Appeals from the UK Registry

Coco de Mer Ltd v. Chanel Ltd* (Patten J.; [2004] EWHC 992 (Ch); 10.5.04)

Coco de Mer Limited (“CML”) applied to register COCO DE MER as a UK trade mark inter alia in Class 3 (perfumery), Class 14 (jewellery), Class 18 (luggage) and Class 25 (clothing).The Trade Marks Registry had upheld an opposition by Chanel Limited under s.5(2)(b) of the Trade Marks Act 1994 on the basis that there would be an association between CML’s mark and Chanel’s registered mark COCO because of the strength of the COCO element in CML’s mark which, in the case of the identical classes of goods concerned, would lead consumers to believe that the goods came from the same or economically linked undertakings.CML appealed to the High Court.The High Court dismissed CML’s appeal.

CML’s retail premises were described as a “modern, fashionable erotic emporium” selling a wide range of erotica-related products.The CML mark consists of the word COCO DE MER in stylised script together with a device depicting the fruit of the Coco de Mer tree, a species of palm tree which grows only in the Seychelles, the fruit of which is said to resemble a female bottom.

Coco de Mer






Chanel’s registered trade mark COCO was for one of Chanel’s fragrances and was the affectionate name by which Mademoiselle Gabrielle Chanel, the founder of the business, had been commonly known, and it was also used by Chanel in the UK for fashion accessories, jewellery and clothing, as well as in relation to perfumes.

The High Court applied established case law (Sabel B.V. v Puma A.G. [1998] RPC 199) holding that the likelihood of confusion is to be appreciated globally, taking into account all factors relevant to the circumstances of the case.In particular, the global appreciation of the visual, aural or conceptual similarity of the marks in question must be based on the overall impression given by the marks, bearing in mind their distinctive and dominant components.The perception of the marks in the mind of the average consumer of the type of goods in question plays a decisive role.The average consumer normally perceives the mark as a whole and does not proceed to analyse its various details.The more distinctive the earlier mark, the greater will be the likelihood of confusion.

The High Court also applied Lloyd Schufabrik and Meyer & Co GmbH v Klijsen Handel B.V. [2000] FSR 77 which establishes that for the purposes of global appreciation, the average consumer of the category of products concerned is deemed to be reasonably well informed and reasonably observant and circumspect.However, account should be taken of the fact that the average consumer only rarely has the chance to make a direct comparison between the different marks but must place his trust in the imperfect picture of them that he has kept in his mind.In order to assess the degree of similarity between the marks concerned, the court must determine the degree of visual, aural or conceptual similarity and where appropriate, evaluate the importance to be attached to those different elements, taking into account the category of goods or services in question, and the circumstances in which they are marketed.

As to the similarity of the marks, although the link between Chanel and the COCO mark is a strong one, the latter had been shown to be well promoted in its own right and to have an established independent presence.When assessing the conceptual significance of each of the marks to judge the degree of similarity, Chanel argued that an average UK consumer was unlikely to know that COCO DE MER was the name of a type of palm native to the Seychelles.The word COCO would be seen as the dominant feature of the mark and the words DE MER simply as descriptive of COCO without their actual meaning necessarily being understood.

The judge agreed that the majority of consumers will have no actual understanding of what the COCO DE MER mark in fact describes and no ability to translate the words, so that the significance of the mark, like that of the registered mark COCO, would largely depend upon the impact it makes as an invented phrase.Accordingly, since the meaning of the COCO DE MER phrase was not available to differentiate the two marks, the average consumer would focus on the most catchy part of the phrase, namely the word COCO as the element more likely to attract his attention than the remaining two words DE MER or the graphic style in which the words are presented.

There was no evidence of actual confusion which meant that the Court had to determine the question of likelihood of confusion from the sale of identical types of goods if conducted from the same retail outlet.Case law establishes the principle that a lesser degree of similarity between the marks may be offset by a greater degree of similarity between the goods and if the association between the marks caused the public to believe wrongly that the respective goods come from the same or economically linked undertakings, there was a likelihood of confusion (Canon Kabushiki Kaisha v MGM Inc. [1999] RPC 117).The High Court accepted that the strength of the COCO element in the two marks created that association.The Hearing Officer had been right to hold that that identity of the goods was sufficient, when added to the degree of similarity between the marks, to make confusion a real possibility.

