1) Redcrier Publications Ltd and Another v 1) Redrup Publications Ltd (t/a Complete Care Training) and Another
| Jurisdiction | England & Wales |
| Judge | Mr. Recorder Alastair Wilson QC |
| Judgment Date | 14 November 2013 |
| Neutral Citation | [2013] EWHC 3481 (IPEC) |
| Date | 14 November 2013 |
| Court | Intellectual Property Enterprise Court |
| Docket Number | Case No: CC13P02064 |
[2013] EWHC 3481 (IPEC)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
IN THE INTELLECTUAL PROPERTY ENTERPRISE COURT
Royal Courts of Justice
Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr Recorder Alastair Wilson QC
Case No: CC13P02064
Andrew Clay of Squire Sanders (UK) LLP for the Claimants
David Mitchell of Counsel, instructed by Davitt Jones Bould for the Defendants
Approved Judgment
Hearing dates: 8th October 2013
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The First Claimants in this action ("Redcrier") conduct a business in the provision of training manuals for care home staff in the UK. The subject of their business is sometimes called the Redcrier Silver Box training system, because the manuals are supplied to subscribing care homes in a cabinet prominently labelled with the words: "The Silver Box". A substantial upfront fee is paid by care homes for an initial subscription, and further fees are paid for updates to the manuals. As part of the service, Redcrier's customers are supplied with what I understand to be exam papers (or maybe their online equivalent) for care home staff. These are marked by Redcrier, who then post out certificates to those who pass the exams.
The business was originally founded by Mr. Redrup, the Second Defendant, but he sold it to Mr. Seville in 2007. Mr. Redrup continued to be closely involved in the business (though, according to him, there were some intermissions due to ill-feeling between him and Mr. Seville) until Mr. Redrup resigned at the beginning of December 2011, after which there was a mass exodus of half Redcrier's staff, who joined Mr. Redrup.
Mr. Redrup set up the First Defendant ("CCT") in January 2012 to conduct a business directly competing with Redcrier. No restrictive covenant has been relied on forbidding him to do so; had CCT and its staff set about writing a new set of manuals straight away, and marketed them alone, there could have been no objection to their activities. This is, however, not what they did. On the contrary, they copied the Redcrier manuals, updated them in some or all cases, and CCT was able to start trading in them more or less immediately, though I do not know the exact date on which they started.
Around October 2012, CCT distributed a flyer offering to provide Redcrier customers with what amounted to a seamless transfer to CCT's upgrade service, even offering to correct exam papers previously distributed by Redcrier. (The flyer incidentally makes it clear that CCT had made a similar offer previously, in March 2012.) The flyer contained allegations about the manner in which Redcrier conducted their business, which led Redcrier to include libel and trade libel claims in this action. Complaint is also made about the use in the flyer of a photograph of the Silver Box, the copyright in which was vested in Mr. Seville.
On 10 January 2013 these proceedings were started. The proceedings were issued out of the Queen's Bench Division on account of the libel claim, notwithstanding the fact that a copyright claim is assigned to the Chancery Division. A defence was filed on 26 March 2013, accompanied by an application, inter alia, to strike out the copyright parts of the action, on the ground that such a claim should have been started in the Chancery Division. This latter point went no further: on 10 May 2013 the whole action was transferred by Master McCloud to the PCC. A CMC was fixed for 31 July 2013 and Redcrier (but not Mr. Seville) launched an application for summary judgment, which was fixed to come on at the same time.
On 31 July 2013 the application for summary judgment and the CMC came before me for a half-day hearing.
