Counterclaim for invalidity based on earlier common-law rights fails to see off trade mark infringement claim

In an action for infringement of the trade mark CRYPTOBACK (Wirex Ltd v Cryptocarbon Global Ltd & Ors [2021] EWHC 617 (IPEC) (16 March 2021)) the defendants argued that they had earlier rights to the name, and also that the application to register it had been made in bad faith, but acknowledged that if they lost on their counterclaim they were infringing the trade mark.

 

The counterclaim was therefore a slightly unusual s.5(4) claim, based on the defendants’ ability to oppose the registration because they had common law rights that, in other circumstances, would have enabled them to sue for passing off. The test for passing off is set out in Lord Oliver’s judgment in Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491 and the present case turned on whether the defendants (counterclaimants) had goodwill in the word. To succeed, they had to convince Hacon J that the name had been distinctive of their services at the claimant’s filing date.

 

The name was plainly a neologism, formed by merging elements of the words “cryptocurrency” and “cashback”. A neologism is not inherently non-distinctive, but it could be taken by consumers to be a new word for a type of goods or services, especially when used for something innovative. Linoleum Manufacturing Company v Nairn [1878] 7 Ch. D. 834 illustrates the problem: the product was protected by patents, which were assigned by the inventor to the plaintiff company which he set up to exploit them, but the name “linoleum”, coined by the inventor to denote the product, was used to denote the substance not (exclusively) the source of the substance, so the defendant could not be stopped from marketing his product as “Linoleum floor-Cloth” after the patents expired.

 

The evidence did not support Global’s contention that they owned goodwill in the name when the trade mark was applied for. There had been email campaigns, a web article and an invoice, but that did not amount to enough to impress the judge. To make matters worse for Global, in the few months of use before the filing date, they had actually applied the name CCRBBACK to their service, which made it more likely that CRYPTOBACK would be seen as a generic name for a new type of service.

Dilution and figurative trade marks: Red Bull v Bighorn

Red Bull energy drink has been around for a long time now. I discovered it during my stint teaching IP at Essex University, when I would take a day a week off from my day job and trek across the country. On arriving at Colchester a can of Red Bull would help me get through the two-hour class I was there to teach, and in fact I recall that it was Austrian students in that class, who drove home with the assistance of a few cans but had to take care because it was illegal in Switzerland, who first alerted me to its properties (I deliberately refrain from using the word "benefits").

Article 9(2)(c) of the EU trade mark regulation (2017/2001) (which is in pretty much the same terms as s.10(3) of the Trade Marks Act 1994) protects a trade mark with a reputation against acts that "without due cause" (I put that in inverted commas because it is hard to see how it could be otherwise) take unfair advantage or that reputation or are otherwise detrimental to it (or for brevity dilution and tarnishment). Back in 1994 (or perhaps more accurately 1989, when the original directive was made) that was a radical new departure in trade mark law, not just in the European Community and still less just in the UK, but in the world at large: the US had dabbled with such protection but even in the Dallas Cowboys Cheerleaders case the judge had stuck to the well-trodden path of confusion rather than following the "dilution" signpost.

A major problem is the notion of a trade mark with a reputation - haven't all trade marks got reputations, some larger than others? The French version of the directive looks to be referring to trade marks "of repute", which is a different matter - and Article L713-5 of the French Code refers to "une marque jouissant d'une renommée". But whatever the law means, we can probably assume that the trade mark RED BULL, and the same trade mark owner's figurative trade marks (what normal people would call logos) or at least some of them, have reputations. (Incidentally, it seems to be the trade mark not the product or the trade mark owner that must have the reputation, which is, well, interesting.) So no surprise that when Red Bull found another energy drink manufacturer selling its wares under the BIGHORN trade mark using signs that bore a certain similarity to Red Bull logos - in one of the three instances pleaded, charging rams rather than charging bulls - they sued for trade mark infringement on grounds of likelihood of confusion (the rams obviously meaning that the defendant's trade mark could not be identical) and unfair advantage (without due cause, of course).


The deputy judge, Kelyon Baker QC, found no infringement under Article 9(2)(b) - likelihood of confusion - but did consider that the defendant took unfair advantage of the reputation of the claimant's trade mark: Red Bull GmbH v Big Horn UK Ltd & Ors [2020] EWHC 124 (Ch) (30 January 2020). I have shown one of the claimant's registered trade marks and one of the defendant's signs, but you can see them all in the judgment if you click on the link, should you feel it necessary.

There was not a high enough level of similarity to find a likelihood of confusion under Article 9(2)(b), but that didn't matter much because the Deputy Judge held that there was unfair advantage, so Red Bull succeeded. Sky v Skykick [2018] EWHC 155 (Ch) told us that this required the global assessment so beloved of the Court of Justice, taking into account all the circumstances of the case. These would include the strength of the trade mark's reputation, the defree of its distinctive character, the degree of similarity, and the nature and degree of proximity of the goods or services. How strongly and immediately was the claimant's mark brought to mind by the defendant's sign? That would determine whether the use of the sign was taking unfair advantage of the trade mark's distinctive character or reputation.

The defendant did not try to argue that the Red Bull trade marks were not well-known within the EU, which would surely have been a waste of time had they attempted it. Nor did it try to justify its actions by showing "due cause", whatever that might look like (parody, perhaps?). The defendant's signs were visually and conceptually similar to the claimant's marks. They were being used for the same goods, which were sold in the same shops. They were therefore likely to cayuse the average consumer to link those signs with the claimant's marks, and unfair advantage was therefore being taken.

Cheat software infringes copyright in Grand Theft Auto V

It won't surprise you to learn that computer games are not my thing. I did have to look at one some years ago for a client who objected to the content (we took the view in the end that the Streisand Effect was likely to make anything the client did about it counter-productive). So if I don't relate to computer games themselves, what am I supposed to think about software that enables the user to cheat in the game?

