Interim in­junc­tions in e-commerce and how to react

An online shop without appealing photos and item de­scrip­tions is un­ima­gin­able these days. They’re a major part of the e-commerce battle for the best market position – which leads to some providers focusing too heavily on their com­pet­i­tion. This can quickly lead to photo theft or other types of legal vi­ol­a­tions. To recognise this in time, you should regularly take a look at the com­pet­i­tion and what they’re up to. Legal vi­ol­a­tions on the internet have been around for long enough to work their way into law, so if you find any, you can issue an out-of-court warning. If that’s not suc­cess­ful, you can quickly request the interim in­junc­tion. But what exactly is an interim in­junc­tion, and which criteria does your request need to fulfill to obtain one? If the roles are reversed and you’re on the receiving end of an interim in­junc­tion, how should you react?

An interim in­junc­tion, also referred to as a pre­lim­in­ary or in­ter­locutory in­junc­tion, is a pro­vi­sion­al form of legal pro­tec­tion that takes place before any actual trial pro­ceed­ings. This means that you don’t have to wait for a lengthy court trial to be able to make your legal claim. In 1975, the House of Lords es­tab­lished a three-pronged test that claims must pass before an interim in­junc­tion will be granted:

• Is there a serious question to be tried?
• Balance of con­veni­ence
• Case for the status quo

In e-commerce in par­tic­u­lar, the interim in­junc­tion procedure is an effective means of rapidly coun­ter­act­ing possible in­fringe­ments. As soon as you discover a violation, you should act as quickly as possible. Doing so will also help you to fulfill the main criteria to prove the necessity of your in­junc­tion, and as a result will make your case stronger. Be careful, though, to make sure that you do indeed have a case – if the later trial rules that the in­junc­tion was un­ne­ces­sary, the party bringing the suit will be liable for monetary damages.

In the U.K., interim in­junc­tions are permitted under Civil Procedure Rules (CPR) 23 and CPR 25. When applying for an interim in­junc­tion, it is assumed that you will first have contacted the re­spond­ent outside of the High Court, unless the cir­cum­stances are very urgent or you have good reason not to. As a general re­quire­ment, though, the claimant cannot object to the re­spond­ent knowing about their ap­plic­a­tion. The ap­plic­a­tion must be a stan­dalone document con­tain­ing very detailed in­form­a­tion about the nature of the in­junc­tion, and spe­cific­ally phrased to outline exactly what conduct is being pro­hib­ited, the reasons for its issuance, and any other necessary in­form­a­tion. The duration of the in­junc­tion must also be clearly stated. This is usually until the date when the case is con­sidered by the Court. The ap­plic­a­tion notice submitted to the High Court is Form N244 and must be filled out in full.

By nature, an in­junc­tion is merely a temporary measure set in place to save time or spare a claim from harm before a trial can take place. Any claim for in­junct­ive relief must be supported by full evidence, including dis­clos­ure of all facts – not only those directly relevant to or in support of the claimant’s case. Following the duty of dis­clos­ure, if an interim in­junc­tion is granted then the claimant must agree to notify the defendant as soon as possible, if they have not already done so. “Without notice” ap­plic­a­tions are only accepted in rare cir­cum­stances, when good reason can be proven. Interim in­junc­tions generally equate to a cease and desist order, which prevents further damage to the claimant. Any further claims, such as damages claims, will be decided in the sub­sequent main court pro­ceed­ings.

As mentioned earlier, there are three basic grounds for the issuance of an interim in­junc­tion. The claimant has to satisfy all three criteria before an in­junc­tion will be granted, called the American Cyanamid Test: that it is a serious question to be tried, the balance of con­veni­ence, and the status quo.

1. Serious question to be tried: Based on the merits of the case, it is likely that it will go on to win at trial. This means that when applying for an in­junc­tion, you should be prepared with all required evidence to prove your claim that the activity you’re looking to block would in fact go against the law or cause unlawful harm to your business. While this does not require you to prove that you will win the case, the Court must be satisfied that the question behind the in­junc­tion is not frivolous.
   
   
2. Balance of con­veni­ence: The con­veni­ence balance weights the possible harm to the claimant if the in­junc­tion is not issued versus the possible harm to the defendant if the in­junc­tion is issued. This takes into con­sid­er­a­tion the relative strength of the parties’ cases, and the extent of the supposed in­fringe­ment. It also considers the cross-un­der­tak­ing in damages and the claimant’s ability to com­pensate the defendant if the in­junc­tion is found to be wrongful, as well as the defendant’s ability to pay damages if it’s not. These harms will be balanced and ruled upon by a judge when con­sid­er­ing the issuance of an interim in­junc­tion.
   