CML relied on the CFI decision in GIORGIO BEVERLY HILLS which like this case concerned identical goods in a similar category.The CFI had upheld the rejection of an opposition based on earlier marks featuring the word GIORGI on the basis that they contained significant figurative elements, additional verbal elements (J GIORGI and MISS GIORGI) and the mark claimed had the additional verbal element of BEVERLY HILLS, which differences impacted on visual, aural and conceptual similarity.CML argued this decision meant the marks have to be considered as a whole and it was wrong to give the word COCO prominence over the other words in the applied-for mark.The judge however said that the CFI case was no more than the application of the principles to the particular facts and did not require the Court to give each part of the mark the same weight or significance.

It should also be noted that recent changes to the Trade Marks Act 1994, made on 5 May 2004, mean that it is now possible for owners of marks with a reputation to prevent the registration of trade marks under s.5(3) which without due cause would take unfair advantage of or be detrimental to an earlier mark, whether the mark applied for is to be used on goods or services which are the same, similar or different to those for which the earlier mark is registered.Previously that section was limited to goods or services which were different to those for which the earlier trade mark was registered and thus it would not have been available to Chanel in this case.The erotic nature of CML’s goods might have allowed Chanel to argue that the registration of their mark would have been detrimental to their own COCO mark.Had s 5(3) been available Chanel would not have had to establish a likelihood of confusion.

Kambly SA Spécialités de Biscuits Suisses v. Inersnack Knabber-Gebäck GmbH & Co. KG*(Lightman J.; [2004] EWHC 943 (Ch); 29.4.04)

Kambly S.A. Specialites de Biscuits Suisses (“Kambly”) applied to the High Court, following the rejection of an opposition by Kambly to the registration of two trade marks by Intersnack, seeking permission to adduce fresh evidence.Under the transitional provisions of the Trade Marks Act 1994 the applications continued to be governed by the Trade Marks Act 1938 and matters of construction were therefore decided under that Act.

Intersnack had applied to register the Goldfischli word and device marks in Class 30 inter alia for “snack products”.There were earlier registrations filed by Kambly dating back to the 1960s for the Goldfischli device and word marks in Class 30.In order to clear the way for progress of the Intersnack registrations, Intersnack applied under s.26 of the 1938 Act for rectification of the Register on the grounds of non-use for a continuous period of 5 years ending one month prior to the date of the applications.Kambly opposed the applications for removal and after a contested hearing the Trade Marks Registrar held that there had indeed been no bona fide use for the 5 year period between 31 July 1988 and 31 July 1993.Accordingly, he held the Kambly trade marks should be removed.Kambly instructed fresh trade mark agents and served an appeal notice as well as an application to adduce fresh evidence.Kambly’s new agents investigated sales between 1980 and 1993 of a cracker manufactured in the USA by Pepperidge (a company which had been licensed by Kambly to manufacture and sell the crackers in the UK under the Goldfischli mark in August 1995).The new evidence related to sales between 1980 and 1993 alleged to have taken place at 9 American military bases in the UK, as well as later use from 1993 to the present day.

The judge refused the application to adduce the fresh evidence about sales of the cracker at the US bases.He held that the issue of whether there was any use of the Kambly trade marks in the 5 year period preceding the application for rectification had already been decided between the parties.The First Decision created an issue estoppel precluding Kambly from raising this issue again.Accordingly, the evidence of use so far as it related to the 5 year period was irrelevant and inadmissible.

Kambly submitted that the evidence also covered the period prior to the 5 year period and sought to rely on this earlier, albeit distant in time, evidence of user.The judge however found that non-user for the statutory period had the practical effect under the 1938 Act of an abandonment and it was not open to the former registered proprietor of the trade mark removed from the register on this ground to seek to rely on earlier use to establish a trade mark which bars registration by the successful applicant for rectification of his own trade mark.To do so would frustrate the purpose and effect of the First Decision and s.26.

Intersnack further argued that as a matter of substantive law the evidence of sales of the cracker on the US bases did not constitute the necessary public use by Kambly.Both parties relied on Anheuser-Busch Inc v Budejovicky [1984] FSR 413 and Gerber Trade Marks [2003] RPC 1; however the judge declined to decide this issue since the application could be decided without answering it.

