03 August 2014

Ifejika v Ifejika - another case about design rights and contact lenses





















In Ifejika v Ifejika and another [2011] EWPCC 31 (23 Nov 2011) His Honour Judge Birss QC (as he then was) ordered among other things an inquiry (or alternatively, by implication, an account) in relation to a lens care product the design rights in which he held to have been infringed by the claimant's brother by of a competing product. The claimant elected an account of profits and this came on before HH Judge Hacon on 17 June 2014 (Ifejika v Ifejika and another [2014] EWHC 2625 (IPEC) (31 July 2014)).

This case is interesting for two reasons. First, it was an account of profits rather than an inquiry as to damages. Accounts are not common in intellectual property cases. Secondly, neither side was legally represented at the hearing so the judge had to do justice as best he could. He was therefore bound to explain the principles by which an account is to be taken.

A factor that might have applied in other circumstances was that the defendant could have applied for a licence of right under s.237  of the Copyright, Designs and Patents Act 1988 which would have limited his liability to twice the amount payable by way of licence fees (see s.239 (1) (c) of the Act). In this case it made no difference because the judge did not think there was a realistic prospect that the Comptroller would settle a licence at less than 1% of the net profits made from the sales of the infringing products.

In computing the sums payable by the defendant His Honour considered the extent of the infringement. Only one feature of the claimant's design had been infringed and the parties disputed whether that feature was an important part of the product. The defendant argued that the feature was "physically a very modest part of the totality" of the product and suggested that the correct proportion of net profits to be attributed to that feature was 1%. The claimant described the feature as the "central hub" of the design and rejected the 1% figure without suggesting an alternative. The judge took a broad brush approach:
"32. I accept [the claimant's] implied submission that it is not appropriate to assess the proportion of profits to be attributed to the undercut feature solely by its physical proportion to the whole, which is in any event hard to gauge. Its functional importance is relevant. But I am not in a position to assess in detail whether it is, as [the claimant] submitted, a key functional feature or whether, as [the defendant] submitted, it plays a marginal role.
33. I have come to the view that the figure of 2% of net profits is about right on the basis that I doubt that the undercut feature is quite as insignificant as [the defendant] suggests, but as best as I can judge, more than doubling [the defendant's] figure of 1% would be going too far in allotting importance to the feature. That means that the relevant profit made by [the defendant] from the sale of the infringing .... products was 2% of £790,000, which is £15,800."
He thus ordered the defendant to pay £15,800 to his brother.

This decision should put an end to litigation that has rumbled on since 2008. Judge Birss QC set out the history in Ifejika v Ifejika and another [2011] EWPCC 28 (6 Oct 2011) when he heard an application to adjourn the trial:
"The case began in the High Court on 21st February 2008. The case came before HHJ Fysh QC sitting as a judge of the High Court in 2009 and in a judgment in October 2009 HHJ Fysh cancelled the Registered Design. Victor Ifejika appealed and his appeal was successful. The Court of Appeal reinstated the Registered Design (see the judgment of Maurice Kay, Rix and Patten LJJ [2010] EWCA Civ 563). The matter then proceeded in the High Court (Patents Court). Mr Justice Floyd transferred the matter to the Patents County Court in early 2011. The case first came before me on 10th March 2011. On that occasion I heard Victor Ifejika and Charles Ifejika in person. Charles Ifejika represents himself and (with permission) the second defendant. I asked the parties about their estimates of the potential magnitude of damages at stake. Both Victor Ifejika and Charles Ifejika were of the view that the likely damages in relation to the Lenscare product are of the order of £35. As regards the AMO product, Charles Ifejika's position is that the likely damages (if the case against him is proven, which of course he denies) may be of the order of £25,000. Victor Ifejika's position on the AMO product is that the likely damages may be of the order of £500,000."
In fact that £25,000 was an overestimate by nearly £10,000. One wonders what the parties could have achieved had they applied their energies to their respective businesses instead of fighting each other.

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