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IPEC grants injunction against Nike’s ‘LNDR’ ad campaign; Court of Appeal tweaks the order

26 March 2018

An interim injunction has been granted against Nike, preventing it from using ‘LNDR’ as part of its ‘Nothing beats a Londoner’ advertising campaign.

The Intellectual Property Enterprise Court (IPEC) recently granted an interim injunction in favour of Frank Industries PTY Ltd (Frank) against the international sportswear group in respect of its alleged infringement of Frank’s registered trade mark, ‘LNDR’.

Frank, which sells upmarket active wear for women under the ‘LNDR’ name, holds a UK trade mark and an international trade mark designating the EU for various goods including clothing in class 25. The marks were registered across various goods and services including clothing, ladies wear, sportswear, tops and underwear. Frank has operated since 2015 and sells its products throughout the EU and the rest of the world.

In January of this year, Nike launched its promotional campaign ‘Nothing beats a Londoner’, which adopted the ‘LNDR’ abbreviation for its slogan. Nike used the wording on its branded clothing, alongside its well-known swoosh trade mark.

Frank brought a claim against Nike for trade mark infringement under sections 10(2)(b) and 10(3) of the Trade Marks Act 1994, and articles 9(2)(b) and (c) of EU Regulation 2017/1001, and for passing off, seeking an interim injunction to prevent the alleged infringing acts.

It argued that there was evidence of actual confusion because people believed that there was an association or collaboration between Nike and the mark, ‘LNDR’. In terms of passing off, Frank asserted that it had established goodwill in relation to the ‘LNDR’ mark, and that Nike’s use of the mark was misrepresenting that their goods were associated with Frank’s ‘LNDR’ products.

As a result, Frank argued that Nike’s promotional campaign would dilute the goodwill in its ‘LNDR’ brand and the reputation of its upmarket clothing range. In response, Nike argued that their use of the abbreviation was merely descriptive.

The ruling

Judge Hacon applied the American Cyanamid principles, as explained in National Commercial Bank Jamaica Ltd v Olint Corp Ltd [2009] UKPC 16, considering: (1) whether there is a serious issue to be tried and (2) if so, what is the balance of convenience? He agreed with Frank’s argument that, by association, Nike’s use of the wording in its campaign could be detrimental to Frank’s brand.

The judge was satisfied that sufficient prejudice would be caused to Frank before the trial could take place, and therefore damages would not prove an adequate remedy. While Judge Hacon acknowledged that Nike may suffer a degree of prejudice if prevented from using the mark, he held it was possible for Nike to continue the campaign without it.

However, if Nike were allowed to continue to use the mark, there was a real risk Frank might lose control of its reputation and suffer irreparable harm to its goodwill. In the circumstances, the balancing act came down in favour of an interim injunction, with a trial date likely to be within a few months.

Frank offered a cross-undertaking of £500,000 and the court considered that it was unlikely any potential damage caused to Nike resulting from the injunction would exceed that amount.

The interim injunction order was granted, together with an order requiring Nike to amend its YouTube and social media adverts and posts to remove references to the offending abbreviation.

However, the matter did not stop there. Nike subsequently appealed in part against the scope of the order, arguing that it was too far-reaching. The Court of Appeal agreed that the scope of the order was burdensome, and felt that the lower Court had not appreciated that requiring Nike to ‘remove’ the abbreviation would effectively require it to take down its social media posts and YouTube videos, losing the benefit of all of the associated ‘likes’ and other social interactions in the process.

In an effort to strike a fairer balance, the Court of Appeal reversed the High Court ruling on the subject of Twitter posts; held that Nike should be permitted to archive its Instagram posts instead of deleting them; and that it could avoid taking down its YouTube videos provided, as long as it blurred out the references to the offending signs.

These decisions serve as a useful reminder that the IPEC, despite being seen as a cheaper and more accessible Court with a simplified procedure, has the power to award an interim injunction – a powerful remedy with potentially severe consequences. It also shows that, while the Courts do the best to strike the ‘balance of convenience’ between claimant and defendant in such cases, when it comes to social media, that can be difficult to achieve.

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