Reported Trade Mark, Design and Copyright Cases for September 2005

13 October 2005

Katharine Stephens


Trade Marks


Appeal from OHIM




















Ref no. CeWe Color v. OHIM
(T-178/03 &T-179/03; 8.9.05
Application (and where applicable, earlier mark) Digi Film, Digi Film Maker – storage media, apparatus for recording, recording digital data (9, 42)
Comment 

OHIM refused the applications under Arts 7(1)(b) and (c). The CFI upheld that decision. The applications were no more than the sum of their parts, neither did they constitute neologisms with their own meaning.

   

Passing off

Ultraframe (UK) Ltd v. Fielding & Ots and 3 joined actions (Lewison J.; [2005] EWHC (Ch) 1638; 27.7.05)

This is a massively long judgment, 487 pages. The judge described it in his opening sentences as the culmination, for the time being, of a long war of attrition between Ultraframe and Mr Fielding, who with his wife, are the majority shareholders in The Burden Group plc, a competitor of Ultraframe’s in the market for the supply and manufacture of conservatories. At the heart of the litigation was a dispute about the ownership of businesses originally owned by Mr Davies. The brand name of the system designed by Mr Davies was “Quickfit”. Mr Davies operated through a number of Quickfit companies, of which one was Quickfit Conservatories Ltd (QCL), all of which became insolvent. In a nutshell, Ultraframe claimed that Mr Fielding and his companies had stolen the business and assets of its associated companies, Seaquest and Northstar, now in liquidation. Of the many issues, this report only deals with the issue of passing off.

Burden claimed the goodwill in the name Quickfit as assignee from QCL. The claim stated that between January 1994 and its liquidation on 6 December 1995, QCL established substantial goodwill in the name which remained in existence despite the winding up. Burden claimed that by using the Quickfit name before they went into liquidation, both Northstar and Seaquest were passing themselves off as QCL or authorised by QCL.

The key question was whether QCL had abandoned the goodwill in the Quickfit name when it went into liquidation. Lewison J. agreed with the statement in Wadlow’s The Law of Passing Off (3rd ed. Para 3-178): “The better view is that if a business is deliberately abandoned in circumstances which are inconsistent with its ever being recommenced then the goodwill in it is destroyed unless contemporaneously assigned to a new owner”. In this case, QCL went into liquidation without any attempt being made to sell its assets, still less sell the business and goodwill as a going concern. Lewison J. held therefore that its goodwill was destroyed.

Had it been necessary to do so, Lewison J. would have held that the claim was barred by acquiescence. It was unrealistic to assert that there was any subsisting goodwill attaching to a business run by a small company that went into liquidation some 9½ years before proceedings began and when QCL had made no objection to the use of Quickfit by Mr Davies, Seaquest and Northstar in the intervening period.

Designs

Unregistered Designs

Alan Sales v. Jonathan Stromberg & Ors (Wyand Q.C.; [2005] EWHC 1624 (Ch); 29.7.05)

This action concerned two designs: a double spiral arrangement called “Infinity” and a triple spiral called “Trinity”, for a “personal harmoniser”, a sealed copper tube pendant containing “imploded” water said to be beneficial to the wearer. Mr Sales had sent rough sketches of these designs to Mr Stromberg. However, they failed to agree an appropriate level of royalties and Mr Stromberg proceeded to develop and market similar designs.

The Defendants argued that, before considering the originality of the designs, Mr Sales first had to establish that the sketches and accompanying notes were design documents in which design right could subsist. However, the Court considered that this was not the correct approach. The question was whether the design was commonplace in the design field in question, and the fact that it was a simple geometric shape did not, in itself, exclude it from protection. Although the Court had more sympathy for the Defendants’ contention that the imprecision of the crude drawings made it impossible for any article to be manufactured to the designs, Mr Stromberg had in fact been able to make prototypes to the designs.

The Court found on the facts that: Mr Sales had not been commissioned to produce the designs; the Defendants did not have an implied licence to use the designs; and, there were sufficient differences between the designs and any prototype(s) previously provided to Mr Sales for the designs to be considered to be original.
The Court held that the Defendants had failed to establish that the designs were commonplace in the design field of complementary medical devices, including ornamental or decorative devices. Although spirals were common in rock and similar art, the Defendants’ expert had failed to appreciate the distinction between what is ordinarily termed a design (which includes surface decoration) and the definition of a design under the CDPA (a design for an article).

