Copyright and Passing off

Case Note: PG Mavros (Private) Ltd. and another v Ponter

John Lambert
27 July 1999

Last updated 2 April 2006
This case first appeared on the Lancaster Buildings website

This is an unusual case in a number of respects. Both parties were domiciled in Zimbabwe and any copying that has been done must have taken place there. The action was for infringement of copyright and passing-off. The application was for an interim injunction until trial to restrain the sale of various allegedly infringing articles in the United Kingdom. The connection with England was even more tenuous for the only acts of secondary infringement alleged actually to have taken place in the United
Kingdom were in Edinburgh. The analysis of the facts was remarkably detailed for an application by order. Mr. Collins decided that there was a serious issue to be tried on copyright infringement though not on passing-off, yet awarded an injunction to protect the distinctiveness of the claimant's product. He disregarded the fact that the claimant had been aware of the defendant's products in Zimbabwe for a whole year but had taken no steps to restrain their manufacture or sale in that country. Whether there will be a trial is anyone's guess, given that witnesses will have to be flown from the third world to London or examined on commission or by video link, and that in addition to an injunction his lordship also ordered security for the defendant's costs.

The Claim
The first claimant, a Zimbabwe company, markets silver miniatures of African wildlife mounted on carved ebony made from the second claimant's sketches. From his sketches, he or his assistants carve sculptures in ivory or wax from which they make moulds to manufacture silver replicas. These are then polished, mounted on ebony root and sold around the world wide though the main market is United Kingdom where annual sales are about £400,000. One of the claimant's customers was a jeweller and silversmith in Edinburgh. Early in May the same jeweller received a brochure from the defendant advertising a similar range of miniatures. A covering letter indicated that the defendant would be in London between the 12 and 21 May 1999 and that she would be pleased to meet the retailer. The letter and brochure found their way to the claimants who served a claim form upon the defendant on her
last day in London. In support of their copyright claim they relied on objective similarity between the claimants' miniatures and the defendant's and the opportunity of the defendant to copy in that she employed 4 former employees of the claimant.

The Applicable Principles
It was common ground that American Cyanamid v Ethicon [1975] AC 396 applied. His lordship was also referred to Series 5 Software Ltd. v Clarke [1996] FSR. 273, 286 but "not for the gloss which it puts on Lord Diplock's statement of the relevance of the relative strength of the parties case, but for confirmation of the elementary proposition that a major factor in the exercise of the discretion is the maintenance of the status quo." He construed the relevant principles as follows:

"The claimants must show that there is a serious question to be tried or a real prospect of succeeding in the claim for a permanent injunction at trial; and that damages will be an inadequate remedy. If there is doubt whether the cross-undertaking in damages is an adequate remedy for the defendant, then the court will consider the balance of convenience: if the balance is even, then the preservation of the status quo will assume importance, and in particular if the defendant is enjoined temporarily from doing something that he has not done
before and the only effect of the injunction, if the defendant is successful at trial, would be to postpone the date at which the defendant is able to embark on a course of action which the defendant has not previously found it necessary to undertake; and if the extent of the uncompensatable disadvantage to each party would not differ widely, it may not be improper to take into account the relative strength of each party's case as revealed by the evidence, provided
the court does not embark on a trial by affidavit: ibid at 408-409."

His judgment did not mention how those principles interrelate to the new Civil Procedure Rules. Clearly, they must have some relevance given that

	litigation is to be a last and not a first resort,
	there is a duty to save time and costs and to deal that cases in ways that are proportionate to the amount of money involved, the importance of the case, the complexity of the issues and the financial position of each party, and
	cases are to be managed actively by the court and not left to the parties.

It appears from Mr. Collins's judgment that neither counsel submitted that the real point of Laddie J's judgment in Series 5 is that the applications judge has a wide discretion which he can tailor to the precise circumstances and that it is wrong to apply Lord Diplock's speech mechanistically.