The judge also declined to accept the fresh evidence on the basis of procedural irregularities in relation to Kambly’s application, following the judgment in Du Pont De Nemours v S T Dupont [2004] FSR 15.That case had confirmed that the same principles apply in trade mark appeals as other appeals, although the nature of such appeals might give rise to particular application of those principles appropriate to the subject matter.The factors set out in Ladd v Marshall, whilst now only guidelines and not rules, were basic to the exercise of discretion to admit fresh evidence.In particular the judge noted that no evidence had been filed explaining why Kambly was not aware of the earlier pre-1997 sales until 2003.He was also not satisfied that Kambly could not have known this fact if it had made reasonable enquiries, for example, from its licensee Pepperidge and others.The minimum evidence called for on an application to adduce fresh evidence was evidence from officers of Kambly of their state of knowledge, what enquiries they had made, and what enquiries they could reasonably have made.Late admission of the evidence would prejudice Intersnack who would be required at a very late date, in what had been protracted litigation, to investigate the position regarding sales in the UK since 1980.Furthermore, since issue estoppel precluded reliance on the most recent 5 year period, the evidence would not have had an important influence on the outcome of the appeal.

Appeal from OHIM - Colour Marks

KWS Saat AG v. OHIM* (ECJ Case C-447/02 P; Opinion of A.G. Philippe Léger; 19.5.04) (not available in English)

The case on appeal from the CFI concerns yet another colour mark (orange) for goods in classes 7, 11, 31 and services in class 42, all to do with treatment of plant seeds. The CFI had upheld the examiner’s and the Board of Appeal’s rejection of the application, primarily on the ground of lack of distinctive character – Art. 7(1)(b) CTMR. It was this A-G whose Opinion was not followed in the landmark Libertel case (C-104/01; [2003] E.T.M.R. 807) but who bravely persevered with his view just a few months later that colour marks are per se unregistrable in his Opinion in Heidelberger Bauchemie, Case C-49/02 and pleaded with the ECJ to have the courage to reverse itself: see [2004] CIPA 93 (February).

But whereas those cases came to the ECJ by way of references under Art. 234 EC, here his freedom of thought was hemmed in by the procedural requirement of an appeal from the CFI and had to restrict himself to a single rueful aside to those cases. This in essence means that as the CFI is the final instance for determining facts, appeal from it to the ECJ may only lie on points of law and manifest error in the appreciation of facts. However, in the Opinion M. Léger found no fault with the CFI’s reasoning on the Art. 7(1)(b) ground or its findings of fact: he reiterated and confirmed that the average consumer is not in the habit of perceiving colour as an indication of origin. M. Léger would for his part have reversed the CFI in regard to its allowance of the application in its class 42 part but he re-emphasised the growing trend of the ECJ not to disturb CFI decisions on the facts.

The real interest of the Opinion lies in the A-G’s exploration of the correct approach to two very fundamental and general administrative law concepts, the obligation of a Tribunal to give adequate reasons for its decision adverse to a party; and the obligation to observe parties’ rights to be heard, enshrined in Art. 73 CTMR (and indeed in Art. 253 EC). The Opinion invites the ECJ to affirm that a decision does not have to refer to every fact or point adduced by that party: so long as that party is enabled to understand the juridical and factual reason(s) for the decision and the legality of the procedure is under the Tribunal’s control, Art. 73 is satisfied.

As for the right to be heard, the complaint was based on the fact that the BoA did a bit of freelance searching of its own and placed some reliance on it in its decision without giving the appellant adequate opportunity to comment on that document. The Opinion states that irregularity of procedure may only be taken into account if it could be shown to have decisively affected the outcome and this was simply not the case here.

Lastly, the appellant’s arguments under Art. 74 CTMR were given particularly short shrift as being a disguised attempt to revisit findings of fact, contrary to Art. 225 EC and art. 58 of the Statute of the ECJ.

Note on Orders dismissing appeals from the CFI and OHIM

The Rules of Procedure of the Court of Justice of the European Communities of 19 June 1991 provide in Article 119 that:

“Where the appeal is, in whole or in part, clearly inadmissible or clearly unfounded, the Court may at any time, acting on a report from the Judge-Rapporteur and after hearing the Advocate General, by reasoned order dismiss the appeal in whole or in part”.

