Passing off and Copyright Infringement - Shua Ltd. v Camp and Furnace Ltd.
Standard YouTube Licence
Jane Lambert
Chancery Division (HH Judge Halliwell) Shua Ltd v Camp and Furnace Ltd [2020] EWHC 687 (Ch) (24 March 2020)
This was a trial of preliminary issues in a passing off and copyright infringement action that had been brought by Shua Limited ("Shua") against one of its shareholders, Camp and Furnace Ltd. ("Camp") and unfair prejudice proceedings that Camp has launched against Shua, its director and shareholder Joshua Burke ("Mr Burke") and his fellow shareholder Jonathan Lacey ("Mr Lacey").
The Passing off Claim
Shua offers an entertainment called Bongo's Bingo, That appears from the above promotional video to be a combination of bingo and disco. "Bingo" is described by Wikipedia as "a game of probability in which players mark off numbers on cards as the numbers are drawn randomly by a caller, the winner being the first person to mark off all their numbers." Having played the game once last Christman day at the Midland Hotel in Bradford for want of anything better to do, much of the appeal seems to lie in the calling of the numbers: "two little ducks 22", "unlucky for some 13", "number 10 Boris's den" and so on. There is apparently an American version of the game which is somewhat different.
For a number of years, Camp has offered Bongo's Bingo nights at its premises in Liverpool. The format for the event was suggested to Mr Burke by Mr Lacey. The dispute arose because both sides claimed the Bongo's Bingo brand. Shua claimed entitlement because the format of the entertainment was Mr Lacey's idea, his stage name was Jonny Bongo and he had appeared in most of the events. Camp claimed that the brand because the events had taken place at its venue and also because of an agreement that it thought it had reached with Messrs Burke and Lacey in 2015.
When Camp offered Bongo/s Bingo nights at its premises which did not involve Mr Burke or Mr Lacey using a logo which had been commissioned from one Murphy by Mr Burke, Shua sued Camp for copyright infringement and passing off. Camp counterclaimed for a declaration that it was entitled to the goodwill in the Bongo's Bingo brand in Liverpool and an injunction to restrain Shua from holding a Bongo's Bingo event in Liverpool without its licence.
The Unfair Prejudice Petition
S.994 (1) of the Companies Act 1996 provides:
"A member of a company may apply to the court by petition for an order under this Part on the ground—
(a) that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or
(b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial."
If the court is satisfied that the petition is well founded, its powers are very wide. S.996 (1) enables it to "make such order as it thinks fit for giving relief in respect of the matters complained of." These include orders to:
"(a) regulate the conduct of the company's affairs in the future;
(b) require the company—
(i) to refrain from doing or continuing an act complained of, or
(ii) to do an act that the petitioner has complained it has omitted to do;
(c) authorise civil proceedings to be brought in the name and on behalf of the company by such person or persons and on such terms as the court may direct;
(d) require the company not to make any, or any specified, alterations in its articles without the leave of the court;
(e) provide for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, the reduction of the company's capital accordingly. "
Camp's petition alleged that Shua was "subject to…legal and/or equitable constraints”, including a duty to “account…for 15% of all gross profits…earned from all BB events”. It sought restrictions on remuneration and prohibitions precluding Shua from holding events in Liverpool without Camp's consent.
History of the Proceedings
Shua issued its claim out of the Manchester District Registry on 23 May 2019, The action came on before His Honour Judge Stephen Davies on 30 May 2019. It is surmised that that judge was sitting as a chancery interim applications judge. He made an order that the issues of liability and injunctive relief in the passing off action should be tried as preliminary issues. Camp presented its unfair prejudice petition on 12 July 2019. At a hearing before Mr Lance Ashworth QC sitting as a judge of the High Court, the learned deputy judge directed that “the issue of whether the conduct of the affairs of [Shua] is subject to the equitable constraints set out in Paragraph 28 of the Petition…be tried as a Preliminary Issue” so as to “take place at the same time as the trial of the Action”. Both cases came before His Honour Judge Hodge QC on 22 Aug 2019 in order to clarify and limit the range of the issues under consideration, Judge Hodge QC directed that the issues for determination were (1) the ownership of the goodwill of the business and copyright in the Logos; (2) the issue identified by Mr Ashworth QC including the existence and terms of an agreement on 15th July 2015; and (3) all claims for injunctive relief flowing from the determination of those issues. Those issues came on for trial before His Honour Judge Halliwell on 9 Sept 2019. On the first day of the trial, he added two further questions for determination: whether (1) Camp is entitled to hold Bongo Bingo events in Liverpool and, if so, whether it is an exclusive right and (2) whether Camp is entitled to 15% commission in respect of events outside Liverpool. The judge tried those issues between 9 and 13 Sept and on the 4, 5 and 8 of Nov 2019. He delivered his judgment on 24 March 2020.
