A large portion of the new enquiries we receive are from established businesses and brands who have received a cease-and-desist letter, telling them they need to rebrand. Often the question people ask us is, what happens when a trademark dispute turns nasty, and what it actually costs to fight one.

A High Court decision handed down last month gives about as blunt an answer as you could wish for. The side that went on the attack, using one of the most serious tools the courts have, lost, and was ordered to pay the other side’s costs on the harshest basis available. The payment on account alone was £215,000, against costs claimed of more than £320,000. It is a hard lesson in something I say to clients all the time: the most expensive fight is usually the one you should never have picked.

Here is what happened, and what I would take from it if it were my brand or my budget on the line.

The Background

The case is part of the long-running fight over the Crystal Bar vape brand, between Bargain Busting Limited and Shenzhen SKE Technology Company Limited. I will keep the names to a minimum, because the point of this piece is the lesson, not the people. If you want the earlier chapter, the Court of Appeal had already ruled on the threat letters in this same saga, which we wrote about separately.

This particular decision was not about who owns what. It was about something the applicant’s side chose to do during the dispute. They brought criminal contempt of court proceedings against the other side’s lawyers. Contempt of court is, in plain terms, an allegation that someone has deliberately interfered with the administration of justice. It is serious. The judge put these allegations on the same level as accusing someone of dishonesty, and the people in the firing line were solicitors, whose careers and professional standing were on the line.

What had those lawyers actually done? They had written to the UK Intellectual Property Office asking it to hold off registering the disputed trademark until the Court of Appeal had dealt with an outstanding application for permission to appeal. That is it. As the judge put it, this is “the kind of thing which solicitors do all the time”, and it was backed up by the IPO’s own published practice at the time. The contempt application was struck out.

Where the Costs Came In

Losing a case does not normally get you a punishing costs order. Something more is needed, something the court calls being “out of the norm”. The judge found it here, and ordered the applicant to pay costs on the indemnity basis, which in plain English means a tougher basis where more of the winner’s costs are recoverable and any doubt is resolved in the winner’s favour, not the loser’s.

Three things drove that, and they are worth understanding even if you never go near a courtroom.

• First, the judge found that the contempt jurisdiction had been weaponised, used to pursue a private commercial interest rather than the public interest it is meant to protect. Another judge had flagged exactly that concern earlier in the case.
• Second, a carefully worded letter that offered not to report the other side’s lawyers to their regulator, the Solicitors Regulation Authority, if they agreed to certain costs terms, was found, read objectively, to be a threat.
• Third, the court found that the criminal contempt proceedings had been used as a form of pressure to make the lawyers stop asking the IPO to delay registration. Criminal proceedings are not meant to be used as a commercial bargaining chip.

Add those together and you get an indemnity costs order, a £215,000 payment on account ahead of a full assessment, and permission to appeal refused on every ground. For a sense of scale, the rates in play in the costs schedules ran beyond £1,000 an hour for the most senior lawyers. This is the level disputes reach once they take on a life of their own.

What I Would Take From This

A few things stand out to me, and none of them require a law degree.

Disputes are where the real money goes, not applications. People agonise over the cost of registering a trademark and barely think about the cost of a fight. Yet a trademark registration is a few hundred pounds, and a dispute that escalates can run into six figures before anyone has won anything. The numbers in this case are not unusual for hard-fought IP litigation. They are simply visible because a judge wrote them down.

Aggression is not a strategy. Going in hard can feel like strength, but the courts can and do penalise tactics they see as disproportionate or designed to pressure rather than resolve. Choosing to escalate, or instructing an adviser whose first instinct is to escalate, can rebound on you in both costs and credibility. In my experience the calmest route is usually the cheapest one, and almost always the one that protects the relationship and your reputation.

Routine, proportionate steps are normal and proper. The conduct that triggered all this, asking the IPO to wait until an appeal was decided, was found to be entirely ordinary. As representatives, that kind of measured correspondence with the IPO is part of what we do for clients every week. The lesson is not that you should never act. It is that you should act proportionately, and take advice on what proportionate looks like before you fire.

The cheapest disputes are the ones you avoid. Most expensive fights trace back to weak foundations, a registration in the wrong classes, a mark that was never as strong as the owner believed, or an enforcement step taken in anger rather than on advice. Getting the groundwork right is dull, and it is the single best protection against ending up here.

How We Approach It

Our instinct is always to keep your financial exposure to an absolute minimum while making sure you are properly protected. That means telling you honestly when a fight is not worth having, the same way we tell clients not to file an application when it is unlikely to succeed. We would rather talk you out of an expensive mistake than earn a fee from one.

Since 2008 we have handled more than 4,170 UK trademark registrations and acted as representatives in countless disputes and near-disputes. A great many of those never became fights at all, because the right early advice took the heat out of them. When enforcement genuinely is the right move, there are proportionate ways to do it, from a properly drafted cease-and-desist letter to formal action, and we will tell you which fits your situation and your budget.

If you are worried about a dispute, brewing or already underway, the first step costs nothing. Run a free trademark search to understand your position, then book a call and we will give you a straight answer on whether you have a fight worth having, and the least costly way through it. You can also read more about how we protect clients day to day on our trademark representation and protection page.

The headline number in this case was £215,000 on account. The real lesson is quieter. Pick your battles, get the groundwork right, and take advice before you escalate, because in trademark disputes the costs are the punishment.