Baby Bottle Design Infringed, Court Loses Toys

Report Headline

The High Court, Chancery Division has found that the Claimants' patent infringement action failed (although that patent would have been infringed if valid) but has upheld the copyright infringement claim and the claims of passing off and trade mark infringement in a case concerning the intellectual property rights subsisting in a baby's nursing bottle sold under the mark "DR BROWN'S". Of particular note was the Judge's finding that some of the defendants were liable as joint tortfeasors in respect of the actions for copyright infringement and passing off and trade mark infringement.

The Parties

The Claimants:
(1) Handi-Craft Company
(2) New Vent Designs Inc

The Defendants:
(1) B Free World Limited
(2) Yasmin Berkovitch
(3) Mothercare UK Limited (settlement reached before trial)
(4) The Boots Company Limited (settlement reached before trial)
(5) Baby B Free Limited
(6) Action Trading Limited (in liquidation)
(7) Amikam Berkovitch
(8) Piero Alberici
(9) Tamir Berkovitch
(10) TTY General Trade Lines Limited
(11) Dvora Berkovitch
(12) Tamir Tirosh

The Citation

[2007] EWHC B10 (Pat)

The Tribunal

High Court, Chancery Division, Patents Court
Before: His Honour Judge Fysh QC

The Context

Patents
Section 1 of the Patents Act 1977 (the "1977 Act") provides that patents shall be granted for any inventions which are capable of industrial application, which are new and which involve an inventive step. Section 3 of the 1977 Act provides that an inventive step is involved in an invention if, having regard to the state of the art, it is not obvious to a person skilled in the art.

Copyright
Primary infringement arises by copying or by copying a substantial part of the copyright protected work, by issuing copies thereof to the public in the UK and/or by authorising the same. Secondary infringement arises by the importation, possession, sale etc. of a product bearing the copyright work in question in the knowledge that such product bears infringing copies.

Passing off
The elements of the tort of passing off are well established and a concise statement of the law can be found in the Jif Lemon case by Lord Oliver. For present purposes, it is worth bearing in mind that passing off requires that there be goodwill or reputation attaching to the relevant goods or services and that the defendant misrepresents to the public that the goods or services offered y him are the goods or services of the claimant and such misrepresentation leads to damage to the claimant.

Joint Liability
A party may be liable for infringement of intellectual property rights as a joint tortfeasor where "he intends and procures and shares a common design that the infringement takes place": CBS Songs Limited v Amstrad Consumer Electronics Plc [1988] AC 1013; Unilever Plc v Gillette (UK) Limited [1989] RPC 583.

Furthermore, a director of a limited liability company who authorises, directs or procures the commission by the company of an infringement of intellectual property rights can, in certain circumstances, be personally liable to the injured party: C Evans & Sons Ltd v Spritebrand Ltd [1985] 1 WLR 317.

The Facts

The Claimants developed and manufactured a liquid nursing bottle which contained a venting system designed to eliminate the build-up of a partial vacuum above the level of the liquid which develops whilst a baby is feeding. The second claimant owned the patent in suit and the trade mark "DR BROWN'S NATURAL FLOW" in respect of infant feeding bottles. It also owned the copyright in the artistic work in the Dr Brown's logo.

The first claimant was the worldwide exclusive licensee of these and other intellectual property rights in the UK and elsewhere.

The product in dispute was a competing nursing bottle called the "B FREE" bottle.

The dispute started when the exclusive worldwide distribution agreement that the first claimant entered into with a Panamanian company (which was controlled by the seventh defendant, Mr Amikam Berkovitch), was terminated by the first claimant. Mr Berkovitch did not accept the termination and proceedings in the US ensued, which resulted in judgment in the first claimant's favour that the agreement had been properly terminated. The Panamanian company was permitted to sell off existing stocks but that company was, as a result of the US proceedings, not permitted to use the "DR BROWN'S NATURAL FLOW" or "NATURAL FLOW" trade marks.

Amikam Berkovitch then proceeded to develop and launch a rival bottle to be manufactured in Israel by TTY and to sell it under the name "B FREE". That mark had in fact been used by the Panamanian company a few years prior to the US proceedings in relation to the Dr Brown's bottle and Mr Berkovitch established Baby B to run the website entitled "babybfree.com" from which he sold the Dr Brown's bottles. This had its own logo which was different from the Dr Brown's logo. A few days after the judgment was handed down in the US, Mr Berkovitch incorporated another company in the UK called "Action Global Trading Limited" and applied to register the mark "B FREE" through that company. He then changed the name of the company to "B Free World Limited".

B Free was supposed to trade in the new B FREE bottles in the UK but did not do so until January 2005. Instead, Amikam Berkovitch marketed the new bottles in the UK through the pre-existing company Action Trading (for UK retail sales). Offline sales of B FREE bottles continued to be made by that company until the injunction was ordered by Laddie J in favour of the claimants in June 2005 (at the interlocutory stage).

The decision

Patent Infringement
Since the Court found that claim 1 of the patent was invalid on the grounds of obviousness as a result of an earlier patent (referred to as "Offman"), that part of the claim failed. Thus, no infringement. However, the Judge made clear that if the patent is valid, it was infringed as alleged.