Ownership of the Goodwill in the Business
The learned judge quoted Lord Oliver's well-known speech in Reckitt and Colman Products Ltd v Borden Inc and others [1990] 1 WLR 491, [1990] RPC 341, [1990] 1 All ER 873, [1990] WLR 491, [1990] UKHL 12 on the ingredients of an action for passing off and directed himself that "a claimant’s reputation will not, in itself, suffice to found a claim. The claimant must be entitled to 'goodwill, in the form of customers, in the jurisdiction…'” (Paragraph [52] of Lord Neuberger's judgment in Starbucks (HK) Ltd and another v British Sky Broadcasting Group PLC and others [2015] 3 All ER 469, [2015] ECC 19, [2015] 1 WLR 2628, [2015] UKSC 31, [2015] WLR 2628, [2015] WLR(D) 229, [2015] FSR 29, [2015] ETMR 31. Hd also quoted Lord Macnaghten's speech on the nature of goodwill in Inland Revenue Commissioners v Muller & Co’s Margarine [1901] AC 217 at 233.
He directed himself at paragraph [55] of his judgment that:
"In a case such as the present where there are competing claims to the goodwill, it is necessary first to identify the business to which such goodwill might putatively appertain and the owner or owners of the relevant business. Once that has been done, it is necessary to identify the distinctive nature of the services that are supplied under the so-called ‘get-up’ and ascertain who is most closely responsible for it and, most importantly, with whose business the public most closely associate it. In Scandecor Development v Scandecor Marketing [1999] FSR 26, the Court of Appeal thus considered that the UK distributor of a business supplying posters in the UK - with all its local connections - was the owner of the goodwill, not the original supplier."
In the next paragraph, he said:
"Consistently with the proposition that the perceptions of the customer are critical, the courts will readily attribute goodwill to a writer or entertainer personally where that person has created or developed a name or non-de-plume and thus attracted a public following. This is the case regardless of whether a third party, such as a newspaper proprietor or broadcaster, has engaged them to provide such services. In Landa v Greenberg (1908) 24 TLR 441, the plaintiff contributed to a newspaper a weekly column for children under the nom-de-plume of “Aunt Naomi”. Following her dismissal, she succeeded in a claim against the proprietor of the newspaper on the basis that the name constituted part of her own stock-in-trade as a writer and it had become identified with her. In Hines v Winnick [1947] Ch 708, the plaintiff was engaged to produce burlesque musical entertainment with a group of musicians in the name of “Dr Crock and his Crackpots”. In the light of Eve J’s guidance in Landa v Greenberg (supra), Vaisey J concluded that the name “Dr Crock” had become part of the plaintiff’s stock-in-trade and it was not open to the defendant to make use of that name in connection with any person other than the plaintiff. No doubt, these authorities can be reconciled with the judgment of Lord Neuberger’s observations in Starbucks v BskyB (supra) on the basis that, in each case, the public associated the relevant name or non-de-plume more closely with the plaintiffs than anyone else and, as the plaintiffs’ “stock-in-trade”, the same could be treated as the asset of their personal business when marketing or negotiating the provision of their services."
Directing himself that the ownership of goodwill is generally to be assessed as at the date of the first alleged transgressions of the parties’ rights on the basis that the transgressions are only actionable from that time, His Honour found that the 18 Jan 2019 was the first occasion that Camp contended that Shua would not be entitled to use the name "Bongo's Bingo" after 31 July 2019. He therefore sought to address the issue of ownership as at 18 Jan, 14 May and 23 May 2019.
At paragraph [56] if his judgment, Judge Halliwell held that the goodwill belonged to Mr Lacey in his personal capacity as a self-employed entertainer, not Camp nor Mr Burke. The idea of combining bingo with disco was Mr Lacey's. He attracted a new audience to Camp's premises for the entertainment. The name Jonny Bongo was his stage name. He compered most of the shows and it was he whom the audiences came to see. The judge found that Mr Lacey had assigned the goodwill in relation to the Bongo's Bingo sign to a partnership between himself and Mr Burle. On the day before Shua issued its claim form against Camp, the partners assigned the goodwill to Shua.