Cheat software is what was in issue in Take-Two Interactive Software Inc & Anor v James & Ors [2020] EWHC 179 (Pat) (29 January 2020) where in an application for summary judgment the judge (Mrs Justice Falk) held that it infringed copyright in the game itself. Not only that, there were breaches of contract both by the defendants and induced by them, the elements of the tort of inducing a breach of contract (knowledge, intention and damage, as laid down in OBG Ltd v Allan [2008] 1 AC 1) being made out against most of the defendants. There were a couple of points (the liability of a minor defendant, and circumvention of technical protection measures under s.296 CDPA to which the defendants seem to have had a plausible factual defence) which were not candidates for summary judgment, but on the other claims the judge saw no reason to leave liability for a trial.

Leaving aside the contract issues, this being an intellectual property blog, the important finding here is that by providing the cheat software the fourth and fifth defendants (the first three having settled earlier) had authorised copying of Grand Theft Auto V or substantial parts of it. The cheat software took information from the game so it could reproduce an image of something for use in the game. That there was copying is plain, and the defendants had provided the means to do the copying. Using the cheat software as intended would inevitably result in infringement.

The defendants tried arguing that the game software on the user's device remained unaltered, and any affect from the cheat software was not permanent: but transient copying is clearly within the s.16 definition of infringement, so that got them nowhere. However, the fact that the impact of the cheat software was on the program when running meant that attention had to be focussed on elements that frankly look a bit peripheral to my mind: images of weapons used in the game, and their software-driven functionality, residing in libraries and code within the program, were the example the judge referred to. Cheating meant conjuring up weapons that the user was not entitled to have, according to the rules of the game, so the copies were infringing ones. It strikes me as a pretty small infringement, and perhaps the fact of the matter is that the wrong here lies outside the scope of copyright (the breach of contract claims look much more substantial and convincing to me), but it does show how copyright can be brought to bear on a problem like this.

Would copyright remedies be worth pursuing? That remains to be decided, and the judge expressed the hope that hte parties will be able to sort that out without a trial. It's hard to see where the damage to the claimant is, and I suppose it's even arguable that the defendants might have made the game a bit more popular by opening up new possibilities and providing a route to a satisfactory outcome that users might not be able to achieve on their own. An account of profits might yield more. However, with copying of elements of the game inherent in the cheating (making more weapons available, etcetera) I can see grounds for the grant of an injunction, which would effectively put a stop to the cheating, even though it seems like a roundabout way to get there.

Full and frank disclosure needed for order for service out

I haven't exactly been waiting for a case on service out , but suddenly two have come along together in the manner of no 253 London buses (substitute your own favourite route number if you wish ). In Easy Group v Easy Fly [2020 ] EWHC 40 (Ch) Nugee J set aside such an order in a passing off, trade mark infringement and unlawful means conspiracy (and, you might add, kitchen sink) claim.

Unlike my previous subject, Wheat v Google (in which judgment was given the following day), there were serious issues to be tried - that wasn't the problem. The issues included where the defendant's website was targeted, whether using a trade mark in a press release made a link between the mark and the services, and whether flying an aeroplane with the trade mark on the side was an infringement.

The problem was that the claimant had failed to tell the judge everything when making the application. Its case was based on the premise that the defendant, a domestic Colombian airline,
was offering its sences in the UK and the EU. It wasn't. The court declined to treat the claim form as valid. The claimants can start again, but will only be able to claim damages for the six years before
the new claim .

Online EU trade mark infringement actionable where advertising directed

Infringement proceedings involving an EU trade mark must generally be brought before the courts of the member state in which a defendant is domiciled (Regulation 207/2009/EC, Article 97(1)). They can also be brought before the courts of the Member State “in which the act of infringement has been committed or threatened” (Article 97(5)). What happens when the defendants are a Spanish company and a Spanish individual, and the trade mark owners are British (and the exclusive licensee is an English company)? Obviously an action could be brought in Spain, but could the claimant sue in the UK on the basis of Article 97(5)??

The claimants issued proceedings for infringement in the Intellectual Property Enterprise Court, on the basis that the defendants' online activities amounted to advertising or offering counterfeit goods for sale in the UK. IPEC refused to accept jurisdiction under Article 97(5), taking the view that only the courts in Spain, where steps had been taken to put the offending sign on a website, or decision to that effect had taken place, had jurisdiction under that provision. The claimants appealed, and the Court of Appeal sent the matter on an expedition to Luxembourg.

The Court of Justice ruled that Article 97(5) allowed the trade mark owner to bring infringement proceedings before an EUTM court of the Member State where the consumers or traders to whom online advertising and offers for sale were directed were located. It made no difference that took decisions and steps necessary to bring about the electronic display in another Member State.

The Court reasoned that, if Article 97(5) were interpreted otherwise, a defendant could deprive Article 97(5) of any effect by making sure that the territory where they set up their website and activated the display of their advertising and offers for sale was the same as that in which it was established.

The Court of Appeal has to decide whether the advertising and offers for sale on the website and platforms in issue were in fact targeted at UK consumers or traders. It must do so on the basis of factors such as the details about the geographical areas where the products were to be delivered.
AMS Neve Ltd and others v Heritage Audio SL and others (Case C-172/18) EU:C:2019:674

India: Use of a trade name similar to a trade mark does not necessarily constitute infringement

In a recent Trademark infringement matter, the Delhi High Court has held that in order to qualify as infringement under Section 29(5) of the Trademarks Act, 1999 (“Act”) there has to be exact use of the registered mark and mere use of a prefix/suffix would not amount to infringement. The Court was hearing a trademark infringement matter wherein the defendant had used a word “MERCYKIND” as part of its trade name which was allegedly similar to that of Plaintiff’s registered trademark “Mankind”.

