Leder & Schuh AG v. OHIM (CFI (Second Chamber); T-32/03; 8.3.05)
On 1 April 1996, Leder & Schuh AG applied to OHIM to register the mark JELLO SCHUHPARK in Classes 18, 25 and 28 for products such as clothing, footwear and headgear. Such registration was opposed by Schuhpark Facies GmbH on the basis of the earlier registration of SCHUHPARK in Classe 25 for footwear products.
The Board of Appeal upheld the decision of the Opposition Division to dismiss the registration in respect of clothing and footwear and the opposition in relation to the rest of the products. The CFI dismissed the appeal and held that Art 8(1)(b) had not been infringed. Having regard to (1) the similarity of the signs; (2) the identical nature of the footwear products; and (3) the similarity, however slight, between the clothing products, there was a risk of confusion. The similarity of the signs depended on the relative weight of the two words JELLO and SCHUHPARK and the fact that JELLO would designate the colour yellow for the relevant public reduced the distinctive strength of JELLO when compared to SCHUHPARK.
Osotspa Co Ltd v. OHIM(CFI (Fourth Chamber); T-33/03; 9.3.05)
Distribution and Marketing GmbH applied to OHIM to register the word mark HAI in Classes 5, 12, 14, 25, 28, 32, 33, 34, 35, 41 and 42 in respect of energy drinks. The CTM application was opposed by Osotspa Co Ltd (“Osotspa”) on the basis of its Community and Austrian trade mark registrations for the figurative mark SHARK registered in Classes 5, 32, 33, 35 and 42 for non-alcoholic drinks (the earlier mark) (NB: “Hai” is the word for shark in German and Dutch). The Opposition Division rejected the opposition on the ground that there was no likelihood of confusion between the marks in question as the conflicting signs are entirely different on the visual and aural level and that they have a completely different structure. Osotspa appealed and the Board of Appeal dismissed the appeal on the basis that there was no significant likelihood of confusion on the part of the public of the Member States of the European Union, and in Austria in particular.
Osotspa then brought an action before the CFI arguing that a minimal degree of similarity between the marks was sufficient for a finding that there was a likelihood of confusion because the goods were identical.
The CFI held that the two signs HAI and SHARK were visually different as the SHARK sign was represented in a figurative manner. Concerning phonetic similarity, the signs at issue were not similar. In relation to the conceptual comparison of the signs, there was a certain similarity since the English word “shark” translates by the word “hai” in German and Dutch. In any case, the CFI found that the important visual and phonetic differences between the marks at issue neutralised to a large extent, that conceptual similarity. Furthermore, the degree of conceptual similarity between the conflicting signs was limited when the relevant public, at the time of purchase, was likely to see and pronounce the name of the mark and not its translation. Therefore, OHIM had been correct in dismissing Osotspa's opposition.
Proof of use
L’Oreal SA v. OHIM (CFI (Second Chamber); T-112/03 ;16.3.05)
L’Oreal applied to OHIM for the registration of the word mark FLEXI AIR in Class 3 for certain goods including shampoos, gels, mousses, balms and essential oils. Revlon (Suisse) SA (“Revlon”) opposed the registration of that mark on the basis of several national registrations for FLEX for goods in Classes 3 and 34. Revlon had registered FLEX in France, Sweden and the UK in respect of products including soaps, essential oils, shampoos and conditioning preparations for hair.
L'Oreal failed to submit its observations by 23 September 2000 as requested by the Opposition Division. On 27 November 2000, the Opposition Division notified the parties that in the absence of any further observations, it would give a decision on the basis of the evidence before it. After that date L'Oreal sent some observations requesting proof of genuine use of the earlier marks and reserving the right to request restitution in integrum. The Opposition Division replied that since those observations had been filed after the notification of 27 November 2000, it would not take account of them. Accordingly, the Opposition Division rejected the trade mark application, finding the existence of a likelihood of confusion with the earlier mark. The Board of appeal upheld the decision of the Opposition Division.
