14 June 2006

Trade Marks - Parallel Imports and Summary Judgment: Doncaster Pharmaceuticals v Bolton Pharmaceutical Co.

This case was about the exercise of the judicial discretion to grant summary judgment under CPR Part 24. One of the principal changes brought about by the replacement of the Orders of the Supreme Court by the Civil Procedure Rules ("CPR") was the substitution of what we used to call the Saudi Eagle test for "triable issue" test for summary judgment.

The Saudi Eagle case (Alpine Bulk Transport Co Inc v Saudi Eagle Shipping Co Inc (1986) 2 Lloyd’s Report 221) was an application to set aside judgment under RSC O13 r 9. The rule enabled the court to set aside or vary any judgment entered on such terms as it thought just. One of the advantages of the old rules was that a simple statement of principle could spawn a judge-made code that tended to fit just about every circumstance in the same was as a fragment of grit produces a pearl. The pearl from this particular piece of grit was that the court's discretion under O19 r 9 would be exercised in favour of a defendant only if the defendant could show a meritorious defence.

By contrast, the hurdle to defeat a summary judgment application was much lower. All that a defendant had to show was that there was an issue that ought to be tried or some other reason for a trial (O14 r 3). CPR 24.2 permits the court to give summary judgment against a defendant if
it considers that the defendant has no real prospect of successfully defending the claim or issue; and there is no other compelling reason why the case or issue should be disposed of at a trial. Effectively, this is the meritorious defence requirement for setting aside a default judgment under RSC O13 r 9.


The case was an appeal from a decision of Mr Terence Mowschenson QC granting summary judgment to the proprietor of a UK trade mark against importers of parallel pharmaceutical products from Spain. The judge below had dismissed a defence of exhaustion of rights on the ground that the evidence was unlikely to succeed. The Court of Appeal allowed it on the basis that there was insufficient evidence to rule it in or out.

On the substantive issue the case does not break much new ground. What is interesting is Lord Justice Mummery's remarks on summary judgment. His lordship noted the difficulty of applying the "no real prospect of success" rule and concluded that "the outcome of a summary judgment application is more unpredictable than a trial."

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