IPEC envelope up copyright infringement claim

Mei Fields Designs Ltd v Saffron Cards and Gifts Ltd and another [2018] EWHC 1332 (IPEC), [2018] All ER (D) 35 (Jun)

Facts:

Mrs Fields designed greeting cards.

She and her husband, Mr Fields, incorporated a company, Metropolis, which produced and sold greeting cards, and they were employed within the business: Mrs Fields as design director and Mr Fields in sales.

Metropolis suffered cash flow problems and, subsequently, entered into a company voluntary arrangement.

The following year, Mr and Mrs Field set up the claimant company. Mei Fields Designs Ltd, to own and exploit the copyright in Mrs Fields’s designs for the greeting cards.

On the same day, 10 April 2012, a document was signed purporting to assign, to Mei Fields, all copyright owned by Mrs Field in the cards she had designed.

Metropolis later filed an intention to go into administration and the assets of the business were offered for sale.

The second Defendant, S, offered to buy those assets and incorporated the first Defendant company, Saffron, as a corporate vehicle to do so. Saffron purchased certain of the business and assets of Metropolis and entered into a licence with Mei Fields (the licence agreement), under which Saffron would produce cards to designs licensed from Mei Fields.

The relationship between the parties soon soured.

Mrs Fields discovered that Saffron had launched two ranges of cards called ‘Adorn and Couture’, which Mei Fields alleged were copies of cards designed by Mrs Fields.

Mei Fields brought a claim, alleging that Saffron had infringed the copyright in Mrs Field’s card designs. It was further alleged that the second Defendant, as the sole director and shareholder of Saffron, was jointly and severally liable for the infringing acts. The allegedly infringing greeting cards fell into two groups: group A and group B.

The Defendants counterclaimed for a declaration that they had not infringed any copyright in the relevant cards, and they sought orders for publication and dissemination.

Claim allowed in part. Counterclaim dismissed.

Issues:

The Court highlighted the following issues:

  1. Whether the designs had been created in the course of Mrs Field’s employment.
  2. Whether Mrs Field held the copyright in the greeting cards on trust for Metropolis
  3. Whether Metropolis was a joint owner or beneficial owner of the copyright in the cards.
  4. Whether the document signed on 10 April 2012 amounted to a valid assignment of the copyright in the cards from Mrs Fields to Mei Fields.
  5. Whether the infringement claim had been established and, if so, whether S was jointly liable with Saffron for any copyright infringement.

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Judgment:

Issue 1

In relation to the group A cards, the Defendants submitted that Mei Fields did not own the relevant copyright and could not bring the proceedings, because, when she had designed the cards, she had been employed by Metropolis, which had solely owned the copyright to it.

Taking into account all the relevant factors, and mindful of the various tests in the case law, Mrs Fields had designed the relevant cards outside the scope of her employment.

Accordingly, copyright in the cards had been first owned by Mrs Fields individually.

Issue 2

The Defendants submitted that, Mrs Fields, as the director of Metropolis, had only held any copyright on trust for that company.

There had been a clear agreement between Mrs Fields (as designer) and Mr and Mrs Fields (as directors or shareholders) that Mrs Fields would own the copyright in the cards she designed.

Although not set out in writing, they had both given clear evidence that that had been their understanding and there were no documents inconsistent with this.

Issue 3

While employees of Metropolis had assisted Mrs Fields in digitising her designs, Metropolis had never been a joint or beneficial owner of the copyright in the cards.

Issue 4

The 10 April 2012 document had been effective to assign Mrs Fields’s copyright in the cards to Mei Fields

Issue 5

The Defendants submitted that, in 2014, Metropolis had sold its intellectual property to Saffron and that Mei Fields no longer held any enforceable rights in such property.

Concerning the group B cards, Saffron contended that they simply were not close enough to infringe Mei Field’s copyright.

Copies of the cards designed by Mrs Fields, which had been sold by Saffron infringed Mei Field’s copyright.

Two cards from Saffron’s Couture and Adorn ranges were infringing.

The acts of infringement had been committed by the both Defendants pursuant to a common design and they were jointly and severally liable for those infringing acts.

The claim would, therefore, be upheld in part. The counterclaim would be dismissed.

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