BACKGROUND

Mankind Pharma Ltd., one of India’s largest Pharmaceutical Company (the “plaintiff”) instituted a Trademark Infringement suit seeking an injunction against Chandra Mani Tiwari and Mercykind Pharmaceuticals Pvt. Ltd[i]., for infringing its registered trademark “MANKIND” and a series of other marks with the suffix/prefix “KIND” and for passing off their business/goods by adopting and using the trade name “MERCYKIND PHARMACEUTICAL PRIVATE LIMITED”.

While passing the order, the Court mentioned that the registered trademark “MANKIND” would be infringed under Section 29(5), if the defendants were found to be using “MANKIND” as part of their trade name. Here, the defendants are using “MERCYKIND” as part of their trade/corporate name which is not a registered trademark of the plaintiff. Thus, there would have been infringement under Section 29(5), if the defendants, as part of their trade name, had used “MANKIND”. Merely because the name of the defendant’s Company is deceptively similar to the plaintiff’s trademark “MANKIND” or any other registered trademarks of the plaintiff with “KIND” as prefix or suffix, it does not amount to infringement under Section 29(5).

This case makes an interesting read for the following reasons:

He who comes into equity must come with clean hands:

In this case, the Court took a strong objection to the fact that the plaintiff had concealed certain information from the Court which the Court considered to be relevant and had weightage in the matter.

The Plaintiff, not so long ago while responding to certain Trademark Examination Report for registration of two of their trademarks had taken a stand that “ATORVAKIND” (plaintiff’s mark) is different from “ATORKIND”; and “STARKIND” (plaintiff’s mark) is different from other cited marks such as “KINDERPLEX”, “KINDERBON”, “KINDERCAL”, “KINDIGEST”, “STAR-VIT”, “STAR”, “STARNET” and “STARCET”. The Court stated that such conduct of the plaintiff disentitles them to the equitable relief. Though the plaintiff contended that the statement made by the advocates for the plaintiff in the communications to the Trademark Registry is a submission of law made in the context and the plaintiff cannot be bound, however the Court refuted the plea and stated that the said contention would not make the fact “irrelevant”.

“Use” of a trade mark:

Since the Plaintiff had alleged infringement under sub-sections (1) to (4) of Section 29, the Court took cognizance of the fact and considered to test whether the defendants were really using “MERCYKIND” as a trade mark.  

Section 29(6) of the Act defines the “use” of the mark: a person is considered to be using a registered mark, if, in particular, he—

(a) affixes it to goods or the packaging thereof;

(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark;

(c) imports or exports goods under the mark; or

(d) uses the registered trade mark on business papers or in advertising.”

In this case the primary objection of the plaintiff was the word “MERCYKIND” which was being used by the defendants. However, upon observation, the Court found that the word “MERCYKIND” was used only in the name of the defendant Company. The Plaintiff had also contended that the defendants are carrying on the business in the same goods as the plaintiff, under the marks “MERCYMOX”, “MERCYCOUGH”, “MERCYCOPE”, etc. The Court observed that the issue was about the usage of the word “MERCYKIND”, which in fact was not the trade mark of the defendants and was also not used as a trade mark by the defendants. Once, it was established that the defendant’s trademarks were words with the mere prefix “MERCY”, the question of “MERCYKIND” also being the trade mark of the defendants with respect to the same goods of the defendants would not arise. Therefore, it was observed by the Court that “MERCYKIND” was not the trade mark of the defendants, therefore, Section 29(1) to (4) do not apply in this case.

Infringement of a trademark under Section 29(5):

The Court further determined the alleged infringement test under Section 29(5) of the Act, which is: “A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered.”

What has been constituted as infringement under Section 29(5) is use of the registered trade mark as trade name or part of the trade name. Thus, the Court held that there would have been infringement under Section 29(5), if the defendants had used the plaintiff’s registered Trademark “MANKIND” as part of their trade name. Merely because “MERCYKIND” is the name of defendant Company, which may be deceptively similar to “MANKIND” or any other registered trade mark of plaintiff with “KIND” as prefix or suffix, would not amount to infringement under Section 29(5). Therefore, it was held that the use of a trade name similar or deceptively similar to the registered trade mark would not constitute infringement under Section 29(5). Thus, prima facie, no case of infringement within the meaning of Section 29 is made out.

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[i] http://delhihighcourt.nic.in/writereaddata/upload/Announcements/AnnouncementFile_8J7VKAUHFZD.PDF

https://www.livelaw.in/use-of-a-trade-name-similar-or-deceptively-similar-to-the-registered-trade-mark-would-not-constitute-infringement-under-section-295-of-trade-marks-act-delhi-hc-read-judgment/

Where there's a hit there's a writ

The old saying doesn't work so well now we don't have writs any more, but anyway the litigation reported by the BBC today is taking place under US law. That also means that considering how it might pan out under English law is pretty speculative, but it does serve to illustrate some important points of copyright law.

The story is about the family of a playwright (a Pullitzer Prize winner, Paul Zindel) suing several parties concerned with the film The Shape of Water. The fact that it is tipped to win an Oscar or two goes some way to explaining why it has generated litigation - the simple fact is that if it wasn't a hit, it would not be worth the price of a writ.

