Wakefield & Anor, R. v

LORD JUSTICE LATHAM: On 6th June 2003 in the Crown Court at Reading after a seven day trial, these appellants were convicted of six counts of unauthorised use of trade marks contrary to sections 92(1) and 104(1) of the Trade Marks Act 1994 and were sentenced to four months' imprisonment on each count concurrently.

They appeal against conviction with leave of the single judge.

The facts out of which the charges arose can be very shortly stated. The appellants traded together under the name Bionic Records. In August 1999 a trading standards officer purchased a number of compact discs from the appellant Wakefield at the Bionic Records store at the Reading Festival. Having looked at those, he was suspicious as to their authenticity and he seized the stock on the stall. Originally the seizures and the enquiry thereafter were in fact taken pursuant to the provisions of the Copyright Design and Patents Act 1988; but ultimately the appellants were charged, as we have said, under the Trade Marks Act of 1994.

When the appellants were questioned about the material, they denied the offences. They in effect accepted that the relevant material consisted of what were described as "bootleg" items, that is unauthorised recordings of concerts. They both accepted that they operated in what they described as a "grey area", but believed that trading was permissible.

When the prosecution was first brought against these two appellants, the prosecuting authorities considered that it was appropriate to charge the partnership under which they were at the time trading, namely Bionic Records, and the original indictment consisted of a number of paired counts, charging, firstly, Bionic Records with unauthorised use of a trade mark and, secondly, the two individual appellants in separate counts.

When it came to the trial date it was accepted that the partnership had been wound up and no longer existed. As a consequence the judge gave leave to amend the indictment so that the paired counts were essentially consolidated and were phrased in the following form, and we can use the first count of the indictment as the example:

The form of the indictment was dictated by the wording of the relevant sections of the 1994 Act, which provide as follows:

As we have said, leave was given by the trial judge for the indictment to be amended in the terms to which we have referred and the jury proceeded to consider the matter on the basis of that indictment.

At the conclusion of the evidence the judge summed up the issues to the jury in the following general terms. He directed them that the first ingredient that the prosecution had to prove was that both defendants were partners in Bionic Records. The second ingredient he directed them to consider was whether the partnership, with a view to gain for itself, undertook the commercial activities that were alleged. Third, that the discs bore a sign which was identical to or likely to be mistaken for a particular registered trade mark. Fourth, that the commercial activity was carried out without the consent of the trade mark proprietor. Fifth, that the sign was used as an indication of trade origin. The jury were then directed that they should consider whether or not the defence under section 92(5) had been established, namely, as the judge put it, that the defendants believed on reasonable grounds that the use of the sign in the manner in which it was used was not an infringement of the registered trade mark. It was in the light of those directions that the jury convicted the appellants of the counts with which we are concerned.

On behalf of the appellants there are two issues raised. The first relates essentially to the form of the indictment. It is submitted that this particular Act sets out a procedure which carries within it the seeds of duplicity on the basis that there is a distinction between section 92 and section 101 as to the defences which are available, particularly where the defendants are the partners, where the issue which may have to be determined is whether a defence under section 92(5) is available to that individual, or whether there is a defence only under section 101(4).

The next point that is made in relation to the form of the indictment is that it was inept, because the section under which the prosecution purported to proceed, that is section 101(4), requires there to have been a conviction of the partnership before the partners themselves can have liability by reason of the wording of the Act.

The second general ground of appeal relates to a discrete issue relating to evidence that was called on behalf of the prosecution to which we will return.

As far as the first ground of appeal is concerned, we consider that the arguments are misconceived. The section which sets out the offence is section 92; that is the offence creating section. Section 101 deals with the question which arises if the prosecution are confronted with the fact that a partnership is involved in the alleged offence, and the procedural steps which should then be taken if they choose to proceed against the partnership.

