Practice - Vimage Products Ltd v Data Candy Ltd
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Intellectual Property Enterprise Court (Mr John Kimbell QC) Vimage Products Ltd. v Data Candy Ltd and others [2022] EWHC 606 (IOEC) (18 March 2022_
Sometimes, through no fault of its own, a claimant joins someone who was not responsible for the alleged wrongdoing as a defendant. That is what appears to have happened in Vimage Products Ltd v Data Candy Ltd and others [2022] EWHC 606 (IPEC) when Vimage Products Ltd. sued Data Candy Ltd and its director, Joanne Roper, as defendants to an action for design right infringement and passing off. Vimage joined them as defendants because they appeared to be the owners of a website that advertised allegedly infringing articles.
In their defence, the defendants denied infringement and identified Lenken Ltd. as the owner of the website. Vimage and Lenken tried unsuccessfully to resolve their dispute without recourse to litigation. Vimage applied to:
- join Lenken and its director Sam Pony as defendants pursuant to CPR r 19.2 (2) (a) and CPR 19.4;
- amend the Claim Form and Particulars of Claim pursuant to CPR 17.1 (2) (b); and require Lenken and Ms Pony to provide Vimage with a complete set of drawings for the allegedly infringing article or alternatively a sample of the product.
Vimage applied for the joinder on the following grounds:
"a. Vimage seeks to ensure that all relevant defendants are at the trial in order for the Court to determine which parties are responsible for the alleged infringing acts.
b. At the time of issuing the claim, Vimage acted reasonably in identifying the First Defendant and the Second Defendant as the appropriate defendants based on the T&Cs of the website complained of and the registrant domain name information. It would be unjust to shut them out from an amendment to reflect subsequent developments.
c. The change in the T&Cs on the smartbreeder.com website has not been explained. It remains unclear why the name of the responsible party changed, when it changed, and whether that reflected the underlying facts. Similarly, although the First Defendant was the registrant of the smartbreeder.com domain, those details appear to have been subsequently hidden from public view.
d. Lenken and Ms Pony appear to be closely connected with the First and Second Defendants. The Second Defendant is a managing director of Lenken as well as being the sole director and shareholder of the First Defendant. In addition, the Second Defendant is named as the buyer in some documents relating to order of ultrasound scanners from a Chinese company.
e. It has been admitted in correspondence that Lenken has dealt in ultrasound scanners
f. If joinder is not permitted, Vimage will be forced to bring separate proceedings against Lenken and Ms Pony. That plainly wastes the Court's time and resources and unnecessarily increases cost for Vimage."
"a. Vimage seeks to ensure that all relevant defendants are at the trial in order for the Court to determine which parties are responsible for the alleged infringing acts.
b. At the time of issuing the claim, Vimage acted reasonably in identifying the First Defendant and the Second Defendant as the appropriate defendants based on the T&Cs of the website complained of and the registrant domain name information. It would be unjust to shut them out from an amendment to reflect subsequent developments.
c. The change in the T&Cs on the smartbreeder.com website has not been explained. It remains unclear why the name of the responsible party changed, when it changed, and whether that reflected the underlying facts. Similarly, although the First Defendant was the registrant of the smartbreeder.com domain, those details appear to have been subsequently hidden from public view.
d. Lenken and Ms Pony appear to be closely connected with the First and Second Defendants. The Second Defendant is a managing director of Lenken as well as being the sole director and shareholder of the First Defendant. In addition, the Second Defendant is named as the buyer in some documents relating to order of ultrasound scanners from a Chinese company.
e. It has been admitted in correspondence that Lenken has dealt in ultrasound scanners
f. If joinder is not permitted, Vimage will be forced to bring separate proceedings against Lenken and Ms Pony. That plainly wastes the Court's time and resources and unnecessarily increases cost for Vimage."