The Defendants’ triple spiral design did not infringe the Trinity design, despite a clear causal connection between the two, as it was made from one piece of copper tubing rather than two, which necessarily made the design sufficiently different. Similarly, there was no breach of confidence as the Trinity design had not been sufficiently developed to put it into practice (the two pieces of tubing broke apart easily) as was required, and the general idea of a triple spiral was not capable of being protected.

The Court swiftly rejected the Defendants counterclaim for infringement and passing off, since Mr Sales was selling products made by the Defendants and was therefore truthfully representing that the goods he was selling were the Defendants.

Registered Designs

Woodhouse UK Plc v. Architectural Lighting Systems & Anr(Judge Fysh; [2005] ECPCC (Designs) 25; 25.7.05)

The case is unusual in that it involved a counterclaim for cancellation of the registered design due to an alleged false claim of proprietorship, rather than citation of prior art. It is also significant in that it is the first case to consider the identity of the “informed user”.

The registered design was for a lantern capable of being fixed to a pole to light public areas and the bracket by which it was attached to the pole. Although the Claimant had commissioned the design, the application for registration had been made “for expediency and convenience” in the name of company unrelated to either the Claimant or the designer.

Section 3(2) RDA 1949 states that an application for a registered design shall not be entertained unless made by the person “claiming” to be the design right owner. Judge Fysh held that this test must be objective, and that a bona fide claim to ownership was not sufficient.

The Claimant argued that it had an equitable right to the design and design right at the time of the registration (as the commissioner of the design) and that a later assignment from the applicant perfected its title. However, Judge Fysh held that this failed on two accounts. First the designer’s terms of business, as interpreted by the Judge, provided that title did not pass until payment, which had been made after the application. Secondly, the applicant itself did not have any right to make the application at any time.

The Claimant also argued that cancellation of the registration was disproportionate, the minor error at the application stage having now been rectified, and that consequently the Judge should exercise his discretion in their favour.

Judge Fysh found that the Claimant and applicant had known at the time of the application that the applicant had no proprietorial ownership in the design, although he considered that there had been no mal intent. Having sought guidance from the Designs Registry regarding its current practice (which considered that the declaration as to ownership in the application form should not be taken lightly), Judge Fysh cancelled the registration. Given the monopoly conferred by registration it was important that the register entries were correct from the start, and this had been a deliberate and not a genuine error.

Despite his decision, Judge Fysh went on to consider the issue of infringement, which was governed by the new Registered Design Regulations 2001 and therefore was to be judged by reference to the overall impression the “infringing” design produced on the informed user.

Judge Fysh considered the informed user to be a user of the articles of the sort which were the subject of the registration - more than the man on the street but not a manufacturer of the articles. The informed user, in this case being regular member of an urban development team, would be aware of the products available in the market and have some knowledge of any basic technical consideration. However, the focus was on eye appeal, and thus an analogy with the “skilled man” was unhelpful.

The visual impact of the lantern was to be assessed in situ as it might ordinarily be viewed, multiple installations on a single pole being considered to be conjoined single units. Although the informed user would be likely to pay somewhat more attention to the lantern, which was the most important feature from a functional, visual, aesthetic and commercial point of view, the appearance of the bracket (which was often supplied separately) could not be discounted; this was part of what was claimed to be novel in the application.

Thus Judge Fysh held that, although the lantern was strikingly different to what had gone before, only one installation cited infringed the registered design due to the different brackets used. The sale of lantern alone did not infringe

Copyright

Clearsprings Management Ltd v. Businesslinx Ltd & Anr(Floyd Q.C.; [2005] EWHC (Ch) 1487; 14.7.05)

Clearsprings was a company that provided accommodation for asylum seekers. Businesslinx was originally a one-man company set up by a software developer to market web-based database software that he had written.

When Clearsprings first met Businesslinx, the software was fairly rudimentary. Clearsprings wanted to acquire a system that would allow remote access to centrally stored data, but did not mention any wider use of the software (such as licensing third parties). Further discussions and demonstrations of the software took place, but still there was no mention by Clearsprings of licensing third parties.

The parties entered into a basic written contract, describing the various software modules that were to be developed, but it made no mention of ownership of copyright in the software. Only subsequently did the parties start to talk about copyright ownership when it became clear that this was a disputed issue.

