High Court dismisses trademark license injunction application due to lack of serious issue on arguable grounds.

THE HIGH COURT

[2025] IEHC 676

[Record No. HP 2025/5550]

BETWEEN

SOMNUS GMC WATERFORD LIMITED AND SOMNUS GMC CARLOW LIMITED

PLAINTIFFS

AND

MICHEAL FLYNN AND MATTRESS MICK LIMITED

DEFENDANTS

Judgment of Ms. Justice Bolger dated the 28th day of November 2025

1. This is the plaintiffs’ application for injunctive relief arising from the defendants’ termination of trademark license agreements, to restrain the defendants from terminating the agreements for the plaintiffs’ licences to use the defendants’ trademarks, restraining the grant of a license to any third parties without what the plaintiffs say is their exclusive territory and restraining the defendants from interfering with the plaintiffs’ operation of their business under the defendants’ brand within those territories. The plaintiffs’ written submissions propose orders a little different from the relief sought in the notice of motion, including asking this court to grant an injunction for a different territorial area and restraining the plaintiffs’ transfer or shutdown of domain, websites or social media.

2. For the reasons set out below, the court is not persuaded to grant the interlocutory reliefs that are sought either in the notice of motion or the additional reliefs set out in the plaintiffs’ submissions.

Background

3. The defendants are the registered owners of two trademarks, Mattress Micks and Mattress Mick's. The defendants promote those trademarks in retail furniture and bedding businesses by a brand that includes the image of the first defendant, uniforms, in-store marketing material and an online presence. The first named plaintiff since 2020 and the second plaintiff since 2022 have traded under the defendants’ trademarks. Prior to January 2025, there was no signed written agreement governing those arrangements but there were a number of draft written agreements, on which changes had been inserted by the plaintiffs, including identifying Laois as part of the plaintiffs’ exclusive territory of Carlow, which were never finalised or signed. The defendants dispute that those unsigned agreements reflected the terms and conditions of their relationship with the plaintiffs. In any event, a new written agreement dated 1 January 2025 was drawn up, which expressly provided for the following:

(i) A territory of 30 km radius in all directions from the premises.

(ii) A term of 12 months from the date of execution automatically renewed every 12 months "unless determined in accordance with the provisions of this agreement".

(iii) Payment of €400 plus VAT per week.

(iv) The first defendant was permitted to assign or novate any or all of his rights and obligations under the license agreement to any third party.

(v) An entire agreement clause. Significantly and relevant to the issues arising in this application, there is an express termination clause which provides as follows:

"Thirty (30) days written notice by either party

Licensor may terminate this License Agreement with immediate effect, if the Licensee commits a material breach in carrying out its Business under this License Agreement, is unable to pay debts when they fall due and/or ceases to carry on its business."

4. The agreement stated at the end: "If you agree to the above terms, please sign where indicated below." The agreement was signed by the first named defendant and on behalf of the plaintiffs, by the deponent of the plaintiffs’ grounding affidavit. That deponent says that he signed it without fully reviewing it and having been assured by the first defendant that there was no change to the terms on which the plaintiffs’ Waterford and Carlow shops operated and that the plaintiffs’ understanding and agreement with the defendant, was that Laoise and Portlaoise fell within its Carlow territory. That understanding is very different from the express terms of the signed 2025 agreement.

5. In September 2025, the plaintiffs heard that the first defendant was going to offer a Portlaoise concession to a different retailer. The plaintiffs wrote to the first defendant on 18 September 2025 and 4 October 2025 to say that Portlaoise was within their territory as per their licence agreements. The defendants did not reply. On 7 October 2025 the first defendant, on behalf of the second defendant, issued a notice indicating the intention to terminate both trademark license agreements within 30 days as per the terms of the agreement of 1 January 2025. No reason for the termination was identified. The defendants assert that it was a no-fault termination upon 30 days’ notice, which they say is expressly provided for in the agreement of 1 January 2025.

The plaintiffs’ case

6. The plaintiffs assert that there are serious issues to be tried in relation to the following:

(i) The applicable terms of their agreement with the defendants.

(ii) The collateral purpose of the termination which the plaintiffs infer from the sequence of events.

(iii) The standing of the second defendant to issue the 7 October notice, where the plaintiffs’ agreements were with the first defendant.