In the present case the partnership did not exist at the time of the trial. Accordingly, no proceedings could be pursued at the date of trial against the partnership. Nonetheless, the prosecution were entitled to, and did, proceed on the basis that the partnership could be said to have been guilty of the offence under section 92 at the time the offence was committed. The consequence of that was that the appellants were liable pursuant to the provisions of section 101(4) if the prosecution established that the partnership was guilty. That is precisely what took place at the trial in the way the judge's summing-up indicated.

The argument that there was duplicity is also, in our view, wholly unfounded. There was only one offence which these two appellants faced. It was an offence under section 92 which they were proceeded against pursuant to the provisions of section 101(4). The only condition precedent to their conviction as a result was that the partnership should have been guilty itself of the offence. The subsection does not require there to have been a conviction of the partnership. It simply requires that the court should be satisfied that the partnership is guilty of the offence. That is, as we have said, the way the judge directed the jury. In determining whether or not the partnership was guilty of the offence, clearly one of the issues that the court had to consider was the extent to which the defence under section 92(5) was made out on in the case of these appellants. In cases where a partnership is said to be liable, the actions of the person or persons who commit the actus reus of the offence will be the relevant actions and it will be his or their mens rea in the section 92(5) sense which will be relevant in this instance. The judge considered that on the facts of this case both appellants were entitled to have the issue put before the jury in order for the jury to determine whether that defence was made out. The jury decided that it was not made out and it was in those circumstances they convicted.

There is nothing, therefore, in this case about which these appellants can, in our judgment, complain in relation to the form of the indictment, or the way the matter was put to the jury by the judge in his summing-up.

We turn then to the discrete issue which relates to evidence which was called on behalf of the prosecution. The evidence was that of a Mr Vernells. He gave factual evidence in relation to the discs which were seized, but he also gave expert evidence to this extent. He described to the judge why it was that he considered that the discs were what were described as bootleg discs. He further gave evidence that major trade mark proprietors did not consent to the making of bootleg recordings of any of the artists in respect of whom they owned the trade marks. It seems to us that Mr Vernells was entitled to give that evidence as an expert. It went directly to the issues raised by the defence, in particular under section 92(5), and accordingly was capable of being of assistance to the jury in their determination of that issue. It was further evidence which could assist the jury to determine whether or not there was in fact any consent by the proprietors of the trade marks to the use that was being made of their trade marks on the discs in question. In those circumstances, we cannot see that the evidence that Mr Vernells gave could in any way be said to have been irrelevant.

It is said that the context in which he made his original statements upon which his evidence was based was essentially in relation to consideration at that time of breaches of copy right. It seems to us that the evidence as presented to the jury by both Mr Vernells and by the judge in his summing-up adequately indicated to the jury the distinction between the two, which was, therefore, not something which, in our judgment, could have been said to have raised any question marks in the jury's mind, or to have confused the jury in any way. In any event, the appellants' own evidence was essentially to the effect that they were aware that bootleg recordings were not recordings which were likely to have been recordings approved by the holders of the trade marks, and, indeed, were recordings capable of being sold at an enhanced price, one can only surmise, for that very reason.

In those circumstances, we do not consider that there is anything in the argument that the evidence of Mr Vernells should not have been admitted, or that the way in which it was given could in any way render the convictions of these two appellants unsafe. Accordingly, we dismiss these appeals.

Now that has this consequence that, as I understand it, if they took the benefit of it, both of these appellants have been on bail at some stage and accordingly they must be returned to custody to complete their sentences.

MR BLACKFORD: My Lord, I think that is clearly correct. In fact Mr Purseglove is now in custody in relation to another matter, which is a conspiracy in relation to trade marks, which was tried at the start of this year, or there was a plea of guilty at the start of this year. So he is in fact in custody in any event. My Lords, I do have an application for costs.

LORD JUSTICE LATHAM: Yes.

MR BLACKFORD: I can advise the Court that the amount of costs is £1,250. I ask that an order for half of that amount be made in relation to each of the defendants.

LORD JUSTICE LATHAM: Yes. Have you anything to say about that, Mr Boumphrey, Mr Living?