The plaintiffs (they still have them in the USA) argue that the film is "in many ways identical" to Mr Zindel's play Let me hear you whisper. The defendants say they never heard of that play, although the article says that there was a TV production of it at about the time the idea of the film was forming in its writer's mind. The writer might have been exposed to it, and it's possible that subconscious copying took place. It's also possible that nothing of the sort happened, and that the "at least 61" ways in which the films are identical are down to the fact that if you tell a story about an aquatic creature kept in a laboratory and its relationship with a cleaner or janitor those similarities are going to happen. Like Hoehling v Universal Studios  618 F.2d 972 (2d Cir. 1980) which turned partly on the point that if you're going to make a film set in Nazi Germany you are bound to have scenes in beer halls and people giving straight-arm salutes.

US copyright law works differently from the way our copyright law works. Because it expressly excludes ideas from protection, US law requires the judge to go through what has become formalised as a three-step process of abstraction, filtration and comparison - to reduce the work to a copyright-protected "golden nugget" before putting it beside the alleged copy to compare the two. The equivelant in our law is the rule that copyright is infringed if the defendant has taken the whole or a substantial part of the work - it all comes down to substantiality at this stage. In other words (and if an American friend should happen to read this I stand to be corrected), US copyright law protects elements of a work which qualify for protection (which are the author's original work, basically) whereas the UK law looks at the work as a whole and asks whether it meets the originality standard, then considers whether a substantial part has been taken. This is a point that I have discussed before on this blog: it seems unlikely that any element which is not the author's original work could be regarded as a substantial part, but this is not an area of the law where everything is set in stone at present.

The news story is by no means a comprehensive disclosure of the facts, so it would be wrong to speculate much about the possible outcome, but an interesting illustration of copyright principles.

Eminem in dispute about use of music in NZ party's election campaign

The amount of trouble that using popular music for election campaigns causes seems to be limitless. Not every party can rely on Lord Lloyd Webber to arrange some conveniently out-of-copyright Purcell for the occasion (though the Rondeau from Abdelazar is better known as the theme used by Benjamin Britten for his Young Person's Guide to the Orchestra, which makes it a strange choice for a Conservative Party campaign tune though it's certainly stirring enough). It features at the end of this election broadcast from 1992 - which is worth watching in itself, I think, reminding us of a very different political era.

New Zealand's National Party, for a campaign in 2014, didn't try Lord Lloyd Webber, but instead went for a piece called "Eminem-esque", which it bought from a stock music purveyor. An odd choice of artist, and genre, for a centre-right party to associate with, you might think, and it gets worse because unfortunately for the Nationalist Party it sounds very like Eminem's song "Lose Yourself" - an even more unwelcome association, you'd have thought: alluding to any song with the word "lose" in the title can't be a good idea. As the BBC reports, it has led to a copyright infringement suit. You can hear both pieces played in court here. Neither has the judge dancing in the aisle, and I'm left with the feeling that I would want to punish any political party that inflicted either piece on me. But that's not the point.

There are more and more cases like this coming to the courts - not the English courts, necessarily (I can't think of any cases like this) but there are plenty of others from elsewhere, whether involving politicians or not. There's a recent piece about it on IP Watch which mentions a new "scholarly comic book" (what an interesting concept) by James Boyle and Jennifer Jenkins, about which I am going to post separately.

In the last couple of years there's been Led Zeppelin v Spirit and Marvin Gaye (the estate of) v  Robin Thicke and Pharrell WilliamsAs a recent programme on BBC Radio 4 showed, there is a lot of activity in the area - with a new profession of forensic musicologist emerging as an important part of the picture. The fear of being sued for copyright infringement has a significant chilling effect on creativity, and especially on improvisation. A consequence of the fact that control doesn't lie with the musicians, but with the suits of the record company, and an illustration of how big business isn't content with the limited exclusive rights given by the copyright system, but strives to turn them into a true monopoly.

But back to the story ... The Nationalist Party seems to have taken the view that, if there were a copyright problem, it was the stock library's problem rather than theirs. I doubt New Zealand copyright law is different enough from ours to make that proposition any less risible than it would be if trotted out by an infringer here. Whether "Eminem-esque" does infringe copyright in "Lose Yourself" is another matter, but it does seem like a strong possibility.

RCD valid and infringed for a change

In Magmatic Ltd v PMS International Ltd [2013] EWHC 1925 (Pat) (11 July 2013) the High Court held a registered Community design for a child's ride on suitcase valid and infringed. The case is important because previously infringement had rarely gone beyond counterfeiting and identical designs. (Incidentally, can one really say something is a design if it has been copied?)

This design was disclosed in 1998 and the Registered Community design was filed four years later. The claimant argued that the disclosure was obscure: the court said it was not so obscure has to be excluded from prior designs, but it was obscure enough not to form part of the design corpus. This is a fine distinction: it interprets Article 7 (1) so as to protect early disclosures.

Unregistered design right also featured. The court said UDR claims much must be effectively particularised. The features to be protected must be chosen carefully, and the claimant must be specific.

The design had been entered in a competition in 1998. The question was, what was disclosed as a result of the awards ceremony? The concept was made available to the public that only those present at the awards ceremony would have enabled to discover the details.

The design is considered obscure if "those events could not reasonably have become known in the normal course of business to the circles specialised in the sector concerned, operating within the Community" according to the Court of Appeal in the Green Lane case.

In the present case, the court concluded that:

• The specialised circles must become aware of the design himself, not just its existence.
• The relevant sector is that of the prior design, although since the Green Lane case the Board of Appeal has twice decided that the relevant sector is actually that of the later registered design (Ferrari v Dansk Supermarked R84/2007-3 and Crocs v Holey R9/2008-3). But the Court of Appeal was bound by the Green Lane case, and it did agree with it.
• The specialised circles must be interpreted widely, including all individuals who conducted trade in relation to the products in that sector - designing, making, advertising, marketing, distributing and selling in the community according to the Green Lane case, and also experts and all businesses involved in the trade including importers (R552/2008-3, Harron v THD Accoustics).
• the phrase "could not reasonably have he have become known in the normal course of business" (Court's emphasis) must be interpreted as a composite whole.
• The burden of proof lies on the party relying on the exception. The onus may shift once it is shown that the disclosure relied on is obscure.

