Legal brief: trademark infringement case backfires - a cautionary tale

The 2021 case of Fox Group International Limited (“Fox”) v Teleta Pharma Limited (“Teleta”) is an example of an intellectual property case backfiring.

Fox, a supplier of cosmetic products, had a distributor agreement with Across Co. Ltd (“Across”) for the distribution of a cosmetic product (“the Product”) in the UK. However, Across expressly retained the intellectual property rights in the product in the distribution agreement.

Despite this, Fox registered a UK trademark in the product seeking to exercise exclusive rights over the product. Fox shortly thereafter threatened and then issued infringement proceedings against Teleta for selling the product in the UK.

Teleta advanced a defence on the basis that it was selling legitimate Across products and that Fox’s UK trademark was invalid and in bad faith. Teleta also counterclaimed for damages for unjustified threats.

Fox argued that Across had consented to it having exclusive rights over the Product. However, Fox lacked persuasive evidence. Eventually, Fox discontinued its claim.

The counterclaim continued. At the hearing, the judge found that Fox had applied for the trademark in bad faith and had made unjustifiable threats, advising that the case was a ‘cautionary tale’ for those seeking to enforce their intellectual property rights.

What are the takeaways?

1. Always carry out sufficient due diligence before threatening and bringing enforcement proceedings to ensure that the products you think are infringing your rights are not actually legitimate goods.
2. Always ensure you own the property right you are seeking to enforce. This is straightforward in principle, but requires careful analysis of distribution agreements, assignment deeds and correspondence between the parties involved. 
3. Always seek specialist legal advice before making a threat of infringement.

If you own and suspect infringement of your intellectual property rights, including trademarks, registered or unregistered design rights, copyright or patents, or you have been accused of infringing an intellectual property right, please contact our specialist team for urgent advice.