[2023] EWHC 1480 (IPEC)

Mr Muir Wood submitted that the point to be decided was simple and could be decided on a summary basis: are the alleged counterfeit goods in fact counterfeit; and can the Court be sure of this now or does that question merit a full trial with evidence and cross-examination?

Mr Muir Wood acknowledged that the point might appear to require factual investigation and more detailed consideration than is possible in a summary application but contended that this was not so based on four propositions:

Given the clear differences between the accepted genuine products and the alleged counterfeit products, their purchase from the Centre, and the lack of any documentary support for the alternative propositions put forward on behalf of the Defendants, Mr Muir Wood submitted in his written skeleton that the Court had sufficient information to give summary judgment on the Claim or to strike out the Defence, particularly in the light of the clear evidence given by Mr Reid about the packaging and bottling activities of JBC.

Mr Muir Wood’s written skeleton had not dealt with the second point set out above at paragraph 8 above namely that the Defendants’ case is that they purchased the allegedly counterfeit products from JBC or its authorised suppliers and that this gave rise to a clear defence.

The relevant part of paragraph 2 of the Defence reads:

“... at all material times, since early 2020 all stocks and supplies of “Sunny Isle” products offered for sale at the Pak Centre have been purchased from C1 directly (and prior to early 2020 from suppliers who the Defs later came to understand to be designated by C1 themselves as their authorised suppliers) […].” [Emphasis in original, internal references omitted.]

Mr Muir Wood submitted that this did not give rise to a clear defence.

First, he submitted that the number of bottles of the product in issue purchased by the Defendants from JBC was small and now some time ago (as demonstrated by an examination of the invoices (Footnote: ¹) rendered by JBC to the Defendants). In the circumstances, it was unlikely that the bottles purchased in March last year, showing multiple differences from those stated by JBC to be authentic, had been purchased from JBC.

Secondly, Mr Muir Wood submitted that the mere fact that a product is purchased from an authorised supplier does not provide a defence to a claim of counterfeiting.

Finally, Mr Muir Wood submitted that if the Defendants had provided evidence showing the source of the bottles that would have been of assistance. He acknowledged, however, that no further information on this issue had been sought by JBC.

In summary, Mr Muir Wood’s position was that it was more likely than not that the bottles had come from a source other than JBC and that therefore no defence arose.

Ms McFarland submitted that the Claimants’ approach is simplistic, ignoring the factual issues between the parties which must be resolved through evidence at trial, in particular as the Defendants maintain that the small number of allegedly counterfeit goods identified by JBC are genuine; that JBC has offered insufficient evidence that they are counterfeit (rather than just ‘different’); and that, in the Defendants’ view, there are good reasons to believe that the evidence given on behalf of JBC is either inaccurate or misleading.

On Ms McFarland’s case, the need for oral evidence and disclosure is clear given that the account provided in the Defendants’ evidence explains or puts in issue the matters relied on by JBC. Ms McFarland pointed to documentary evidence already provided that between 2020 and 2021 around $300,000 worth of products were purchased by the Defendants from JBC. The Defendants’ position is that the samples relied on by JBC will most likely originally have come from those purchases.

Ms McFarland subsequently accepted a point made by Mr Muir Wood that the product in issue (4fl oz Jamaican Black Castor Oil) was only a portion of the $300,000 worth of products purchased from JBC. However, she maintained that the Defendants’ evidential point still stood: that if the bottles in question had been purchased from the Store, it is most likely that they had originated from JBC. Ms McFarland relied further on the fact that JBC had engaged with this paragraph of the Defence in paragraph 3 of their Reply:

“As to the remainder of paragraph 2, whilst it is admitted that the Defendants have bought genuine Goods from JBC, it is denied that the Counterfeit Goods were acquired from JBC, whether directly or through authorised suppliers or howsoever. For the reasons set out in the PoC, which will be further elaborated in evidence, the Counterfeit Goods are counterfeit and do not originate from JBC.”

Ms McFarland submits that this involves a critical issue of fact which can be resolved only at trial. She further submitted that the dispute as to the bottles’ original source also provided additional context for JBC’s reliance on observed differences in the bottles’ design and appearance. The Defendants have clearly put the source of the bottles in issue and in the light of that contention evidence as to changes caused by JBC’s packaging and bottling practices would be relevant. Ms McFarland noted that no documentary evidence on this topic had yet been disclosed, with only the written evidence of Mr Reid so far available to the Court.

In summary, Ms McFarland’s substantive submission was that:

Ms McFarland submitted that there could hardly be a clearer defence than that the goods were supplied to the Defendant by JBC or its authorised distributors and were genuine (non-counterfeit) goods. As live issues of fact existed on these issues, the Court must, in the light of the authorities, dismiss JBC’s Application given the necessarily summary nature of the assessment and the burden of proof on JBC.