Application des Gaz SA v Falks Veritas Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE STAMP,LORD JUSTICE ROSKILL |
| Judgment Date | 22 May 1974 |
| Judgment citation (vLex) | [1974] EWCA Civ J0522-2 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 May 1974 |
[1974] EWCA Civ J0522-2
In The Supreme Court of Judicature
Court of Appeal
Appeal (by leave of Mr. Justice Whitford) by plaintiff from order of Mr. Justice Whitford on 19th November, 1973.
The Master of the Rolls (Lord Denning),
Lord Justice Stamp and
Lord Justice Roskill.
Mr. VIVIAN PRICE, Q.C., and Mr. W. BRUCE SPALDING (instructed by Messrs. Titmuss Sainer & Webb) appeared on behalf of the Appellant Plaintiff.
Mr. F.P. NEILL, Q.C., and Mr. RALPH LUNZER (instructed by Messrs. Ashurst Morris Crisp & Co.) appeared on behalf of the Respondent Defendant.
1 BEFORE ENGLAND JOINED THE COMMON MARKET
This is the first case in which in this Court we have had to consider the Treaty of Rome. It comes about because of a tin-can. If you should go for a picnic or camping, you will be likely nowadays to take with you something to boil water. One of the most useful is a tin-can containing butane gas in liquid form. It is a small round tin, 3½ inches high and 3½ inches in diameter, with a domed top. The tin is completely air-tight. When you want to use it, you fit it into a holder, pierce the top, and light the flame. It is a very ordinary sort of tin, but the first one of its shape was made by a French company called Application des Gaz S.A. I will call the company the "Gas" Company, and the tin the "Gaz" tin. There is no copyright in the tin. But there is, or may be, copyright in a drawing of it which was made beforehand. The drawing was made by M. Robert Faure, a French citizen. He made it 18 years ago. France is, of course, a member of the Copyright Convention. French citizens are entitled to the protection of our copyright law, just as our own citizens. It was done by Order in Council under section 32 of the Copyright Act, 1956. The drawing by Mr. Faure was a simple design for the tin-can. But it is said to be an "original artistic work" such as to be the subject of copyright, even though it has no artistic value, see section 3(1)(2) of the Copyright Act, 1956. M. Faure assigned his copyright in the drawing years ago to the French Gaz Company. That company now claims the copyright in it.
Nevertheless, before 1968 the French company could not prevent anyone from copying the drawing of the Gaz tin. The reason was because the drawing was an industrial design. As such, it was not within the protection of our copyright laws, seesection 10 of the Copyright Act, 1956, So it follows that before 1968 anyone could have made a tin of exactly the same shape as the Gaz tin without being in breach of the law.
But in 1968 much of section 10 was repealed by the Design Copyright Act, 1968. As a result industrial designs are now protected by the law of copyright. Since that Act came into force on 25th October, 1968, the copyright in an industrial design is infringed by anyone who reproduces it in any material form — see section 3(5) of the 1956 Act. The reproduction may be in two dimensions or in three. It may be reproduced on paper by drawing a similar design. It may be reproduced in metal by making an object of similar shape, that is, the shape proposed by the design. The only exception is when the object looks so different from the design that no ordinary person would take it to be a reproduction of it, see section 9(8) of the 1956 Act.
I must now tell you about an English company — Falks Veritas Ltd. I will call it the English Veritas Company. They manufacture all sorts of camping equipment. In particular metal holders, such as gas-burner cylinders and appliances. For some years they have had a licence from the French Gaz Company. This licence enables them to make tin-cans containing liquified gas without thereby infringing the patent of the French Gaz Company: (but it would appear that the licence does not enable the English Company to make tin-cans of the Dame shape as the Gaz tins). In return for this licence, the English Veritas Company agreed to pay a substantial royalty to the French Gaz Company. This went on for some years with the English Veritas Company making tin-cans of a different shape from the Gaz tins.
But in April 1970 the English Veritas Company decided to make tins of the same shape as the Gaz tins. They did this because it was a good business move. The tins could be standardised.The Veritas tins could be used in the same holders as the Gaz tins. The two would be interchangeable. The only difference was that the Gas tins were painted blue. The Veritas tins were painted orange. This venture proved to be a great success. The English Veritas Company sold many Veritas tins, and paid royalties on them to the French Gaz Company.
