Care’-ful with know-how and trade marks

23.07.2014

Recent developments (in particular the Motorola / Samsung decisions relating to the use of standard essential patents, alluded to on this blog here) may suggest that competition law and IP are unhappy bedfellows, with the former hampering IP right holders’ ability to obtain injunctive relief in respect of their patent rights.

Last week’s judgment by Mr Justice Henderson in the High Court provides something of a corrective. In Carewatch Care Services v. Focus Caring Services et al, a competition law defence was raised in respect of a claim that the defendants had breached post-termination restrictions in a care home franchise agreement.

The raising of ‘euro-defences’ in general commercial litigation is sometimes viewed as something of a try-on. Generally, it is all too rare to see the limits to the competition rules, with competition authorities all too rarely giving reasoned analysis as to why certain agreements or practices do not infringe.

Here, there was no criticism of Focus for having raised the competition law defences, but those defences did not hinder the claimant’s enforcement of the contractual restrictions. Applying Pronuptia de Paris, as suitably adjusted for a services, rather than a distribution, franchise, Henderson J robustly dismissed those defences. He particularly emphasised the need for the franchisor to have the ability to protect its know-how and reputation in a setting characterised by the intensely personal relationships between carer and care-home resident – to do otherwise would be to allow the former franchisee to benefit from the knowledge imparted to it by the franchisor to set up in competition with it. An injunction restraining breach of the post-termination restrictions was therefore allowed.

Sophie Lawrance

Author