The first of these is common sense. The the is an interesting procedural development. The Court held that the obscure designs exception was not a plot applicable in the present case because people connected with the luggage trade were at the awards ceremony and saw the design.

The court held that the informed user was a child between three and six years old, or a related adult. Parties agreed, although the Pogs case differed: children would not buy suitcases out of their pocket money.

The designer of a child's ride on suitcase it had considerable design freedom, so abroad scope of protection was appropriate. The substantial departure from the design corpus also supported this.

The different overall impression given by the Registered Community design compared with the earlier design meant that the validity of the Registered Community design and was not compromised.

Comparing the parties' products, the registered Community design did not include a representation of the bottom of the case, so that was excluded from the comparison. Also, the Registered Community design did not feature graphical elements so the comparison had to be of the shapes alone.

The claimant identified the features of the Registered Community design present in the defendant's product. The defendant identified the novel features of the Registered Community design not in its case, and the features of the case which were not present in the Registered Community design. The court held that the differences were not as visually significant as the defendant contended. The defendant's case was more like the Registered Community design than it was like the old original design, so the Registered Community design was infringed.

As for UK UDR, the court stressed how important it is to particularise the claim. The claimant must make absolutely clear on what designs it relies, with clarity and precision. In this case, the claimant for only got to the final version on day two of the trial.

The defendant argued that the claimant particulars extended to abstract generalisations rather than delineating particular designs. The court rejected this argument, but it did hold that the claimant's particulars if design poor more like patent claims than an identification of particular aspects of configuration of a product, so they amounted to methods of principles of construction. (check words in judgment).

The court held that where the particulars of the design were permissible, there was an infringement.

There was also a claim aim relating to infringement of copyright in the packaging. The court held there any copying that had taken place place was not of a substantial part.

The right sort of confusion

On 31 July last year, Hildyard J found the defendants, Okotoks Ltd, liable for passing off and infringement of a Community trade mark (not available on Bailii, as far as I can see): the contest was FINE & COUNTRY v FINE for estate agents. The defendants are better known under the name "haart" which we must all have seen on estate agents' boards, and (if you are anything like me) wondered about. In Okotoks Ltd & Anor v Fine & Country Ltd & Ors [2013] EWCA Civ 672 (14 June 2013) the Court of Appeal upheld that judgment.

The defendants argued that, even if (as the judge had found) there was a likelihood of confusion between the CTM and their sign, it was a type of confusion that public policy tolerates - "good confusion", if you will, as I certainly do, because that looks like quite a nice turn of phrase - because it refers to the quality of what the business concerned has to offer. It is laudatory: it tells you that they are selling high-quality properties (though if they are new and have one bedroom they will be smaller than elsewhere in Europe). For several reasons the judge did not think that the confusion was tolerable, and the Court of Appeal agreed. It also agreed on the passing off point.


The leading judgment (that of Lewison LJ) runs to 125 paragraphs, 40 pages, and I haven't found anything in it that I need particularly to draw to your attention - all good stuff, but nothing earth-shattering, even just the slightest bit of shattering. However, I should point you to the IPKat, who picks up on the point that the trial judge was said by the Court of Appeal to have got some things wrong, and who asks some questions about when the Court of Appeal may substitute its understanding of the facts for those of the judge (especially in the light of the recent Lumos judgment, in which Lloyd LJ also sat). See here where there is also a link to the Kat's report of the first instance judgment.

Satco Plastics Ltd v Super Pack Ltd & Anor [2013] EWPCC 29 (05 June 2013)

Another PCC case, another UKUDR case: they are getting more and more numerous. It's Satco Plastics Ltd v Super Pack Ltd & Anor [2013] EWPCC 29 (05 June 2013), in which Mr Recorder Baldwin QC explains that manufacturing something in China, even when it was with the intention of importing it into the UK, does not infringe UK unregistered design right. Actually importing the articles would probably be a different matter, but that isn't what the claimant pleaded. Strange.

SDL Hair Ltd v Next Row Ltd & Ors [2013] EWPCC 31 (14 June 2013)

SDL Hair Ltd v Next Row Ltd & Ors [2013] EWPCC 31 (14 June 2013)  is a judgment of Mr Recorder Richard Meade (not another debutant intellectual property judge?) and concerns a patent for heating hair rollers. There is a lot in the 44-page judgment about inductive heating, which is quite interesting but not knowledge that many lawyers will be able to put into regular use. The upshot of the consideration of the physics was that there was no infringement, but there were also points to be considered about whether the claimant was an exclusive licensee and therefore entitled to sue, and whether certain threats were actionable (they were) and if so who was liable for some of them (an individual who had made a threat was held to be personally liable).

Button Moon creator wins in PCC

Button Moon (Photo credit: Wikipedia)

The BBC reports that Ian Allen, the creator of the children's TV series Button Moon which entertained at least some of my daughters all those years ago, has won a copyright infringement case in the Patents County Court. In fact it was a passing off case too (as you might well guess after reading the BBC piece), decided by Miss Recorder Amanda Michaels last week. I wonder whether this is Amanda's first published judgment? The case is Allen v Redshaw [2013] EWPCC B1 (15 May 2013) and I don't think it contains anything groundbreaking. The mere fact that the BBC reported it on their website is reason enough to mention it here, though.

