Trademark claim struck out as High Court ruling exposes the true cost of litigation

A trademark infringement claim brought in the High Court has been struck out in full after the claimant failed to comply with a court order requiring it to provide substantial security for costs, in a decision highlighting the financial considerations claimants must address before embarking on litigation.

The claim related to alleged infringement of a registered trademark used on vape display stands supplied to major UK supermarkets.

Acting for Phoenix, one of the UK’s leading vape distributors, Knights successfully challenged the claimant’s ability to meet the costs exposure seen in High Court proceedings.

Following an application for security for costs, the court ordered the claimant to pay £450,000 into court in staged tranches as a condition of continuing the claim.

When the claimant failed to make the required payments, Knights’ legal team applied to have the claim struck out. The court agreed, bringing the proceedings to an end and awarding Phoenix with its costs of both the underlying action and the strike‑out application, a relatively rare decision.

Commenting on the judgment, Andrew Leese, Partner in the Intellectual Property team at Knights, said:

“Bringing claims to the High Court requires careful consideration at the outset of both legal merits and funding realities. Where a claimant cannot demonstrate an ability to meet potential adverse costs, the court will intervene decisively to safeguard parties.

“Security for costs isn’t something that should be overlooked, and this case shows how quickly a claim can unravel if the financial aspect of litigation has not been properly planned for. This is a lesson that will no doubt resonate across all litigation cases going forward.

“In many cases, there may be alternative routes available, such as different forums or funding structures, which should be considered before proceedings are issued.”

The decision comes following wider discussions about access to justice for parties with the availability and cost of after‑the‑event insurance, which in many cases can be just as high as the costs sought when initially making a claim. Claimants are forced to make strategic choices when choosing whether to pursue a dispute.

Intellectual Property Partners at Knights, Andrew Leese and Philip Partington, led the case, supported by Associate, Sina Khadem and Solicitor, Sergio Ferreira.