The answer to the first question was that the goodwill belonged to Shua.
Ownership of the Copyright in the Logos
The transcript does not reproduce the logos but it is surmised that one may be the strip of letters that appears on the home page of Shua's website and the other those letters in a mauve roundel as appears on the YouTube video and Shua's twitter stream. The evidence before the judge was that Mr Burke had commissioned one Murphy to design the logos while he was employed by Camp inter alia to stage events at its premises. Shortly before the commencement of proceedings, Mr Murphy assigned such copyright as may have subsisted in the logos to Mr Burke and Mr Burke in turn assigned it to Shua.
It does not appear from the transcript that the subsistence of copyright in those logos was ever challenged. Mr Justice Whitford held in Re Karo Step [1977] RPC 355 that copyright can subsist in the artwork for a trade mark but that was before the Court of Justice;s decision in C-5/08 Infopaq International A/S v Danske Dagblades Forening [2009] EUECJ C-5/08, [2009] ECDR 16, [2010] FSR 20, ECLI:EU:C:2009:465, [2009] ECR I-6569, [2012] Bus LR 102 that a work in which copyright subsists must express the author's intellectual creation.
A consideration that did trouble the judge was that Mr Burke was employed by Camp inter alia to stage Bongo's Bingo events at its premises when he commissioned Mr Murphy. It was not unlikely that Camp paid or reimbursed Mr Murphy's fee. His Honour described it as an "untidy arrangement" with "blurred boundaries." Nevertheless, he was satisfied Mr Burke did not engage Mr Murphy to create the Logos in his capacity as an employee because he was at liberty to carry out promotional and other work during that period which did not fall within the scope of his contract of employment.
Consequently, the judge found that Shua owned the copyright in the logos.
Whether a Binding Agreement was reached by the Parties on 15 June 2015
Camp claimed an interest in the Bongo Bingo business by virtue of an agreement that it alleged that its former director, Miles Falkingham had made with Mr Burke on 15 June 2020. The judge found that a meeting had taken place between Mr Burke and Mr Falkingham but it had been very short. All that had been agreed was that Bingo Bongo events would continue to be held at Camp's premises on the previous arrangements. There may have been an intention to enter a more formal agreement because Mr Burke said he would instruct a solicitor friend to draw up an agreement but that had not happened. The judge concluded that there had been no binding agreement between the parties. Or at least not one that gave rise to an interest in the Bongo's Bingo brand..
Whether the Management of Shua was subject to Equitable Constraints
As Camp's case had depended on the existence of an agreement the finding that there had been no agreement meant that there could be no equitable constraints on Shua's management. The judge noted that:
"In the context of a Section 994 petition, “equitable constraints” are “equitable considerations which make it unfair for those conducting the affairs of the company to rely on their strict legal powers”, O’Neill v Phillips (supra) at 1099A-B (Lord Hoffman). In this respect, the concept of unfairness runs parallel to the concept of “just and equitable” as a ground for winding up and the guidance of the House of Lords in re Westbourne Galleries Ltd [1973] 1 AC 360 applies, O’Neill v Phillips (supra) 1099 B-C"
Referring to Lord Wilberforce's speech in Re Westbourne Galleries, His Honour observed that equitable considerations have to be based on or otherwise involve an agreement or understanding, implicit or otherwise, about the management of the affairs of the company. On the evidence before him, the judge could find no agreement, understanding or other basis for the relief claimed by the petitioner. The answer to this question was no.
Whether Camp is entitled to hold Bongo Bingo events in Liverpool and if so whether it is an exclusive right
In view of his finding that the goodwill in Bongo's Bingo belongs to Shua, the answer to the first question was no and the second did not arise. He added that his finding would have been different had there been a binding agreement on 15 June 2015 as alleged by Camp.
Whether Camp is entitled to 15% commission in respect of events outside Liverpool
In view of his earlier findings on the ownership of goodwill and the outcome of the 15 June 2015 meeting, the answer was "no".
Injunction
Even though this case had been listed as a trial of preliminary issues, Judge Halliwell concluded at paragraph [103.4] of his judgment that he could give judgment on the whole passing off action upon which he did not seem to have heard full argument or seen any evidence:
"I am satisfied that Shua is able to establish against C&F the essential requirements for a passing off action identified by Lord Oliver in Reckitt & Colman v Borden (supra), namely (1) it is entitled to the BB goodwill; (2) C&F has misrepresented to the public that the events initially marketed to take place in August 2019 were BB events; and (3) Shua has thereby sustained or is likely to sustain damage by reason of C&F’s misrepresentations."
