ATB Sales Ltd v Rich Energy Ltd

Trial dates: 12 and 13 March 2019

Judgment provided in Draft: 9 May 2019

APPROVED JUDGMENT

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.

INTRODUCTION

This is judgment in a copyright infringement claim. What is sought, amongst other things, is an injunction which would require the removal of the logo of the First Defendant, Rich Energy Limited, from the Formula 1 race car and website of the Rich Energy Haas Formula 1 motor racing team.

The Claimant has traded under the name ‘Whytes Bikes’ since 1994 as a bicycle designer and manufacturer. It has used a logo in the course of its business (“C's Logo”) of which a stag's head device is a substantial part (“C's Device”). The Claimant says that C's Device is an original artistic work designed in December 2008 by its employees Mr Guy Farrant and Mr Mark Morgan in the course of their employment. Accordingly, copyright subsists in it, and the Claimant is the owner of that copyright. At trial the Defendants abandoned their pleaded challenge of these points and now accept them.

The First Defendant markets an energy drink under the brand ‘Rich Energy’. The Second Defendant, Mr William Storey, is the director and sole shareholder of the First Defendant. The Third Defendant, Staxoweb Limited, is a digital marketing company founded by Mr Sean Kelly, who is a childhood friend of Mr Storey. The Defendants say Mr Storey commissioned the Third Defendant in May 2015 to design a brand identity for the First Defendant and that Mr Kelly, working with the Mr Storey, designed a logo (“D1's Logo”) of which a stag's head device is a substantial part (“D1's Device”). It is not disputed that the First Defendant has used D1's Device in the course of its business since it was incorporated in September 2015.

C's Device

D1's Device

The Claimant claims that:

i) D1's Device is a copy of the whole or alternatively a substantial part of C's Device;

ii) it did not consent to the First Defendant using it; and

iii) the First Defendant's use of D1's Device:

a) on products it has marketed and made available for purchase;

b) on the First Defendant's website;

c) on promotional, advertising and marketing materials including in its sponsorship of sporting events such as the Rich Energy Haas Formula 1 Motor Racing team;

is copyright infringement by reason of breach of sections 17, 18 and 20 of the Copyright Designs and Patents Act 1988 (“ CDPA 88”).

The Claimant claims that the Second Defendant and the Third Defendant are liable for such infringements as joint tortfeasors.

The Defendants deny copyright infringement. They say D1's Device was not copied, but independently designed without reference to, or any knowledge of, C's Device, and that the First Defendant owns the copyright in D1's Device. They do not deny that the First Defendant has used D1's Device as pleaded by the Claimant.

The issues which survive from His Honour Judge Hacon's list of issues compiled at the Case Management Conference on 1 May 2018 are:

i) Whether D1's Device was the result of copying C's Device or independently designed;

ii) If copied, whether D1's Device reproduces the whole or a substantial part of C's Device;

iii) Whether, if the court finds infringement, the Second and Third Defendants are jointly liable for the infringing acts.

Finally, the First Defendant filed a UK registered trade mark application for a mark including D1's Device in classes 5, 25 and 32 on 9 September 2015, which was registered on 4 December 2015 under UK trade mark registration no. 3126288 (“D1's Mark”). The Claimant says the use of D1's Mark is liable to be prevented in the United Kingdom by virtue of the law of copyright, being a ground of refusal of registration in section 5(4) Trade Marks Act 1994 (“ TMA”). The Claimant seeks a declaration of invalidity pursuant to section 47(2) TMA.

The Defendants at trial accept that this issue stands or falls with the copyright infringement case. If the court finds that D1's Device infringes copyright in C's Device, then they accept that the Claimant's claim for a declaration of invalidity of D1's Mark will succeed.

THE LAW

Copyright

It is now conceded by the Defendants that the Claimant's Device is an original graphic work, being an artistic work, in which copyright subsists and is owned by the Claimant.

Section 16(1) CDPA 88 provides that the owner of the copyright in a work has the exclusive right to do certain acts restricted by the copyright which include, inter alia, copying it, issuing copies of the work to the public, and communicating the work to the public. Section 20(2)(b) CDPA 88 makes clear that communication of a work to the public includes making it available on the internet, or as the wording of the statute provides: “the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them”.

By section 16(2) CDPA 88, a person infringes copyright in a work if he does, or authorises another to do, any of the acts restricted by the copyright without a licence. By section 16(3) CDPA 88, the restricted acts include doing that act: (a) in relation to the work as a whole or any substantial part of it; and (b) directly or indirectly.

There are a number of provisions of the CDPA 1988 which are to be construed so far as possible in conformity with articles 2 and 3(2) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (“the Information Society Directive”). That includes provisions with which we are concerned. This was explained by Arnold J in England & Wales Cricket Board v Tixdaq [2016] EWHC 575 (Ch) at para 65:

“65. …the starting point must be that ss. 16, 17 and 20 of the 1988 Act are to be construed so far as possible in conformity with arts 2 and 3(2) of the Information Society Directive. Article 2 gives authors and others the right to authorise or prohibit reproduction of works and other subject matter “in whole or in part”. It is clear from Infopaq I [ Case-5/08 Infopaq International A/S v Danske Dagblades Forening (EU:C:2009:465, [2009] ECR I-6569)] and subsequent authorities that, in the case of literary and artistic works within art. 2 of Berne, this does not mean that reproduction of any part is a restricted act. Rather, the CJEU has held that art.2(a) of the Information Society Directive is to be interpreted by reference to the rationale for granting protection, which in the case of literary and artistic works is the intellectual creativity they express. Thus, as the Court put it in Infopaq I at [39]:

“…the various parts of works thus enjoy protection under Article 2(a)… provided that they contain elements which are the expression of the intellectual creation of the author.””

Accordingly, when considering whether a “substantial part” of a copyright work has been taken for the purposes of section 16(3) CDPA 88, what matters is the extent to which that part contains elements which express the intellectual creation of the author. If it contains elements which express the intellectual creation of the author, then it is a substantial part. If it does not, it is not.

It is common ground that an essential part of proving copying is an unbroken causal connection between the original work and the infringing copy. That causal connection can be either direct or indirect, pursuant to section 16(3)(b) CDPA 88. A prima facie case of copying may arise if there is substantial similarity and proof of access to the original work by the alleged infringers. In the leading authority Designers Guild v Russell Williams Textiles [2000] 1 WLR 2416, at 2425, Lord Millet expressed the court's task as follows:

“The first step in an action for infringement of artistic copyright is to identify those features of the defendant's design which the plaintiff alleges have been copied from the copyright work. The court undertakes a visual comparison of the two designs, noting the similarities and the differences. The purpose of the examination is not to see whether the overall appearance of the two designs is similar, but to judge whether the particular similarities relied on are sufficiently close, numerous or extensive to be more likely to be the result of copying than coincidence. It is at this stage that similarities may be disregarded because they are commonplace, unoriginal or consist of general ideas. If the plaintiff demonstrates sufficient similarity, not in the works as a whole but in the features which he alleges have been copied, and establishes that the defendant had prior access to the copyright work, the burden passes to the defendant to satisfy the judge that, despite the similarities, they did not result from copying.

Even at this stage, therefore, the inquiry is directed to the similarities rather than the differences. This is not to say that the differences are unimportant. They may indicate an independent source and so rebut any inference of copying.”

Allegations of fraud/inauthenticity of documents

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