Original Beauty Technology Company Ltd v G4K Fashion Ltd
| Jurisdiction | England & Wales |
| Judge | Mr. David Stone |
| Judgment Date | 10 September 2021 |
| Neutral Citation | [2021] EWHC 2555 (Ch) |
| Docket Number | Case No: IL-2018-000105 |
| Year | 2021 |
| Court | Chancery Division |
[2021] EWHC 2555 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
Royal Courts of Justice
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr. David Stone
(sitting as a Deputy Judge of the High Court)
(Remotely via MS Teams)
Case No: IL-2018-000105
Mr. David Ivison (instructed by Mono Law) appeared on behalf of the 1st and 2nd Claimants
Mr. Chris Aikens (instructed by Fieldfisher) appeared on behalf of the Defendants
Approved Judgment
THE DEPUTY JUDGE:
This matter was listed before me today during the long vacation to deal with an urgent application by the First and Second Claimants (the Claimants) dated 26 August 2021. The Third Claimant is in liquidation and no longer playing an active role in the proceedings. The Claimants' application is in two parts. First, they seek an order that the Respondents provide answers to their Part 18 request dated 24 August 2021. Second, the Claimants seek directions for disclosure prior to the damages inquiry fixed to be heard over five days from 25 October 2021.
The Respondents took advantage of the listing to file their own application notice, dated 8 September 2021, seeking a contingent, reciprocal disclosure order. That is, if the Claimants are successful in their application for disclosure, the Respondents seek an identical order, mutatis mutandis. That application was made without permission and without proper notice, and was put on the following footing: “the Claimants' preference is for disclosure to be kept as limited as possible since they do not consider that the cost and effort involved in providing and reviewing extensive disclosure is justifiable as necessary or proportionate in the circumstances of this case”.
Background
The background to this case is set out in the judgment I gave on 9 July 2021, which can be found at [2021] EWHC 1848 (Ch). Relevantly for today's purposes, it is sufficient to note the following. After a trial over eight days, I gave judgment on 24 February 2021 in relation to the alleged infringement of UK unregistered design rights ( UKUDR) and Community unregistered design rights ( CUDR) in 20 selected garments (the Selected Garments) out of a total of 91 garments, which rights the Claimants said were infringed by the Defendants. That judgment can be found at [2021] EWHC 294 (Ch). I found that seven of the Selected Garments infringed both UKUDR and CUDR and 13 infringed neither right. I dismissed the passing off claim. A form of order hearing took place on 1 April 2021, where I made orders for dealing with the remaining 71 garments which had not then been adjudicated. I gave a short ex tempore judgment (which can be found at [2021] EWHC 836 (Ch)) on the Defendants' request for declarations of non-infringement. An issue arose after the form of order hearing in relation to the various colourways of some of the infringing garments, and I dealt with that in a judgment which can be found at [2021] EWHC 953 (Ch). I dealt with a further issue relating to costs where a Part 36 offer has been made: that judgment can be found at [2021] EWHC 954 (Ch). Also on 1 April 2021, I listed the matter for trial on 6 August 2021 to deal with any of the remaining 71 garments which the parties were not able to resolve. I gave directions to prepare for that trial, together with directions for the Claimants' election of a damages inquiry or account of profits in relation to all infringements. I listed the result of that election to be heard over five days from 25 October 2021.
Following the Claimants' election of a damages inquiry in relation to the infringing Selected Garments, and relevantly for today's applications, I then heard a CMC on 24 June 2021. At that CMC the Claimants made no request for disclosure (beyond Island Records v Tring disclosure) and, indeed, went so far as to say that disclosure was not necessary for the purposes of the damages inquiry. The Defendants requested a provision for disclosure but could not at that time say what it was in relation to which they sought disclosure. At the CMC, neither party requested disclosure under PD51U. I therefore ordered that there be no disclosure other than known adverse documents, but I provided permission to the Defendants to apply for disclosure if so advised after service of the Points of Claim. The Claimants did not seek permission to apply for disclosure, nor was it given to them. No permission to appeal that part of my order was requested by either party (although the Defendants sought permission to appeal other aspects of my order).
In the end, the additional trial listed for 6 August 2021 was not necessary, because the remaining disputes as to liability were resolved between the parties (encapsulated in an order dated 30 July 2021), and I am grateful to them for doing so. The Defendants have delivered up the infringing garments. The Claimants have served their Points of Claim in the damages inquiry. The parties have been using the time to prepare for the damages inquiry, which is listed to start roughly six weeks from today. Witness statements in chief are due to be exchanged on 24 September 2021, any expert reports on 8 October 2021, and skeletons are to be lodged on 22 October 2021.