It turns out that it isn't her first published judgment: I find there are a couple in the same piece of litigation, Ghias (t/a Griller) v Ikram (t/a the Griller Original) & Ors [2012] EWPCC 4 (26 January 2012) and [2012] EWPCC 3 (24 January 2012).

Director jointly liable for copyright infringement

It is not unknown for directors of companies to be held personally liable for copyright infringements committed by their companies. One can be jointly liable for an infringement if one has acted in concert with another infringer, or other infringers, for a common purpose, but it is rare for directors of a company to be jointly liable with their company. In a recent Scottish case, Naxos Rights International Ltd v Project Management (Borders) Ltd and Salmon [2012] CSOH 158 the Outer House of the Court of Session ruled that the defendant and its sole director were jointly liable for infringing copyright.

 

Naxos is the largest independent classical music record label in the world, and certainly when it was new it was widely disliked in the industry. It developed its catalogue by using eastern European orchestras and performers which it could hire for much less than it would have to pay British ones. It also had a spot of copyright trouble in the US, in Capitol Records, Inc. v Naxos of America, Inc. 2005 NYSlipOp 02570, arising from its issuing of CDs made from old shellac discs which it turned into digital recordings and cleaned up. But that was then, and this is now: Naxos seems now to be regarded as a respectable player in the classical music industry, with a fantastic repertoire at budget prices.

The defendant company offered classical music through its website, which ominously could be found at the address www.royalty-free-classical-music.org. Naxos sued the company and Dr. Salmon, its sole director and shareholder (don't get your fish mixed up) for unpaid royalties stemming from sale and resale of two Naxos recordings, one Vivaldi's "The Four Seasons" performed by Cappella Istropolitana, which was based in Bratislava, with Takako Nishizaki (violin), conducted by Stephen Gunzenhauser - a classic Naxos mix, I think; and the other the Christmas carol "Joy to the World" performed by the Choir of Worcester Cathedral under Donald Hunt, which fits the Naxos mould less well - indeed, not at all. A total of 14 tracks were in issue, and there was no doubt that the files offered by the defenders were indeed copies of the Naxos recordings. The court found the company liable for infringement with no difficulty, but what about the director, Mr. Salmon? On the principle that there is joint liability where a party "intends and procures and shares a common design that the infringement takes place", the court ruled that he was liable in his own right. He had, along with the company, put together and operated the website through which the infringing tracks were sold, and he could not hide behind the corporate veil. Ironically, of course, Mr. Salmond's defence was based on the principle in Saloman v Saloman and Co. Ltd. [1897] AC 22, but more important was the less ancient (English) precedent  MCA Records v Charly Records Ltd [2002] FSR 26 (CA), in which Chadwick LJ identified the four principles which deal with a director's liability, which I think bear repeating here:

49 First, a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the governance of the company - that is to say, by voting at board meetings. That, I think, is what policy requires if a proper recognition is to be given to the identity of the company as a separate legal person. Nor, as it seems to me, will it be right to hold a controlling shareholder liable as a joint tortfeasor if he does no more than exercise his power of control through the constitutional organs of the company - for example by voting at general meetings and by exercising the powers to appoint directors. ... I would hesitate to use the word 'never' in this field; but I would accept that, if all that a director is doing is carrying out the duties entrusted to him as such by the company under its constitution, the circumstances in which it would be right to hold him liable as a joint tortfeasor with the company would be rare indeed. ...

50 Second, there is no reason why a person who happens to be a director or controlling shareholder of a company should not be liable with the company as a joint tortfeasor if he is not exercising control through the constitutional organs of the company and the circumstances are such that he would be so liable if he were not a director or controlling shareholder. In other words, if, in relation to the wrongful acts which are the subject of complaint, the liability of the individual as a joint tortfeasor with the company arises from his participation or involvement in ways which go beyond the exercise of constitutional control, then there is no reason why the individual should escape liability because he could have procured those same acts through the exercise of constitutional control. ...

51 Third, the question whether the individual is liable with the company as a joint tortfeasor - at least in the field of intellectual property - is to be determined under principles identified in CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013 and Unilever Plc v Gillette (UK) Limited [1989] RPC 583. In particular, liability as a joint tortfeasor may arise where, in the words of Lord Templeman in CBS Songs v Amstrad at page 1058E to which I have already referred, the individual 'intends and procures and shares a common design that the infringement takes place'.

52 Fourth, whether or not there is a separate tort of procuring an infringement of a statutory right, actionable at common law, an individual who does 'intend, procure and share a common design' that the infringement should take place may be liable as a joint tortfeasor. As Lord Justice Mustill pointed out in Unilever v Gillette, procurement may lead to a common design and so give rise to liability under both heads.

 

A fine mess

In Slater v Wimmer [2012] EWPCC 7 (16 February 2012) the rules about ownership of copyright got into a fine mess. The defendant is (according to Wikipedia) 'a Danish philanthropist, space advocate, entrepreneur, financier, adventurer, author and future space tourist'. I have also seen him described as a Danish celebrity, but as I haven't seen him in The Killing, Borgen or The Bridge, I am discounting that claim. As for being a 'space advocate', I wonder whom he represents? Or is it that he is concerned about the size of new housing (as my two-day-a-week-employers are)?

In his capacity as an adventurer (though presumably also wearing his financier hat, as I am sure these things do not come cheap) he hired a filmmaker to record him, and a few others, sky-diving from Mount Everest. The defendant dived, and the claimant filmed, and in due course the claimant sent the defendant a copy of the film for approval. I imagine he didn't take legal advice (and why should he?) because he seems to have crossed his fingers and hoped to be paid if the film were used.

And indeed it was used, in a programme on Danish TV (so, it's not all dark and gloomy thrillers). The claimant then sent the defendant an invoice. The defendant made clear that he was not inclined to pay, and the claimant uploaded it to YouTube.