The ECJ has used this provision to dismiss two recent appeals from the CFI: Streamserve Inc v. OHIM C-150/02 (reported April 2004 CIPA 232) and Telefon & Buch Verlags GmbH v. OHIM C-326/01 (5.2.04).In the latter case, the CFI had held that UNIVERSALTELEFONBUCH (universal telephone directory) and UNIVERSALKOMMUNIKATIONSVERZEICHNIS (universal communications directory) were descriptive under Article 7(1)(c) CTMR of tapes, disks, printed matter, publishing services, and editing of written text (classes 9, 16, 41 and 42).The ECJ held that the CFI had acted correctly and committed no error of law.The appeal was merely a challenge to the CFI’s assessment of fact and was therefore “manifestly unfounded” and was dismissed.

The reference in La Mer Technology Inc v. Laboratoires Goemar SA C-259/01 (27.1.04, previously unreported) was also disposed of by Order, but not under Article 119.Despite the High Court’s maintenance of the majority of its questions following the decision in Ansul C-40/01, the ECJ held that the answers could clearly be deduced from that decision.Therefore, the Court repeated its ruling in Ansul, but added the following:

1. When it serves a real commercial purpose, even minimal use of the mark or use by only a single importer in the Member State concerned can be sufficient to establish genuine use within the meaning of the Directive.

2. While the Directive makes the classification of use of the trade mark as genuine use consequential only on consideration of the circumstances which pertain in respect of the relevant period and which predate the filing of the application for revocation, it does not preclude, in assessing the genuineness of use during the relevant period, account being taken, where appropriate, of any circumstances subsequent to that filing.It is for the national court to determine whether such circumstances confirm that the use of the mark during the relevant period was genuine or whether, conversely, they reflect an intention on the part of the proprietor to defeat that claim.


Peak Holding AB v. Axolin‑Elinor AB* (ECJ Case C-16/03; Opinion of A.G. Stix‑Hackl; 27.5.04) (not available in English)

This case concerns the question of when under Article 7(1) of the Trade Marks Directive a product should be considered as being put on the market for the purposes of exhaustion of trade mark rights in the EEA, in the context of a sale of goods bearing trade marks by companies not connected with the trade mark holder.

Between 1996 and 1998, clothing products bearing the Peak Holding trade mark were manufactured outside the EEA and subsequently imported into that area by the trade mark owner or by companies forming part of the same group.Peak Holding submitted that the distribution of such products was then carried out only by companies belonging to that same group.However, in 1999, some of the products were sold to a French company, on the condition that they could not be resold in any European country, except for Slovenia and Russia.The trade mark owner nonetheless agreed that 5% of the products could be sold in France.As a matter of fact, these goods had never left the EEA and in September 2000 the defendant began to sell and advertise products bearing the Peak Holding trade mark in its stores.As a result, the trade mark owner started proceedings for trade mark infringement before the Swedish courts.The national court decided to stay proceedings and referred to the ECJ the question whether exhaustion of such rights had occurred.In short, the ECJ was asked to consider whether exhaustion had occurred as a result of the mere import into the EEA or whether it was the later actions of the trade mark owner that should be considered relevant for that purpose, that is, offering the product for sale (but prior to selling them).

According to A.G. Stix‑Hackl, the mere import of the goods through customs did not mean that the goods were placed on the market.Article 7(1) should be interpreted in the sense that products are placed on the market when an independent third party obtains the right to make free use of the products, e.g. through sale and not merely through the offer for sale.With regard to the issue of whether a territorial restriction in the distribution agreement for the resale of the goods would be relevant to determine exhaustion, the A.G. was of the opinion that such restriction did not have any effect.In fact, when the trade mark owner placed on the market goods bearing trade marks, exhaustion occurred automatically regardless of the particular contract entered into by the trade mark owner and the purchaser.

Labelling and advertising of foodstuffs

Douwe Egberts NV v. Westrom Pharma NV* (ECJ Case C-239/02; Opinion A.G. Geelhoed, 11.12.03) (not available in English)

The present case regards the meaning of Community law provisions on the labelling and advertising of coffee extract products, but the opinion has wide ranging application to the labelling of all foodstuffs.