Copyright

After comparing at some length each of allegedly infringing items with the work in which copyright was claimed and considering the defendant's explanations for the similarity, the learned deputy judge found that there was a serious issue to be tried. That is not surprising though he did not specify whether he found that there was an arguable case of primary or secondary infringement. The case on secondary
infringement was clear enough, but the particulars of claim also alleged that the defendant had infringed the claimants' copyrights by issuing copies in the United Kingdom within the meaning of s.16 (1) (b) and s. 18 of the Copyright, Designs and Patents Act 1988. Such an act would constitute primary infringement of copyright. That is an interesting point because the words "issuing copies to the public" replace the words "publishing" which appeared in the old Act. In Infabrics Ltd. v Jaytex Shirt Co. Ltd. [1984] RPC 403 the House of Lords held that publishing meant making copies that had previously been unpublished in the United Kingdom.
Passing-off
Equally interesting, was the case on passing-off which relied essentially on the style of the claimants' miniatures:

"At the hearing Mr Platts-Mills QC, for the claimants, argued that quite apart from the copyright claim, and quite apart from any intentional copying, the Mavros style was sufficiently distinctive that any person who produced pieces with a substantially similar appearance was likely to mislead the public as to the trade origin of the pieces. Indeed, I understood him to go far as to say that (at least unless any such person made it clear that the origin of the products was not Mavros) Mr Mavros had a virtual monopoly in small solid silver miniatures of African wild life mounted on carved dark wood."

If that submission is right, it would be difficult to reconcile with Jacob J's dicta in Hodgkinson that there is no common law tort of copying in this country and that in the absence of deception making a similar but competing product does not amount to passing off. Mr. Collins did not consider it necessary to make a judgment on that issue because the evidence in support of passing-off was precisely the same as the
evidence of infringement of copyright. He found no evidence of confusion in relation to other products. He noted that the defendant had argued that her products were "scrupulously branded" and that he had been shown samples of her packaging.

Balance of Convenience
Though he made no judgment on passing-off Mr. Collins granted an injunction substantially on the basis of the potential damage to the distinctiveness of the claimants' products:

"It is not argued for the purposes of this application that any damage accrues to the Mavros business by reason of the quality of the Argentia miniatures. But if the distinctiveness of the Mavros product will be affected by the sale of the Argentia miniatures, quantification of the loss of goodwill would be notoriously difficult, and damages would not be an adequate remedy. So also, if Argentias entry into the United Kingdom market is delayed by an injunction, then damages on the cross-undertaking would be difficult to assess and might well be an insufficient remedy."

The pecuniary loss for either side was unlikely to be enormous. As the claimants' sales in the United Kingdom were only £400,000 any loss of profits by reason of the defendant's sales would be only a fraction of that sum. As for the defendant, the learned deputy judge considered that her loss would be covered sufficiently by the claimants' offer to deposit £10,000 by way of security for their cross-undertaking
as to damages. Were both parties to proceed with reasonable expedition (as CPR Part 29 requires), the loss that either party would suffer would be measured in the low thousands. The judgment does not disclose the costs of the application but, as the claimants were represented by leading and junior counsel, it is hard to see how they could be proportionate to such an amount.

Choice of Forum

Significantly, the learned judge took no account of the claimants unexplained failure to sue in Zimbabwe where any primary infringement would have occurred, where the supply of any infringing goods could have been cut off at source, where it would be much easier for witnesses to testify and where it would be easier for the successful party to recover its damages and costs. His lordship merely noted that the defendant could have applied for a stay on the basis that Zimbabwe was the appropriate forum but had chosen not to do so and that there had been no delay in bringing proceedings in England once the infringement had been discovered. Had there been proceedings in Zimbabwe it would have been quite normal for the English court to support them pending their resolution by an injunction here but this injunction envisages a trial in England. The claimants have to come up with some security for costs which, as the judge noted, may be subject to Zimbabwe exchange control. Even when that matter has been addressed, the idea of transporting Zimbabwean carvers to the Strand or examining them over a satellite link or on commission in a case involving the loss of profits on £400,000 sales where the remedy cannot affect the two-thirds of the claimants' sales that are not to the United Kingdom seems ambitious.

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