Raft Ltd v Freestyle of Newhaven Ltd and others  EWHC 1711 (IPEC),  All ER (D) 64 (Jul)
The claimant (Raft) was a manufacturer and retailer of furniture. It owned and operated two stores in London, as well as other stores, which operated under franchise agreements.
The first defendant (Freestyle) manufactured sofas. Freestyle was the successor in business of another sofa manufacturer, Freestyle of London, which was currently in liquidation.
The second defendant (H) was the sole director and sole shareholder of both Freestyle and Highly Sprung. He took all the decisions for Freestyle and Highly Sprung save in respect of pricing.
The third defendant (Highly Sprung) operated a furniture retail store in London, immediately adjacent to Raft’s store. Raft alleged that Freestyle had made, and Highly Sprung had sold, sofas which infringed Raft’s United Kingdom unregistered design right in the overall designs of two variations of the Loft sofa: ‘the wide-arm Loft sofa’ and ‘the skinny-arm Loft sofa’.
H was said to be jointly liable for the acts of infringement.
Raft further contended that the defendants had passed off sofas as Raft sofas.
H counterclaimed, alleging that Raft had infringed his UK unregistered design right in the overall design of a sofa called ‘Combi’ by making and selling sofas known as ‘Manhattan’.
At the time H had created the Combi, he had been a director and employee of Freestyle of London, which later went into liquidation. Alternatively, the counterclaim was brought by Freestyle, in the event that it owned the design right.
The issues were as follows-
1. Firstly, whether the defendants were liable for infringement in respect of Raft’s ‘wide-arm Loft sofa’ and a slimmed down version, ‘the skinny-arm Loft sofa’. Freestyle admitted that it had made sofas to the wide-arm Loft sofa design for supply to Highly Spring. Highly Sprung admitted that such copies were sold from its store in Tottenham Court Road. H’s contended that, in his view the sofas in question were copies of another design called ‘the Kubus design’.
2. Secondly, whether the defendants were liable for passing off. It was not in dispute that Raft owned goodwill in its business. The claimants alleged that a number of misrepresentations had been made on the part of Highly Sprung.
The court ruled:
Design right subsisted in a design if it was an original design (as per s 213(1) of the Act). There were two requirements for originality. The first was that the design was original, the design had to be the creation of the designer, not copied from another. The second requirement for originality was that the design was not ‘commonplace’ within the meaning of s 213(4) of the Act.
The more useful test was whether the author had expended sufficient time, labour and skill in the creation of his design.
The design of the wide-arm Loft sofa satisfied the first requirement of originality. Design right therefore subsisted in that design. On the unchallenged evidence, the design of the Loft sofa had been created by an employee of Raft and the design right was owned by Raft.
Freestyle admitted that it had made sofas to the wide-arm Loft sofa design for supply to Highly Spring. It followed that Freestyle had had infringed.
Possession and sale of an infringing article was a secondary infringement, so to establish that Highly Sprung was liable for secondary infringement it was necessary for Raft to show that Highly Sprung had had knowledge or reason to believe that the sofas in issue sold were infringing articles.
On the facts, the allegation of secondary infringement by Highly Sprung was made out. Highly Sprung had admitted that such copies had been sold from its store in Tottenham Court Road.
H’s stated ground for his lack of knowledge or reason to believe was that in his view the sofas in question were copies of the Kubus design. That view did not absolve Highly Spring from secondary infringement.
In respect of the skinny-arm Loft sofa, the change in design had been too minor and localised to give rise to a newly original design in the sofa as a whole.
Raft’s claim to infringement by Freestyle and Highly Sprung of the design right in the wide-arm Loft sofa succeeded. H was jointly liable for the acts of infringement. However, the claim in relation to the skinny-arm Loft sofa failed.
To establish a successful action in passing off, the following had to be proved: (i) the claimant’s ownership of goodwill in his business, the goodwill being attached to a badge of origin; (ii) a relevant misrepresentation on the part of the defendant by use of the badge of origin or something similar to it; and (iii) consequent damage to the claimant’s goodwill.
There was nothing in the evidence which sufficiently supported either of the alleged misrepresentations on the part of Highly Sprung. It was likely that if a significant proportion of the public had been misled about a trade connection between Raft and Highly Sprung as retailers or about the maker of Highly Sprung’s sofas, at least somebody would have made that plain. In the absence of any misrepresentation there could have been no passing off.
Raft’s claim for passing off was dismissed.
The Combi design was original and that design right subsisted in it. However, the counterclaim failed because none of the defendants had a cause of action. At the time H had created the Combi, he had been a director and employee of Freestyle of London, which was currently in liquidation and there was no suggestion that any rights in the Combi design had been acquired by any of the defendants from the company or later from the liquidator or otherwise.
The counterclaim would be dismissed.