Douwe EgbertsNV started proceedings in Belgium against Westrom and others for the sale of a product marketed under the name “DynaSvelte Café” composed of instant coffee, fructose and chromium, marketed as a slimming aid. The jar, the packaging and the instructions for use contained references such as “absolute innovation in weight control”, “slimming” and mentioned that it had been developed in the United States of America by “Dr Ann Wees Allen in association with the Glycemie Research Institute”.Douwe Egberts alleged that such references infringed several provisions of the Belgian national laws on the advertising and labelling of this kind of product, and requested that the national court order that the infringing information should no longer be used and that the products containing such information should be withdrawn from the market.The national court stayed the proceedings and referred several questions to the ECJ.

In relation to the first question, A.G. Geelhoed was of the opinion that the sales descriptions listed in Directive 1999/4/EC as to the use of the terms “coffee extract” etc could only be used for the products referred to in that Directive.However, that did not prevent other names, such as a commercial or invented names, being used alongside those descriptions.

Secondly, and in relation to Article 18 of Directive 2000/13/EC on the labelling and presentation of foodstuffs, A.G. Geelhoed observed that with regard to labelling, it established a total harmonisation, hence the provisions of national laws could not prohibit statements which were not prohibited by the Directive, unless they could be justified on the grounds contained in Article 18(2), e.g. protection of public health. On the facts, the A.G. considered that the national provisions prohibiting statements referring to slimming qualities, medical recommendations and attestations could not be justified on the grounds of protection of public health. Consequently, the Directive precluded the application of such national provisions.

The A.G. observed that the Directive distinguished between labelling and advertising.In relation to the latter, Article 28 and Article 30 of the EC Treaty applied.In the view of the A.G., these provisions precluded the application of non-harmonised national laws regarding advertising of foodstuffs prohibiting references to slimming, references to medical recommendations, attestations, quotations or statements of approval in the labelling and/or the presentation and/or the advertising of foodstuffs imported from other Member States. It was up to the national court, however, to determine to what extent the advertising rules could be applied to the same statements regarding national products.

Passing Off

Christoper Riddle v. United Service Organisation & Ots (Lewison J.; [2004] EWHC 1263(Ch); 26.4.04)

Lewison J. dismissed an application for summary judgment in this passing off case as he could not say that the defendants had no real prospect of success in establishing that the claimant had insufficient goodwill in the name “The Nelson Riddle Orchestra”.So far as inherited goodwill was concerned (the claimant was one of the late Nelson Riddle’s children), there were potential issues about the effect of the lengthy gap between Nelson Riddle’s last physical appearance in England in the 1960s and his death and the extent to which there was goodwill attributable to “The Nelson Riddle Orchestra” as opposed to the man.The claimant also claimed independent goodwill in the name of the orchestra, but the extent of this goodwill was effectively challenged by the defendants on the facts.

Design Right

Intercase UK Ltd & Anr v. Time Computers Ltd & Ots   (Patten J.; [2003] EWHC 2988 (Ch); 16.12.03)

The case related to a versatile, safe and secure, computer-equipped desk called the I-Desk designed by Mr Brooks.On the basis of an assignment to them by Mr Brooks of all IP rights in the I-Desk, the claimants commenced proceedings for design right in the I-Desk and passing off against the defendants for the manufacture and sale of computer desks under the name ICE-Desk.

The defendants submitted that the claim was misconceived because, at the date of the commencement of the proceedings, the claimants neither owned the design right nor the goodwill.The claimants applied to amend their claim to plead, in the alternative, that their title had now been perfected by a subsequent assignment from Mr Brooks’ then employer, a company called Millennium.The defendants resisted this application.To preserve their position, therefore, the claimants intended to issue new proceedings.In the event, the claimants were allowed to amend and issue the new proceedings, following which and subject to the question of relief, the defendants conceded liability for design right infringement and passing off in the new proceedings.In the first proceedings, the Master ordered a determination of whether the claimants were entitled to relief which meant determining whether, absent the assignment from Millennium, the first claimant owned the design right and whether the claimants or either of them owned any goodwill in the I-Desk.

Patten J. held that the design was make in the course of Mr Brooks’ employment and Millennium was the first owner of the design right (Ultraframe UK Ltd v. Fielding [2003] RPC 435 followed).Mr Brooks was the designer of the I-Desk and at the material time was a director, the controlling shareholder and, although not recorded in any document, also an employee of Millennium.Mr Brooks made no distinction between his time and the company’s time, but carried out the design process, both in terms of the drawings and the creation of the prototypes, during the course of his work for Millennium and at no expense to himself.In reality, Millennium was Mr Brooks.

