High Court: notices of discontinuance may be set aside in certain circumstances

• Walton sued Verweij for trademark infringement; Verweij counterclaimed for passing off and revocation
• Walton filed notice of discontinuance in relation to its EU marks
• Court set aside notice and held that marks were invalid
   

When commencing infringement proceedings, one should always be mindful of how to extricate oneself from those proceedings, if needed. In the United Kingdom, bar settlement, the normal course is to serve a notice of discontinuance in relation to all (or part) of the claim. The consequence of this is usually that the claim (or a particular aspect of it) comes to an end, with the discontinuer liable to pay the other side’s costs, to be assessed if not agreed. However, in Walton International Ltd v Verweij Fashion BV ([2018] EWHC 1608 (Ch), 28 June 2018), Mr Justice Arnold has held that, in certain circumstances, such notices can be set aside.

Both parties had been trading using the sign GIORDANO since the 1980s - Walton International’s main markets being Asia, Australasia and the Middle East, and Verweij Fashion’s main market being Europe. In 2016 Walton International sued Verweij Fashion for infringement of its UK and EU trademarks (registered in the 1990s and 2000s) for GIORDANO for men’s clothing and accessories. Verweij Fashion counterclaimed for passing off and revocation of the trademarks.

The case turned, in part, on Verweij Fashion’s assertion that Walton International had not made genuine use of the trademarks and that, therefore, Verweij Fashion was the senior user of the sign GIORDANO in Europe. The UK action was part of a series of disputes in different jurisdictions, including the European Union Intellectual Property Office (EUIPO).

Prior to trial, Walton International filed a notice of discontinuance in relation to its EU trademarks. Verweij Fashion, however, applied for the notice to be set aside. It reasoned that Walton International was seeking to shield an assessment of the validity of its EU trademarks.

Mr Justice Arnold concurred, setting aside the notice and holding the trademarks to be invalid. He explained that, if the notice were to be permitted, it would be only on the condition that Walton International did not further assert the EU trademarks against Verweij Fashion in any other European member state or rely on them before the EUIPO.

The case serves to show the level of discretion which the English courts have regarding the conduct of legal proceedings, particularly where the validity of IP rights is in issue.

Antony Craggs, D Young & Co, London