The standard for introductory injunctive relief

8. The plaintiffs maintain that the serious issue test is satisfied once they raise issues that are not frivolous or vexatious and they rely on the decision in McAndrew v. Launceston Property Finance DAC 2023 IECA 43 in submitting that the court must take the facts asserted at their height on the presumption that they are capable of being established in due course. I do not agree that this reflects the applicable law, given the decision of Charleton J in Hoey v. Waterways Ireland 2021 IESC 34, that the fair issue threshold was not the frivolous or vexatious standard for applications to strike out proceedings. Charleton J said that a plaintiff had to establish something that was reasonably arguable rather than speculative. A comparable approach can be seen in the decision of Dignam J in Rogers & Anor v. Allied Irish Banks PLC & Ors 2024 IEHC 50, where he held that evidence beyond a "mere assertion" was required to establish a fair issue to be tried.

9. Thus, the plaintiffs must establish a reasonably arguable case by reference to evidence that goes beyond speculation or a mere assertion. Thereafter, as per the decision of the Supreme Court in Merck Sharpe and Dohme, the court must examine the balance of justice and/or where the least risk of injustice lies which requires consideration of both the balance of convenience and the adequacy of damages i. The applicable terms and conditions of the agreement between the plaintiffs and the defendants

10. It is almost trite law to say that a person, particularly a businessperson, is bound by what they sign. The Supreme Court in James Elliott Construction Limited v. Irish Asphalt Limited 2014 IESC 74 held that the parties were bound by the terms and conditions of assigned contractual documents "regardless of whether or not they have read the terms and conditions".

11. Here, the plaintiffs claim to have been given assurances by the first named defendant different to the written terms and conditions of the agreement that were signed on their behalf. Not only is that inconsistent with the entire agreement clause in the agreement that was signed, but it is a claim made by reference to no documentary evidence or any details of the circumstances in which such assurance are alleged to have been made. The plaintiffs’ claims of assurances having been made are no more than assertions and are insufficient to establish what is required for a serious issue to be tried.

12. The plaintiffs also argue that the written termination clause in the 2025 agreement (which is similar to the termination clause in the previous draft unsigned agreements) does not entitle either party to terminate on 30 days’ notice other than for cause, i.e. that the 30 days’ notice in the first paragraph of the termination clause is limited by reference to the circumstances outlined in the second paragraph thereof of a material breach or inability to pay its debts. This submission is challenged by the reference in the second paragraph to termination "with immediate effect" which contradicts the 30 day notice of the first paragraph. The plaintiffs also argue that their analysis is supported by the automatic renewal of the agreement every 12 months "unless determined in accordance with the provisions of this agreement".

13. If the plaintiffs are correct, it would render the agreement incapable of being terminated other than where there is a material breach or inability to pay debts. That cannot be so and is not supported by any reasonable analysis of contract construction. It would also be inconsistent with the plaintiffs’ own termination of previous license agreements which contain similar termination clauses. The plaintiffs say that those agreements were terminated by agreement but adduced no evidence beyond a mere assertion of having reached that agreement. The defendants deny the existence of any such agreement and assert that the plaintiffs unilaterally terminated the license agreements. However, they do not seriously dispute that they did not object to the plaintiffs’ unilateral termination of their agreements at the time.

14. The plaintiffs also rely on an estoppel. I am not satisfied that they have adduced evidence of any representation made to them, nor that they relied on such a representation to their detriment, sufficient to establish a reasonably arguable case in that regard.

ii. Collateral purpose

15. The plaintiffs claim that the licence agreement was terminated in order to allow the defendants to reassign the plaintiff's Laois territory. They rely on the UK decision in Braganzia v. BP Shipping Limited & Anor [2015] UKSC 17 in submitting that any contractual power must be exercised honestly, rationally and for the purpose for which it was conferred. That decision relates to the very particular circumstances of the purported termination of an employment relationship and cannot easily be applied to a commercial contract. In any event, I am satisfied that the defendants have established a reasonably arguable case that the termination of the agreement between the parties permitted a 30-day no-fault termination and that Laois is not included in the plaintiffs’ territory. I therefore do not accept that the plaintiffs have established an arguable case for a serious issue to be tried on the collateral purpose point.

iii. The standing of the second defendant

16. The plaintiffs say that the second defendant is a stranger to them and that their agreement was with the first defendant and therefore they challenge the standing of the second defendant to terminate that agreement. This is despite a clear assignment clause contained in the agreement, the first defendant’s averment in relation to having sold his trademarks to the second defendant and entered a deed of assignment with it (which is exhibited) and the fact that the plaintiff wrote to the second defendant on 9 October 2025 after receiving notice of termination on 7 October 2025.