On the question of passing off, the Judge held that the defendants could not submit, as they had pleaded, that they, as opposed to either Millennium or the claimants, were the owners of the goodwill in the I-Desk brand because they had effectively abandoned that claim by submitting to judgment in the second proceedings.On the facts, the claimants proved that they had the necessary goodwill and reputation in the I-Desk by the relevant time.The defendants’ counterclaim based on breach of contract failed, together with a Part 20 claim against Mr Brooks.


Infringement by indirect copying

Ultra Marketing (UK) & Thomas Scott v. Universal Components Ltd(Lewison J.; [2004] EWHC 468 (Ch); 12.3.04)

Mr Scott claimed copyright infringement (subsisting by virtue of the 1956 Act) in a drawing dated 1976 showing a profile of an extruded aluminium frame containing ledges or pips projecting from the sides.He claimed that the defendant, Universal, had indirectly copied his drawing because it had seen a copy of a drawing called GAP500 and verbally instructed its designer to incorporate pips into a design for a Universal product.Because of technical constraints, the result was inevitably an indirect copy of the 1976 drawing.Mr Scott did not own the copyright in GAP500, but it was said to be a copy of his 1976 drawing.

Lewison J. held that this submission was legally well founded (LA Gear Inc v. Hi‑Tec Sports plc [1992] FSR 121 followed).However, on the facts, the application had to be dismissed.Universal had not copied the 1976 drawing.The differences between Universal’s product and the 1976 drawing were sufficient to rebut any such inference.The only common feature between the two was the pips.An idea of such simplicity would need to be exactly copied before copying could be said to amount to a substantial part of the work.This was a case where, given the general idea of using pips, Universal’s designer was able to produce an independent design of his own.

Secondary Infringement

Nouveau Fabrics Ltd v. Voyage Direction Ltd & Anr* (Mann J.; [2004] EWHC 895 (Ch); 28.4.04)

Mann J. held that the defendants infringed the claimant’s design of a fabric called Pineapple by importing and selling a fabric of a design known as Luxor.Mann J. rejected the defendants’ attempt to dissect the Pineapple design into individual and non‑original components.The drawings fell to be treated as a whole and, as a whole were original.In relation to the question of whether there had been copying, the Judge also rejected the defendants’ attempt to dissect the designs.Where, as here, the designs were not identical and there was no direct evidence of copying, he had to compare designs to see if the similarities, when looking at the subject matter as a whole, gave rise to an inference of copying.Having found there was an inference of copying, Mann J. held that there was insufficient evidence in the story of how the Luxor design had come about to rebut it.

This was a case of secondary infringement under Sections 22 and 23 of the 1988 Act, and therefore the final question was whether the defendants knew, or had reason to believe, that Luxor was an infringing copy of the Pineapple design.The precise test for “reason to believe” was a subject of some doubt, but had been commented on by Morritt J. in LA Gear Inc v. Hi‑Tec Sports Plc [1992] FSR 121 at 129 as follows:

Nevertheless, it seems to me that reason to believe must involve the concept of knowledge of facts from which the reasonable man would arrive at the relevant belief.Facts from which the reasonable man might suspect the relevant conclusion cannot be enough.Moreover, as it seems to me, the phrase does connote the allowance of a period of time to enable the reasonable man to evaluate those facts so as to convert the facts into a reasonable belief.

In commenting on this passage, Mann J. stated:

Accordingly, “reason to believe” requires more than “reason to suspect”, and it requires an evaluation of all factors known to the defendant in order to see whether he fulfils the test.He does not have to accept a claimant’s assertions at face value, but he cannot ignore them either.Having been made aware of the claim of copyright and copying, he has to evaluate it.What starts as grounds for suspicion have to harden into grounds for belief, whether or not the defendant actually believes it.His evaluation will, in many cases (and certainly in the present) have to include making reasonable enquiries, and the answer to the question of whether he has reason to believe will have to take the result of those enquiries into account.