There are some circumstances where a court may imply a term to the effect that the contractor should assign copyright to the commissioner of the work, or provide an exclusive licence (see the discussion in Robin Ray v. Classic FM [1998] FSR 622). Clearsprings relied on the following facts:

  • The software embodied Clearsprings’ businesses processes in electronic form

  • Businesslinx was really part of a team alongside Clearsprings’ employees creating a composite work

  • The contract price

These arguments were not conclusive and the Judge took account of other factors:

  • Businesslinx had written a number of standard routines and an assignment or exclusive licence to Clearsprings would effectively prevent it from marketing any software to third parties that included these standard routines

  • Leaving Businesslinx with just the rights to the source code as it was before work started on the software commissioned by Clearsprings took no account of the standard routines developed in the course of the project

  • There was no evidence as to whether the contract price of £30,000 was a lot or a little for the work done

It was true that Businesslinx had been given a lot of material detailing Clearsprings business processes, but the law of confidence would protect this. Moreover, a term could be implied to the effect that Businesslinx could not licence the software developed for Clearsprings as a whole to a third party.

However, the Judge rejected the proposition that there was an exclusive licence in favour of Clearsprings (or that there was any obligation on Businesslinx to assign the copyright to Clearsprings).

Clearsprings therefore had a non-exclusive, royalty-free, perpetual and irrevocable licence to use the software developed by Businesslinx. This licence extended to repairing, maintaining and upgrading the software in line with its business of providing accommodation to asylum seekers.

Hyperion Records Ltd v. Dr. Lionel Sawkins (L.JJ. Mummery, Mance & Jacob [2005] EWCA Civ 565; 19.5.05)

Dr Sawkins, a musicological scholar, claimed that Hyperion, a record company, infringed the copyright in 4 performing editions he made of the composer, Lalande’s, work. At first instance, the Judge (Patten J. [2004] EWHC 1530) held that sound recordings of music on a CD made and sold by Hyperion infringed the copyright in 3 performing editions originated by Dr Sawkins. The Judge also held that the moral rights of Dr Sawkins had been infringed in accordance with Section 77 CDPA.

The main dispute concerned whether any of the performing editions fell within the statutory definition of an “original and musical work” in the CDPA. Mummery L.J., giving judgment for the court, found that the effort, skill and time which Dr Sawkins spent in making the 3 performing editions was sufficient to satisfy the requirement that they should be “original” works in the copyright sense. With regards to whether the performing editions were “musical” works, Hyperion claimed that the editorial interventions by Dr Sawkins did not create a new “musical” work. This was on the basis that Dr Sawkins did not create new notes. Mummery L.J. found that “it was wrong in principle to single out the notes as uniquely significant for copyright purposes and to deny copyright to the other elements that make some contribution to the sound of music when performed”. Mummery L.J. also agreed with Patten J. on the issue of moral rights since although the sleeve named Dr Sawkins, it did not identify his authorship. The appeal was dismissed.

Note:

The reader’s attention is drawn to the following judgments which have been reported in the July-August edition of E.M.L.R. A brief outline of each case is given below.

Frazer-Woodward Ltd v. British Broadcasting Corporation(Mann J.; [2005] EWHC (Ch) 472; [2005] E.M.L.R. 22; 23.3.05)

Use of 13 photographs of the Beckhams in a T.V. program criticising tabloid journalism and the methods employed by the tabloid press and celebrities to exploit a story to their advantage was held to be fair dealing for the purpose of criticism or review (section 30(1) CDPA). Sufficient acknowledgment had been given to the author.

IPC Media Ltd v. News Group Newspapers Ltd(Hart J.; [2005] EWHC (Ch) 317; [2005] E.M.L.R. 23; 24.2.05)

Summary judgment was granted. Reproduction of the front cover of the claimant’s magazine “What’s on TV” by the defendant with a view to comparing it with the defendant’s own magazine was not for the purpose of criticism or review of the copyright work itself. The use did not amount to fair dealing with section 30(1) CDPA.

Phonographic Performance Ltd v. Reader(Pumfrey J.; [2005] EWHC (Ch) 416; [2005] E.M.L.R. 26; 22.3.05)

Reader was in contempt of court for breach of an order restraining him from playing PPL’s sound recordings without licence. PPL were awarded additional damages under section 97(2) CDPA. The infringement had been deliberate and flagrant. PPL were awarded (1) the costs of the enquiry agents; (2) the sum equal to the unpaid licence fee down to the date of the application to commit.

Reporter’s note: I am grateful to my colleague at Bird & Bird, Claire Bennett, for the summaries of the Sale and Woodhouse decisions and Richard Stephens of The Law Office of Richard Stephens for the summary of the Clearsprings decision.

The CFI decision can be found at http://curia.eu.int/en/content/juris/index.htm.