Aviareto Ltd v Global Closing Room Ltd

• Jurisdiction: Ireland
• Judge: Ms. Justice Butler
• Judgment Date: 26 May 2021
• Neutral Citation: [2021] IEHC 377
• Court: High Court
• Docket Number: [2020 No. 5266 P.]

Between

Aviareto Limited

Plaintiff

and

Global Closing Room Limited

Defendant

[2021] IEHC 377

[2020 No. 5266 P.]

THE HIGH COURT

Interlocutory injunction – Trademark infringement – Delay – Plaintiff seeking an interlocutory injunction restraining the infringement of the plaintiff’s registered trademark – Whether delay on the part of the plaintiff in seeking the relief operated to preclude the court from granting an interlocutory injunction

Facts: The plaintiff, Aviareto Ltd, applied to the High Court for an interlocutory injunction to restrain the defendant, Global Closing Room Ltd, from using the name or sign ‘Global Closing Room’ in alleged breach of the plaintiff’s EU trademark (Number: 017941564) in the mark ‘Closing Room’. Although the plaintiff was the holder of a registered trademark, the defendant challenged the validity of that trademark in its counterclaim to the proceedings. As the validity of the trademark would not be determined until the substantive trial, the court accepted its presumptive validity for the purposes of this application. The defendant contended that delay on the part of the plaintiff in seeking the relief operated either to preclude the court from granting an interlocutory injunction or, alternatively, should be weighed against the plaintiff in the balance of convenience.

Held by Butler J that there were three main factors of relevance to the balance of justice in this case namely the adequacy of damages, the fact that the defendant deliberately took a commercial risk in launching its business under a name similar to the plaintiff’s registered mark and the plaintiff’s delay. Butler J held that the first two of these weighed in favour of the granting of interlocutory relief to the plaintiff. The court was struck by the fact that the refusal of such relief would mean that a plaintiff would not be able to rely on or enforce its presumptively valid registered trademark against a defendant who can meet an award of damages pending the determination of the defendant’s challenge to that mark. Butler J held that the third factor, delay, weighed against the grant of interlocutory relief. However, Butler J did not think that the delay had been of such a length of itself to warrant refusal of relief nor had it caused the defendant to alter its position or incur expense that would not have occurred had the plaintiff acted more quickly. Butler J found that the plaintiff’s delay had provided the defendant with something of a litigation advantage for the purposes of this application, but it had not caused the defendant any actual harm. Butler J held that the expense already incurred by the defendant and the losses and expense that could be anticipated by the making of an order in the plaintiff’s favour arose because of the defendant’s decision to launch its business under a brand very similar to the plaintiff’s mark. Butler J held that to a very large extent the negative weight of the delay was off-set by the deliberate decision of the defendant to take the commercial risk of using a name similar to the plaintiff’s registered mark. Butler J held that the decision was taken before and independently of any delay on the part of the plaintiff. Therefore, Butler J did not think that the delay in this case made it inequitable to grant interlocutory relief.

Butler J held that she would grant the plaintiff an interlocutory injunction restraining the infringement of the plaintiff’s registered trademark and the use by the defendant of the name or sign Global Closing Room pending the trial of the action.

Application granted.

JUDGMENT of Ms. Justice Butler delivered on the 26th day of May, 2021

Introduction

1 This is the plaintiff's application for an interlocutory injunction to restrain the defendant from using the name or sign ‘Global Closing Room’ in alleged breach of the plaintiff's EU trademark (Number: 017941564) in the mark ‘Closing Room’.

2 The defendant characterises the dispute between the parties as being merely a naming dispute. However, trademarks are legally recognised in order to protect the interest the holder has in providing goods or services under a distinctive name that is identified with the provision by it of those goods or services and which distinguishes its goods or services from those of its commercial rivals. If the name did not matter, commercial entities would not, as both of these parties have done, seek to register trademarks in order to protect their names.