In applying this test, Mann J. held that at the time of receipt of the letter before action, the first defendant knew nothing of the claim to copyright.The letter before action gave rise to a prima facie inference of copying but the first defendant could not be expected, at that stage, to have known whether there was a good answer to the charge of copying – time had to be allowed for a proper evaluation.The answer was expected to lie with the suppliers of the Luxor fabric who were based in Italy.The first defendant made enquiries, but the picture received was one of coyness and confusion.The first defendant’s managing director had written to the Italian suppliers stating that “if you cannot provide the relative design information, then you have copied it  …” (his emphasis) which demonstrated that he was aware that what he had received was insufficient.Following that, Italian lawyers acting for the supplier wrote indicating, for the first time, that the idea for the Luxor design originated with the supplier.By this time, at the latest, it was apparent that the important questions were not being addressed and that it was unlikely that they would be addressed so as to give favourable answers.Therefore from the date of receipt of this letter, the first defendant would have had reason to believe that Luxor was an infringing copy.

In relation to the second defendant, it was apparent that it had carried out no researches and relied upon the first defendant to tell it what to do.The Judge would have been prepared to decide (depending on the facts of the case) that a person who had reasonable grounds to suspect was capable of becoming a person with reasonable grounds to believe if he carried out no sensible enquiries and did absolutely nothing in the face of continued assertions of the copyright owner.However, since the claimant did not press for an earlier date, the Judge found that the second defendant acquired its “reason to believe” on the same date as the first defendant.





Reporter’s note:I am most grateful to Simon Clark of Berwin Leighton Paisner, who acted for the claimants, for providing me with the images of the designs.

Joint ownership

Pamela Brighton & Anr v. Marie Jones (Park J.; [2004] EWHC 1157 (Ch); 18.5.04)

The first claimant was the director of the 1996 version of the play “Stones in his Pockets”.The defendant was the script writer.She had then re-written the play in 1999.It was this 1999 version which was such a commercial success. The first claimant claimed joint authorship in the play.She also claimed that the defendant, in re‑writing the play in 1999, copied without her permission her draft opening script which the defendant had used in the 1996 version.Park J. held that the first claimant was not a joint author and that, although the draft opening script was used in both the 1996 and 1999 versions, the defendant had an implied licence to do so.This summary does not deal with the second claimant’s contractual claims.

Park J. held that to be a joint author under Section 10(1) of the CDPA 1988, the contributions, although they did not have to be equal, had to be significant, they had to be “the right sought of contributions” (per Laddie J., Fylde Microsystems v. Key Radio Systems [1998] FSR 449) ie. towards the creation of the work, but that they did not have to be in writing.Here, the first claimant’s contributions to the 1996 script were not substantial in that almost 100% of the words chosen were composed by the defendant.Further, although the first claimant had made an input to the plot during rehearsals in 1996, the changes were not significant enough to mean that the result was a different dramatic work to that written by the defendant.Further, she had not established that her contributions were to the creation of the dramatic work as opposed to the interpretation and theatrical presentation.The first claimant was not a joint author.There was a contractual bar to the claim (not detailed here).

The first claimant also claimed infringement of the copyright in her draft opening script which she had sent to the defendant to “kick start” the writing of the play.Park J. held that, in writing the 1996 script, the defendant had copied the draft, not in the sense of “language copying”, but in the sense of “altered copying”, in that she had taken a substantial part of the plot from the draft (there was no claim to joint authorship based on the use of the draft).However, the defendant had had an implied licence to use the draft when writing the play in 1996.This was not disputed.In 1999, when the defendant re‑wrote the script, it also involved a degree of copying of the draft because it involved a degree of copying of the 1996 script.The Judge held that the implied licence had not been revoked and therefore remained in existence when the defendant re-wrote the 1999 script and entered into contracts to exploit it.Such a licence could be terminated on reasonable notice, but until it was revoked, it remained in force.The solicitor’s letter before action operated as a revocation and therefore the defendant could, in future, no longer exploit the 1999 script without the permission of the first claimant.

Assignment of Reversionary Interest

Novello and Company Ltd v. Keith Prowse Music Publishing Company Ltd* (Patten J.; [2004] EWHC 766 (Ch); 7.4.04)

The key question in this case was whether a living author (a composer) was able, during the currency of the Copyright Act 1956, to assign the reversionary interest in his works expectant on the termination of the period of 25 years from his death. Under the 1911 Act, the position was quite clear – any inter vivos assignment of the reversionary interest would not be effective and the interest would rest in the author’s personal representatives. Under the CDPA 1988, the position was also clear – an author was able to assign the reversionary interest. That left uncertainty in relation to the period 1 June 1957 to 1 August 1989. Patten J. held that the transitional provisions in the 1956 Act (Schedule 7, paragraph 28(3)) did not apply the proviso (in Section 5(2) of the 1911 Act) to new assignments and therefore Section 36(1) of the 1956 Act operated to confer an unrestricted right of assignment of copyright (contrary to the conclusion in Paragraph 5-113(b) of Copinger and Skone James on Copyright, 14th edition). An assignment made in 1973 was therefore effective to pass the reversionary interest to the defendant.