On appeal the CFI held that L’Oreal’s request for proof of genuine use should have been made within the time limit. If the late submission of the request was due to an administrative error as L'Oreal had argued, it was only L'Oreal’s responsibility. The Board of Appeal was entitled to reject the request for proof of genuine use because although L'Oreal had submitted its request for such proof before the Board of Appeal, it had not adduced any new matter justifying the failure to submit that request within the time-limit.
On the point of likelihood of confusion the parties had agreed that the earlier mark was of weak distinctive character. However, as the Board of Appeal had correctly stated the distinctive character of a mark is only one factor among others to be taken into account in the assessment of the likelihood of confusion. Even in the case of an earlier mark of weak distinctive character and a trade mark applied for which was not identical, there remained the potential for a likelihood of confusion to be established. Regarding the goods covered by the opposed trade marks, it was not disputed that the goods were in part identical and in part very similar. Furthermore, when comparing the signs the Board of Appeal had been correct in establishing that the dominant character of the “flex” element of the FLEXI AIR mark led to the conclusion that the signs were visually similar. It further confirmed that a sign consisting of two words and a sign consisting of a single word can be visually similar in particular when four letters were placed in the same order and at the beginning of both signs. Next, in relation to phonetic similarity, the Board of Appeal had been correct in finding that the signs were phonetically similar since the first four letters of FLEXI AIR were pronounced in exactly the same way as the sign FLEX. The letter “I” was an insignificant addition to those first four letters and the word “air” was not such as to destroy the similar pronunciation of the marks in question. Finally, the CFI held that the Board of Appeal had been correct in establishing that the terms “flex” and “flexi” were closely related, both referring to the flexibility and the vitality of hair.
In the matter of Application No. 2313504 in the name of Linkin Park LLC
(Mr Richard ArnoldQC; O-035-05; 7.2.05)
In 2002, Linkin Park LLC, the corporate vehicle of a US rock group called Linkin Park (the “Group”), had applied to register the trade mark LINKIN PARK in respect of a wide range of goods and services in Classes 9, 14, 16, 18, 21, 25 and 41. The Hearing Officer granted registration of the mark for all the goods but for “printed matter, posters and poster books” in Class 16 on the basis that such registration would be contrary to section 3(1)(b) and (c) and to the Registrar’s practice based on the decisions of the CA in TARZAN Trade Mark  RPC 450 and ELVIS PRESLEY Trade marks  RPC 567.
The applicant appealed the decision on the following grounds:
- the Hearing Officer had failed to take into account the fact that the mark was coined by the Group and was therefore an invented word;
- the mark was not descriptive because the subject matter was not characteristic of the goods within the meaning of section 3(1)(c);
- the Hearing Officer was fundamentally wrong, as was the Registrar’s practice, to differentiate between goods such as posters and other goods. In particular, the applicant contended that the mark was no more descriptive for posters than for “calendars, decals, stickers” in relation to which registration had been accepted; and
- the decision was inconsistent with certain other registrations.
Mr Arnold QC held that the Hearing Officer was correct in rejecting the registration of the mark in respect of posters under s 3(1)(c) and did not consider s 3(1)(b). Mr Arnold QC’s findings were as follows:
- Although the mark was coined by the Group, it was descriptive because by the time of the application the mark had acquired a well established meaning.
- LINKIN PARK was descriptive or at least capable of being used descriptively, as it would be difficult if not impossible for other traders to market posters depicting the Group without using the mark
- The Hearing Officer was right to differentiate between goods such as posters and other goods. Mr Arnold QC disagreed with the applicant’s argument that the relevant consumers would expect merchandise relating to the Group, including posters, to be licensed by the Group or its corporate vehicle. Copyright law suggested the opposite, as the first owner of copyright in a photograph of the Group would be the photographer or the photographer’s employer and its exploitation would not require the Group’s licence. Accordingly, even if performers’ names may be registered in respect of compact discs on the basis that members of the public would expect such items to be authorised by the performer, that did not mean that such marks were registrable for posters. Mr Arnold QC noted that if the applicant had wished to secure registration on the basis that consumers would expect posters depicting the Group to be licensed by the Group, it should have adduced evidence showing such contention. He also noted that the registration for “calendars, decals, stickers” may have been wrongly accepted but it was not a matter he had to review.
