Nude Brands Limited (“NBL”) lost its application for temporary injunction to block the imminent release of the new perfume in the Stella McCartney range, STELLANUDE. 

NBL is the registered proprietor of the Community Trade Mark for the word mark NUDE and is bringing an action alleging that the use by Stella McCartney Limited (“SML”) (and others) of the sign “STELLANUDE” on its new perfume is an infringement of its trademark.  22 August 2009 was the scheduled launch date of STELLANUDE and NBL had sought an injunction from the Court restraining this launch with an expedited trial to follow without delay.

NUDE & STELLANUDE: Likelihood of confusion?

The Judge briefly addressed the merits of NBL’s case on trademark infringement and determined that there was an arguable case that the average consumer might be confused.  SML had disputed confusion and contended that the registration of the mark NUDE is, in any event, invalid on the grounds that it lacks the necessary distinctive character and/or its use is customary in the fashion industry.  Should a mark be judged invalid then it is treated as having always been invalid.

Balancing convenience

However, while NBL leapt the hurdle of showing that there was a serious question to be tried they ended up on the wrong side of the balance of convenience.  When deciding whether to exercise its powers, the Court will always look to which party will suffer the most damage.

In refusing NBL interim relief, the Court decided that while not entirely perfect, NBL’s position was more likely to be compensated by damages than SML. 

NBL had argued that the harm it would suffer would be irreparable and could not be fixed by financial compensation alone.  It cited the Trinity of (1) damage to its reputation, (2) the loss of exclusivity and dilution of its trademark and (3) the loss of a chance to produce its own NUDE branded perfume.  A key element of these arguments for NUDE was its commitment to using natural products and the fact that STELLANUDE was aimed at the lower end of the perfume market, while NBL focuses its products at mid to high end consumers.

SML submitted that in reality no consumer would be confused between NUDE and STELLANUDE, and referred to several pre-existing scents using the word NUDE.  They also cited the fact that NBL’s potential development of a NUDE perfume had on the evidence not advanced past the sample stage and with regard to the maintenance of exclusivity that NBL had entered into a licence agreement with Dior for it to use NUDE on Dior skincare products. 

Against this, SML argued that it had invested substantial sums preparing for its launch date (some 4.8 million Euros worth of product had been manufactured for distribution).  If the launch was postponed (even with a speedy trial), it would in effect lose the highly lucrative 2009-2010 Christmas selling period and potentially the STELLANUDE product as a whole.

Comment

This Judgment reinforces the position that in order to obtain an temporary injunction the evidence of irreparable harm to the applicant will have to have real force behind it to tip the balance of convenience in its favour.  Damage to market standing and the dilution of a brand do cause long term harm but they are easy to say and difficult to conclusively provide evidence of.  Faced with the cold, hard and substantial figures cited by SML, NBL’s arguments struggled. 

Another element of the decision which will be food for thought for brandowners, who have licensed or are considering licensing the use of their trademarks, is the emphasis the Court placed on the terms of NBL’s licence with Dior in reaching its decision.  In order to rely on arguments in respect of exclusivity and quality control, agreements which allow the use of a brand will need to reflect these aims. 

The case is likely to reach trial in the New Year, unless the two sides reach a compromise.