No doubt the French Gaz Company were glad to receive the royalties. But, nevertheless, they took great exception to this new venture by the English Veritas Company. The French Gaz Company had long ago granted a concession to another English Company called PTC-Langdon Ltd. 3y this concession they granted to the English concessionaires the exclusive right to make and sell their Gaz products in the United Kingdom, including, of course, their blue Gaz tins and the holders. The new orange Veritas tins cut directly into their exclusive market because the Veritas tins could be used in the Gaz holders.
In order to put a stop to this competition, the French Gaz Company and their English concessionaires took several steps. The case has not yet been tried. So I can only give the allegations made by the English Veritas Company, which may, or may not, be well founded. They allege that the English concessionaires of Gaz approached the wholesale firms who handled camping equipment. These firms had been accustomed in the past to handle both the Gaz products and the Veritas products. But when the English Veritas Company put their orange Veritas tins on the market, the English concessionaires of Gaz told the wholesalers that, if they continued to distribute the Veritas products, they would no longer supply them with the Gaz products. Faced with this threat, some of the wholesalers entered into written agreement with the English concessionaires of Gaz whereby they agreed to handle Gaz products only.
In addition, on 12th February, 1972, the French Gaz Company brought an action against the English Veritas Company. They claimed that, by making and selling the orange Veritas tins, the English Company had infringed the copyright in Pi. Faure's drawing showing the design of the Gaz tin. They claimed that all the orange Veritas tins belonged to them. They demanded that they be delivered up: and claimed damages for conversion of those that had been sold. They claimed an injunction also.
In June, 1972, the English Company put in a defence. They said that M. Faure's drawing was not the subject of copyright. It was not an original artistic work. It was just a conventional shape of tin. They also said that the French Gaz Company could not complain, because they had accepted royalties on the orange Veritas tin and had acquiesced in the production of them, or were estopped from complaining.
That was the state of the pleadings before the United Kingdom Joined the Common Market. The defences were:- (1) No copyright. (2) Acquiescence or estoppel.
2. AFTER ENGLAND JOINED THE COMMON MARKET
On 17th October, 1972, the Parliament of the United Kingdom passed the European Community Act, 1972. It said that the Treaty of Rome was to be given legal effect in the United Kingdom. It took effect from 1st January, 1973.
A few months later the English Veritas Company thought that there were provisions in the Treaty which gave them additional defences. They sought to amend their defence by making these allegations against the French Gaz Company.
(i) Abuse of dominant position.
The English Veritas Company said that the French Gaz Company, in association with their English concessionaires, had abased their dominant position contrary to Article 86 of the Treaty of Rome. The abuse lay in bringing pressure to bear on wholesalers, in that they insisted that those wholesalers should handle the Gaz products only. If the wholesalers handled Veritas products, they would not supply them with Gaz products. The would also sue the wholesalers for infringement of copyright and damages for conversion.
(ii) Concerted Practice to Prevent Competition
The English Veritas Company also said that by those measures the French Gaz Company, in association with their English concessionaires, had joined in a concerted practice contrary to Article 85 of the Treaty of Borne. They had sought to enforce their alleged copyright so as to prevent or restrict competition within the Common Market.
The French Gaz Company opposed the amendments. Mr. Justice Whitford allowed them to be made. The French Gaz Company appeal to this Court.
Mr. Vivian Price, Q.C., for the French Gaz Company acknowledges that the Court has a wide power to allow amendment of pleadings: see Order 20, r. 8. But he says that these amendments would change the character of the case altogether: that they bring in matters since the action was commenced: that questions under the Treaty of Rome should be dealt with in separate proceedings altogether: and that these amendments would be useless.
3 CAN THE COURT TAKE ACCOUNT OF THE TREATY? The first point taken by the French Gaz Company was thattheir claim for infringement of copyright arose in 1970 and 1971 — long before we joined the Common Market. The writ was issued on 12th April, 1972, The rights of the parties ought, they said, to be decided according to the law as it stood then": and not as altered by the Treaty of Rome, which did not become applicable here until 1st January, 1973. The Treaty, they said, ought not to be applied retrospectively so as to affect the rights of the parties in actions already...
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