly, it is important to follow up the supply chain quickly before a supplier has been tipped off.
Remember double recovery
Remember that there are rules prohibiting you from recovering damages greater than the amount to which you are entitled (called ‘double recovery’).
Consider getting a court order if you settle
Consider getting any agreed undertakings sealed by the court. This potentially allows a penal notice to be incorporated on the face of the court order. Where a penal notice is included and the terms of the order are breached, the defendant can be held to be in contempt of court, which could mean that they are imprisoned, fined or have their assets seized.
Tips for criminal and civil actions
Ensure relevant IP rights are in place: Make sure you have the right IP rights in place in the UK and can easily obtain copies of registration and renewal certificates.
Use a mix of actions: Consider using a mix of civil and criminal actions as part of a wider enforcement programme. Rely on customs actions and actions by Trading Standards and the police as part of a mixed enforcement strategy.
Consider disposing of claims quickly, where appropriate: Sending a warning letter or draft claim form can often be sufficient to settle a claim.
Identify or train experts to identify counterfeit products: Identify and/or train individuals within your organisation who can provide expert opinion on whether a particular item is counterfeit or not and why. Different individuals may be needed for different product lines. Training individuals carefully is key since they will need to be able to justify why they are an expert in identifying counterfeit goods of the type in question. Individuals must have the time available to consider samples, and (for those with more developed anti-counterfeiting strategies) to provide expert reports and to attend court to give oral evidence, where necessary.
Consider developing standard responses: Defendants often raise similar arguments, and it can be useful and save time to develop standard responses. Common issues raised by defendants include that:
- there was no knowing infringement
- the defendant has decided to stop trading or is insolvent
- the defendant does not accept that the goods are counterfeit
- the defendant would like to inspect the goods.
Defendants also often ask how damages/costs have been calculated, and it can be useful to prepare brief explanations.
Prepare template witness statements and expert reports: For those with more established anti-counterfeiting strategies (with multiple claims), having template documents in place can be invaluable. These can include cease and desist letters, undertakings/settlement agreements, claim forms, particulars of claim and consent orders. Where full criminal or civil actions are regularly brought, having standard witness statements and expert reports can also be merited.
Consider the appropriate forum: Consider whether a claim under the STS or in the IPEC (where costs are likely to be lower) is merited. Also consider the availability of summary judgment and judgment in default.
Implement a system for handling and storing evidence: Goods suspected of being counterfeit should be kept in sealed and labelled bags, which should themselves be kept in a lockable compartment. A written record (continuity of evidence log) should be maintained to prove that the sample has been correctly handled and stored.