The judge (HHJ Birss QC) decided that there was no agreed contract between the parties, so the ownership of copyright fell to be decided under the rules in the Copyright, Designs and Patents Act 1988. He held that the defendant was the producer, having made the financial arrangements, while the claimant was the director, and they were therefore joint authors of the film and co-owners of the copyright in it. Nothing unexpected there, given that no-one could produce a contract to show otherwise. But it's the upshot of that finding that's really interesting: each had reproduced and communicated to the public a work in which the other owned the copyright, and both therefore infringed.

Mitchell v British Broadcasting Corporation (BBC) [2011] EWPCC 42

Mitchell v British Broadcasting Corporation [2011] EWPCC 42 (21 December 2011) shows a couple of things that we knew already, though until someone like HHJ Birss QC tells us that they apply to the facts of a particular case there is enough uncertainty to justify playing the forensic lottery. Independent creation is always a defence to a copyright infringement action, and subconscious copying is extremely difficult to prove. In fact, I'd say impossible, except with the assistance of presumptions, which didn't help here. Mr Mitchell thought that the BBC had ripped off an idea he had for an animated TV series for children, and, more importantly because copyright could protect them, a group of characters he devised for it. 147 paragraphs later the judge held that they hadn't.

Hodgson v Isaac: how to show copyright infringement

In Hodgson & Anor v Isaac & Anor [2010] EWPCC 37 (5 December 2011) HHJ Birss QC had to compare the claimant's book against the defendants' film script. If the book had been fictional, the matter would have been quite easy to decide: there would either have been copying, or there wouldn't, and we could then go on to consider exciting issues of whether taking facts only amounted to an infringement. But here the book was Mr Hodgson's biography, which Mr Isaac had not read: however, he had heard that history from Mr Hodgson's own mouth.

Interestingly, Mr Isaac offered to submit to arbitration by the Writers' Guild to determine the question of copyright infringement. An appropriate order was made by the court initially seised of the matter (Newcastle County Court) but the Guild said it was not equipped to carry out the task. (I wonder what the Society of Authors would say? I doubt they are any better equipped to carry it out - the expertise is there, as it probably is at the Guild, but not the time.)

So the judge compared them, and came to the conclusion that the screenplay reproduced a substantial part of the book. He considered plot, characters and incidents. Mr Isaac had had a copy of the book but claimed not to have read it. The judge took the view that there had been copying, and then that the defendant had taken a substantial part - a part in which the elements reproduced are the expression of the intellectual creation of their author, in line with the Court of Justice's judgment in Case C‑5/08, Infopaq.

A particularly obscure branch of metaphyiscs

Not my phrase: that's what Jacob LJ called design law, in Dyson v Qualtex five years ago. Earlier this week, I spent a day presenting a course on IP infringements and enforcement - someone else's course, so I was using materials I hadn't prepared, though I don't think I'd have covered the subject any differently. I found myself having to explain to the audience that designs featured less in real, practising, life than any other area of intellectual property law, but that the law was so complicated - such a mess - that it demanded a large chunk of such a course.

I've been explaining the same thing to my Russian students, and my American student, all studying for external London University LLB degrees, the American one having done her resit yesterday. The examiner demonstrates what might be thought to be an unhealthy interest in designs - worse than that, in fact, because the Community system isn't part of the syllabus and copyright seems to loom large, which makes it all seem highly artificial. But it's certainly an area of law in which, right now, there's quite a lot going on, with the Court of Justice handing down its judgment in the Pogs case last week and now the Court of Appeal deciding Dyson Ltd v Vax Ltd [2011] EWCA Civ 1206 (27 October 2011).

The story so far is that last year Mr Justice Arnold held that Vax's Mach Zen vacuum cleaner did not infringe Dyson's UK registered design, much to some people's surprise and Sir James Dyson's dismay. Dyson appealed.

To succeed in such an appeal, the appellant would have to show that the judge had gone wrong in principle. That's a big ask, and I don't think Mr Justice Arnold is the sort of chap to do that very often. The case was based on Article 9(2) of the Community design directive, which refers to the degree of freedom of the designer in developing his design, and that (as Jacob LJ observed) plainly refers to the registered design, not the accused object. Dyson complained that the judge had referred several times to the freedom of Vax's designer. Jacob LJ thought that it mattered not, there being no change in the degrees of design freedom between the date of the design and that of the design of the Vax machine.

Dyson's counsel (Henry Carr QC) also stated his case as being that the judge had effectively decided (as paraphrased in the Court of Appeal by Lady Justice Black) that the better the design the more people would say that it is only going to be worse if I do it a different way, so the less the design freedom, and ingenious and innovative designs would be penalised. Jacob LJ did not read the judgment this way. Indeed, the judge specifically held that the registered design was "strikingly different" from the existing "design corpus": Dyson argued that he had however failed to apply the principle that where this is the case the new designi s likely to have a greater overall visual impact than if it is "surrounded by kindred prior art", as HHJ Fysh pithily put it in Woodhouse. The Court of Appeal rejected this approach, holding that the judge was still entitled to find that the Vax machine did produce on the informed user a different overall impression from that produced by the Dyson design.

Sir James Dyson is clearly unhappy, according to this report, though I don't think he has taken full account of the rile of the Court of Appeal. I am disappointed that he should have launched such a diatribe, although I can understand that he feels miffed. He ought however to be directing his ire against a design law which seems more hopeless the  more I think about it.