- The decision was not inconsistent with other registrations, including the applicant’s corresponding CTM application that had been accepted by OHIM.
The appeal was dismissed.
The Gillette Company v. LA-Laboratories Ltd Oy (Third Chamber of the ECJ; C-228/03; 17.03.05)
The claimant, Gillette Company (“Gillette”), had registered in Finland the marks “Gillette” and “Sensor” in respect of razors under Class 8 and granted to Gillette Group Finland the exclusive right to use these marks in Finland. The defendant, LA-Laboratories (“LA”), sold razors composed of a handle and a replaceable blade and blades under the mark “Parason Flexor”. The defendant affixed a sticker with the words “All Parason Flexor and Gillette Sensor handles are compatible with this blade” to their blade’s packaging. Consequently, Gillette sued LA for trade mark infringement on the basis that the use of the Gillette and Sensor marks created a link in the mind of consumers between the claimant’s and the defendant’s products and gave the impression that LA was authorised to use the marks.
The first instance Finnish court held that Gillette’s trade marks had been infringed under Article 4(1) of the Finnish law on trade mark (7/1964), which gave the proprietor of a mark the exclusive right to use it. Article 4(2) of the same law, which provided for an exception to the exclusivity granted under Article 4(1), had to be interpreted narrowly in the light of Article 6(1)(c) of Directive 89/104, and did not relate to essential parts of a product. Since the handle and the blade were to be regarded as essential parts of the razor, the spare parts exception did not apply. On appeal, the court found that the blades were spare parts and reversed the decision. Gillette appealed to the Third Instance Finnish Court, which decided that the case raised questions as to the interpretation of article 6(1)(c) of Directive 89/104 in relation to the criteria for determining whether a product was or was not comparable to a spare part or an accessory, to the meaning of “necessary” and to the proviso of “honest practices” in commercial or industrial matters.
Further to the hearing of the opinion of A.G. Tizzano on 9 December 2004 (reported in the CIPA report of January 2005), judgment was rendered by the Third Chamber of the ECJ on 17 March 2005.
Since the intended purpose of the products as accessories or spare parts was cited only by way of example, the application of Article 6(1)(c) was not limited to spare parts and accessories and it was not necessary to determine whether a product was comparable to an accessory. More crucial was the question of the meaning of necessary. It was for the national court to determine whether, in the circumstances of the case in the main proceedings, use of a third party’s trade mark was necessary, taking into account the nature of the public for which the product marketed by the third party in question was intended.
To be necessary, such a use had to indicate the intended purpose of the product. For example, use of a third party’s trade mark to inform the public that the advertiser was specialised in the sale, repair and maintenance of products bearing that trade mark constituted a use indicating the intended purpose of a product within the meaning of Article 6(1)(c).
In addition, such use was necessary where in practice it represented the only means of providing the public with comprehensive and complete information on that intended purpose.
In that respect, to determine whether there were other means of providing such information, it was necessary to take into consideration the possible existence of technical standards or norms generally used for the type of product marketed by the third party and known to the public for which that type of product was intended.
The ECJ had previously held that honest practices constituted in substance the expression of a duty to act fairly in relation to the legitimate interests of the trade mark owner (see BMW v. Deenik Case C-63/97, Gerolsteiner Brunnen v. Putsch (KERRY/GERRI) Case C-100/02). In that respect, use of a trade mark would not comply with honest practices in industrial or commercial matters where:
- it gave the impression that there was a commercial connection between the reseller and the trade mark proprietor;
- it affected the value of the trade mark by taking unfair advantage of its distinctive character or repute;
- it discredited or denigrated that mark; or
- where the third party presented its product as an imitation or replica of the product bearing the trade mark of which it is not the owner.
