13 May 2015

Red Berries - Bodo Sperlein Ltd v Sabichi Ltd

In  John Kaldor Fabricmaker UK Ltd v Lee Ann Fashions Ltd [2014] EWHC 3779 (IPEC) (21 Nov 2014) which I discussed in Is this a copy? John Kaldor Fabricmaker UK Ltd v Lee Ann Fashions Ltd 11 Dec 2014, His Honour Judge Hacon assessed the steps to be taken by the court when assessing an allegation of infringement of copyright. He considered them again in  Bodo Sperlein Ltd v Sabichi Ltd and Another [2015] EWHC 1242 (IPEC) (8 May 2015) at paragraph [33] of his judgment:
"In the absence of direct evidence of copying, the first of the steps to which I referred is to consider whether the claimant has established a prima facie inference of copying by reason of similarities between the copyright work and the defendant's work. In many cases (this is one) any inference of copying will come in the first instance from a comparison between the defendant's work and a publicly available design in the alleged chain of copying."
He added at paragraph 35]:
"As I said in John Kaldor (at [11]), the stronger the prima facie case of copying which can be inferred from any similarities, the more compelling the defendant's evidence of independent design must be to rebut that inference. Evidence of independent design usually comes from the relevant designer, who says what he or she did. To move that evidence towards the compelling end of the spectrum, where this is needed, generally speaking it must (a) point to one or more designs available to the independent designer at the date of alleged copying, other than the claimant's or anything derived from it, which could plausibly have been the source of relevant design inspiration and/or (b) establish that the designer did not have access to any image of the design which, according to the claimant, was directly copied."
In Kaldor the judge accepted the defendant's explanation for the similarity between the original and the putative copy. In Bodo Sperlien he did not.

To His Honour's eye, the similarities between Bodo Sperlein's Red Berry design and Sabichi's Red Blossom were very striking indeed. Sabichi's desgner identified several differences such as the smooth twig of the Red Blossom design as opposed to the more realistic and detailed appearance of the Red Berry design, the number of berries, the precise placing and shape of the twigs and berries, and so on, but even she conceded in her witness statement that the Court might look at those designs and have difficulty telling them apart. One telling ground for an inference of copying was the colour used in the Red Blossom collection. The judge found it almost inconceivable that Sabichi's design should employ exactly the same shade of red as that of the Red Berry design unless either the latter was copied or alternatively there was a very convincing explanation for the coincidence. 

Even though Sabichi's designer had no recollection  of copying and the judge accepted that she had tried to give her evidence accurately he did not think that she had discharged the burden of explaining away the similarities. At paragraph [48] he said:
"I accept that she has no recollection of being influenced by the Red Berry design, but the possibility cannot be excluded that she has forgotten such influence or successfully put it out of her mind."
His Honour was particularly impressed by the similarities in colour and the only reasonable explaation for such similarities was copying. He concluded at paragraph [51] that Sabichi infringed Dodo's copyright by the importation into the UK of Blossom ceramics and the sale of those products in this country.

In my case note on Kaldor I wrote that that Kaldor would have won had it registered its fabric design as a registered design or as a registered Community resign. As there is no examination design registration is a relatively cheap and easy exercise. It is true that Bodo won without registering its design but it might have won more easily had the Red Berry design been registered.

The other notable thing that happened in this case was that the judge conducted a summary account of profits immediately after determining liability. Usually liability and the appropriate pecuniary remedy are decided in separate sessions many months apart for largely historical reasons in the Chancery Division. In this case the parties filed pleadings and evidence in relation to an account of profits which allowed Judge Hacon to proceed with the account immediately after determining liability. In OOO Abbott and Another v Design & Display Ltd and Another [2014] EWHC 2924 (IPEC) (4 Sept 2014)  His Honour had attempted to summarize (at [38] to [40]) the law on the costs which may be deducted from gross profits when assessing the appropriate profits payable by a defendant in an accountL
"[38] … (1) Costs associated solely with the defendant's acts of infringement are to be distinguished from general overheads which supported both the infringing business and the defendant's other businesses.
(2) The defendant is entitled to deduct the former costs from gross profits.
(3) A proportion of the general overheads may only be deducted from gross profits in two circumstances:
(a) if an overhead was increased by the acts of infringement (i.e. the increase would not have occurred but for the acts of infringement), that increase may be deducted;
(b) if the defendant was running to maximum capacity such that the infringing business displaced an alternative business which otherwise would have been conducted, the apportioned overheads incurred by the infringing business (and which would have been incurred by the displaced business) may be deducted.
(4) The evidential burden is on the defendant to establish any of the above.
[39] The logic of the principle which I have numbered (3)(b) (adopted from the judgment of the High Court of Australia in Dart Industries Inc v Decor Corp Pty Ltd [1994] FSR 567) is that while a defendant may not deduct the profit that it would have made from the displaced business (i.e. the loss of profit from an opportunity forgone, called the 'opportunity cost') it would be unfair to deprive the defendant of both the opportunity cost and the apportioned overheads which would have sustained the displaced business (and which sustained the infringing business).
[40] The corollary of (3) as a whole is that if the overheads would have been incurred anyway in the absence of the infringing business and also no opportunity cost was incurred by the defendant, no overheads may be deducted from its gross profits."
The evidence of costs and allowable deductions was largely agreed so the judge was able to make an award straight away.

Should anyone wish to discuss this case or copyright and designs law in general he or she should call me on 020 7404 5252 or use my contact form.

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