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30th October 2017

Interesting recent cases in the IP Enterprise Court (IPEC)


30th October 2017

Interesting recent cases in the IP Enterprise Court (IPEC)

Several IPEC cases have been of interest recently and we thought you would like to see a summary.

In the IPEC, this recent case confirms the underlying trend currently adopted by the courts in awarding very low damages in respect of infringement claims for misuse of photographs online. We act for clients on a regular basis who are on the receiving end of such a claim and it is interesting to see that the courts are taking a much more realistic approach in the absence of flagrant infringement and where the damage to the copyright owner is minimal.

IPEC confirms decision not to award additional damages and costs in copyright claim

The IP Enterprise Court (IPEC) has confirmed an order of the district judge who declined to award additional damages and costs to the copyright owner in a copyright infringement action relating to a photograph of Dylan Thomas.

Hacon J, sitting in the IPEC, agreed that the district judge had correctly applied the law by reference to comparables (the user principle), in reaching a figure of £250 in compensatory damages plus £3 interest. Hacon J also declined to award additional damages pursuant to section 97(2)(b) of the Copyright, Designs and Patents Act 1988, although for different reasons to those given by the district judge. In reaching his decision, Hacon J took into account all the circumstances, including that the photograph was only used for 17 days; the defendant had removed the photograph from the website as soon as it received notice from the copyright owner and the defendant did not gain any benefit from the infringement. Rejecting the copyright owner’s argument that the low award of damages did not provide the dissuasive element required by the IP Enforcement Directive (2004/48/EC), Hacon J took the view that there was no prospect of the defendant infringing the copyright in any of the copyright owner’s photographs in the future nor were there third parties in need of dissuasion from carrying out similar minor infringements.

On costs, Hacon J held that the discretion of the court was wide. CPR 44.4(3)(a)(i) implied that the court could take into account the conduct of the parties before as well as during proceedings. By threatening to bring proceedings in the United States, the copyright owner had deliberately intended to maximise cost and pressure on the defendant to settle. Hacon J confirmed the district judge’s order that the claimant should pay the defendant’s travelling costs.

Case: Pablo Star Media Ltd v Richard Bowen [2017] EWHC 2541 (IPEC), 13 October 2017

It has also been interesting to read this summary which looked into how the courts weigh up the balance of damage to both claimant and defendant when assessing whether to grant an interim injunction.

IPEC dismisses interim injunction application in MEMORIA trade mark and passing off dispute

In a judgment for which the transcript has just become available, the Intellectual Property Enterprise Court (IPEC) has refused to grant an interim injunction to Memoria Ltd, the owner of the UK word mark MEMORIA, registered for various services, including memorial services, to prevent trade mark infringement and passing off by Funeral Zone Ltd, which had developed a “Memoria” app for storing memories relating to a deceased person.

Memoria Ltd argued that Funeral Zone’s marketing of the Memoria app, through use of the sign “Memoria”, would amount to passing off and infringe sections 10(1), 10(2) and 10(3) of the Trade Marks Act 1994.

Hacon J accepted that it was possible that Memoria Ltd might suffer damage between the hearing date and trial if members of the public familiar with Memoria Ltd’s services conducted under the “Memoria” name thought that there was a connection in the course of trade between Funeral Zone’s services offered in the app and Memoria Ltd due to the use of the “Memoria” sign, and disliked Funeral Zone’s services so that they decided not to purchase a memorial object from Memoria Ltd, or not to use Memoria Ltd in the event of a bereavement. He did not think that the harm was likely to be on very large scale based on the evidence he had seen, but nonetheless the possibility existed.

However, the evidence suggested that Funeral Zone might suffer irreparable harm between the hearing and trial if the judge were to grant an interim injunction. In particular, damage could occur due to the possible collapse of the £1.5 million investment Funeral Zone had secured from investors in relation to the app, which would lead to four-fifths of staff being made redundant, and the loss of Funeral Zone’s advantage in being the first in the field with its app. While such damage might not occur, if it did, really considerable serious harm would be caused to Funeral Zone.

Therefore, the balance was in favour of not granting an interim injunction.

We get asked about IP valuation on a regular basis. To our clients, the overriding barrier to obtaining a professional valuation is often the cost. It is interesting to read that as a result of this study, the IPO is going to extend its finance toolkit to include a director of IP valuers and their specialisms.

IP valuation market study

The Intellectual Property Office (IPO) has published a study of the IP valuation market.

The study states that it was commissioned to understand why companies do not consider the hidden financial value of their intangible assets and particularly intellectual property (IP) on a more routine basis. The stated objective was to understand four aspects of the UK market for IP valuation, namely, the market structure: who the main participants were, and how they interacted; the drivers of behaviour: what motivated companies to value their IP; the barriers to more efficient functioning of the market: what limited engagement with the valuation market; and the potential solutions to overcome the barriers. The IPO also asked researchers to examine three related aspects of the market with reference to international benchmarks and recognised best practice, namely, the extent of IP valuation activity in the UK, whether common and consistent IP valuation methods and approaches were being applied and whether the market was working effectively from a competition perspective.

The study recommended highlighting the benefits to business of valuing their IP through a series of case studies; extending the IPO’s finance toolkit to include an open directory of IP valuers and their specialisms; introducing a tailored IPO programme of education and incentives, targeted individually for businesses and intermediaries, to include direct discussions with lenders and investors; conducting further research to gain a more sophisticated understanding of the links between intangible asset valuations and IP strategy, how valuations of the same assets have varied by purpose or over time, and a comparison of valuations carried out by buyers versus sellers; and initiating dialogue between the IPO, accounting and industry bodies on the possible introduction of voluntary IP statements or labelling, potentially as part of corporate social responsibility reporting or in annual financial statements.

Source: IPO study, Hidden Value: A study of the UK IP Valuation Market, 27 September 2017.

If you would like further information on intellectual property issues, please email me.

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