Nude Brands Limited (NBL) is a small cosmetics company that makes cleansers, moisturisers and other products and claims its ingredients are more natural than some competitors'. It was founded by Ali Hewson, wife of U2 singer Bono.
Fashion designer Stella McCartney commissioned perfumes to be made in her name by Yves Saint Laurent Beaute Limited (YSLB) and its parent company L'Oréal. The latest perfume is called Stellanude, a name which NBL said violated its trade marks in the term 'nude' for cosmetics, including perfumes.
The full trial is yet to be heard, but NBL applied for an injunction to stop the launch of the perfume until after a court has heard the case. The High Court refused that request, saying that Stella McCartney Limited (SML) would suffer more by the granting of the injunction than NBL would by its not being granted.
"The likely damage to SML and L'Oréal if an injunction is wrongly granted outweighs the damage to NBL if it is refused," said Mr Justice Floyd. "Whilst NBL may ultimately prevail at the trial, it seems to me that an injunction and damages at that stage, though far from perfect as remedies, are more likely to be able to restore them to their rightful position than an award of damages under the cross undertaking to SML."
"The effect of an injunction wrongly granted against SML would be to cause a massive disruption to their business, and probably cause them to abandon use of the brand altogether," he said.
NBL does not make perfume but said that it had plans to do so. The High Court ruled that it would be unfair to prevent SML and L'Oréal launching a perfume because of one that was not close to launch.
"The evidence establishes that [NBL's launch of a perfume] is anything but imminent, as the lead time for such a product is 2-3 years, and the evidence does not establish that the plans for such a perfume product have got beyond producing some free sampler products," said Mr Justice Floyd. "The NUDE perfume project is far in the future. If NBL succeed in the action they will have removed SML from the market long before it is launched."
SML argued that the term 'nude' was not distinctive enough to justify trade mark protection, and that the term on its own could not distinguish between different perfumes that used it in their name.
The Court said that the term 'nude' was capable of being protected by trade mark registrations.
"In my judgment it is plainly arguable that that the mark would survive the attack outlined by [McCartney's lawyer]," said the ruling.
The Court also found that the term 'Stellanude' was similar enough to the term 'nude' to justify scrutiny under trade mark law.
Mr Justice Floyd then weighed the 'balance of convenience', judging which company would be most hurt if his ruling went against it. He found that because SML was about to launch the perfume in a marketing project that cost it millions of pounds it had the most to lose, whereas NBL was unlikely to lose customers.
"The risk of confusion between NBL's products and SML's is, in my provisional view, small. The purchaser will know that she (or, more gallantly, he) is purchasing an SML perfume," he said. "SML's evidence was that all the arrangements for the launch of the product have been made. The cancellation deadlines for much of the advertising has passed. 26,000 units of the product are already in retailers such as Boots and the Perfume Shop."
"The 2009 launch [would] have to be cancelled, most likely permanently. [SML said that] preventing the launch would cost [SML] many millions of pounds in lost investment and will bring about an incalculable loss to the goodwill and reputation of [SML, YBSL and L'Oréa] in the industry, with the media and in the minds of consumers," said the ruling.
The High Court also refused permission for a fast trial.