3 The plaintiff, on the other hand, contends that it is not trying to restrain the defendant from carrying on its business, which it acknowledges is perfectly lawful. The plaintiff seeks only to prevent the defendant from doing so under a name, the use of which the plaintiff contends is a breach of its trademark. This may understate the difficulty which arises from the fact that by the time this application for an injunction was issued in September, 2020, the defendant claims to have been carrying on its business under the name of Global Closing Room for some 10 months, although there are significant issues between the parties as to the extent of that business and the length of time for which it had been carried on. Regardless of the view the court may reach on these latter issues, restraining an existing business from operating under its existing name necessarily entails, at a minimum, a degree of disruption and expense and may even prevent a business from operating at all unless the name can be readily changed.

4 Although the plaintiff is the holder of a registered trademark, the defendant has challenged the validity of that trademark in its counterclaim to these proceedings. As the validity of the trademark will not be determined until the substantive trial, the court must accept its presumptive validity for the purposes of this application. In normal course, the holder of a trademark is entitled to rely on that mark and to expect a court to grant the relief necessary to enable it to do so whether on an interlocutory or a final basis. In this case, the defendant has raised a number of grounds on foot of which it claims the plaintiff is not entitled to or should not be granted interlocutory relief. Whilst I will deal with each of these in due course, for the purpose of this thumbnail sketch, the most significant is the contention that delay on the part of the plaintiff in seeking this relief operates either to preclude the court from granting an interlocutory injunction or, alternatively, should be weighed against the plaintiff in the balance of convenience. The longer a plaintiff takes to come to court to complain about a defendant's trademark infringement, the greater the time, energy and money the defendant is likely to have invested in building up its business under the disputed mark. Consequently, there may be a greater potential for injustice in requiring the defendant to cease using the name until the substantive dispute between the parties can be determined.

Factual Background

5 The services provided by both the plaintiff and the defendant are highly specialised and, consequently, the factual background to the proceedings is complex. The plaintiff company is a joint venture between SITA SC (described as a company specialising in air transport communications and information technology) and the Irish State. Pursuant to a series of tender competitions, the plaintiff has, since 2006, been appointed as registrar and operator of an International Registry of Mobile Assets in Aircraft Equipment. The International Registry in turn was established pursuant to a Protocol to the Cape Town Convention on International Interest in Mobile Equipment, 2001 (“the Aircraft Protocol” or “the Protocol”). The Cape Town Convention provides a system of international treaties governing the financing and leasing of a range of different types of highly valuable mobile equipment of which aircraft was the first. Legal effect was given to the Convention and the Protocol in this jurisdiction by the International Interests in Mobile Equipment (Cape Town Convention) Act 2005. That act also allowed the Minister for Transport to acquire shares in any company established for the purposes of operating the International Registry. It is unnecessary to examine the procedure under the Cape Town Convention for the adoption, signature and ratification of a Protocol but, for the purposes of these proceedings, it should be noted that two other protocols are at an advance stage in the process. These are the Luxembourg Protocol covering Railway Rolling Stock and the MAC Protocol (Mining, Agricultural and Construction Equipment).

6 The ownership structure of the type of equipment falling within the protocols to the Cape Town Convention is frequently multi-layered with a number of different entities involved in the financing, leasing and securitisation of the various assets comprised within the equipment. For example, an aircraft engine may be owned separately to the plane in which it is located and both may be subjected to multiple financial transactions for which the relevant asset will be provided as security. The registration of an interest in the International Registry affords that interest priority over unregistered interests in the same equipment or interests which are registered later in time. Consequently, the sequencing of registrations resulting from major transactions is an important aspect of operating the International Registry. In light of the experience gained as registrar under the Aircraft Protocol, the plaintiff developed a digital platform through which a series of transactions in respect of an asset can be pre-positioned prior to registration so that, at the point of registration, they will be released into the registry in the correct or agreed chronological sequence which thereafter determines their order of priority. This system, which has been live since 2015, took seven...