Ifejika v Ifejika

I have before me two renewed applications for permission to appeal from a judgment of HHJ Hacon sitting in the Intellectual Property Enterprise Court dated 31 July 2014. Both applications for permission to appeal are filed out of time for appealing. I also have an application for permission to adduce further evidence.

The judgment of HHJ Hacon was given in an action for infringement of unregistered design right. It arose in a dispute between two brothers, Victor Ifejika and Charles Ifejika. It has been before this court on previous occasions. I will refer to the two brothers by their first names for convenience; I intend no discourtesy to them by doing so. Both presented their cases to me in person.

The action was brought by Victor, in the first instance both for infringement of registered design and for infringement of unregistered design right in espect of a contact lens cleaning device.

In his judgement dated 23 November 2011 HHJ Birss QC cancelled the registered design and held that some of the unregistered design right had been infringed by sales on the part of Charles’ company of two products, the AMO product and the lens care product. The only feature of the design that was taken was the so-called undercut feature, a feature which enabled a lens case to be engaged securely into the main body of the lens cleaning device.

The judge held that Charles was responsible for the infringements personally as well as with his company. HHJ Birss assessed the damages in relation to the lens care product at £10. The inquiry related only to the AMO product.

The account obviously required the judge to determine the number of AMO products which had been sold. Charles had contended that it was only 350,000 products, but by the trial he had had to accept that this figure was too low. The judge had to wrestle with differing estimates of the number in fact sold. Victor contended in the end that it was 565,000, but the judge took 510,000 as the correct figure.

This led the judge to a figure of £790,000 for the total net profit. To this he applied a percentage of two per cent as the proportionate value of the unregistered design to the product as a whole. This led to final award of £15,800.

The judgment was handed down on 31 July 2014, but Charles’ notice of appeal was not served until October 2014. This is significantly out of time. The grounds on which it is sought to excuse the delay is that the notice of appeal was served at the High Court and not at the Court of Appeal. Charles says he was given the wrong information by the High Court at the time of submitting his appeal, then the High Court told him that his papers for the appeal were transferred to the Court of Appeal on 8 September 2014 and when he rang to confirm he was told that his papers were received and he was given a number. However he was given the number of what was in the end to be Victor’s appeal.

There are three grounds of appeal which are put forward in the grounds attached to the appellant’s notice. The first is that the judgment is unjust as the defendant was put in a position where only the judge and the claimant had all the appropriate documents in front of them, which they were discussing in depth. The defendant could not fully follow or comprehend the arguments clearly.

The second ground of appeal is that in the account of profit non-infringing items were added in, despite the defendant stating clearly in the witness statements that this should not be allowed to happen.

The third ground of appeal relates to the Licence of Right provision in the Copyright, Designs and Patents Act. It is said that whilst the judge acknowledged that provision he wrongly applied the date of the earliest infringement that was mandated by the relevant statutory provision.

On the first ground Charles complains that because of the absence of a properly prepared common trial bundle he was at a disadvantage at the trial in dealing with the figures being discussed between Victor and the judge. It focuses in particular on a May 2004 purchase order referred to by the judge at paragraphs 19 to 22 of the judgment.

I do not think that this is a realistic ground of appeal. Firstly, it does not seem to me that the judge placed any relevant weight on the 2004 purchase order. He derived is ultimate figures from the VAT returns. Secondly, I do not see any realistic prospect of this court coming to a different conclusion on the numbers of products sold. The parties were a long way apart and, as I have already related, Charles had conceded that his figure was too low. The true figure was higher and the judge’s conclusion was that it was 510,000 based on the VAT returns is one that he was entitled to come to on the evidence.

So far as the second ground of appeal is concerned, Charles complains in particular that loss-making lens care case products were included in the account. Initially I thought that he intended to rely on further evidence which was not before the judge to establish his proposition, but he points out that his witness statement made the same point and he had already brought this matter to the attention of the judge. I asked Charles how much difference this point made to the overall figures. He contended that the inclusion of the lens case products into the account had made the ultimate results and he estimated approximately two per cent.

In an inquiry which is of necessity involving very broad estimates and what may seem like rough justice, it seems to me that an error of two per cent, which in any event I am not satisfied that the judge made, justifies the grant of permission to appeal. It is in any event a ground of appeal on the facts; there is no error of principle in the approach which HHJ Hacon took and this court is notoriously reluctant to entertain appeals on issues of fact. I therefore consider that there is nothing in the second ground of appeal.

As to the third ground, the position appears to be this. The statute limits the recovery of damages to twice the royalty which the Comptroller would have set. The limit can only operate if an undertaking is given by the defendant to accept a licence on terms to be settled by the Comptroller. The judge said that the statutory cap would have no application in this case. In paragraph 36 he said “I do not think that there is a realistic prospect that the controller would settle a licence at less than one per cent of the net profits made from the sales of AMO products. In those circumstances the cap simply would not bite on the facts of the present case.” I confess that I simply do not understand what point is sought to be made which could affect the ultimate outcome of this case based on the date of the first infringement. I see no realistic prospect of a successful appeal based on the statutory cap.

That deals with all three grounds of appeal. I do not consider that Charles’ appeal would have a realistic prospect of success. There would be no purpose in granting an extension of time, which in any event I do not consider to be justified. There is no other compelling ground on which permission to appeal should be given. I therefore dismiss Charles’ application for permission to appeal. The further evidence application was not persisted in, but is in any event refused.

Victor’s grounds of appeal amount to some 19 paragraphs, but many of these are not grounds of appeal but simply argument. From those I have extracted the following. Firstly, the judge misconstrued the Licences of Right provision and in so doing constrained himself to grossly underestimate the value of the undercut feature. Secondly, the undercut feature had far more importance to the design than the judge gave credit for. Thirdly, I understood his grounds of appeal to be saying that on the basis of expert evidence now sought to be adduced for the first time the judge should have accepted a much higher percentage for the undercut feature. Wisely, in the light of the observations of Lewison LJ when considering this application on the papers, I was not taken to, and Victor did not press, that third ground of appeal.

As to the impact of the Licences of Right provisions, the answer is the same as I gave in relation to Charles’ appeal. This is not a case in which the cap had any impact on the damages that were awarded. Therefore the points based on the statute simply do not arise.

So far as the judge’s estimate of the importance of the undercut feature is concerned, Victor addressed me at length this morning as to the relative size and importance of the plastic mouldings which together make up the undercut feature which retains the lens case. This is a classic matter which is for the first instance judge to evaluate on the material before him. I am wholly unpersuaded that the judge was operating on any misconception about the nature and importance of the undercut feature. He had to make an evaluative assessment not only of the proportion in material terms which it bore to the design as a whole, but also its functional importance. He was confronted with an estimate by Charles that this was one per cent and no competing estimate from Victor as to a greater percentage.

In those circumstances the judge’s conclusion as to the relevant percentage is, in my view, completely unimpeachable. There is no prospect of this court coming to a different conclusion. I would also dismiss Victor’s application for permission to appeal.