Comment
"(a) regulate the conduct of the company's affairs in the future;
(b) require the company—
(i) to refrain from doing or continuing an act complained of, or
(ii) to do an act that the petitioner has complained it has omitted to do;
(c) authorise civil proceedings to be brought in the name and on behalf of the company by such person or persons and on such terms as the court may direct;
(d) require the company not to make any, or any specified, alterations in its articles without the leave of the court;
(e) provide for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, the reduction of the company's capital accordingly. "
Camp's petition alleged that Shua was "subject to…legal and/or equitable constraints”, including a duty to “account…for 15% of all gross profits…earned from all BB events”. It sought restrictions on remuneration and prohibitions precluding Shua from holding events in Liverpool without Camp's consent.
History of the Proceedings
Shua issued its claim out of the Manchester District Registry on 23 May 2019, The action came on before His Honour Judge Stephen Davies on 30 May 2019. It is surmised that that judge was sitting as a chancery interim applications judge. He made an order that the issues of liability and injunctive relief in the passing off action should be tried as preliminary issues. Camp presented its unfair prejudice petition on 12 July 2019. At a hearing before Mr Lance Ashworth QC sitting as a judge of the High Court, the learned deputy judge directed that “the issue of whether the conduct of the affairs of [Shua] is subject to the equitable constraints set out in Paragraph 28 of the Petition…be tried as a Preliminary Issue” so as to “take place at the same time as the trial of the Action”. Both cases came before His Honour Judge Hodge QC on 22 Aug 2019 in order to clarify and limit the range of the issues under consideration, Judge Hodge QC directed that the issues for determination were (1) the ownership of the goodwill of the business and copyright in the Logos; (2) the issue identified by Mr Ashworth QC including the existence and terms of an agreement on 15th July 2015; and (3) all claims for injunctive relief flowing from the determination of those issues. Those issues came on for trial before His Honour Judge Halliwell on 9 Sept 2019. On the first day of the trial, he added two further questions for determination: whether (1) Camp is entitled to hold Bongo Bingo events in Liverpool and, if so, whether it is an exclusive right and (2) whether Camp is entitled to 15% commission in respect of events outside Liverpool. The judge tried those issues between 9 and 13 Sept and on the 4, 5 and 8 of Nov 2019. He delivered his judgment on 24 March 2020.
Ownership of the Goodwill in the Business
The learned judge quoted Lord Oliver's well-known speech in Reckitt and Colman Products Ltd v Borden Inc and others [1990] 1 WLR 491, [1990] RPC 341, [1990] 1 All ER 873, [1990] WLR 491, [1990] UKHL 12 on the ingredients of an action for passing off and directed himself that "a claimant’s reputation will not, in itself, suffice to found a claim. The claimant must be entitled to 'goodwill, in the form of customers, in the jurisdiction…'” (Paragraph [52] of Lord Neuberger's judgment in Starbucks (HK) Ltd and another v British Sky Broadcasting Group PLC and others [2015] 3 All ER 469, [2015] ECC 19, [2015] 1 WLR 2628, [2015] UKSC 31, [2015] WLR 2628, [2015] WLR(D) 229, [2015] FSR 29, [2015] ETMR 31. Hd also quoted Lord Macnaghten's speech on the nature of goodwill in Inland Revenue Commissioners v Muller & Co’s Margarine [1901] AC 217 at 233.
He directed himself at paragraph [55] of his judgment that:
"In a case such as the present where there are competing claims to the goodwill, it is necessary first to identify the business to which such goodwill might putatively appertain and the owner or owners of the relevant business. Once that has been done, it is necessary to identify the distinctive nature of the services that are supplied under the so-called ‘get-up’ and ascertain who is most closely responsible for it and, most importantly, with whose business the public most closely associate it. In Scandecor Development v Scandecor Marketing [1999] FSR 26, the Court of Appeal thus considered that the UK distributor of a business supplying posters in the UK - with all its local connections - was the owner of the goodwill, not the original supplier."