The ECJ held that it was again for the national court to determine whether, in the case in the main proceedings, the use made of the trade marks owned by Gillette had been made in accordance with honest practices. In that regard, consideration should be given to (1) the overall presentation of LA’s packaging containing the razor blades; (2) the product marketed by Gillette; (3) the circumstances in which Gillette’s mark was displayed on LA’s product: (4) the circumstances in which a distinction was made between LA’s mark and Gillette’s mark; and (5) the effort made by LA to ensure that consumers distinguished its products from those of Gillette.
The court also held that the fact that a third party used a trade mark of which it was not the owner in order to indicate the intended purpose of its own product did not necessarily mean that it was presenting its own product as being of the same quality as, or as having the same properties as those of the product bearing the trade mark. Whether there had been such a representation was a matter of fact for the national court. However, the finding of such a representation could be relevant when dealing with the honest practices issue.
O2 Holdings Ltd and O2 (UK) Ltd v Hutchison 3G Ltd Ch D (Sir Andrew Morritt VC;  EWHC 344; 11.01.05)
The Vice Chancellor refused an application to refer questions relating to proceedings already commenced to the European Court of Justice for a preliminary ruling in advance of a trial for trade mark infringement on the basis that the answers to the questions were not necessary to enable the national court to give judgment.
The applicant and the defendant both carry on business in the field of mobile telecommunications. The applicant was originally called BT Cellnet. Following its separation from BT, it was then renamed O2. The name is the chemical formula for oxygen. To strengthen that association with oxygen O2 adopted a “blue bubble imagery”. O2 registered a number of trade marks, some were word marks and other device marks consisting of “bubbles devices”.
The defendant launched a campaign of comparative advertising on television using some bubbles. O2 instituted proceedings against H3G seeking an injunction claiming that the use of bubbles in H's advertisement infringed its “bubble” trade marks and also claimed passing off. H3G counterclaimed for invalidity of the O2 bubble marks based on bad faith and lack of distinctive character. The application for an injunction was dismissed and instead a speedy trial was ordered. The particulars of claim were amended and the claim for passing off was dropped. Consequential amendments were made by H3G to its defence in which it averred that each of the contentions of European Law advanced by O2 in its amended particulars of claim was wrong. O2 then amended its reply. H3G further sought information from O2 requesting: i) precise identification of the sign used by H3G alleged to infringe; ii) specifying whether O2 relied on the bubble sequence in H3G’s advertisement or any specific frame or frames and if so which and iii) confirmation that such signs were alleged to be similar to each of the bubbles marks relied on. O2 declined to comply with that request on the basis that they considered it “unnecessary and a waste of costs until we know the outcome of any pre-trial reference regarding clarification of the law to be applied in this matter”.
O2 argued that the reference to the ECJ ought to be made in advance of the trial because the answers to the questions would or might eliminate, reduce in scope or at least affect substantial areas of the factual inquiry. H3G argued that it could not be predicted in advance that it would be necessary to enable the court to give judgment at trial to have the answers to all or any of the questions.
The VC held that though the conventional view had been that the facts should be determined first, it was clear from various authorities that this was not an indispensable requirement for the exercise of the discretion to refer. Nevertheless, none of the questions in this case arose if H3G succeeded in revoking the O2 trade marks on the basis that the marks were devoid of any distinctive character. The fact that H3G might succeed in its attack on that basis, showed that it could not be predicated that the questions would arise and that a reference to the ECJ was necessary. Furthermore, it could not be said that it would be “necessary” for the ECJ to answer those questions to enable the national court to give judgment in due course, only that it might be. Furthermore, the identification of the relevant sign was a matter for the national court to determine. The very fact that the answers to the questions might eliminate, reduce or affect areas of factual enquiry demonstrated that they were, to that extent, dependent on the findings of fact to be made by the judge at trial.
