Avoid getting in a spin: Lessons for managing future Registered Designs cases - Spin Master Limited v PMS International Group [2017] EWHC 1477

It is relatively rare for a case management conference ("CMC") to be of sufficient interest to be the subject of an article. However, these proceedings raised general issues of how to achieve short, cost-effective hearings where one or perhaps both parties were preparing for a much longer trial.

Background

This CMC concerned a claim for infringement of a Community Registered Design by the claimant and a counterclaim by the defendant for unjustified threats of infringement.

The defendant produced a construction toy called "Clingabeez", consisting of individual balls with hook projections, which could be stuck together to build larger structures. The claimant alleged that its product, "Bunchems", which was "Activity Toy of the Year" in 2016, was a substantial departure from the design corpus and, as such, made a significant visual impact on the informed user. The claimant's "Bunchems" product was protected by a Community Registered Design.

The Judge, Mr Justice Carr, noted that the claim and counterclaim raised straightforward disputes, wholly typical of cases of this nature – namely, the claimant contended that the alleged infringement created the same overall impression as the Community Registered Design and pleaded certain similarities. In response, the defendant pleaded that the overall impression of the "Clingabeez" product on an informed user was different and that certain features were dictated by function and in respect of other features, design freedom was restricted. As was generally the case, the Judge noted that the counterclaim would stand or fall depending on whether the Community Registered Design in issue had been infringed.

Observations of the Judge

The Judge expressed surprise that, in light of the above, the costs budget for the defendant was approximately £360,000 and – even more surprisingly – the budget for the claimant was approximately £776,000. Further, the time estimated for trial – six days by the claimant and four days by the defendant – were both considered to be excessive.

The Court of Appeal had given clear guidance in respect of registered designs claims that admissible evidence was limited and hearings should be short (Dyson Ltd v Vax Ltd [2011] EWCA Civ 1206, expanding on Procter & Gamble Co v Reckitt Benckiser (UK) Limited ([2007] EWCA Civ 936). In particular:

1.Registered design cases were concerned with the overall impression of the registered design, the alleged infringement and the design corpus. It was easier to see this than to describe it in words.

2.Admissible evidence in such cases was very limited, and was most likely to comprise technical evidence about design constraints. Such evidence was unlikely to require substantial cross-examination. It should be possible to decide a registered designs case in a few hours.

3.If permission for expert evidence was to be given, then the precise ambit of that evidence should be defined. The expert should be told what question to address and the evidence should be confined to those questions.

 4.It was clear law that whether the defendant has copied was irrelevant to liability. It was equally irrelevant for the defendant to prove or to give disclosure about how his design was arrived at.

To the above principles, he added some further observations:

1. It was clear from previous judgments that there was no reason why registered design cases should last for days, when one understood what really matters.

2. Whilst tempting, claimants should avoid seeking to introduce allegations of copying. In both of the above cases, limitations on design freedom were in issue and the Court of Appeal held that copying was irrelevant. Proof of copying may be considered by claimants to be useful prejudice, but it was nothing more. The appropriate causes of action in civil proceedings for such allegations were infringement of unregistered design and infringement of copyright.

Lessons for the future

The judge, having addressed each of the ten areas of dispute at the CMC, offered some lessons for the future, advising that parties consider the following steps:

1. Use images: The parties should, in appropriate cases, produce images at an early stage to show the differences or similarities upon which they rely, and in the case of the defendant, those features which are wholly functional or in which design freedom is said to be limited. Requests for further information are unlikely to be helpful.

2. Disclosure: The parties should carefully consider why, if at all, disclosure is necessary, rather than agreeing to standard or even issue based disclosure. Claimants should not try to introduce or seek disclosure in relation to copying.

3. Expert Evidence: Expert evidence as to whether the alleged infringement produces on the informed user the same or a different overall impression as the registered design should not be included in cases concerning consumer products. The parties should try to limit the length of any expert evidence to an agreed number of pages.

4. Relevance of evidence of fact: If evidence of fact is to be introduced, the court must be satisfied of its relevance.

5. Scope of cross-examination: The parties should be prepared at the pre-trial review to identify issues on which cross-examination is necessary, and to explain why.

6. Limited use of samples: Where multiple designs, or multiple infringements, are alleged, the parties should each select a limited number of samples on which the issues can be tested.

7. Issues to be postponed until damages inquiry: The parties should give careful thought to those issues which can be postponed to a damages inquiry, which will only need to be considered if liability is established.

Commentary

Parties are often so invested in proceedings that the complexity of the matter and the issues in dispute risk being overstated. This guidance is intended to ensure that registered design cases remain proportionate and offers a useful tool, both for inter-partes correspondence and at a CMC, to help manage over-active claimants. Whilst case management will vary from case to case, parties should be aware that there is a risk of annoying the court and a potential impact on costs recovery if these lessons are not followed – and if you are in front of Mr Justice Carr, ignore at your peril!