IP Insight: PlanetArt LLC & Anor v Photobox Ltd & Anor
IP Insight is a case study series from Virtuoso Legal, the intellectual property specialists. This case concerns preparation of undertakings when defending a interim prohibitory injunction claim.
On 2 July 2019, Ms. Pat Treacy, Deputy Judge of the High Court passed her judgment and refused to grant an interim prohibitory injunction.
Instead, Ms. Treacy found that undertakings provided by the Defendant were sufficient.
PlanetArt, the Claimant, is a company that trades under brand, “Free Prints”. As the name suggests, they offer free photo prints to its customers. It operates mostly through its app, where is has found great success.
Photobox Ltd, the Defendant, is also a company which also offers photo prints for sale; however, it operates mostly through its website. In early 2018, Photobox launched a “Photobox Free Prints” app, as it faced commercial pressure to make some of its print services available for free, subject to a monthly allowance.
As you can imagine, this move by Photobox did not go down well with PlanetArt, as the use of “Free Prints” could be seen as passing off their goodwill. In addition, the visual appearance of Photobox’s app on the Appstore was very similar to that of PlanetArt’s “Free Prints” app, adopting similar colours and style.
PlanetArt made an application to the court to seek an interim injunction to prohibit Photobox’s use of “Free Prints” and “Photobox Free Prints”, except where its use was genuinely descriptive.
Ahead of the first hearing, Photobox offered a series of undertakings to PlanetArct, promising to make various changes to the app to remove any visual similarities (which it did immediately) and to do nothing further in relation to promoting or marketing the app. These were then annexed to the order made by Mr Justice Birss at the first hearing on 3 May 2019.
At the second hearing, Mr Alkin acting for Photobox was asked whether the changes to the app would be reversed. Mr Alkin set out that it was “content with the undertakings continuing until trial”.
There was some confusion as to whether Photobox would continue all of its undertakings until trial, or just those relating to the changes it made to the app.
In making its decision on this point, the judge applied the case of Zipher v Markem  EWCA Civ 44 setting out that undertakings should be read in their overall context in which they were given and “if there is real doubt as to the meaning or effect of what was said, it should […] be resolved in favour of the person who would be bound.”
After much debate, the Deputy Judge, as part of her judgment on the application, set out that Mr Alkin only intended for Photobox to continue the undertakings specifically relating to the appearance of the app to continue until trial.
This meant that Photobox was permitted to revise their undertakings in relation to promoting and marketing of the app – which they did. Photobox narrowed the scope of their undertakings from those initially given.
The Injunction Application – American Cyanamid
The judge set out the basic principles of assessing whether an interim injunction should be granted as per trusty American Cyanamid.
There was much debate as to whether there was a serious question to be tried. As you will have noted, “Free Prints” is arguably highly descriptive of the services it offers. On this basis, Photobox argued that any action in passing off would be doomed to fail, as goodwill could not possibly subsist in the words “Free Prints”, particularly as it had not acquired a secondary distinctive meaning.
Deputy Judge Treacy found that there was a serious question to be tried, albeit only marginally. It must be noted that ‘a serious question to be tried‘, is a lower threshold than requiring a strong case. PlanetArt may have struggled had this been a higher hurdle to jump.
Deputy Judge Treacy found that damages would likely be an inadequate remedy for either party in the event that PlanetArt succeed at trial in the absence of interim relief. Equally, Deputy Judge Treacy found the same to be the case if PlanetArt’s claim failed and Photobox had been subjected to an interim injunction in the run up to trial.
As is often the case, the application came down to the balance of convenience. Deputy Judge Treacy considered that the damage to Photobox from a wrongful grant of an injunction would be greater than that of PlanetArt if an injunction is not granted.
In addition, damages would be easier to calculate for PlanetArt as they have been established for longer and have a longer trading history to draw on.
Also considered by the judge as part of the balance of convenience were the undertakings provided by Photobox, as they went towards the question of whether further damage would be caused. The undertakings were considered to reduce the risk of injustice to PlanetArt. This no doubt assisted Photobox’s resistance to an interim injunction.
Deputy Judge Treacy also indicated that PlanetArt’s case suffered from “material weaknesses” – alluding to difficulty they will face in evidencing goodwill in “Free Prints”, being a highly descriptive term.
As a result of the above, the balance of convenience was tipped towards Photobox and the interim injunction application was refused.
When you are faced with a strong interim injunction application, it is wise to consider whether there is anything you can offer by way of undertakings, which could mean that you avoid more onerous terms imposed by the court.
Indeed, undertakings will be factored in as part of the balance of convenience and may be enough to tip the scale.
This case just proves that experience in selecting the correct strategy is crucial to litigation success – and can make a significant difference in the outcome.
As such, defendants should think carefully about whether they should offer interim undertakings.
In addition, they should seek to balance the nature of those undertakings in order to both avoid a costly interim injunction – as well as an onerous capitulation. Such a balance can only be achieved with specialist advice.