(1) Phones 4U Ltd (2) Caudwell Holdings Ltd v. (1) Phone4u.co.uk Internet Ltd (2)Abdul Heykali (3) New WorldCommunications (Southern Division) Ltd(Richard SeldonQC;  EWHC 334 (Ch); 9.3.05)
The claimants failed in their passing off claim to restrain the defendants from using domain names incorporating the phrase “phone4u”. The claimants owned and operated the high street chain of mobile phone shops called “Phones 4U”. The defendants were also in the mobile phone business and used domain names which incorporated the phrase “phone4u”. The claimants brought an action for both passing off and trade mark infringement. An unusual aspect of the case was that proceedings were only brought in February 2004, whereas the acts of which the claimants complained commenced in August 1999.
The judge found that the phrase “Phones 4U”, although it was not wholly descriptive, was not inherently distinctive. Furthermore, he was of the opinion that the claimants had failed to show that at the relevant time, the mark had become distinctive through use. Consequently, the judge held that the claimants had no goodwill at the relevant date and that accordingly the claim for passing off should fail.
Even though it was not strictly necessary, the judge then considered the issue of misrepresentation, in respect of which he re-affirmed the necessity to prove deception rather than mere confusion, as “mere confusion which does not lead to a sale is not sufficient” (quoting Lord Jauncy in the Jif Lemon case). He found that the evidence submitted (which included surveys) pointed to confusion rather than deception, as no customer had ever purchased a mobile phone from the defendant mistakenly thinking that they were dealing with the first claimant and as most of the misdirected e-mails were from customers of the first claimant making a complaint or raising a query about phones already acquired from the first claimant. Thus, the passing off claim also failed on the misrepresentation requirement.
Another argument of the claimants was that an interim injunction should be granted on the basis of the decision in British Telecommunications plc v. One in a Million  FSR 1. The judge distinguished the present case from One in a Million on the following basis: - passing off could not be established; - it was not a quia timet action, as the defendants had actively traded on their website, which could not be said to be an instrument of fraud; the domain name was descriptive rather than distinctive; - the defendants genuinely intended to use the domain name for internet trading; and – the defendants were not seeking to extract value by reason of the claimant’s ownership of the goodwill in the name.
The claim for trade mark infringement failed as well, mainly because of the judge’s findings as to deception. Following the principle stated in Reed Executive plc that “a mere association between the mark and the sign created in the mind of the public will not amount to an infringement unless it also entails deception as to the economic source of the goods bearing the sign”. There was no sufficient evidence of deception to prove infringement.
Oakley Inc v. (1) Animal Limited (2) H Young Holdings Plc (3) H Young (Operations) Limited(Peter PrescottQC;  EWHC 419 (Pat); 16.3.05) – Supplementary judgment
We refer to the Oakley v. Animal decision contained in last month’s report. A reference has since been made to the ECJ in a supplementary judgment by Mr Peter Prescott QC. Regulation 12 of the Registered Design Regulations 2001 provided that the validity of certain existing design registrations should be governed by the 1949 Act. This was in accordance with Article 11.8 of the Directive 98/71/EC on the legal protection of designs which permits member states to keep their old national law on the validity of existing design registrations. However, it was argued that a member state wishing to exercise the derogation contained in Article 11.8 should have done it by 28.10.01 (deadline for the implementation to the Directive). The question referred to the ECJ was therefore whether Regulation 12, which came into force after 28.10.05, was contrary to the Directive.
IPC Media Limited v. News Group Newspapers Limited(Hart J.;  EWHC 317 (Ch); 24.2.05)
The claimant was granted summary judgement for copyright infringement. The judge held that the defence of fair dealing was not available to the defendant, as it had used the claimant’s copyright material to advance its own competing purposes at the claimant’s expense and in so doing advanced its own work.