MR LIVING: My Lord, I have not been given a schedule of costs. I have only just found out the amount of it, so I can't comment on what has been charged, simply to say that Mr Wakefield will have to go back to prison. He is self-employed. He can't earn whilst he's not working in his shop and I would ask you to take that into account. It is -- whilst I understand the prosecution in this case is not the CPS, but is a trading standards organisation, it is still, in my submission, open to the court to take the defendant's personal circumstances into account when deciding what, if anything, to award in costs.

LORD JUSTICE LATHAM: Mr Boumphrey.

MR BOUMPHREY: My Lord, two matters. Firstly, Purseglove's current conviction relates to a conspiracy in relation to copy right matters rather than trade mark matters. I say that just for the sake of the record. Mr Purseglove is currently serving three and a half years on that conspiracy with a five year possible sentence in default if he fails to make a £1.8 million confiscation order that has been made against him. I expect in the circumstances a cost sum of £1,250 will make little difference to his total position. But my expectation is that if an order is made for that sum, it is likely to join the end of the queue -- a long queue of creditors, and in those circumstances it might be something that the prosecution might not wish to take any further steps in relation to.

LORD JUSTICE LATHAM: Yes.

MR BOUMPHREY: The situation so far as Mr Purseglove is concerned is that there is a restraining order on behalf of this Court in relation to him and the money he can spend. I am expecting the situation to arise where the receivers are appointed in relation to his existing assets. So if there is an order made against him, that would be a matter that they will have to consider as to where it falls in the queue for Mr Purseglove's assets.

LORD JUSTICE LATHAM: Yes.

MR BLACKFORD: My Lord, I should have said that the amount that I mentioned is purely counsel's fees and --

LORD JUSTICE LATHAM: Sorry, remind me, is it £1,250 or £1,500?

MR BLACKFORD: £1,250. And in relation to Mr Wakefield it is fair to say that only a few weeks ago an order was made in relation to the costs of the trial in this case in the sum of, I think, £13,000. I don't think, despite where he is going to spend the next two months, I don't think that there is a problem as to means and I don't think really that that is --

LORD JUSTICE LATHAM: Yes.

MR BLACKFORD: -- suggested is in any detail by my learned friend.

SIR EDWIN JOWITT: Is there a confiscation order made in his case?

MR BLACKFORD: Not in relation to Mr Wakefield. That was not the -- there was an application for a confiscation order, but in the event that was not proceeded with because of the other matter in relation to Mr Purseglove, and that's why the orders for costs were made so recently, because the confiscation order proceedings were only dropped that recently.

LORD JUSTICE LATHAM: Right.

MR BLACKFORD: But in relation to Mr Purseglove I say that the prosecution is entitled to its costs. There may be some difficulty in recovering them, there may not. But it is a small sum in relation to the £1.8 million confiscation order that has been made and quite clearly Mr Purseglove is a man of some considerable means.

LORD JUSTICE LATHAM: We will retire.

LORD JUSTICE LATHAM: We consider that in the circumstances it would be appropriate to make an order that the appellants pay the costs of the prosecution today in the sum of £1,250 which will be divided equally between the two appellants.

I don't know in those circumstances, Mr Living, whether there is any application in relation to time to pay as far as Wakefield is concerned?

MR LIVING: My Lord, there certainly will. I didn't know -- I have discussed it with my learned friend. There certainly will be an application for time to pay the whole of the costs. There wasn't an application in front of His Honour Judge Playford, because, of course, he stayed the order pending the outcome of this appeal.

LORD JUSTICE LATHAM: Yes.

MR LIVING: My learned friend is of the opinion that the application is better made to the magistrates who will --

LORD JUSTICE LATHAM: My personal view is that the right way to deal with it is to -- or is likely to be to roll all the liabilities up and for consideration to be given to time to pay the whole of that by the appropriate Magistrates' Court on enforcement.

MR LIVING: My Lord, yes. That is ...

LORD JUSTICE LATHAM: Yes, thank you. Thank you all very much.