Is mediation compulsory for resolving trade mark disputes?

People often think mediation is not helpful to Intellectual Property (IP) disputes because of the monopolistic nature and desire for injunctions, but that is not always true. The case of DKH Retail Limited, C-Retail Limited, Supergroup Internet Limited, Superdry Plc v City Football Group Limited is a trade mark case and the leading authority for compulsory mediation.

The facts of the case

The order arose from the clothing company Superdry’s dispute with Asahi. Superdry is said to be inspired by the dry taste of the Asahi “Super Dry beer”. This dispute became more complicated with the involvement of the Premier League football club, Manchester City.

Manchester City was involved due to its sponsorship deal with Asahi, meaning ‘Super Dry’ appeared on some of City’s Asahi-sponsored kits. Soon after ‘Super Dry’ appeared on the kit, Superdry filed a claim in the High Court alleging infringement of its trade mark registrations of SUPERDRY, which covered clothing. However, it is not the trade mark issues that make the case noteworthy.

This case is interesting because of the compulsory mediation order. It follows on the decision in Churchill, and the change to the Civil Procedure Rules (CPR) in 2024 aimed at encouraging mediation.

Other orders have been made, but this is the first reported High Court decision after last year’s changes. The order required both parties to engage in mediation and shows the willingness of the judiciary to act. The judge relied on the decision in Churchill where the Court of Appeal confirmed the court had power to order unwilling parties to engage in ADR. In this case, the judge referred to how effective mediation can be in resolving complex commercial disputes efficiently.

There is also a cost penalty to not mediating, and that existed before the Churchill decision and the CPR change. It is therefore important to realise the costs risk of not mediating, illustrated by the decisions where the High Court has imposed indemnity costs such as DSN v Blackpool Football Club Ltd [2020] and BXB v Watch Tower and Bible Tract Society of Pennsylvania & Ors [2020].

Effective mediation gives opportunity to resolve disputes without court hearings. Those looking to enforce their IP rights, and those accused of infringing the IP rights of others, should now be more open to mediation.

If you have questions or concerns about trade mark disputes or IP rights, please contact James Tumbridge.