High Court dismisses trademark claim over costs

A recent decision from the High Court has underscored the crucial financial considerations that claimants must navigate before engaging in litigation. In a trademark infringement case concerning the alleged misuse of a registered trademark used on vape display stands supplied to prominent UK supermarkets, the claim was entirely dismissed due to the claimant's failure to comply with a court order demanding substantial security for costs.

In representing Phoenix, a leading distributor in the UK vaping sector, Knights successfully contested the claimant’s capability to meet the financial exposure associated with High Court proceedings. Following an application for security, the court mandated that the claimant deposit £450,000 into court in designated staged tranches to proceed with their claim. However, when the claimant did not fulfil these financial obligations, Knights' legal team sought to have the claim struck out altogether.

The court ruled in favour of this application, resulting in the termination of the proceedings and awarding Phoenix its costs not only for the underlying action but also for the strike-out application, a relatively uncommon outcome in such cases. Andrew Leese, Partner in the Intellectual Property team at Knights, remarked that “bringing claims to the High Court requires careful consideration at the outset of both legal merits and funding realities.” He further stressed the importance of demonstrating an ability to meet potential adverse costs, warning that “the court will intervene decisively to safeguard parties.”

Leese noted that “security for costs isn’t something that should be overlooked, and this case shows how quickly a claim can unravel if the financial aspect of litigation has not been properly planned for.” He also highlighted alternative routes that litigants might consider, such as varying the forum or exploring different funding structures prior to initiating proceedings.

This ruling arrives amidst growing discussions regarding access to justice, particularly concerning the availability and costs associated with after-the-event insurance. Such insurance can sometimes rival the costs initially sought in claims, compelling claimants to make strategic choices about pursuing disputes. The case led by Knights, with Leese and Philip Partington as Intellectual Property Partners, and supported by Associate Sina Khadem and Solicitor Sergio Ferreira, serves as a significant reminder of the intricate intersection between legal strategy and financial readiness in the realm of litigation.