The claimant was the publisher of a weekly magazine “What’s on TV” and owned the copyright in the magazine logo and layout. The defendant, publisher of The Sun among other publications, had reproduced the front cover of a July 2004 edition of the claimant’s magazine in advertisements contained in The Sun, together with the front cover of another magazine and the front cover of The Sun’s own new magazine.
This tactic had already been used by the defendant in October 1998. At the time, and following the issue of proceedings, the parties had reached a settlement in which, among other things, the defendant undertook not to infringe the claimant’s copyright in the logos and layouts of any cover of “What’s on TV” by making a copy of or by issuing to the public copies of the whole or any substantial part of such logos and layouts. In this case, the claimant brought an action for copyright infringement on the basis that the reproduction of its front cover and logo breached its copyrights, and for breach of contract in relation to the undertaking.
As a defence, the defendant argued fair dealing under ss. 30(1) and 30(2) of the Copyright, Designs and Patents Act 1988. It contended that it was merely engaged in comparative advertising and that the use of the claimant’s material was for the purpose of criticism or review not of the work itself but of the claimant’s product. The claimant submitted that the defendant’s use of its material did not constitute criticism, review or reporting of current events, and that even if the contrary was arguable, such use was not fair dealing as its purpose was to reduce the sales for the claimant’s magazine and this could have been achieved without reproducing the claimant’s material and breaching its copyrights.
Hart J. held that although it was arguable that the offending advertisements could be characterised as criticism or review, he was not persuaded that the kind of criticism involved constituted criticism of the claimant’s work or of another work within the meaning of s. 30(1). He considered that the key issue lied rather in the question of whether the defendant’s use amounted to fair dealing, which was an elusive concept. He found that the defendant arguably passed the three criteria defining fair dealing as set out in paragraph 2016 of Laddie, Prescott and Vitoria in the Modern Law of Copyright and Designs (quoted by the Lords in Ashdown v. Daily Telegraph  RPC 235 CA). Indeed, the use of the claimant’s material did not itself compete with the claimant’s product and the defendant did not use previously unpublished material. Finally, although the whole of the copyright work had been copied, it had not been copied in such a way as to reproduce all its essential features (large parts of the text on the front cover were not legible).
The judge then considered the claimant’s argument that the defendant’s use of the claimant’s material could not amount to fair dealing because of the “simple fact that the purpose of the whole exercise was to reduce sales of the claimant’s product and that that purpose could equally well have been pursued without using the copyright material.” The judge regarded such a question as relatively difficult because on the one hand the notion of competitiveness in the current market place involved necessarily activities which were aimed at the promotion of one product to the expense of another whilst on the other hand, our legal culture placed a high value on copyright.
He concluded that in fact the solution lied in the defendant’s argument, which was that they were merely using the copyright work for the purpose of identifying the claimant’s product and not because they wished to make unfair use of the copyright work. This ignored the fact that the essential function of copyright was to identify the copyright owner’s product and to do so for the benefit of the copyright owner. In copying the work to advance its own competing commercial purposes at the expense of the claimant, the defendant was taking advantage of the fact that the claimant’s work had created a literary/artistic identity for its product. This could not be described as fair dealing in the context of or as part of an exercise in or for the purpose of the criticism or review of the claimant’s work.
The judge also allowed the claimant’s contractual claim.
Navitaire Inc v. (1) Easyjet Airline Co Ltd (2) Bulletproof Technologies Inc (Pumfrey J;  EWHC 0282 (Ch);11.3.05)
An application to re-open the trial after judgment but before order to allow the claimant to adduce further evidence was dismissed because the evidence could have been obtained with reasonable diligence for use at the trial and it would not have changed the court view on the relevant issue.