In the next paragraph, he said:
"Consistently with the proposition that the perceptions of the customer are critical, the courts will readily attribute goodwill to a writer or entertainer personally where that person has created or developed a name or non-de-plume and thus attracted a public following. This is the case regardless of whether a third party, such as a newspaper proprietor or broadcaster, has engaged them to provide such services. In Landa v Greenberg (1908) 24 TLR 441, the plaintiff contributed to a newspaper a weekly column for children under the nom-de-plume of “Aunt Naomi”. Following her dismissal, she succeeded in a claim against the proprietor of the newspaper on the basis that the name constituted part of her own stock-in-trade as a writer and it had become identified with her. In Hines v Winnick [1947] Ch 708, the plaintiff was engaged to produce burlesque musical entertainment with a group of musicians in the name of “Dr Crock and his Crackpots”. In the light of Eve J’s guidance in Landa v Greenberg (supra), Vaisey J concluded that the name “Dr Crock” had become part of the plaintiff’s stock-in-trade and it was not open to the defendant to make use of that name in connection with any person other than the plaintiff. No doubt, these authorities can be reconciled with the judgment of Lord Neuberger’s observations in Starbucks v BskyB (supra) on the basis that, in each case, the public associated the relevant name or non-de-plume more closely with the plaintiffs than anyone else and, as the plaintiffs’ “stock-in-trade”, the same could be treated as the asset of their personal business when marketing or negotiating the provision of their services."
Directing himself that the ownership of goodwill is generally to be assessed as at the date of the first alleged transgressions of the parties’ rights on the basis that the transgressions are only actionable from that time, His Honour found that the 18 Jan 2019 was the first occasion that Camp contended that Shua would not be entitled to use the name "Bongo's Bingo" after 31 July 2019. He therefore sought to address the issue of ownership as at 18 Jan, 14 May and 23 May 2019.
At paragraph [56] if his judgment, Judge Halliwell held that the goodwill belonged to Mr Lacey in his personal capacity as a self-employed entertainer, not Camp nor Mr Burke. The idea of combining bingo with disco was Mr Lacey's. He attracted a new audience to Camp's premises for the entertainment. The name Jonny Bongo was his stage name. He compered most of the shows and it was he whom the audiences came to see. The judge found that Mr Lacey had assigned the goodwill in relation to the Bongo's Bingo sign to a partnership between himself and Mr Burle. On the day before Shua issued its claim form against Camp, the partners assigned the goodwill to Shua.
The answer to the first question was that the goodwill belonged to Shua.
Ownership of the Copyright in the Logos
The transcript does not reproduce the logos but it is surmised that one may be the strip of letters that appears on the home page of Shua's website and the other those letters in a mauve roundel as appears on the YouTube video and Shua's twitter stream. The evidence before the judge was that Mr Burke had commissioned one Murphy to design the logos while he was employed by Camp inter alia to stage events at its premises. Shortly before the commencement of proceedings, Mr Murphy assigned such copyright as may have subsisted in the logos to Mr Burke and Mr Burke in turn assigned it to Shua.
It does not appear from the transcript that the subsistence of copyright in those logos was ever challenged. Mr Justice Whitford held in Re Karo Step [1977] RPC 355 that copyright can subsist in the artwork for a trade mark but that was before the Court of Justice;s decision in C-5/08 Infopaq International A/S v Danske Dagblades Forening [2009] EUECJ C-5/08, [2009] ECDR 16, [2010] FSR 20, ECLI:EU:C:2009:465, [2009] ECR I-6569, [2012] Bus LR 102 that a work in which copyright subsists must express the author's intellectual creation.
A consideration that did trouble the judge was that Mr Burke was employed by Camp inter alia to stage Bongo's Bingo events at its premises when he commissioned Mr Murphy. It was not unlikely that Camp paid or reimbursed Mr Murphy's fee. His Honour described it as an "untidy arrangement" with "blurred boundaries." Nevertheless, he was satisfied Mr Burke did not engage Mr Murphy to create the Logos in his capacity as an employee because he was at liberty to carry out promotional and other work during that period which did not fall within the scope of his contract of employment.
Consequently, the judge found that Shua owned the copyright in the logos.
Whether a Binding Agreement was reached by the Parties on 15 June 2015
Camp claimed an interest in the Bongo Bingo business by virtue of an agreement that it alleged that its former director, Miles Falkingham had made with Mr Burke on 15 June 2020. The judge found that a meeting had taken place between Mr Burke and Mr Falkingham but it had been very short. All that had been agreed was that Bingo Bongo events would continue to be held at Camp's premises on the previous arrangements. There may have been an intention to enter a more formal agreement because Mr Burke said he would instruct a solicitor friend to draw up an agreement but that had not happened. The judge concluded that there had been no binding agreement between the parties. Or at least not one that gave rise to an interest in the Bongo's Bingo brand..
