Overview
In December 2023, the owners of the Superdry brand launched trade mark infringement and passing off proceedings against City Football Group Limited ("City Football") under the Shorter Trials Scheme in the Business and Property Courts.
As part of a pre-trial review in November 2024, Mr Justice Miles ordered the parties to take part in a one-day mediation (despite resistance from City Football) which ultimately led to the dispute being settled before the full trial (DKH Retail Ltd and Ors v City Football Group Ltd [2024] EWHC 3231 (Ch)).
Background
The dispute between Superdry and City Football concerned the use of "SUPER" and "DRY" on training kits of Manchester City for the 2023-2024 season. The wording "SUPER "DRY" Asahi 0.0%" featured on the Manchester City training kit owing to a sponsorship agreement between the well-known beverage brand Asahi and City Football which operates Manchester City.
Superdry, a British clothing company which was founded in 2003, was concerned about the use of "SUPER" and "DRY" on the training kits owing to its use and rights in the "SUPERDRY" mark in the UK. Superdry subsequently launched trade mark infringement proceedings and passing off claims based on its rights in SUPERDRY.
Pre-Trial Review
In November 2024, Superdry and City Football attended a pre-trial review. Among other issues, Superdry made an application for an order for compulsory mediation for the parties before the full trial. Superdry relied on the Court of Appeal ruling in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 which determined that the court had power to order unwilling parties to engage in alternative dispute resolution (ADR). On 1 October 2024, following the Churchill case, the court's general powers of management under the Civil Procedure Rules (CPR) were amended to promote ADR, including the power to order parties to participate in ADR under CPR 3.1(o).
Superdry notified the court that there had been no mediation prior to the pre-trial review, although there had been some unsuccessful settlement negotiations between the parties. Superdry submitted that, given the costs both parties would incur for the full trial, a one-day mediation before the end of December 2024 could save the parties significant costs as well as the court's time and resources.
At the pre-trial review, City Football submitted arguments to reject the mediation request on the basis that there was no realistic prospect of success, and the timing was too close to the full trial date. City Football's counsel also put forward the argument that the parties in this case were commercial parties with experienced solicitors and that realistically, if there was a settlement to be reached, they would have already reached it. Furthermore, City Football's counsel commented that even if Superdry was prepared to compromise, City Football wanted to know "once and for all" whether it could place Asahi branding on football kits and other clothing, so a judicial determination was necessary.
Having considered both parties' submissions, Mr Justice Miles ordered that the parties attend a one-day mediation with a view to seeking a resolution before the trial. Following the mediation, the parties notified the court that a settlement had been reached.
Comment
It is interesting that Mr Justice Miles ordered the mediation, particularly considering how recently the changes to the Civil Procedure Rules were made and given the late timing of the application at the pre-trial review. The judge clearly weighed up the benefits of ADR, even though he found some of the defendant's arguments against a mediation fairly convincing. Given the settlement of this challenging case through ADR, it could encourage other judges to order mediation more readily between parties, to see if an amicable resolution can be found. This case certainly demonstrates that in the right circumstances, settlements can be reached when mediation is forced on the parties, even where one party is heavily against it and feels there are 'intractable differences". As Mr Justice Miles also reflected, "Experience shows that mediation is capable of cracking even the hardest nuts".