Toy Wars - Cabo Concepts v MGA Entertainment
Patents Court (Mr Justice Mellor) Cabo Concepts Ltd v MGA Entertainment (UK) Ltd and another  EWHC 491 (Pat) (4 March 2021)
Yesterday I mentioned the cake war between Marks & Spencer and Aldi (see Jane Lambert Cake Wars 17 April 2021 NIPC News). Today I discuss the litigation between the suppliers of the Worldeez and LOL Surprise! toys, If you have never heard of either, this video LOLSurprise Lil Sister vs. Worldeez NEW! Who will win!?! by Adulting With Children should enlighten you. At the very least you should appreciate the children's pleasure as they unwrap their packages.
MGA's LOL Surprise! dolls appear to be well established in the UK market. They are described at para  of Mr Justice Mellor's judgment in Cabo Concepts Ltd v MGA Entertainment (UK) Ltd and another  EWHC 491 (Pat) (4 March 2021). Cabo Concepts says that it had planned to launch its Worldeez products in the UK but was forced to abandon the market because of certain communications between MGA Entertainment and a number of British toy distributors. It alleges that MGA Entertainment (UK) Ltd and its US holding company, MCA Entertainement Inc., entered anti-competitive agreements, abused a dominant position and made unjustified threats. It has brought an action for damages against those companies for infringements of arts 101 and 102 of the Treaty on the Functioning of the European Union and s.2 and s.18 of the Competiton Act 1998 and also for unjustified threats within the meaning of s.70 of the Patents Act 1977.
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CPR 63.2 (2) requires claims to which Section 1 of Part 63 Practice applies to be started in the Patents Court or the Intellectual Property Enterprise Court. Those cases include any claim under the Patents Act 1977. Even though it was only a relatively unimportant part of the claim, the threats action was enough to bring it within the scope of CPR 63.2 (2). In accordance with para 5.3 of the Part 63 Practice Direction, the parties agreed the issues and most of the directions for the trial of the action. However, there remained three upon which they could not agree:
- whether there should be a split trial in accordance with the usual chancery practice or whether liability and damages should be decided in one go;
- whether the case should be transferred to the Competition List or stay where it is for listing before an assigned judge with experience of competition law; and
- what disclosure should be ordered.
- the time that would be taken up at trial with the IP aspects would be much less than that needed to resolve all other issues,
- in terms of technical complexity, this case is at the very lowest end of the scale,
- the issues could be tried by any chancery judge and that
- it would be desirable for the action to be tried by a judge with expertise in competition law.
. Other factors to be derived from the guidance given by CPR Rule 1.4, which reflect a common sense and a pragmatic approach, may include whether a split would assist or discourage mediation and/or settlement; and whether an order for a split late in the day after the expenditure of time and costs might actually increase costs.
. All these sorts of factors seem to me to be potentially relevant and need to be taken into account in what is essentially a pragmatic balancing exercise in assessing how the case is likely to unfold according to whether there is or is not a split.
 It follows that each case falls to be assessed by reference to its own facts, features and peculiarities. Further, the assessment has to be made before the Court can responsibly take any reliable view as to the prospects of success, and thus as to whether quantum will be a live issue or not."
"........ a split will involve duplication of witnesses and some of the evidence. Furthermore, two trials will inevitably cost more than a single trial and it will take much longer to resolve the dispute. Contrary to the Claimant's submission, considerations of efficiencies, cost savings and time to achieve resolution all point towards a single trial."