The claimant was the owner of a ticketless airline booking system (OpenRes). The defendants had developed a similar booking system (eRes) after the relationship between the claimant and the first defendant had broken down. The claimant sued for copyright infringement but the judge, in his previous judgment, held that the way in which the defendants had used the OpenRes system in the design of the eRes system was legitimate.
The claimant sought to adduce fresh evidence that was hearsay evidence in the form of a transcript of a deposition by a witness who did not appear at trial. The transcript allegedly showed that contrary to what was said in the statement of defence, the second defendant had received a file from the first defendant recording information relating to the Open Res database and had used that information in the design of the eRes database.
The claimant submitted that the fresh evidence should be admitted as it came as a surprise, having regard to what the witness had previously said, and as it could not have been obtained with the exercise of reasonable diligence. The defendants opposed the application on the ground that the fresh evidence would inevitably be excluded, as the witness could not be compelled to attend for cross-examination.
The judge held that the same factors should be taken into account when considering the introduction of fresh evidence on appeal and after judgment but before the order is perfected (Stewart v. Engel  1 WLR 2268 followed). The defendants’ argument failed, as the hearsay evidence would not, in the judge’s opinion and having regard to s. 1 of the Civil Evidence Act 1995, be rendered inadmissible by the fact that the witness could not be compelled to attend for cross-examination. Moreover, the court could not be certain that the witness would not appear voluntarily.
However, the claimant could not satisfy the three requirements to adduce fresh evidence lied down in Ladd v. Marshall  1 WLR 1489. Firstly, the claimant failed to show that the evidence could not have been obtained with reasonable diligence for use at the trial. The evidence in question was available from a witness of whom the claimant was aware and who had been interviewed twice over the phone during the preparation for the trial. At the time, the witness’ recollection was deemed to be poor and jogged and consequently was not used as evidence. Documents were then used in the preparation of the deposition to stimulate the witness’ recollection. The judge held that the two interviews carried out without the assistance of documents with a witness whose recollection was recognised as poor and in need of being stimulated were an insufficient basis to conclude in the first place that the witness could not give useful evidence. Accordingly, the evidence could have been obtained with the exercise of reasonable diligence and what the witness said when his memory was stimulated could not be said to have come as a surprise. An attempt could have been made to adduce the evidence at the trial itself.
The claimant also failed to satisfy the second and the third criteria, which respectively required that the evidence be such that, if given, it would probably have an important influence on the result of the case and that such evidence be credible. The judge held that the admission of the hearsay evidence, if not cross-examined, would not change his views of the case.
Locksley Brown v Mcasso Music Production Limited (Judge FyshQC;  EWCC 1 (Cpwt))
The case concerned copyright infringement in relation to a rap song – “Mr High Roller” – which was used in a television advertisement.
The Claimant claimed joint ownership of the copyright in the lyrics. The music and lyrics of the song had been composed by two employees of the Defendant advertising agency. However, the first version of the song did not sound “authentic” and the Claimant, a session singer, was employed to give it a “rapping feel”. During a recording session, for which he was paid £75 - it also being agreed that he would receive £1000 for use of the song in the television advertisement for 2 months - the Claimant began to rap changes to the lyrics of the song. The Court found that there were a number of significant changes to the lyrics and the quality was improved. The Court concluded no agreement regarding ownership had been reached, although there was agreement that the Claimant's creative contribution to the success of the song would be 10% of the whole. The Judge found that the Claimant was a joint author of the lyrics. He had collaborated with the composers to change the lyrics and the result was an adaptation which was both significant and original in the copyright sense. In particular, the Judge took into account that in rap, words are of greater importance that in many other music forms.
The use of the advertisement as a “showreel” on the Defendant's site from March – December 2000 was alleged to be infringing. Infringement was also alleged because, after this date, the showreel was available on a disposal sub-site within the Defendant’s site. The evidence was that the “showreel” was not downloadable. It was clear from s173(2) CDPA that a co-owner could sue his co-owners for doing any of the acts restricted by copyright without his licence and the Judge found the use on the main site infringing. The use of the “showreel” on the disposal sub-site was not infringing because normal users of the site would not have been able to locate it (the issue was also not properly pleaded).
