Planet Art v Photobox passing off: no compunction when refusing injunction
The reputation of the English court as a tough forum in which to obtain an interim injunction has been underlined by Pat Treacy (sitting as a Deputy Judge of the High Court) in Planet Art LLC and Anor v Photobox Limited and Anor [2019] EWHC 1688 (Ch) (judgment not yet widely available).
Background
Planet Art and Photobox are commercial rivals. Both offer online printing, particularly of photographs. Planet Art launched in the UK in 2014 and operates exclusively through mobile applications; its main app is called “FREEPRINTS”. For many years Photobox has offered a certain number of free prints to attract potential customers. In late 2017 or early 2018 Photobox concluded that this offer was undermining its paid-for business model. Photobox therefore decided to launch a standalone app (with a limited allowance of free prints) to combat the surprising trend of customers finding ways to use the same free “introductory” offer multiple times, which was - of course - impossible to foresee.
Photobox alighted on the equally unexpected name of “PHOTOBOX FREE PRINTS” and - lo - app stores were graced with two similarly named apps (left), whose icons appeared to be even more similar once downloaded (right):
Planet Art was displeased [no doubt its face was a picture] and started a passing off claim against Photobox. The claim is based on the sign "FREEPRINTS" and colourably similar signs (such as "FREE PRINTS"). The court was asked to impose an interim injunction to prohibit the Defendants’ use of "FREE PRINTS" and "PHOTOBOX FREE PRINTS", except where the use is genuinely descriptive. [Presumably there would have been debate regarding the Claimant’s proposed multi-limbed interpretation of “genuinely descriptive” had the judge been minded to grant the injunction.]
At the initial hearing before Mr Justice Birss (the substantive hearing was adjourned so that Photobox could prepare and serve evidence), Photobox offered undertakings in writing. In essence, these were “standstill” undertakings. Photobox would not take down its app, but equally it would not actively market or further develop the app. It also offered to make changes to the app to remove other similarities to the Planet Art app, which it duly made [readers will note that the first three screens of both apps start with "Free", "Easy" and "Fast"]:
A further hearing followed, at which the continuation of the undertakings discussed, but not with total clarity. By the time the third hearing took place (at which the court would decide whether to grant an injunction), Photobox had narrowed the undertakings on offer. Photobox would be allowed to refer to the app on its website and actively market the app via sponsored search results and paid-for listings (as long as Photobox did not bid on the term "FREEPRINTS" or close variants), to send marketing emails to existing customers and to arrange sponsored social media posts. Not so much a standstill as a leap forward...
Breaking the undertaking
There was a preliminary debate regarding whether Photobox had at the second hearing orally continued the original undertakings to trial. In other words, was it open to Photobox to narrow the scope of the undertakings to trial? On reviewing records of the second hearing, the judge decided that it was. Counsel for Photobox had only indicated that Photobox was content for the undertaking regarding the appearance of the app to continue to trial. At the end of second hearing the judge ordered that the undertakings should be continued until trial. Counsel for Photobox then immediately pointed out that Photobox had previously given undertakings that went beyond the appearance of the app, and that he had not intended to commit Photobox to these undertakings until trial. Following the second hearing, Planet Art wrote to Photobox to clarify the scope of what was on offer.
At the third hearing, the judge noted that there was confusion regarding what Photobox had actually offered. Following Lord Neuberger's comments in Zipher v Markem [2009] EWCA Civ 44 (paragraphs 19 and 23-24), the judge held that she could re-examine the scope of the undertaking(s) given orally, and that the ambiguity should be resolved in favour of the person who would be bound by the undertaking i.e. Photobox. The narrower undertakings would be continued to trial, if the court did not grant an injunction.
Injunction expunction
This debate was the warm-up for the main event: should an interim injunction be granted? Out came the trusty American Cyanamid guidelines [now 44 years old; still going strong].