In the light of the Court's findings on validity, this report does not focus in detail on the arguments leading up to that conclusion. However, it is worth stating that the Court followed the guidance given by Sachs LJ in General Tyre & Rubber Co v Firestone Tyre Co [1972] RPC 4567 in respect of "novelty"; and in relation to "obviousness", the Court adopted the fourfold, structured approach proposed by Oliver LJ in Windsurfing International v Tabur Marine Ltd [1985] RPC 59. In that connection, it is also worth noting that when the enquiry relates to obviousness, what has to be determined is whether what is being claimed now as inventive would have been obvious and not whether it would have appeared commercially worthwhile to exploit it – evidence of commercial considerations in such a context is usually secondary evidence.

Copyright Infringement
Subsistence and ownership of the copyright in the logo in question was eventually conceded and, furthermore, a degree of copying was admitted to have taken place. Accordingly, what fell to be decided was whether the copying of a "substantial part" of the copyright work had occurred.

The Court followed the leading modern case on this topic: Designer's Guild v Russell Williams [2001] 1 WLR 2416 (HL) and in particular referred to the speech of Lord Millett.

Ultimately, the Judge found in favour of the claimants on the basis that as a mater of impression unaffected by the circumstances of the copyright. He held that the one logo made the same visual impression on him as the other. He also pointed out although the artistic work in issue may not have been of inherent aesthetic merit or the outcome of exalted drafting achievement, the skill and labour which go into devising logos for products and services, cannot these days be under-estimated. "Thousands of pounds are regularly paid for the creation of simple logos".

The Judge went on to make findings in respect of the various defendants regarding primary and secondary infringements. In particular, the claimant's logo was infringed by the UK corporate defendants and was also infringed by Amikam Berkovitch as joint tortfeasor with those companies and, also by TTY as importers of the bottles and packaging bearing the logo since on the facts, the Judge agreed that TTY had the requisite knowledge – the statutory requirement.

Passing Off and Trade Mark Infringement
Based on the evidence available at trial, the Court found that Amikam Berkovitch orchestrated a group of persons (mostly his family) to assist him in executing a deliberately illegal and dishonest course of commercial conduct in relation to nursing bottles. The Judge said that he intended to hijack the considerable goodwill which had by then been built up in England around the Dr Brown's bottles to launch what was to become the B FREE bottles. He did this by falsely portraying the B FREE bottles to both trade and the public as being improvements on the Dr Brown's bottles when they were not. Since he had been intimately connected with establishing the Dr Brown's bottles on this market, he was in an unrivalled position to do so which the Judge said was textbook passing off.

The UK corporate defendants were liable for trade mark infringement and passing off and, given the facts referred to above, Amikam Berkovitch was found to be a joint tortfeasor in relation to those causes of action, as was Mr Alberici. The action against TTY and Tamir Tirosh also succeeded on the basis of joint tortfeasance.

Joint Liability
The Court held that Amikam Berkovitch's working relationship with Action Trading was such that he was jointly and severally liable with that company in respect of its passing off, trade mark and copyright infringements. Before its liquidation, Action Trading was said to be his principal alter ego.

The Judge stated that when two or more persons' involvement in the commission of a tort is, on the facts, part of a common (and not a similar) design, they are joint tortfeasors. Facilitating the commission of a tort may not be enough whereas authorising it may be. The court must first identify the "design" and then come to a conclusion as to whether the parties' designs are co-incident. Thereafter, liability will depend on the facts and the court will ultimately have to make a value judgment in the light of that evidence. A full trial will place the court in a better position to assess joint liability than, say, an application for a strike out.

In the present case, the "common design" in relation to passing off was to "filch the claimant's undoubted goodwill in this country which is associated with the Dr Brown's baby bottle, in order to deceive the trade and public into thinking (contrary to the fact) that their B FREE bottle was a new and improved version of it".

Comment

Tucked away in the judgment is a useful reminder to patent licensees that they should consider registering the transaction, instrument or event pursuant to which that party becomes an exclusive licensee of the patent within a period of 6 months. Otherwise, it is possible for third parties who do not know of the licensee's rights to acquire conflicting interests in the patent, without being bound by the earlier, unregistered rights. One of the other adverse effects of failing to register is that the exclusive licensee may not be entitled to any damages or an account of profits in respect of acts prior to the date of registration.

In relation to that part of the judgment which concerned the action for copyright infringement, the Court looked at the requirement, in respect of secondary infringement, of possession of the requisite knowledge. The burden of proving this is on the claimant and, since it is well established that suspicion is not enough, it is advisable that a letter from the claimant/claimant's solicitor containing a sufficient summary of the facts relating to subsistence, ownership and identification of the work in issue is sent to put the recipient on adequate notice before action. Such a course of action is particularly important when laymen are made personal defendants in copyright infringement actions.

The Judge made some interesting comments about the liability of directors based on the case C Evans & Son Ltd v Spritebrand Ltd [1985] 1 WLR 317 and Counsel's submissions. Directors and claimants proceedings against companies should bear the following in mind regarding the position of directors of companies which are tortfeasors:

The liability of a director is a specific and recognisable instance of general joint tortfeasance.
If the alleged tort is not one for which the claimant must prove a particular state of mind or knowledge, then if the facts sufficiently implicate the director personally in the tort committed by the company, he may be liable together with the company.
Directors are the company's agents and therefore, under the general principles of agency, they are inherently at risk of being jointly and severally liable with the company for acts committed by it.