The Judge assessed damages at £180, on the assumption, which had not been disputed, that the Claimant’s creative contribution was 10% of the whole. The Judge felt unable to assess damages on the basis of a reasonable royalty because the use of the song on the showreel did not generate a tangible income stream. He took account of the fact that the film was only one of many items available on the website and there was no evidence it had been viewed by anyone, concluding that, had the parties negotiated, they would have settled upon a token figure of £20 per month.
Experience Hendrix LLC v Purple Haze Records Limited & Anr (Hart J;  EWHC 249 (Ch); 24.2.05)
The case concerned an application for summary judgment on the issue of whether the Defendants had infringed performer’s rights in performances given by the late Jimi Hendrix in Sweden on 9 January 1969. It was not in issue that the Defendant had made and sold in the UK copies of a recording of the performances.
The case raised interesting issues regarding “springing” rights because in 1969 there was no protection for perfomers’ rights, save for criminal sanctions in the Performers’ Protection Acts 1958-1963. Perfomers' rights were first expressly provided for in Part II, CDPA with a commencement date on 1 August 1989. Section 180(3) provides that the rights applied in relation to performances taking place before commencement “but no act done before commencement, or in pursuance of arrangements made before commencement, shall be regarded as infringing those rights”.
It was disputed by the Defendant that the performances were “qualifying performances” so as to be protected. Section 181, CDPA provides that a performance can qualify for protection either by virtue of a qualifying individual or because it took place in a qualifying country. A qualifying country included any EEC member state. Sweden did not join the EEC until 1 January 1995 and the Defendants argued that the performance did not qualify because the relevant date at which the qualification requirements had to be satisfied was when the performance took place. The Defendant relied on the absence of transitional provisions in the Orders under s208 or in the Copyright and Related Rights Regulations 1996 for countries joining the EU after the commencement date. They argued that the effect otherwise would be that once Sweden became a qualifying country this would retrospectively render acts in the UK after 1 August 1989 infringing acts. The Judge refused to accept this argument. The Defendant had conceded that a performance given in the UK prior to 1 August 1989 was a qualifying performance. Therefore, a different view could not be taken for EEC Member States or based on when other countries became qualifying countries. The springing interest problem was just a consequence of the way the Act had been drafted. There might be a defence to damages on the basis of innocent infringement (although it was not clear how this would apply to an account of profits).
The Defendant also sought to argue that the performer for the purpose of asserting the rights was not Jimi Hendrix’s Estate alone, but also included the performers who had performed with him and were therefore co-owners. The action had not been properly constituted because they had not been joined to the proceedings. The Judge rejected this argument. The Act proceeded on the basis that each individual performer, even where a performance was given by one or more individuals, had performance rights under the Act if the performance satisfied the requirements to qualify for protection. However, joint ownership would be possible due to the transmissibility of the performance rights. The Judge left open the point of whether one co-owner of performance rights could sue alone for infringement of those rights, although he noted this was possible in copyright.
The Judge also had to consider various arguments over the construction of a management agreement by which it was argued the managing company had become entitled in law or equity to his performance rights. The Judge rejected this argument. The agreement provided that the company got a percentage of certain gross payments made to Hendrix. It did not entitle the company to sell Hendrix’s services to third parties and pocket all the proceeds and on its true construction the agreement did not provide for any assignment.
Summary judgment was granted against the Defendants.
Reporter’s note: I am grateful to my colleagues at Bird & Bird Robert Williams, Cristina Garrigues, Jacqui Irvine and Brigitte Gratton for helping me with the preparation of this month’s report.
All CFI and ECJ decisions can be found at http://curia.eu.int/en/content/juris/index.htm.