Mei Fields Designs Ltd v Saffron Cards and Gifts Ltd
| Jurisdiction | England & Wales |
| Judge | David Stone |
| Judgment Date | 06 June 2018 |
| Neutral Citation | [2018] EWHC 1332 (IPEC) |
| Court | Intellectual Property Enterprise Court |
| Docket Number | Case No: IP-2017-000122 |
| Date | 06 June 2018 |
[2018] EWHC 1332 (IPEC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
INTELLECTUAL PROPERTY ENTERPRISE COURT
Royal Courts of Justice
Rolls Building
Fetter Lane, London, EC4A 1NL
David Stone
(sitting as an Enterprise Judge)
Case No: IP-2017-000122
Ms Ashton Chantrielle (instructed by Keystone Law Limited) for the Claimant
Mr Jonathan Moss (instructed by Steeles Law Solicitors Limited) for the Defendants
Hearing dates: 25 and 26 April 2018
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.
David Stone (sitting as an Enterprise Judge):
Mei Fields designs greeting cards. She has designed over 2300 such cards, many of them involving swatches of fabric decorated with beads, sequins and/or stitching. Images of some of her cards appear later in this judgment. It is alleged that copyright in Mrs Fields' card designs (the “Works”) has been infringed by Saffron Cards and Gifts Limited (“Saffron”). It is also alleged that the sole director and shareholder of Saffron, the Second Defendant Mr Paul Steele, is jointly and severally liable for the infringing acts of Saffron.
For present purposes, the allegedly infringing greeting cards fall into two groups: the first, which I will call Group A, are cards designed by Mrs Fields and produced and sold by Saffron after 21 March 2016, the date on which the Claimant, Mei Fields Designs Limited (“MFD”) terminated the licence it had with Saffron for Saffron to produce cards designed by Mrs Fields. The second, Group B, are cards designed by Saffron's designers which are alleged to be infringing copies of cards designed by Mrs Fields.
Saffron and Mr Steele both deny copyright infringement. In relation to the Group A cards, Saffron's main argument is that ownership of copyright in Mrs Fields' cards never sat with her, and so MFD does not own the relevant copyright, and cannot bring these proceedings. The bulk of the two day trial was taken up with the ownership issue. In short, MFD says that Mrs Fields designed the cards and assigned the copyright to it. The Defendants say that when Mrs Fields designed the cards, she was employed by Metropolis Worldwide Limited (“Metropolis”) and that Metropolis therefore solely owned the copyright in the cards. Alternatively the Defendants say that, as a director of Metropolis, Mrs Fields only holds any copyright on trust for Metropolis. In the further alternative, the Defendants say that Mrs Fields created the cards together with various employees of Metropolis, and so any copyright is jointly owned with Metropolis. In any event, the Defendants say that Metropolis sold its intellectual property to Saffron in 2014 and that therefore MFD no longer holds any enforceable rights in such property. The ownership issue arises only in relation to cards produced by Mrs Fields prior to 23 December 2013.
MFD also alleges that 12 Group B cards created by Saffron in 2014 are unlawful copies of Mrs Fields' designs. Saffron admits that it had access to Mrs Fields' designs, and took the idea of a swatch of fabric attached to a card, but Saffron says that the cards simply are not close enough to infringe any copyright.
The Defendants counterclaim for a declaration that they have not infringed any copyright in the cards together with orders for publication and dissemination.
Further, Mr Steele says that whilst he was the sole director and sole shareholder of Saffron, he was not sufficiently responsible to be jointly liable for copyright infringement. This is important for MFD because earlier this year Saffron divested itself of most of its assets, so no longer has sufficient assets to meet any judgment against it for copyright infringement.
MFD's claim for unpaid royalties was settled prior to the hearing, and I need say no more about it.
Ms Ashton Chantrielle of counsel appeared for MFD. Mr Jonathan Moss of counsel appeared for Saffron and Mr Steele.
Background facts
Many of the background facts are uncontested, although the legal consequences of those facts are hotly disputed.
(a) Metropolis was incorporated on 13 January 2000. From then until December 2013, Mrs Fields and her husband Mr Paul Fields ran Metropolis. They were its only directors and shareholders. Both were also employed within the business: Mrs Fields as Design Director and Mr Fields in sales. Both received salaries for their roles.
(b) Initially, Metropolis distributed cards produced by third parties. It also published a bespoke postcard range for a Japanese distributor. In Spring 2000, Metropolis was granted a licence by the BBC to produce greeting cards, posters and t-shirts for the “Walking with Dinosaurs” series.
(c) From September 2000 until December 2013, Mrs Fields designed greeting cards that were then produced and sold by Metropolis. These cards included on the back “Designed by Mei Fields” and “Published by Metropolis”. Metropolis had some success – its ranges of greeting cards were sold in larger retailers including John Lewis, Paperchase, Selfridges, Liberty, Fortnum & Mason and Waitrose.
(d) In April 2011, suffering from cash flow problems and following professional advice, Metropolis entered into a Company Voluntary Arrangement (“CVA”). Metropolis continued to trade.
(e) In April 2012, following an approach from a third party wishing to license Mrs Fields' designs, Mr and Mrs Fields took advice, and set up the Claimant, MFD, to own and exploit the copyright in Mrs Fields' designs for greeting cards. On the same day that MFD was incorporated (10 April 2012), a document was signed purporting to be an assignment to MFD of all copyright owned by Mrs Fields in the cards she had designed and in all future cards (the “10 April 2012 Document”). The legal effect of that document is in dispute. On 12 April 2012, MFD entered into two licence agreements as licensor, one with Metropolis and one with Swan Mill Paper Company Limited. A Metropolis board minute of 17 April 2012 also mentions the set up.
(f) Despite the CVA, Metropolis struggled financially. In December 2013, Metropolis stopped making payments into the CVA and filed an intention to go into administration. Mr Philip Armstrong was appointed as one of the joint administrators. The assets of the business were offered for sale. These expressly excluded the copyright in the cards designed by Mrs Fields, as noted in:
i. Mr Steele's email to one of his advisors dated 6 December 2013;
ii. The posting of the assets at IP-BID. com on 10 December 2013;
iii. The internal memo from FRP Advisory dated 17 December 2013; and
iv. The letter from FRP Advisory to creditors dated 17 January 2014.
(g) Mr Steele, who is not himself particularly creative (his words) but has a long experience in creative industries, expressed an interest in buying Metropolis's assets. Mr Steele incorporated Saffron on 12 December 2013 as a corporate vehicle to own the assets acquired from Metropolis. Saffron entered into a licence with MFD on 23 December 2013 (the “Licence Agreement”) under which Saffron would produce cards to designs licenced from MFD. The Licence Agreement is clear on its terms that MFD owns all copyright in the designs created by Mrs Fields. Mr and Mrs Fields were paid out on the termination of their employment with Metropolis as at 31 December 2013. Whilst it was originally intended that Mr Fields be employed by Saffron as a sales director, that was not in the end pursued by Mr Steele.
(h) On 9 January 2014, Saffron purchased “certain of the business and assets” of Metropolis for £20,000.
(i) Mr Steele moved into Metropolis' premises in January 2014 and Saffron took over the business of Metropolis, including the employees (other than Mr and Mrs Fields). On the premises at the time Saffron moved in were a computer in the art department on which Mrs Fields' digital artwork was stored; archived samples of all of Mrs Fields' designs published by Metropolis; catalogues showing Mrs Fields' designs; warehouse stock and a permanent display of cards in the show room.
(j) Whilst Mrs Fields initially designed cards for Saffron under the terms of Saffron's Licence Agreement with MFD, the relationship soon soured. There is evidence of disputes between Mr and Mrs Fields on the one hand, and Mr Steele on the other hand, as early as April and May 2014.
(k) On 20 October 2014, Mrs Fields discovered that Saffron had launched two ranges of cards called Adorn and Couture. The Adorn and Couture ranges (which included the Group B cards referred to above) were launched in October 2014. MFD alleges that cards in both ranges are copies of cards designed by Mrs Fields.
(l) Saffron withheld royalty payments to MFD as early as July 2014, and then stopped paying royalties altogether in February 2016. On 21 March 2016, MFD terminated the Licence Agreement. Saffron continued to sell cards designed by Mrs Fields, including to John Lewis, Waitrose, Waterstones, Tesco and online via Amazon (ie the Group A cards).
(m) A letter before action was sent on behalf of MFD on 30 June 2016, although the parties had been in correspondence prior to that date. These proceedings were commenced on 5 July 2017.
(n) It was announced in the industry press on 6 March 2018 that Mr Steele had retired after 40 years in the card and gift trade. The same article announces the transfer of Saffron's assets to a third party card and gift company.
I note for completeness that the uncontested evidence before me was that it takes at least six months to prepare a new handmade range of greeting cards from initial design concept to launching the product on the market.
The written evidence...
To continue reading
Request your trial
-
KBF Enterprises Ltd v Gladiator Nutrition 3.0 Ltd (now dissolved)
...were followed and applied by Mr David Stone, sitting as a Deputy IPEC judge, in Mei Fields Designs Ltd v Saffron Cards and Gifts Ltd [2018] EWHC 1332 (IPEC), a judgment handed down on the first day of this 69 The question of when such an evidential burden arises had, in the meantime, been ......
-
Michael Penhallurick v MD5 Ltd
...set out in the judgment of David Stone, sitting as an Enterprise Judge in Mei Fields Designs Ltd v Saffron Cards and Gifts Ltd [2018] EWHC 1332 (IPEC): “42. I accept, as put to me by both counsel, that there is no single test to be applied. Rather, it seems to me that the question of wheth......
-
Advanced Connection Ltd v Able Technology (Hong Kong) Ltd And Others
...court to come to any view on the veracity of such explanation and denial. 26. In MEI Fields Designs Ltd v Saffron Cards Ltd & Anor [2018] EWHC 1332 (IPEC), Judge David Stone observed at [113] as “ 113. Given the frequency with which such claims are made, there is a developing body of case l......
-
Sprint Electric Ltd v Buyer's Dream Ltd
...sitting as a judge of that court in Bayani v Taylor Bracewell [2018] EWHC B5 (IPEC) and MEI Fields Designs v Saffron Cards and Gifts [2018] EWHC 1332 (IPEC)). Essentially the same substantial hurdle provided for by the IPEC version of this rule applies in the Shorter Trial Scheme. In the S......