Irish court grants pan-European preliminary injunction in trademark dispute

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The court issued a preliminary injunction in a decision that builds on the Supreme Court’s ruling in Merck and Clonmel and endorsed the alleged validity of trademarks as property rights, legal experts say .

Dublin-based Michael Finn and Erika O’Donnell of Pinsent Masons (Ireland) commented after the High Court granted a pan-European preliminary injunction against Global Closing Room Limited (GCRL) at the request of Aviareto Limited. Aviareto is a joint venture that operates the International Registry of Mobile Assets – an electronic registry of securities in aircraft and other mobile assets and overseen by the International Civil Aviation Authority. Pinsent Masons represented Aviareto in this matter.

In fulfilling its role with the registry, Aviareto operates an online facility called Closing Room. The name “Closing Room” has been in use since 2015 and was registered as an EU trade mark in August 2019, as well as in several other jurisdictions, for six classes of goods and services.

GCRL has been registered in Ireland since August 2019 and, like Aviareto, provides services to facilitate major aircraft transactions. In September 2019, GCRL filed an EU trademark application for “Global Closing Room” covering the same six classes for which Aviareto’s “Closing Room” trademark had been registered. Aviareto filed an opposition to this application in October 2019, which was largely successful, with the EU Intellectual Property Office (EUIPO) ruling earlier this year in favor of the opposition across all classes except one.

In the Irish High Court and in the substantive proceedings, Aviareto argued that GCRL was liable for the infringement of its trade mark and unregistered rights in the ‘Closing Room’ trade mark, which it claims bears damage to the notoriety it has accumulated in the brand and its reputation. Aviareto is claiming damages. Aviareto also sought an injunction to prevent GCRL from using and marketing under a name similar to its trademark. GCRL in return filed a counterclaim challenging the validity of Aviareto’s trademark. The High Court said it would rule on these issues after a full trial, but in the meantime considered whether to grant a preliminary injunction against GCRL.

The legal test for determining whether preliminary injunctions should be granted in Ireland was set by the Irish Supreme Court in 2019 in a case involving pharmaceutical giant Merck and rival drugmaker Clonmel. If the preliminary hurdles of the legal test are satisfied, the court must assess whether or not the balance of justice favors the issuance of the preliminary injunction. In that case, there was no dispute between the parties that there was a fair question to be tried, and so the court had to decide whether to grant a preliminary injunction based on the balance of convenience. A range of factors are relevant to this balancing exercise, but the primary question in most cases is whether an award of damages, as opposed to the issuance of an injunction, would constitute an adequate remedy for any alleged violation.

There were two other main factors which the High Court found relevant to the balance of justice in the context of Aviareto’s preliminary injunction application. These factors were the fact that GCRL took a deliberate business risk by launching its business under a name similar to the Closing Room brand, and Aviareto’s delay in seeking the injunction.

The court considered it relevant for the assessment of the sufficiency of the damages and gave importance to the fact that Aviareto was asserting a valid presumed property right in its European Union trademark and that these rights had been granted to it in accordance with the prescribed legal channels and presumed valid for the purposes of the company’s claim.

The court considered that Aviareto’s claim for damages was primarily motivated by a desire to preserve its reputation and gave weight to evidence provided by independent IT experts regarding the security of GCRL’s website which the court found relevant to Aviareto’s reputational concerns. The court was satisfied that Aviareto had established legitimate concerns about the security of GCRL’s website “which, if materialized, would be likely to adversely affect [Aviareto’s] reputation and goodwill”.

Based largely on the nature of the rights that Aviareto seeks to protect and the circumstances of the alleged infringement, the court held that damages would not constitute an adequate remedy for Aviareto in this case.

Raising his arguments as to the balance of justice in this case, Aviareto made new arguments claiming that if GCRL wanted to start a business using a trademark similar to his, he should have challenged the validity of the trademark in advance. the Closing Room brand to do so. This is colloquially known as “leading the way” and has developed as a legal concept in the field of patent law. However, the court accepted GCRL’s argument that the concept of clearing the way does not apply to trademark disputes. Michael Finn of Pinsent Masons, however, said the court made it clear that was not the end of the matter.

Finn said: “The court held that the rationale underlying the concept of clearing the lane is one of commercial common sense. When a person creates a business knowing that it is likely to infringe the intellectual property rights of others, the weight to be given to claims made on the expenses already incurred during the inevitable litigation will necessarily be reduced. . In this case, the dispute between the parties did not arise from ignorance or oversight on the part of the defendant: GCRL was aware of the existence of the Closing Room mark.

“Thus, if there was no particular obligation for GCRL to have requested the revocation of the Aviareto brand before launching its activity, unlike a manufacturer of generic drugs in the pharmaceutical field, the simple launch of its activity should not lead to a conflict of intellectual rights. property rights. Principles of commercial common sense applied and meant that as GCRL had knowingly launched a business under a brand bearing a striking similarity to that of Aviareto, it should have anticipated and had to bear responsibility for the consequences to it of the action. that Aviareto took to protect its brand,” says Finn.

Central to GCRL’s case was her claim that Aviareto delayed too long in filing his injunction against her, and she argued that this factor should tip the scales of justice in her favor. Rather than categorizing the delay complained of as a separate matter that could prevent a plaintiff from obtaining relief from the court, regardless of the merits of the claim, the court treated it as a element of the balance of convenience. The court held that this was consistent with the case law developed by the Supreme Court in Merck and Clonmel. Although the court acknowledged that Aviareto was responsible for some delay, it said it was not to the extent that GCRL supported it.

Erika O’Donnell of Pinsent Masons said: ‘Ms Justice Butler said that the delay factor weighed against granting an interim measure, but to a very large extent the costs associated with said delay were outweighed by the deliberate decision by GCRL to start using a name similar to Aviareto’s trademark without any prior attempt to clear the way. As a result, the High Court granted Aviareto an interlocutory injunction restraining the infringement of its trademark and GCRL’s use of the name or sign “Global Closing Room” pending the full trial. »

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