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Copyright Lawyer: IPEC Update

May 19, 2015

On 8 May 2015, His Honour Judge Hacon handed down judgment in the Intellectual Property Enterprise Court (IPEC) in respect of a copyright infringement claim.

The case provides a helpful analysis of when an inference of copying may be established; in what circumstances late applications to introduce new evidence should be allowed in IPEC; and, in circumstances where the issue of quantum (i.e. if a claimant is successful, how much should the defendant pay to them) was dealt with at the same time as liability. The full judgment can be found here.

Facts

The case involved a berry design created by the Bodo Sperlein in 2001 called “Red Berry”, which was placed on various different pieces of tableware and proved to be a success.

In 2013, an employee of Bodo Sperlein came across items of tableware in a store run by the first defendant which they initially believed were part of the Red Berry range that was produced by Bodo Sperlein. However, upon closer inspection, the products bore the name of Sabichi and came from their own range of tableware called “Red Blossom” and litigation ensued.

Inference of copying

In this case, it was found by HHJ Hacon that there would be an inference of copying, as the designs were so similar. In particular, the fact that exactly the same shade of red was used for the berries in both designs made it almost inconceivable that no copying had taken place without a compelling explanation.

HHJ Hacon then had to consider whether the defendants had produced compelling evidence of independent design, therefore rebutting the inference of copying. As the designer or the design assistant could have seen the Red Berry design, and no evidence of an alternative source of inspiration was provided by the designer, it was found that the Red Blossom designs were copies of the Red Berry design.

Given that copying had been established, it was then necessary to establish whether a substantial part of the Red Berry design had been copied. A simple comparison of the works by HHJ Hacon left little doubt that the design was copied in substantial part.

Admissibility of late evidence

In this case, late applications from both Bodo Sperlein and Sabichi were successfully made to introduce further evidence on the first morning of the trial. However, HHJ Hacon stated that only on rare occasions will such applications be allowed in IPEC. The Judge highlighted some important considerations to keep in mind when determining whether to allow late evidence. These included:

  1. Whether the opposing party is in a position to deal with the new evidence;
  2. Whether there had been a reasonable opportunity to file the evidence earlier;
  3. The reason for the delay;
  4. Whether the new evidence could be dealt with during the trial, in particular in cross-examination of a witness;
  5. Whether the evidence is relevant to the principle issues before the court.

Deductible expenses from an account of profits

In this case, Bodo Sperlein elected for an account of profits, rather than an inquiry as to damages. Questions arose as to whether there should be any deductions from the profit made by the Sabichi Homewares for the sale of the infringing products. The following points need to be considered in relation to any deduction;

  1. Costs associated with only the defendant’s acts of infringement should be distinguished from general overheads of the business;
  2. Deductions can be made if an overhead was increased by the acts of infringements (as an example, in this case, a deduction was made in respect of import duty on the infringing products), or if the defendant was running to maximum capacity and the infringing business replaced an alternative business; and
  3. The burden is on the defendant to prove that these costs have been incurred.

Conclusions

The case provides useful guidance as to when an inference of copying will be found and how that inference may be able to be rebutted by a defendant, what factors may assist a late application to admit evidence if it is needed, and when an account of profits is calculated, what overheads may be deducted from those profits.

If you have any questions relating to copyright law or any other intellectual property matter, please contact our intellectual property specialists at Waterfront on 0207 234 0200 or contact@waterfront.law.