Construing patents: pretend the defendant had never been born

Convatec Ltd. & Ors v Smith & Nephew Healthcare Ltd & Ors [2011] EWHC 2039 (Pat) (27 July 2011) is a 185-paragraph blockbuster of a judgment of HHJ Birss QC, sitting in the Patents Court for a change. The case itself is a fairly straightforward infringement claim and invalidity counterclaim concerning wound dressings made from cellulose in various forms. There is a lot of consideration of wound dressing techniques and the construction of the claims of the claimants' patent - leading the judge to point out, as the IPKat notes, that it will not do to try to read the claims onto the defendant's product: "A patent is to be construed as if the infringer had never been born." (Nobel's Explosives Co. v Anderson (1894) 11 RPC 519.) Remarkably, Floyd J cited exactly the same principle (indirectly, given that he was quoting from Jacob LJ's judgment in Technip France's Patent [2004] RPC 46) in his judgment in Cephalon v Orchid & Mylan [2011] EWHC 1591 (Pat):

It is clear that one does not start with the alleged infringement, read the patent, and ask whether the patentee meant to cover it. But it is sometimes necessary to have regard to the infringement in order to identify the question which has to be asked on construction. In Technip France's Patent [2004] RPC 46 Jacob LJ put it in this way:

"Although it has often been said that the question of construction does not depend on the alleged infringement ("as if we had to construe it before the defendant was born") per Lord Esher M.R. in Nobel's Explosives Co. v Anderson (1894) 11 R.P.C. 519 at 523), questions of construction seldom arise in the abstract. That is why most sensible discussions of the meaning of language run on the general lines "does it mean this, or that, or the other?" Rather than the open-ended "what does it mean?"

I wonder whether I can encourage people to adopt the title "Man of the World Rule" for this principle - after the bleak but beautiful song by Peter Green?

After the Hundred Years War - the War of the Roses

And it seems to have ended in a draw. A bit early to say, as I can't read 46 pages, 164 paragraphs, of a judgment that quickly, but cutting to the chase it looks like honours are pretty even. Samuel Smith Old Brewery (Tadcaster) v Lee (t/a Cropton Brewery) [2011] EWHC 1879 (Ch) (22 July 2011) is a trade mark infringement and passing off case. The protagonists are two Yorkshire breweries, Sam's being the oldest in the county (established in 1758, according to Wikipedia: now it might be more accurate to call the company Humphrey's for short, as Humphrey Smith is joint managing director, with his brother Oliver, and Humphrey seems to be the target of many critical comments) while Cropton (named after the village in which the brewery is located) is a relative newcomer having been established in 1984. Both make that once-rare thing, real ale, although I imagine that Sam (whose products I have found as far away as Seattle) makes considerably more of it.

Sam has a number of registered trade marks, one of which comprises a stylised white rose design, others of which include a white rose. Hardly a matter for surprise, in Yorkshire: for those unfamiliar with historic rivalries in the north of England (relatively speaking - we are talking about the area south of the Tees here) the white rose is the symbol of the House of York, and the red rose of the House of Lancaster. The Wars of the Roses speak volumes about the cordiality of relations between them.

These latter-day all-white Wars of the Roses erupted when Cropton began brewing two beers which clearly announced their Yorksire origins. There's Yorkshire Bitter, a bottled beer made for Marks & Spencer, and a draught and bottled beer which it called Yorkshire Warrior, profits from which go to the Yorkshire Regiment Benevolent Fund. All well and good - very commendable - but the white rose featured on both labels. The Warrior label incorporated the regimental colours of the Yorkshire Regiment, which - unsurprisingly - featured a white rose.

There was also a groundless threats claim or two.

Arnold J, who might justifiably be nicknamed Solomon after this effort, held that: 

i) Cropton Brewery has not infringed the Trade Mark by use of the Yorkshire Bitter label;
ii) Cropton Brewery has infringed the Trade Mark pursuant to Article 5(1)(b) by use of the Yorkshire Warrior label;
iii) Cropton Brewery has a defence in respect of its infringement of the Trade Mark by use of the Yorkshire Warrior label under Article 6(1)(b) in respect of the period to the end of October 2009, but not subsequently;
iv) Samuel Smith’s claim for passing off succeeds in relation to the Yorkshire Warrior label, but not the Yorkshire Bitter label;
v) The letter dated 10  December 2007 is an unjustifiable threat but Cropton Brewery is not “a person aggrieved” by it, while the letter dated 7 July 2010 is not a threat of infringement proceedings.

It all brings to mind an earlier - much earlier - trade mark case from the same part of the country: YORK TM [1982]. FSR 111, the last word (until the 1938 Act was repealed) on the unsuitability of geographical names as trade marks. Of course, a white rose might not be seen as a geographical indication, but this stylised design says "York" (House, city or county of) pretty clearly to a large number of people. A white rose is, at least, highly descriptive of anything connected with that part of the world, almost as much as the word - although there was no challenge to the validity of the key trade mark. Does this smack of absolutism - a trade mark bully trying to monopolise a sign that should be available for others to use too? Perhaps: and the excuse that the directors of a company have a duty to their shareholders to take advantage of what trade mark law offers doesn't apply here in quite the same way - in fact, the claimant is a private unlimited company.

The Yorkshire Bitter dispute was settled when Marks & Spencer agreed to change the label to remove the rose - which, when first approached by the claimant, they had argued was a very different white rose anyway. It was the claimant's first approach to M&S that was the first threat complained of. The Warrior dispute was decided by the fact that the defendant thought it had the permission needed to use the regimental badge - but the regiment itself had no authority to grant permission, so once that came out and the permission that had wrongly been given was withdrawn any further use became an infringement.

Well, still much to get out of reading this judgment - and I'll reassess the outcome: not as equal as I thought. Samuel Smith seems to have got just about everything it wanted in the litigation. In the court of public opinion, though, the comments I linked to above show that it has lost big time, and I'll certainly be choosing alternatives to their products in the future - as if that'll bother them.