   
3. Status quo: A difficult re­quire­ment to describe, the con­sid­er­a­tion of the status quo is different for each case and will be con­sidered dif­fer­ently depending on the available facts. For example, it could be found that some detail present in the case is in violation of the status quo and therefore subject to immediate in­junc­tion. However, the endeavour of the Court is usually to maintain.

How can the Court respond to your request?

When an ap­plic­a­tion for in­junc­tion is submitted, the decision is usually made in court during a hearing with all parties present. Which arguments the Court is willing to hear depends on the type of ap­plic­a­tion. With “ex parte” ap­plic­a­tions, the Court will only hear arguments from the party seeking the in­junc­tion. Cases with “inter partes” ap­plic­a­tions allow both parties to have their arguments heard. Some ap­plic­a­tions can also be heard as a com­bin­a­tion of the two - for instance “ex parte on notice”, where the defending party can attend the hearing but cannot present a full argument. Most courts will consider cases based on minimal com­pre­hen­sion of facts and witnesses, though judges can call for a more thorough hearing if they feel that they have reason to doubt your claims. It’s important to remember that at all times, the Court retains ultimate power over in­junc­tions, and can change them or set them aside at their dis­cre­tion.

The term “forum shopping” refers to the choice of court, judge, or jur­is­dic­tion in favor of the plaintiff. Generally, the case is brought in the district where the in­fringe­ment was committed. But with e-commerce, it means that vi­ol­a­tions can be committed virtually anywhere within the reach of the internet. In theory, they fall under every jur­is­dic­tion – although this obviously is not a practical ap­plic­a­tion. As a result, the claimant can apply for an interim in­junc­tion in a number of different courts and therefore choose one that will help them gain an advantage over the defendant. For example, some courts require less burden of proof or have more lenient precedent with certain types of in­junc­tion cases. Past judgments on similar cases can give the claimant an in­dic­a­tion of their chances of success, as well as con­sid­er­ably influence the court’s decision. It’s common practice for lawyers to file an ap­plic­a­tion with several courts at the same time in order to achieve the best possible chances of winning. E-commerce is already regulated in the UK and EU by the Elec­tron­ic Commerce (EC Directive) Reg­u­la­tions of 2002, which helps clarify how jur­is­dic­tion is divided and handled online.

Let’s turn the tables: You’ve received an interim in­junc­tion and are charged with a violation for your e-commerce. You could be faced with con­sid­er­able losses. How should you react in this situation? What legal steps must you take to defend yourself in the event of an unlawful in­junc­tion? Are there any ways to have an in­junc­tion annulled?

You are required to comply with the interim in­junc­tion as soon as it has been served to you. Whether or not the applicant’s claims are justified in your opinion is not yet decided at this phase. The expedited procedure is used to obtain a pre­lim­in­ary court order usually without oral pro­ceed­ings. However, if you’re concerned about a re­strain­ing order, you can rest slightly easier with the guarantee that any in­junc­tion found to be wrongly issued will be com­pensated by monetary damages from the claimant.

If you believe that the in­junc­tion filed against you is un­jus­ti­fied, it is now your re­spons­ib­il­ity to gather as much evidence as you can to prove in court that the issuance was un­ne­ces­sary. It may also be helpful to review the precedent of the court where you will be making your argument. If the in­junc­tion was granted without notice, then you as the re­spond­ent will be allowed to present your arguments to the Court - though it’s not con­sidered a formal appeal. If the hearing was on notice, you can make a request to the High Court to be heard by the Court of Appeal. If the High Court, denies this request, you can appeal to the Court of Appeal itself.

If the main pro­ceed­ings are initiated, the case will be examined in the context of a civil pro­ceed­ing. If the applicant decides against a court case or if the cir­cum­stances have changed, you can apply to suspend the in­junc­tion. If the interim in­junc­tion proves to be un­jus­ti­fied and has been issued un­ne­ces­sar­ily, you have the right to monetary com­pens­a­tion. The claimant will be required to reimburse you for all costs incurred as result of the pro­hib­i­tion, including court costs. After the judgement, there is still an op­por­tun­ity to appeal – either through the High Court or the Court of Appeals itself.

Please note the legal dis­claim­er relating to this article.