Photobox argued that "FREE PRINTS" is wholly descriptive, and has not acquired a secondary meaning. Therefore, Planet Art could have no goodwill in the term, and there was no serious issue to be tried. The judge disagreed, but seemingly not by much. The judge expressed a view that the term is clearly descriptive; there was little evidence before the court that the term had acquired a secondary meaning; and even if it had acquired a secondary meaning, the scope of protection would be narrower than an inherently distinctive term. There were also difficulties regarding the misrepresentation element of passing off, in part due to Photobox's efforts to distinguish its use of "FREE PRINTS" from Planet Art's. [Perhaps a surprising statement in the context of close similarities between Planet Art's app and the Photobox app in its original form].
The judge found that damages would be difficult to quantify (whether for Planet Art, or for Photobox following a cross-undertaking) and would not be an adequate remedy. Nevertheless, the balance of convenience was against granting an injunction. Planet Art's case was relatively weak. Photobox would likely suffer more from a wrongfully-granted injunction than Planet Art would with no injunction. Photobox's undertakings would achieve a degree of balance between the parties in the marketplace, and reduce the likelihood of consumers being deceived.
Comment
The judge emphasised repeatedly that the balance of convenience was innately tied up with the strength of Planet Art's case. She had severe doubts regarding the former. Perhaps - on paper - Planet Art would have had a good chance of securing an injunction here, were it not for the weakness of its case, because the judge formed a clear view that damages would not be an adequate remedy. For IP claims in the English court other than patent and trade secrets cases, this is not a given.
It seems eminently possible that without Photobox's unilateral changes to its app and the (narrowed) undertakings, the decision would have gone in Planet Art's favour. It seems wise, as a defendant facing a possible injunction, to consider what one is prepared to offer voluntarily, in order to get on the front foot, rather than to wait for the possible imposition of more onerous terms.
Finally, Amanda Tipples QC (sitting as a Deputy Judge of the High Court) has subsequently refused permission for Planet Art to adduce consumer survey evidence on the basis of a pilot survey ([2019] 8 WLUK 38). Given that there was approximately a month between the decisions of Pat Treacy and Amanda Tipples, it seems likely that the pilot survey was commissioned before, and not in response to, the former's decision. This might explain why the pilot survey apparently was not directed to the key issue in this case: secondary meaning. In light of this, the judge was not convinced that the probative value of the evidence would justify the cost. The fact that the claim is being heard under the Shorter Trials Scheme was also relevant: if a full survey were allowed this would increase complexity and reduce procedural efficiency.
Background
Planet Art and Photobox are commercial rivals. Both offer online printing, particularly of photographs. Planet Art launched in the UK in 2014 and operates exclusively through mobile applications; its main app is called “FREEPRINTS”. For many years Photobox has offered a certain number of free prints to attract potential customers. In late 2017 or early 2018 Photobox concluded that this offer was undermining its paid-for business model. Photobox therefore decided to launch a standalone app (with a limited allowance of free prints) to combat the surprising trend of customers finding ways to use the same free “introductory” offer multiple times, which was - of course - impossible to foresee.
Photobox alighted on the equally unexpected name of “PHOTOBOX FREE PRINTS” and - lo - app stores were graced with two similarly named apps (left), whose icons appeared to be even more similar once downloaded (right):
Planet Art was displeased [no doubt its face was a picture] and started a passing off claim against Photobox. The claim is based on the sign "FREEPRINTS" and colourably similar signs (such as "FREE PRINTS"). The court was asked to impose an interim injunction to prohibit the Defendants’ use of "FREE PRINTS" and "PHOTOBOX FREE PRINTS", except where the use is genuinely descriptive. [Presumably there would have been debate regarding the Claimant’s proposed multi-limbed interpretation of “genuinely descriptive” had the judge been minded to grant the injunction.]
At the initial hearing before Mr Justice Birss (the substantive hearing was adjourned so that Photobox could prepare and serve evidence), Photobox offered undertakings in writing. In essence, these were “standstill” undertakings. Photobox would not take down its app, but equally it would not actively market or further develop the app. It also offered to make changes to the app to remove other similarities to the Planet Art app, which it duly made [readers will note that the first three screens of both apps start with "Free", "Easy" and "Fast"]:
A further hearing followed, at which the continuation of the undertakings discussed, but not with total clarity. By the time the third hearing took place (at which the court would decide whether to grant an injunction), Photobox had narrowed the undertakings on offer. Photobox would be allowed to refer to the app on its website and actively market the app via sponsored search results and paid-for listings (as long as Photobox did not bid on the term "FREEPRINTS" or close variants), to send marketing emails to existing customers and to arrange sponsored social media posts. Not so much a standstill as a leap forward...