Evidence
In relation to today's applications, I have been provided with:
i) second and third witness statements of Mr Joshua Marshall, a member of the Defendants' legal team; and
ii) an eleventh witness statement of Mr Richard Southall, a member of the Claimants' legal team.
I have also been asked to read a number of pieces of correspondence passing between the parties and I have done so. I have also had detailed skeleton arguments from Mr Chris Aikens, who appears on behalf of the Defendants, and Mr David Ivison, who appears on behalf of the Claimants.
Part 18 Request
The Defendants seek an order under CPR 18.1 for the Claimants to provide the information and clarification sought by the Defendants in their Request for Further Information dated 24 August 2021. That document made eleven requests:
1. Please state each and every fact and matter relied on in support of the First and Second Claimants' case on loss of profit as set out in paragraph 7.
2. Please state the value of P contended for by the First and Second Claimants in relation to each Infringing Garment.
3. If it is the First and Second Claimants' position that they are unable to answer request 2 at this stage in the Inquiry, please explain why and state when it is anticipated they will be able to answer it. Please also set out, if applicable, each and every piece of further information or evidence which the First and Second Claimants require of the Defendants in order to answer request 2.
4. Please explain how the Per Unit Profit figures set out in Schedule 1 have been calculated. Without prejudice to the generality of the foregoing, please set out, for each garment, the source and value of the starting revenue figure and each and every category of cost (for example cost of manufacturing the garment) that has been deducted from the starting revenue figure to calculate Per Unit Profit.
5. In relation to each garment, please set out each and every category of cost actually incurred in relation to the sale of such garment which has not been deducted from the starting revenue figure to calculate Per Unit Profit.
6. Please state each and every fact and matter relied on in support of the First and Second Claimants' case that, in the hypothetical scenario, the Defendants would have been prepared to agree a royalty calculated as a percentage of the Claimants' normal (i.e. undiscounted) sales price, as opposed to a percentage of the Defendants' anticipated gross profit.
7. Please state each and every fact and matter relied on in support of the First and Second Claimants' case that, in the hypothetical scenario, the Defendants would have been prepared to agree that the royalty would be payable in respect of each garment imported into the United Kingdom/ EU (as applicable) even where the imported garment was sold to a customer outside the United Kingdom/ EU (as applicable).
8. Please state each and every fact and matter relied on in support of the pleaded values of X and Y.
9. Please explain how the figures for “Minimum acceptable reasonable per-unit royalty” in the furthest right-hand column of the table in Schedule 2 have been calculated.
10. Please explain why the figures for “Cs' normal selling price” and “25% Cs' normal selling price” differ as between Cs' Designs C61 and C61*.
11. Please state each and every fact and matter relied on by the First and Second Claimants in support of their case on Additional Damages as set out in paragraph 21.
The Defendants submitted that the Claimants' Points of Claim are not compliant with CPR 16.4(1)(a) in that they do not contain a concise statement of the facts on which the Claimants rely in support of a number of aspects of their pleaded case. Mr Marshall's second witness statement sets out that, as a result, the Defendants are not able to plead back to those aspects of the Points of Claim. In reality, to comply with the timetable, the Defendants did serve a Defence to the Points of Claim, but on a number of issues, they gave a bare denial.
Counsel for the Defendants submitted that the test to be applied is whether answers to the Part...
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Original Beauty Technology Company Ltd v G4K Fashion Ltd
...to institute the disclosure pilot and refused most of the Defendants' requests for specific disclosure. That judgment can be found at [2021] EWHC 2555 (Ch). The Court of Appeal refused the Defendants' application for permission to 8 On 1 October 2021, I refused the Defendants' application ......
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Original Beauty Technology Company Ltd v G4K Fashion Ltd
...side requested a hearing. Background 8 The background to these proceedings can be found in my judgment dated 10 September 2021, at [2021] EWHC 2555 (Ch). Relevantly for this application, it is sufficient to note the following points. After a trial over eight days, on 24 February 2021 I gav......
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Original Beauty Technology Company Ltd v G4K Fashion Ltd
...judgment I have given in these proceedings. The background can be found in the most recent of them, dated 10 September 2021, at [2021] EWHC 2555 (Ch). Relevantly for this application, it is sufficient to note the following points. After a trial over eight days, on 24 February 2021 I gave j......