Mr Kimbell noted at para [16] of his judgment that the proposed defendants did not really have an answer to those points. He quoted the text of CPR 19.2 and referred to the Court of Appeal's judgment in The Welsh Ministers v Price and others [2017] EWCA Civ 1768, [2018] BCC 93, [2018] 1 BCLC 1, [2017] WLR(D) 749, [2018] 1 WLR 738, [2018] 1 All ER (Comm) 1108, [2018] WLR 738, [2018] 2 All ER 860. He directed himself that
"the 'two lodestars' are: (i) the policy objective of enabling parties to be heard if their rights may be affected by a decision in the case and (ii) the Overriding Objective in CPR Part 1."
"the 'two lodestars' are: (i) the policy objective of enabling parties to be heard if their rights may be affected by a decision in the case and (ii) the Overriding Objective in CPR Part 1."
He also considered the following passage of Angela Fox's Intellectual Property Enterprise Court, Practice and Procedure (3rd edition 2021):
"The Court recognises that occasionally the facts on which a claim against another party might be based might not emerge until after particulars of claim have been served. Consequently, in general the court will permit the addition of a new party if it is likely to assist the court in the efficient resolution of all matters in dispute."
"The Court recognises that occasionally the facts on which a claim against another party might be based might not emerge until after particulars of claim have been served. Consequently, in general the court will permit the addition of a new party if it is likely to assist the court in the efficient resolution of all matters in dispute."
The deputy judge was satisfied that the court ought to exercise its power to permit Lenken and Ms Pony to be joined to these proceedings essentially for the reasons advanced by Vimage. He observed at para [18]:
"This is a classic case of facts emerging after proceedings have been served which justify a party or parties being added. The existing Defendants in their defence identified Lenken as being the party behind the website said to the conduit for at least some of the alleged infringements. That in turn led to Ms Pony. It would make no sense, in my judgement, for Vimage to be compelled to issue new proceedings against Lenken and Ms Pony in these circumstances. If they did so, those new proceedings would have such a degree of overlap with these proceedings that they would almost inevitably be consolidated in any event. In my judgement, it saves time and costs to avoid this and instead to permit joinder of Lenken and Ms Pony to these proceedings."
As to the application for permission to amend, Mr Kimbell directed himself that any application to amend must also meet the cost-benefit test described in Temple Island v New English Teas [2011] EWPCC 19 at [25] – [33] and in Fox at para 4-119. He added at [24]:
"a. Permission to amend can be refused on the ground that the text of the amendment was not expressed sufficiently clearly – see Vol 1 of the White Book 2021 at 17.3.5 citing Swain-Mason v Mills & Reeve LLP (Practice Note) [2011] EWCA Civ 14; [2011] 1 WLR 2735 at [107]) and Hague Plant Ltd v Hague [2014] EWCA Civ 1609; [2015] C.P. Rep. 14
b. The party seeking permission needs to show the claim as amended has some prospects of success - see Vol 1 of the White Book 2021 at 17.3.6. The question is whether the proposed new claim has a real prospect of success. An application for permission to amend a defence will be refused if it is clear that the proposed amendment has no prospect of success (Groveholt Ltd v Hughes [2010] EWCA Civ 538 at [50]). Thus, the court may reject an amendment which is inherently implausible, self-contradictory or is not supported by contemporaneous documentation."
b. The party seeking permission needs to show the claim as amended has some prospects of success - see Vol 1 of the White Book 2021 at 17.3.6. The question is whether the proposed new claim has a real prospect of success. An application for permission to amend a defence will be refused if it is clear that the proposed amendment has no prospect of success (Groveholt Ltd v Hughes [2010] EWCA Civ 538 at [50]). Thus, the court may reject an amendment which is inherently implausible, self-contradictory or is not supported by contemporaneous documentation."
The proposed defendants had opposed the proposed amendment on grounds of lack of clarity and cogency which the deputy judge had no difficulty in rejecting. He was satisfied that all the amendments met the IPEC cost-benefit test and helpfully particularized and focused the claimant's case in a way that assisted the defendants and the court. He directed the amended pleading to be filed within 14 days.
All the defendants denied that they had drawings or samples of the infringing article and offered to file a witness statement to that effect which Mr Kimbell accepted.
The judgment may have addressed three short and frequently recurring issues but it contains a lot of law. Anyone wishing to discuss this article may call me on 020 7404 5252 or send me a message through my contact page.
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