Breaking the undertaking
There was a preliminary debate regarding whether Photobox had at the second hearing orally continued the original undertakings to trial. In other words, was it open to Photobox to narrow the scope of the undertakings to trial? On reviewing records of the second hearing, the judge decided that it was. Counsel for Photobox had only indicated that Photobox was content for the undertaking regarding the appearance of the app to continue to trial. At the end of second hearing the judge ordered that the undertakings should be continued until trial. Counsel for Photobox then immediately pointed out that Photobox had previously given undertakings that went beyond the appearance of the app, and that he had not intended to commit Photobox to these undertakings until trial. Following the second hearing, Planet Art wrote to Photobox to clarify the scope of what was on offer.
At the third hearing, the judge noted that there was confusion regarding what Photobox had actually offered. Following Lord Neuberger's comments in Zipher v Markem [2009] EWCA Civ 44 (paragraphs 19 and 23-24), the judge held that she could re-examine the scope of the undertaking(s) given orally, and that the ambiguity should be resolved in favour of the person who would be bound by the undertaking i.e. Photobox. The narrower undertakings would be continued to trial, if the court did not grant an injunction.
Injunction expunction
This debate was the warm-up for the main event: should an interim injunction be granted? Out came the trusty American Cyanamid guidelines [now 44 years old; still going strong].
Photobox argued that "FREE PRINTS" is wholly descriptive, and has not acquired a secondary meaning. Therefore, Planet Art could have no goodwill in the term, and there was no serious issue to be tried. The judge disagreed, but seemingly not by much. The judge expressed a view that the term is clearly descriptive; there was little evidence before the court that the term had acquired a secondary meaning; and even if it had acquired a secondary meaning, the scope of protection would be narrower than an inherently distinctive term. There were also difficulties regarding the misrepresentation element of passing off, in part due to Photobox's efforts to distinguish its use of "FREE PRINTS" from Planet Art's. [Perhaps a surprising statement in the context of close similarities between Planet Art's app and the Photobox app in its original form].
The judge found that damages would be difficult to quantify (whether for Planet Art, or for Photobox following a cross-undertaking) and would not be an adequate remedy. Nevertheless, the balance of convenience was against granting an injunction. Planet Art's case was relatively weak. Photobox would likely suffer more from a wrongfully-granted injunction than Planet Art would with no injunction. Photobox's undertakings would achieve a degree of balance between the parties in the marketplace, and reduce the likelihood of consumers being deceived.
Comment
The judge emphasised repeatedly that the balance of convenience was innately tied up with the strength of Planet Art's case. She had severe doubts regarding the former. Perhaps - on paper - Planet Art would have had a good chance of securing an injunction here, were it not for the weakness of its case, because the judge formed a clear view that damages would not be an adequate remedy. For IP claims in the English court other than patent and trade secrets cases, this is not a given.
It seems eminently possible that without Photobox's unilateral changes to its app and the (narrowed) undertakings, the decision would have gone in Planet Art's favour. It seems wise, as a defendant facing a possible injunction, to consider what one is prepared to offer voluntarily, in order to get on the front foot, rather than to wait for the possible imposition of more onerous terms.
Finally, Amanda Tipples QC (sitting as a Deputy Judge of the High Court) has subsequently refused permission for Planet Art to adduce consumer survey evidence on the basis of a pilot survey ([2019] 8 WLUK 38). Given that there was approximately a month between the decisions of Pat Treacy and Amanda Tipples, it seems likely that the pilot survey was commissioned before, and not in response to, the former's decision. This might explain why the pilot survey apparently was not directed to the key issue in this case: secondary meaning. In light of this, the judge was not convinced that the probative value of the evidence would justify the cost. The fact that the claim is being heard under the Shorter Trials Scheme was also relevant: if a full survey were allowed this would increase complexity and reduce procedural efficiency.