Construction of Research Agreement

Cyprotex Discovery Ltd v. The University of Sheffield* (L.JJ. Ward, Potter and Clarke; [2004] EWCA Civ 380; 1.4.04)

The Court of Appeal upheld the Judge’s decision. The University were the owners of copyright in a set of computer programs which had arisen out of research carried out at the University and subsequently developed into a potentially commercially exploitable form by an employee of the defendant (one of the Sponsors) with assistance from a University employee. The Research Agreement governing the relationship between the parties contained the following clause on ownership of intellectual property rights:

9(b)   Resulting Intellectual Property shall mean individually and collectively all inventions, improvements and/or discoveries whether or not patentable or capable of other intellectual property protection which are conceived and/or made by one or more members or other agents of the University acting either on their own or jointly with one or more employees of the Sponsors [including the defendant] in performance of the Programme of Research and relating to its objective [… and shall belong to the University].”.

The Judge was right to reject the test of joint/sole ownership in the field of copyright as the criterion governing the question of whether or not the work done under the Programme of Research qualified as Resulting Intellectual Property under clause 9(b). Clause 9(b) was written in the broadest possible terms meaning anything produced in carrying out the Programme of Research to which the University contributed either by way of conception or creation. On the facts and absent the Research Agreement, the program would have belonged to the defendant, but under the Agreement it belonged to the University because of the assistance given to the defendant’s employee by a University employee when writing the program.

Database Rights

Abuse of a dominant position

IMS Health GmbH & Co. OHG v. NDC Health GmbH & Co. KG* (ECJ; C-418/01; 29.4.04)

IMS was engaged in the tracking of sales of pharmaceutical and healthcare products. It provided the data to laboratories in a brick structure, each brick corresponding to a designated geographical area. NDC at first tried to market sales data but in a different brick structure, but on account of reticence manifested by potential clients changed to a very similar structure to IMS. The Oberlandesgericht Frankfurt am Main upheld the decision to grant an injunction against NDC, finding that the brick structure was a database protectable by copyright. NDC complained to the Commission which ordered IMS to grant NDC a licence pursuant to Article 82 EC Treaty. This was later withdrawn and, in the main proceedings, the Landgericht Frankfurt am Main referred various questions on the interpretation of Article 82.

The ECJ first commented on the questions which sought to clarify the relevant criteria for determining whether use of the IMS brick structure was indispensable for enabling a potential competitor to gain access to the market in which the copyright owner, IMS, occupied a dominant position. The Court held that it was for the national court to decide, having regard to the degree of participation by the users in the development of the structure and the outlay, particularly in terms of cost, on the part of the potential users to purchase sales data in an alternative structure and whether the supplier of the alternative structure might therefore have to offer the data to users on terms which were uneconomic.

The Court then turned to the question of whether the refusal by an undertaking in a dominant position to grant a licence constituted abusive conduct. It was settled law that the refusal to grant a licence, even if the act of a dominant undertaking, was not itself abusive, but it could, in exceptional circumstances, involve abusive conduct (Magill C-241/91). Such refusal was abusive if three cumulative conditions were satisfied:

1. The undertaking which requested the licence intended to offer, on the market for the supply of the data in question, new products or services not offered by the copyright owner and for which there was potential consumer demand. What was important was that the undertaking requesting the licence was not intending to limit himself to essentially duplicating the goods or services already offered by the copyright owner on the secondary market (here the market for sales data) and was prevented from developing the new product or service.

2.  The refusal was not justified by objective considerations.

3.  The refusal was such as to reserve to the copyright owner the market for the supply of sales data in the Member State concerned by eliminating all competition on that market.

Reporter’s note: I am most grateful to the following for the reports provided to me: the editor, Tibor (KWS Saat case), Audrey Horton (Coco de Mer and Kambly cases) and Marta d’Oliveire Gaspar (Peak Holdings and Douwe Egberts cases).

Websites at which the reported decisions marked with an asterisk can be found are as follows:


High Court: