Mr Damian Evans v Joseph Joseph Ltd
| Jurisdiction | England & Wales |
| Judge | Master Raeburn |
| Judgment Date | 04 February 2022 |
| Neutral Citation | [2022] EWHC 192 (Ch) |
| Docket Number | Case No: IL-2020-000050 |
| Court | Chancery Division |
[2022] EWHC 192 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
The Royal Courts of Justice
7 Rolls Buildings
Fetter Lane
London, EC4A 1NL
DEPUTY Master Raeburn
Case No: IL-2020-000050
Thomas St Quintin (instructed by McDaniel & Co Solicitors) for the Claimants
Hugo Cuddigan QC (instructed by Gowling WLG LLP) for the Defendants
Hearing dates: 22 and 23 September 2021
APPROVED JUDGMENT
I direct that this approved judgment, sent to the parties by email on 4 February 2022, shall deemed to be handed down on that date, and copies of this version as handed down may be treated as authentic.
Introduction
This is the trial of a claim issued under CPR Part 8 on 21 April 2020 in which the Claimants seek various declarations as to the meaning of provisions in a licence agreement relating to the use, administration and exploitation of design rights.
The First Claimant, Mr. Damian Evans is a designer who has designed a number of commercially successful kitchen utensils and devices. Mr. Evans exploits his designs through the Second Claimant, a company incorporated in 2011.
The First Defendant is Joseph Joseph Limited (“ JJL”); a well-known producer and vendor of homeware goods. The Second Defendant, Mr. Richard Joseph is a co-founder and the Managing Director of JJL.
This case is concerned with disputes that have arisen between the parties as to what their licence agreement requires of them by way of ongoing obligations and cooperation, particularly in relation to the filing, maintenance and use of certain design right registrations for kitchen products.
The Issues
The parties have agreed a list of issues to be determined by the Court in this claim which can be broadly summarised as follows:
i) What does the requirement in clause 3.7 of the licence agreement that the “parties mutually agree” mean?
ii) What does the requirement in clause 3.7 of the licence agreement, that a registration be “beneficial” mean?
iii) What does clause 3.7 of the licence agreement require the defendants to do in respect of renewal of registrations of designs?
iv) What does clause 3.8 of the licence agreement require the Defendants to do to use designs registered to the Claimants?
v) What does clause 3.8 of the licence agreement permit the Claimants to do if they obtain a registration of a design?
vi) What does clause 4.4 of the licence agreement require statements provided to the Claimants to record?
vii) What does clause 5 of the licence agreement entitle the Claimants' auditor to see?
viii) Should the declarations sought by the Claimants be made?
The Licence Agreement
On 1 January 2007, Mr. Evans and JJL entered into a licence agreement (the “ Original Agreement”) pursuant to which Mr. Evans licensed the intellectual property rights in his designs for kitchenware to JJL for commercial production. It also provided, amongst other things, that where JJL sought to apply to register intellectual property rights in a given territory, it would do so in the names of both JJL and Mr. Evans as joint proprietors.
Mr. Evans and JJL amended the Original Agreement by a Deed of Variation dated 11 April 2011. The Deed of Variation included a provision pursuant to which Mr. Evans assigned all intellectual property rights in his designs to JJL. This replaced the prior arrangement under the Original Agreement whereby Mr. Evans had owned the relevant rights and licensed them to JJL.
The Original Agreement as varied by the Deed of Variation (together, the “ Licence Agreement”), continues to govern the relationship between the parties.
Under the Licence Agreement, the following definitions are used:
“ the Designs” are defined as:
“… the designs details of which are given in the Schedule to this Licence and any other designs in which the Licensor owns the Rights and which the Licensor and Licensee both agree are to be subject to the terms of this Agreement”;
“ the Rights” are defined as:
“ …all vested contingent and future rights of copyright United Kingdom and Community design right (whether registered or unregistered) and all accrued rights of actions and all other rights of whatever nature in and to the Designs whether now known or in the future created to which the Licensor is now or may at any time after the date of this agreement be entitled under any of the laws in force in each and every part of the world;”
“ the Licensed Articles” are defined as:
“ …any articles manufactured by the Licensee [or by the Manufacturer for the Licensee] and to which any of the Designs is applied”;
“ Licensor” means Mr. Evans;
“ Licensee” means JJL;
“ Joseph Joseph” refers to “Richard Joseph, Joseph Joseph Limited”;
“ the Manufacturer” means JJL;
“ the Term” means the period of time commencing from 1 January 2007 in perpetuity;
“ Territory” is defined as: “worldwide”;
“ Net Sales Value” is defined as:
“…in relation to any of the Licensed Articles, the price charged to the customer less any value added tax or other sales tax, carriage charges and credit notes raised for returned goods, and after deducting any allowances for lost or damaged merchandise; provided that where any of the Licensed Articles is incorporated into a larger product, the Net Sales Value shall be the price that would have been charged to the customer if the Licensed Article in question had been sold on its own less any such deductions. In the case of sales other than in arm's length transactions the price shall be deemed the average Net Sales Value of the relevant Licensed Articles which have been sold in arms' length transactions during the accounting period under clause 4 below during which sales other than in arm's length transactions took place. If there have been no arm's length sales the price shall be that of the subsequent resale price in the first arm's length transaction.”
Clause 3.1 (as amended) provides:
“ Damian Evans hereby assigns by way of present and future assignment to Joseph Joseph with full title guarantee the Rights to hold to Joseph Joseph its successors and assigns absolutely throughout the world for the full period of all such and any of the Rights and all renewals reversions and extensions of such period subsisting or arising under the laws in each and every part of the world and afterwards so far as permissible in perpetuity to include the right to sue for infringement of the Rights occurring prior to the date of this assignment”.
Clause 3.7 (which replaced a corresponding clause in the Original Agreement) provides:
“Joseph Joseph warrants and undertakes to make it's [sic] best efforts to protect and defend Joseph Joseph's Rights including registration of the Designs in Joseph Joseph's name in all Territories (where the parties mutually agree it is beneficial) which the Design will be sold and potentially sold and where competitors may manufacture and sell potential copies of the Designs. In the event that JJL does not or does not wish to register in a particular territory (“Damian Evans Territory”) within the Territories then Damian Evans shall be free, at his own expense, to take out such registrations as he deems fit (“Damian Evans Registrations”).”
Clause 3.8 (which also replaced a corresponding clause in the Original Agreement) provides:
“3.8 In the event that any registrations are made under clause 3.7 by Damian Evans then
3.8.1 Joseph Joseph grants to Damian Evans an exclusive licence (for production of the Designs) under the Rights to manufacture, distribute, offer for sale and sell the Licensed Articles in the Damian Evans Territory under the Damian Evans Registrations; and
3.8.2 In the event that Joseph Joseph subsequently wishes to exploit the said Damian Evans Territory or any of them Damian Evans will assign any such Damian Evans Registrations to Joseph Joseph upon reimbursement of the costs incurred by Damian Evans in registering such Damian Evans Registrations.”
Clauses 3.10, 3.11 and 3.12 provide:
“3.10 In the event that the Rights or any of them are not to be exploited by Joseph Joseph Joseph Joseph shall notify Damian Evans forthwith. Upon receipt of that notification Damian Evans shall, within 14 days of receipt of such notice, inform Joseph Joseph that Damian Evans requires the transfer of the said Designs no longer to be exploited.”
“ 3.11 Upon receipt of such Notice set out in 3.10 Joseph Joseph shall at its own expense transfer the Rights set out in the said notice to Damian Evans”;
“ 3.12 In the event that the Designs or any of them are not exploited for a continuous period of one year then the Licence in respect of those Designs shall terminate”.
Clause 4.1 provides:
“ In consideration of the rights granted under this Licence Agreement, the Licensee shall, subject to the following provisions, pay to the Licensor a royalty at the rate of 5 per cent of the Net Sales Value of all Licensed Articles which have been sold or otherwise disposed of on a commercial basis by the Licensee during the period in which any rights forming part of the Rights subsisted in the Licensed Articles which were the subject of such sale or other disposal.”
Clause 4.4 provides:
“ All royalties payable on the Licensed Articles sold or otherwise disposed of by the Licensee in accordance with clause 4.1 above shall become due and shall be paid by the Licensee to the Licensor within 30 days after the first day of January, April, July and October of each year, such payment to be accompanied by a statement showing the quantities of Licensed Articles sold or otherwise disposed of on a commercial basis by the Licensee, the Net Sales Value in respect of...
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Licensing Design Rights And The Burden Of Protection
...factual matrix has now become a key battleground. This was explored in the case of Evans and anor v Joseph Joseph Ltd and anor [2022] EWHC 192 (Ch). Of particular interest, were the terms 'best efforts', 'parties mutually agree' and 'beneficial'. Important too was the extent of the obligati......
-
Licensing Design Rights And The Burden Of Protection
...factual matrix has now become a key battleground. This was explored in the case of Evans and anor v Joseph Joseph Ltd and anor [2022] EWHC 192 (Ch). Of particular interest, were the terms 'best efforts', 'parties mutually agree' and 'beneficial'. Important too was the extent of the obligati......