17. The first time the plaintiffs raised an issue about the Trade Marks Act, 1996 was in their written submissions that were furnished to the defendants on the evening before the hearing of this interlocutory application. The plenary summons does not seek any reliefs pursuant to the Trade Marks Act. I am not satisfied that the provisions of the Act establish a serious issue to be tried in relation to the standing of the second named defendant for the following reasons:

(i) Section 32(3) of the Act requires a licence agreement to be signed to be effective. The only signed agreement is that 1 January 2025 which the plaintiff seek to disavow and do not seek to enforce. That questions the entire basis of the plaintiff's attempts to rely on an effective trademark licence and/or the provisions of the Trade Marks Act.

(ii) The plaintiffs do not own the trademarks but simply are party to a licence agreement in relation to them. The licence is not the trademark. There is no conflicting interest as provided for at section 29 (3) of the Act.

(iii) Sections 28 and 32(4) allow a trademark to be transferred in the same way as other personal property and in relation to licences, unless the licence provides otherwise, a licence shall be binding on the successor entitled to the grantor.

(iv) Section 53 of the Act does not apply. The trademark license agreement did not confer property rights on the plaintiff. There is no issue of acquiescence arising here.

18. The plaintiffs have not established a reasonably arguable case on the basis of the provisions of the Trade Marks Act 1926.

Balance of justice

19. In the event that I am wrong in relation to the plaintiffs having failed to establish an arguable case of a serious issue to be tried, I will consider the balance of justice by reference to the balance of convenience and the adequacy of damages.

Balance of convenience

20. The plaintiffs have come to seek equitable relief in circumstances where they ceased paying licence fees to the defendants sometime prior to the termination of their license agreements. The plaintiffs say that this was by agreement. The defendants disagree, although it is common case that they did not take steps to challenge the alleged unilateral cessation of payments at the time. The plaintiffs rely on the minutes of a meeting of 15 April 2025, which confirm the defendants’ agreement to the suspension of licence fees. The defendants dispute the validity of those minutes. The minutes do not assist the plaintiffs as it is not clear who prepared them, albeit they are signed by the plaintiffs’ accountant as having approved them. There is no reference to approval of the minutes having been sought or granted by or on behalf of the defendants and in those circumstances, the purpose of the minutes is unclear. The minutes refer to the pending closure of the Gorey store, which it seems, closed on the 2nd of April, some 13 days before the meeting that the minutes purport to record is claimed to have taken place.

21. The plaintiffs have committed to the restoration of the licence fees in the context of securing the injunctive relief they seek in this application. That does not get them over the difficulty identified above as their conduct is assessed by what was prior to the impugned termination and not by reference to what they say they will do going forward. In those circumstances, there is an issue about the enforceability of this license agreement in the absence of consideration (Harrahill v. Swain 2015 IECA 36).

22. The plaintiffs contend that the termination of the license agreement and the defendant's failure to recognise Laois as part of the plaintiff’s contractual territory will have a very significant impact on their business. They aver to damage to their goodwill and economic viability including loss of exclusivity, customer relationships, brand presence and staff retention and the forced removal of signage and online assets. More significant and of concern to this court is their averment that redundancies relating to their 18 staff "would be unavoidable". However, no evidence is given as to why redundancies would be unavoidable. The plaintiff’s furniture shop business can still continue albeit with different marketing materials and online presence, if any. This will certainly be challenging for the plaintiffs, as it would be for any business, but I have not been satisfied that the difficulty of having to run their furniture shops with different branding, uniforms, online presence and so on, comes anything close to the catastrophic levels for which the plaintiffs contend.

Adequacy of damages

23. I am mindful of the observations of the Supreme Court in their decision in Merck Sharp and Dohme that a court should be sceptical around the inadequacy of damages in a commercial context.

24. The plaintiffs argue that damages would not be an adequate remedy for reasons related to the issues raised by them vis-à-vis the balance of convenience set out above. The plaintiffs have averred that a forced rebrand would entail “substantial unbudgeted cost: removal and replacement of internal/external signage and fascia: redesign and production of printed collateral and uniforms; re-livery of the delivery fleet; and the build, hosting and optimisation of two replacement websites (together with migration of email, online listings and customer journeys). The plaintiffs would also lose the accumulated search-engine equity and digital footprint associated with the existing brand, necessitating significant marketing spend merely to recover baseline visibility. These are sunk and time-critical costs that damages cannot readily quantify after the event."

