The claimant obtained an interim injunction in respect of alleged infringement of its trade marks in beers brewed under licence by the respondents. They said the beers produced were of inferior quality, and threatened the brand. The grant of such injunctions created commercial risks for third parties, and it seemed reasonable to require undertakings form the applicant for such an injunction. However a freezing order is of a special type, the existence of which could be doubted. A non-proprietary freezing order did not relate to assest in which the applicant held any interest, but rather created a right. Nevertheless a wide injunction could be a request for a claimant to issue blank cheques to unkown and uncounted third parties. A third party who was adversely affected could himself make application to the court, and a wide undertaking was not required. A cross-undertaking had not been given for the benefit of third parties; but the company argued that, by analogy with the standard practice in freezing order cases, it should have been.
Neuberger J said: ‘None the less, while this court should not be over-indulgent to a person seeking an interlocutory injunction, it seems to me that it would be a strong thing to require him to sign not merely a blank cheque in favour of the defendant, if it turned out that he should not have been granted the injunction, but a series of blank cheques in favour of third parties of whose very existence and interest he may be unaware and for whose losses he may find himself liable even though he is entitled to his injunction.
As Mr Howe says, if a third party is detrimentally and unfairly affected by an interlocutory injunction, his interest can either be put before the court by the defendant, as happened in Galaxia, or he can himself make an application to the court to vary or discharge the interlocutory injunction or to extend to him the benefit of the cross undertaking.
If it could be said that the court was overburdened with such applications by third parties or that there were many cases of injustice to third party because of the absence of such a wide cross undertaking, then there might be more in this point. However, I have not had my attention drawn to any case which has led to a procedural problem, nor any reports, whether in the law reports or legal commentaries, of a perceived injustice in this connection.’
47 Accordingly, I am not persuaded that it would be appropriate to impose the sort of wide cross undertaking indemnities on a claimant seeking an interlocutory injunction. That is not to say that the court should never consider imposing a wider cross undertaking in damages than that usually extracted from an applicant for an interlocutory injunction. It is fair to say that the argument in this case has ensured that I will henceforth think a little more carefully about the terms of any cross undertaking in damages to be extracted from a claimant in return for the grant of an interlocutory injunction.
48 Quite apart from this, it seems to me that Miss Heal’s contention suffers from a further problem, namely whether the effect of the wider cross undertaking which she seeks can properly be imposed. The fact that it may have been open to Bahr Behrend to apply for an extension of the cross undertaking, or even if the court could and should have imposed a wider cross undertaking on January 11 or 25, 2002, it does not mean that the court can impose such a cross undertaking retrospectively.’
Neuberger J
Times 06-Jun-2003, Gazette 14-Aug-2003, [2004] FSR 5
Trade Marks Act 1994 16 19
England and Wales
Citing:
Cited – Galaxia Maritime SA v Mineralimportexport CA 1982
The defendants were Mineralimportexport and a freezing injunction was initially granted to prevent them from removing from the jurisdiction (just before Christmas) a cargo on a third party’s vessel which was only on voyage charter to . .
Cited by:
Cited – Smithkline Beecham Plc and others v Apotex Europe Ltd and others PatC 26-Jul-2005
Application was made to join in further parties to support a cross undertaking on being made subject to interim injunctions.
Held: On orders other than asset freezing orders it was not open to the court to impose cross-undertakings against . .
Cited – Cartier International Ag and Others v British Telecommunications Plc and Another SC 13-Jun-2018
The respondent ISP companies had been injuncted to stop the transmission of websites which infringed the trade mark rights of the claimants. The ISPs now appealed from the element of the order that they pay the claimants’ costs of implementing the . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 July 2021; Ref: scu.183836