In Harrods Limited v. Harrods (Buenos Aires) Limited, an English court granted an interlocutory injunction restraining passing off with worldwide effect. Our sources have informed us that this decision is currently on appeal.

The events that led to the decision began around 1913, when Harrods Limited, the famous London department store, established a wholly-owned subsidiary, Harrods (South America) Limited in Buenos Aires, which subsequently became a parallel company named Harrods (Buenos Aires) Limited, an English registered company. Harrods (Buenos Aires) Limited operated a large store in Buenos Aires under the HARRODS name and there was a management connection between the two companies until the late 1940s when they severed all ties.

Harrods (Buenos Aires) Limited eventually encountered financial difficulties, and, in an attempt to find either a buyer, or an investor to finance the renovation of their Buenos Aires store and help expand their business, they issued a circular stating that a prospective investor could take advantage of the worldwide fame and reputation in the HARRODS name. Harrods Limited sued Harrods (Buenos Aires) Limited in the United Kingdom seeking, inter alia, an injunction against passing off, which was granted.

Among the issues the judge had to consider were whether an English court would have jurisdiction over the dispute and, if so, what should be the scope of an injunction.

The court concluded that it had jurisdiction over the dispute because the South American countries into which Harrods (Buenos Aires) Limited sought to expand its business had laws against trademark infringement and unfair competition, and that a judgment of an English court would be enforceable in those jurisdictions.

The plaintiff showed that the HARRODS name was associated in these countries with Harrods Limited, not Harrods (Buenos Aires) Limited, and the court found sufficient grounds for an injunction.

The court granted a worldwide injunction restraining Harrods (Buenos Aires) Limited from passing itself off as associated with Harrods Limited by means of the circulars, and an injunction limited to South America restraining Harrods (Buenos Aires) Limited from passing itself off as associated with Harrods Limited by trading under the HARRODS name. The court limited the scope of the injunction on the latter issue, because Harrods (Buenos Aires) Limited gave an undertaking stating that they would first apply to the court before seeking to trade outside South America, thereby mitigating the threat of passing off outside that continent. Harrods (Buenos Aires) Limited was allowed to continue to operate the Buenos Aires store under the HARRODS name and to continue any existing associated mail-order business.

It now appears that English courts are willing to grant injunctions with extremely far-reaching effect in cases where a plaintiff can make out a sufficiently strong case of, or threat of, a breach of intellectual property rights beyond the borders of a single country.