25. In their written submissions, the plaintiffs refer to the following: "(i) Identity erasure:

Compelled de-branding and digital transfer sever the nexus between the local customer base and the licenced persona;

(ii) Digital extinction: Domain/social channel transfer destroys accumulated SEO equity, rankings and contentlosses difficult to reconstitute ex post;”

It has not been made clear to the court what exactly this is or how it is claimed to occur as a result of the termination of the license agreements.

26. The plaintiffs also cite customer connectivity goodwill and rely on the decision of the Court of Appeal in Betty Martin Financial Services Limited v EBS DAC 2019 IECA 327 in relation to longstanding customer connection and trading identity which they say supports their application for injunctive relief. I distinguish that decision on the facts in particular as set out at paragraph 73 and

75 and the particular regulatory context to which that decision related. As per para.73: “Here, given the nature of the contracts at issue, including the express obligations placed on the Agent, and having regard to the regulatory context in which they were entered into and in which they fall to be performed, (which in my opinion is a very significant consideration), it is arguable that such an implied term is necessary to give business efficacy to the Tied Agency Agreements or (in the words of Lord Neuberger) to give it a “commercial or practical coherence”. The tests of necessity and obviousness are often used interchangeably (as indeed Murphy J in Sweeney v Duggan used them: see at page 540) and, applying the test of obviousness, it is in my opinion arguable that if the fabled officious bystander had asked the parties in 2011 whether the Agreements could be terminated (albeit on notice) because the Agent was performing its express contractual obligations (which of course reflect general obligations imposed by the general law, in the interests of consumer protection) and resisting pressure to breach those obligations by mis-selling investment products, the answer would have been a testy “of course not”.”

As per para.75:

“It follows that, in my opinion, the Agent has established a serious issue to be tried that, as a matter of law, the Tied Agency Agreements could not be terminated on the grounds that the Agent declined to be pressurised into mis-selling financial products to its customers.”

27. The plaintiffs contend that the defendants’ damages arising from the grant of the injunctive relief sought are, unlike theirs, quantifiable. However, that does not appear to address the consequences for the defendants of being compelled to permit the plaintiffs to use their brand (including the image of the first-named defendant)—together with trademarks, marketing materials, and online resources, in circumstances where they do not wish them to do so. It also requires the defendants to refrain from allowing any third party into a territory that the plaintiffs claim, based on an assertion that Laois was agreed to be included in Carlow, notwithstanding that the written terms of the contract state otherwise.

28. I am satisfied that the damages the plaintiffs may suffer, if it is found at trial that the injunction sought should have been granted, are quantifiable as they arise from running a retail premises. Figures in relation to turnover, outgoings and profits can be calculated for the years during which the plaintiffs had the benefit of the defendant's trademarks and compared to the time since the termination of the trademark license agreement.

29. For the reasons set out above, I refuse the interlocutory relief sought.

Indicative view on costs

30. This is an interlocutory application and therefore, subject to a different standard than what is required to establish liability at trial. Order 99 rule 4 of the Rules of the Superior Courts required the court to determine costs, unless it is not possible to do so justly on the interlocutory application. I have determined that the plaintiff has failed to establish a serious issue on reasonably arguable grounds, but that does not necessarily mean that the plaintiffs will fail at trial. It is possible that the parties may secure additional information from discovery, replies to particulars, interrogatories and the evidence that may be given at trial.

31. I have regard to the decision of the Court of Appeal in the Yoplait Ireland Limited v. Nutricia Ireland Limited 2025 ICEA 163 where the Court of Appeal confirmed that the costs of an interlocutory application should be determined unless justice requires otherwise. In that case, the High Court had observed that the interlocutory application was subject to a special standard not equivalent to the success or merits of the case at trial and held that the interest of justice required the costs to be reserved to the trial with a limit of 80% for the company that had been partially successful in the interlocutory application. This decision was upheld by the Court of Appeal. My indicative view on costs is that a similar reserved costs order should be made here.

32. I will put the matter in before me on 10th December 2025 at 10 am for the purpose of making final orders and for such case management as may be required.

Counsel for the plaintiff: Neil Rafter BL

Counsel for the defendant: Neal Flynn BL