As the case then stood in relation to the manuals, Redcrier had published five editions before CCT started their business, and the Particulars of Claim asserted ownership of the copyright in all of them. CCT disputed the existence of copyright on the basis of lack of originality, partly on the basis that the Redcrier manuals had been derived from third party sources and partly, so far as later editions were concerned, on the basis that each later edition was too closely based on its predecessor to have any independent copyright. CCT also challenged Redcrier's title to copyright in the first four editions of the manuals because Mr. Seville was the owner of any copyright in those editions. Redcrier were unable to answer this latter point, and since the application for summary judgment was made by Redcrier alone, this gave rise to a difficulty for them. This defect in Redcrier's title was, in part at least 1, sorted out in the course of the hearing by means of the speedy execution of a short assignment from Mr. Seville to Redcrier, but there was no available time to continue the hearing and it was adjourned to a further hearing, which took place before me on 8 October 2013.
By the time of the resumed hearing, CCT had admitted that it had infringed copyright in the Manuals, without distinguishing between the various editions and they had abandoned the "copying from a third party" point. Accordingly they agreed to submit to the usual relief.
Mr. Redrup, however, does not admit that he is liable as a joint tortfeasor. It was agreed that the issue of his liability would have to be tried later, which prompted CCT to seek to postpone any enquiry (or account) against them until after the trial of the action against Mr. Redrup, submitting that it would be wrong for the Court
to be put in a position where it might have to conduct the same enquiry (or account) twice against different Defendants. This raised interesting questions of law and procedure, but in the end the parties very sensibly agreed that such questions would be avoided if the issue of Mr. Redrup's liability as a joint tortfeasor were to be tried at the same time as the enquiry (or account). I will so order.The issues of libel and trade libel arising from the flyer referred to above will have to be the subject of a separate trial, and the parties have agreed appropriate directions for that.
The only outstanding matters on which I must now rule are Redcrier's application for an interim payment of damages and the question of costs.
Interim Payment
CPR Rule 25.7 provides (so far as relevant here):
"(1) The court may only make an order for an interim payment where any of the following conditions are satisfied —
(a) the defendant against whom the order is sought has admitted liability to pay damages or some other sum of money to the claimant;
(b) the claimant has obtained judgment against that defendant for damages to be assessed or for a sum of money (other than costs) to be assessed;
(c) it is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money (other than costs) against the defendant from whom he is seeking an order for an interim payment whether or not that defendant is the only defendant or one of a number of defendants to the claim;
(d)…
(4) 2 The court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment."
As to the amount of such an interim award, there is a certain asymmetry about the nature of the jurisdiction conferred by CPR 25.7. Given the fact that there is going to be a delay before damages are finally determined, there is a risk that by the time they are, a Defendant will be unable to pay any excess due beyond the interim payment. Conversely, however, if a Defendant is ordered to pay too much by way of an interim award, there is a risk that the Claimant will be unable in due
course to repay the excess. It is not obvious why the amount of the interim award should be calculated so as to lay all this risk on the Claimant rather than upon the Defendant, who is, by this time, a proven wrongdoer, or at least that the risk should be shared between them. There is provision in CPR 25.8(2) for repayment in the event of an overpayment, but the natural reading of CPR 25.7(4) is that the amount awarded should not be more than what is likely to be awarded at the hearing, and the authorities demonstrate that the amount of an award should be calculated in a way that makes a repayment very unlikely to occur.For example, in Nuttall v Fri-Jado [2010] EWHC 1966 (Pat), Kitchin J. (as he then was) considered the application of CPR 25.7 to a claim for lost profits damages for patent infringement, and said:
" 10. CPR 25.7 provides that the Court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment. In Ultraframe (UK) Ltd v Eurocell Building Plastics Ltd [2005] EWHC 2111 (Ch) Pumfrey J. provided the following guidance as to the matters the court should take into account in determining what, if any, order to make:
'1. Generally, interim payment procedures are not suitable where factual issues are complicated, or where difficult points of law arise;
2. This does not prevent an award from being made even in respect of part of a complex claim if that part can be identified as what Robert Walker J. calls "an irreducible minimum part without venturing too far into the disputed area of fact or law";
3. It may well be appropriate simply to ignore certain heads of claim altogether whilst concentrating on those parts of the claim which can be assessed on established principles with some confidence;
4. While a broad brush approach to detail may be appropriate to an enquiry as to damages (see,...
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