Whether the Management of Shua was subject to Equitable Constraints
As Camp's case had depended on the existence of an agreement the finding that there had been no agreement meant that there could be no equitable constraints on Shua's management. The judge noted that:
"In the context of a Section 994 petition, “equitable constraints” are “equitable considerations which make it unfair for those conducting the affairs of the company to rely on their strict legal powers”, O’Neill v Phillips (supra) at 1099A-B (Lord Hoffman). In this respect, the concept of unfairness runs parallel to the concept of “just and equitable” as a ground for winding up and the guidance of the House of Lords in re Westbourne Galleries Ltd [1973] 1 AC 360 applies, O’Neill v Phillips (supra) 1099 B-C"
Referring to Lord Wilberforce's speech in Re Westbourne Galleries, His Honour observed that equitable considerations have to be based on or otherwise involve an agreement or understanding, implicit or otherwise, about the management of the affairs of the company. On the evidence before him, the judge could find no agreement, understanding or other basis for the relief claimed by the petitioner. The answer to this question was no.
Whether Camp is entitled to hold Bongo Bingo events in Liverpool and if so whether it is an exclusive right
In view of his finding that the goodwill in Bongo's Bingo belongs to Shua, the answer to the first question was no and the second did not arise. He added that his finding would have been different had there been a binding agreement on 15 June 2015 as alleged by Camp.
Whether Camp is entitled to 15% commission in respect of events outside Liverpool
In view of his earlier findings on the ownership of goodwill and the outcome of the 15 June 2015 meeting, the answer was "no".
Injunction
Even though this case had been listed as a trial of preliminary issues, Judge Halliwell concluded at paragraph [103.4] of his judgment that he could give judgment on the whole passing off action upon which he did not seem to have heard full argument or seen any evidence:
"I am satisfied that Shua is able to establish against C&F the essential requirements for a passing off action identified by Lord Oliver in Reckitt & Colman v Borden (supra), namely (1) it is entitled to the BB goodwill; (2) C&F has misrepresented to the public that the events initially marketed to take place in August 2019 were BB events; and (3) Shua has thereby sustained or is likely to sustain damage by reason of C&F’s misrepresentations."
Comment
I have to say that there are aspects of this litigation that surprise me.
The first is the claimant's decision to bring the action in the Intellectual Property list in the Chancery Division rather than the Intellectual Property Enterprise Court ("IPEC"). There the case would have been managed tightly from start to finish and tried in 2 days by an Enterprise Judge. Recoverable costs would have been limited to £50,000. Equally, I am surprised that the defendant did not apply for transfer to IPEC.
This is the just sort of case that IPEC hears regularly. It usually disposes of them with just two hearings, namely a case management conference that can be conducted by telephone and a trial of no more than two days. In this case, there seem to have been a lot of interlocutory hearings:udge Stephen Davies on 30 May, Mr Ashoworth after the presentation of the petition and Judge Hodge on 12 June 2019 and again in August as well as an application to add to the list of issues on the first day of the trial. That trial lasted 8 days spread over two months. Judgment was delivered more than 6 months after the first day of the trial. The costs of all those hearings must be considerable.
The first is the claimant's decision to bring the action in the Intellectual Property list in the Chancery Division rather than the Intellectual Property Enterprise Court ("IPEC"). There the case would have been managed tightly from start to finish and tried in 2 days by an Enterprise Judge. Recoverable costs would have been limited to £50,000. Equally, I am surprised that the defendant did not apply for transfer to IPEC.
This is the just sort of case that IPEC hears regularly. It usually disposes of them with just two hearings, namely a case management conference that can be conducted by telephone and a trial of no more than two days. In this case, there seem to have been a lot of interlocutory hearings:udge Stephen Davies on 30 May, Mr Ashoworth after the presentation of the petition and Judge Hodge on 12 June 2019 and again in August as well as an application to add to the list of issues on the first day of the trial. That trial lasted 8 days spread over two months. Judgment was delivered more than 6 months after the first day of the trial. The costs of all those hearings must be considerable.
