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Red Bull gives you… personal liability25th February 2020 Intellectual Property
On 30 January 2020, the High Court of Justice of England & Wales (‘High Court’) handed down its judgment in the case of Red Bull GmbH (‘Red Bull’) v Big Horn UK Ltd (‘Big Horn’), a European energy drinks producer, Voltino Eood (‘Voltino’), a European distributor, and Big Horn’s sole director, Lyubomir Enchev (‘Mr Enchev’).
Red Bull brought a claim against Big Horn for trade mark infringement, largely in relation to Big Horn’s use and attempted trade mark filing of the image of two charging rams in front of a yellow circle, as depicted below:
Red Bull Registered Trade Mark Big Horn Logo
Understandably, Red Bull did not want Big Horn to “free-ride” on the reputation it had spent years, effort and large sums of money growing in the EU.
EU Trade Mark Opposition
In August 2016, Voltino filed an EU trade mark application for Big Horn’s Logo. Unfortunately, as often occurs when prospective trade marks are not professionally cleared during the registration process, this only served to place Red Bull on notice of the proposed mark and the activities of Voltino, Big Horn and Mr Enchev. Indeed, Red Bull launched opposition proceedings against the trade mark application in the EU Intellectual Property Office.
If Voltino had instructed intellectual property (‘IP’) specialists to conduct a professional clearance search when applying to register its trade mark, it may have noticed that a similar logo containing two ramming bulls was already registered in many jurisdictions in the EU by Red Bull. It may also have been aware that Red Bull is a company well-known for enforcing its IP rights.
In all likelihood, an IP specialist would have advised that seeking to use the Big Horn Logo would be very high risk and likely to result in trade mark infringement proceedings in the High Court. That is precisely what happened in this case.
High Court Proceedings
In January 2020, Kelyn Bacon QC found that Big Horn had infringed Red Bull’s trade mark and that Mr Enchev was personally liable as a joint tortfeasor.
The judge explained that Big Horn had taken unfair advantage of the distinctive character and reputation of Red Bull’s mark, without due cause. However, the judge stopped short of concluding that the average consumer of energy drinks was likely to confuse the two logos as being associated with each other.
This result serves as a stark reminder to businesses entering a market where other large reputable brands dominate, that using vaguely similar branding to those brands, even if customers are not confused, is still high risk.
Lessons Learnt: DIY Litigation
This case has a number of other lessons for businesses dealing with IP disputes.
a.) High Court Horror
The defendants in this case were clearly ill-equipped. While they had legal representation for a brief period of time, Mr Enchev decided to take matters into his own hands by representing both himself and Big Horn.
The cracks in the defendants’ defence of these proceedings were exposed by the judge’s comments that Mr Enchev had “patchy” engagement with the proceedings and had failed to:
- comply with orders for disclosure for documents;
- serve any witness evidence for the trial;
- appear or be represented at the pre-trial review; and
- file a skeleton argument for the trial.
In addition, a day before the trial was due to commence, Mr Enchev had asked for the trial to be adjourned until an unspecified future date. This was rejected by the judge.
Aside from the above shortcomings relating to following court procedure, the defendants also failed to properly defend themselves. Mr Enchev barely challenged the evidence of Red Bull and gave little evidence to defend himself and Big Horn. It was also noted that Big Horn had advertised the infringing products online in the UK during the litigation process, showing it had not bothered to minimise any damages owed to Red Bull.
The key message here is that, without any legal representation, the defendants seemingly struggled to keep up with court proceedings and to act in a way which would not be seriously detrimental to their legal position. Guidance by a solicitor through this process would have gone a long way in avoiding the pitfalls the defendants faced.
b.) The Consequence Of Loss
Although Voltino was the company which designed and sought to register Big Horn’s Logo, the judge concluded that because Mr Enchev, in the capacity of the sole director of Big Horn, had “not only assisted with but entirely controlled Big Horn’s actions”, he was “directly responsible for Big Horn’s activities” and therefore personally liable as a joint tortfeasor, along with Big Horn.
Overall, personal liability is not rare in the world of IP litigation. It is worth remembering that while acting in the capacity of a director or employee at a company, you may be held personally liable (both in civil and criminal law) for infringing IP rights. Indeed, the judge said: “the fact that the alleged joint tortfeasor was a director of the primary tortfeasor does not exclude liability”.
While the decision on costs in these proceedings has not yet been made public, it is likely the defendants will be faced with a large adverse costs award.
What Does This Mean For You?
This case is a reminder that, often, personal liability is inescapable and unavoidable – even if your infringement of IP rights was made while operating from a limited company. That means your personal belongings, such as your house, car and gadgets are all at risk. That may also mean you face a fine and possibly a prison sentence.
You should heed the lessons learned by Mr Enchev. It is important that you seek legal representation as soon as possible, particularly if IP disputes turn towards litigation.
We are a London-based specialist IP team led by Philip Partington and advise clients on a range of IP-related issues.