A factor that may have influenced the choice of venue is that both parties and most of their legal representatives are in the North of England. A trial in Manchester was obviously more convenient for all concerned than one in London. As I live in the North of England and have practised on the Northern and Northeastern Circuits for most of my career, I can understand that concern very well. However, paragraph 1.6 of the Intellectual Property Enterprise Court Guide state that Enterprise Judges are ready and willing to sit outside London. Judge Melissa Clarke has actually done so on at least one occasion (see APT Training & Consultancy Ltd & Another v Birmingham & Solihull Mental Health NHS Trust [2019] EWHC 19 (IPEC) (9 Jan 2019) which I blogged in Trade Marks: APT Training and Consultancy Ltd. and another v Birmingham & Solihull Mental Health NHS Trust 21 April 2019. I have obtained directions for trials in Leeds and Manchester on more than one occasion through all those cases settled before they came on for trial.
The case did come on for trial remarkably quickly, Proceedings were issued on 23 May 2019, the petition was presented on 12 July 2019 and the trial started on 9 Sept 2019. Having said that, perhaps an 8-day trial would have benefited from more time for preparation.
The second puzzling feature is the defendant's decision to launch an unfair prejudice petition. It seemed to add nothing to the defence and increased the list of issues that the judge had to try. It depended on the existence of an agreement between the parties on 15 July 2015 which had already been pleaded in the counterclaim. As the judge pointed out at paragraphs [91] and [92], it required the defendant to prove the existence of an underlying agreement, understanding or other obligation relating to the management of Shua which was inherently unlikely and in the end proved simply not to be there.
It is not clear why the judges who heard the interim applications ordered a trial of preliminary issues when there was nothing particularly complex or unusual about this case. Had it been brought in IPEC the parties would have agreed or the judge would have discerned at the case management conference a list of issues for trial upon which there would have been directions for disclosure and exchange of witness statements but the whole case would have been tried in one fell swoop. As it happened the judge ignored the limitations and decided the whole case as I noted above; but he did so without evidence or argument on misrepresentation and damage.
The second puzzling feature is the defendant's decision to launch an unfair prejudice petition. It seemed to add nothing to the defence and increased the list of issues that the judge had to try. It depended on the existence of an agreement between the parties on 15 July 2015 which had already been pleaded in the counterclaim. As the judge pointed out at paragraphs [91] and [92], it required the defendant to prove the existence of an underlying agreement, understanding or other obligation relating to the management of Shua which was inherently unlikely and in the end proved simply not to be there.
It is not clear why the judges who heard the interim applications ordered a trial of preliminary issues when there was nothing particularly complex or unusual about this case. Had it been brought in IPEC the parties would have agreed or the judge would have discerned at the case management conference a list of issues for trial upon which there would have been directions for disclosure and exchange of witness statements but the whole case would have been tried in one fell swoop. As it happened the judge ignored the limitations and decided the whole case as I noted above; but he did so without evidence or argument on misrepresentation and damage.
The decision to order the determination of the ownership of "the goodwill in the business" as a preliminary issue is particularly curious because goodwill does not exist in gross. It relates to a mark, get-up or other sign that distinguishes the goods or services of one supplier from those of all others, The court has to be satisfied that members of the public who buy the goods or services in question associate the sign with a particular supplier in relation to such goods and services and with none other. It is usually proved by showing the advertising for the goods or services in question, the sums spent on such advertising and sales under the mark. In the early days at least, it would be expected that most of the promotion of the Bongo's Bingo nights would have been undertaken by the venue. Mr Burke staged the event as Camp's contractor and Mr Lacey was the artist who drew the crowds but no enquiry seems to have been made as to whether the public came for a bingo or dance entertainment at Camp's premise or specifically to see Jonny Bongo.
Any copyright in Mr Murphy's work would have subsisted in his artwork for the logo rather than the logo itself. As I have already noted there has been since Inforpaq a higher originally threshold than there was when Mr Justice Whitoforfd decided Re Karo Step, As Mr Burke had been retained specifically to stage events fro Camp. The idea that Camp would have tolerated his running a major event entirely for himself would require very compelling evidence indeed.
Any copyright in Mr Murphy's work would have subsisted in his artwork for the logo rather than the logo itself. As I have already noted there has been since Inforpaq a higher originally threshold than there was when Mr Justice Whitoforfd decided Re Karo Step, As Mr Burke had been retained specifically to stage events fro Camp. The idea that Camp would have tolerated his running a major event entirely for himself would require very compelling evidence indeed.
Further Information
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