G-Star Raw Cv v Rhodi Ltd & Ors

The Claimant (“G-Star”) carries on business as a designer, manufacturer and distributor of clothing and fashion accessories. In particular, G-Star is one of Europe’s leading denim fashion brands and designers of contemporary urban garments.

In this action, G-Star, represented by Hugo Cuddigan, seeks injunctions, orders for delivery up, an inquiry as to damages or an account of profits, and other relief in respect of alleged infringement of the United Kingdom unregistered design rights in the design of a pair of contemporary jean trousers known as the “Arc Pant”. The Defendants contend that the rights in question entered the licence of right period under section 237 of the Copyright Designs and Patents Act 1988 (“the CDPA”) on 1 January 2014, such that no injunction restraining infringement is now available to G-Star on any view.

G-Star accepts that all the articles which, as it alleges, infringe its rights were made abroad. However, G-Star contends that they are “infringing articles” pursuant to section 228(3) of the CDPA, on the basis that (a) they have been imported into the United Kingdom and (b) they copy G-Star’s design so as to produce articles exactly or substantially to that design, such that they would have infringed G-Star’s unregistered design rights if they had been made in the United Kingdom. G-Star’s claim against the corporate Defendants is accordingly for secondary infringement pursuant to section 227 of the CDPA. G-Star also has a claim against the individual Defendants on the basis that they entered into a common design with some or all of the corporate Defendants to do the acts which, on G-Star’s case, involved infringement of its rights.

The claim relates to 9 separate styles of jeans marketed under the “Voi” brand, called “Bowral”, “Capel”, “Carton”, “Ibaraki”, “Jurien”, “Maleny”, “Vale”, “Vobar” and “Winton” (“the Rhodi Styles”). The Defendants, represented by Jonathan Hill, take issue with G-Star’s case root and branch. However, their main line of defence is that (a) none of the Rhodi Styles are substantially the same as the Arc Pant, and no constituent part of them is substantially the same as its counterpart in which G-Star claims that unregistered design right subsists and (b) in any event, they did not copy the Arc Pant.

According to a witness statement made by their solicitor at an earlier stage of these proceedings, the Defendants contend that “their styles were created without reference to the Arc Pant” and “they created their designs in late 2011 onwards by just following general fashion trends in the denim market, and to the extent that their styles have similarities with the Arc Pant this is due to them sharing generic features which had by late 2011 become common”. However, it forms no part of their case before me that the designs in issue are commonplace – or, for that matter, that any of them are functional.

In many cases there will be an inter-relationship between the issues of whether articles have been made substantially to a design and whether that design has been copied. If there is a substantial similarity between the defendant’s design and that of the claimant,

Confusingly, and contrary to what their names suggest, it appears, and is admitted on the pleadings, that it was the Second Defendant, Rhodi Inc. Imports Limited, that stocked for commercial purposes, offered for sale and put on the market in the United Kingdom the allegedly infringing articles; and that it was the Fifth Defendant, Rhodi Suppliers Limited, that imported those articles and sold them to the Second Defendant.

It is denied that any of the other corporate Defendants played any part in the activities of which G-Star complains. There is evidence that the First Defendant, Rhodi Limited, supplied staff who worked on those activities, and that the Fourth Defendant, Rhodi Marketing LLP, operated a website that had some involvement in those activities. I return below to whether these facts provide a basis for establishing liability against them. So far as concerns the Third Defendant, Voi Jeans Limited, and the Sixth Defendant, Rhodi Group Limited, however, as Mr Cuddigan effectively conceded in closing, in my judgment G-Star has no real case at all, and I say little more about them.

This is not the first instance of litigation between these parties, or some of them. Following initial test sales to the public in June 2008, the Arc Pant was fully launched at an industry show in Berlin in July 2010, and G-Star went on to achieve sales of more than 2 million items by the end of 2012. In January 2010, G-Star became aware of a “Voi” style called “Mavrick”, which was described in a G-Star internal email dated 19 January 2010 as being “the most blatant copy [of the Arc Pant] so far. Almost everything is the same, shape of leg, shape of front pocket, shape of back pocket”.

G-Star and others then brought proceedings (“the “2010 proceedings”) against (among others) all the Defendants to the present action except Voi Jeans Limited and Rhodi Marketing LLP (“the 2010 Defendants”), alleging infringement of design rights in the Arc Pant and other G-Star styles in relation to various “Voi” styles of jeans including “Iceman” and “Mavrick”.

The 2010 proceedings were compromised by a Consent Order dated 15 July 2011. The terms of settlement are confidential, but included provision for the 2010 Defendants to procure a bank guarantee to which G-Star could have recourse in the event that G-Star provided satisfactory evidence that G-Star’s rights had subsequently been infringed by the 2010 Defendants. On 14 February 2013, G-Star made a claim under that guarantee, which the bank met using monies that it recouped from Rhodi Group Limited.

In the present action, both sides place reliance on these events.

On the one hand, G-Star relies upon them (a) as a step in the story of the Defendants’ alleged copying of the Arc Pant, and (b) as relevant to its case that (as it needs to establish to make good a claim of secondary infringement) the Defendants knew or had reason to believe that the articles complained of in this action were “infringing articles”.

On the other hand, the Defendants contend that there was no such subsequent infringement, and, accordingly, that G-Star was not entitled to payment under the above bank guarantee. The Defendants therefore counterclaim for (a) a declaration of noninfringement and (b) repayment to Rhodi Group Limited of the sum which G-Star obtained under that bank guarantee. The Defendants also argue that this history supports the improbability that they would have copied the Arc Pant as alleged in the present action. They say, in essence, (i) “once bitten, twice shy”, and (ii) that it would have been foolhardy for them to do this, because it would have been obvious to them that G-Star would be monitoring their compliance with the above settlement agreement.

The genesis of the present action occurred in December 2012, when G-Star learned of the existence of the “Jurien” style, which it regarded as an infringement of its rights.

By letter dated 12 December 2012, G-Star’s solicitors objected to the “Jurien” style, and complained that the terms of settlement of the 2010 proceedings had been breached: “… the JURIEN style substantially reproduces the majority of the prominent features of two particular Voi styles complained of in [the 2010 proceedings] … Our client is very surprised that you have chosen to reproduce our client’s design again, simply using a new style name, in such a flagrant manner. In correspondence and discussions during those earlier proceedings our client made it abundantly clear that such infringing activity by your client would not be tolerated, and would be the subject of immediate action if it occurred”. G-Star subsequently objected to other “Voi” styles.

Mr Browne goes on to consider, in section 5 of his report, whether there is anything in the design corpus which would cause him to modify those conclusions. Having considered the design corpus both up to the assumed date of design of the Defendants’ “Iceman” and “Mavrick” styles in 2009 and then from that date up to the date of design of the Rhodi Styles, and in particular a number of third party styles relied upon by Mr Sajid in his report, Mr Browne gives a negative answer to that question. He concludes as follows:

“6.1

For the reasons set out in section 5 above, there is nothing in the Design Corpus presented by Mr Sajid as at 2011/12 which alters my views set out in section 4 above. In my view, the ARC pant is a different shape to almost all of the other styles on the market, even around the time of the design of the Defendants’ garments (except, of course, Rhodi’s Iceman and Mavrick styles). The design features Mr Sajid refers to in general terms, namely the use of “twisted seams”, a “third pattern piece”, and “darts” at the knee, are all generic design ideas. The examples he refers to show how these general design ideas have been used in practice, by various designers both at the high end of fashion and on the high street. It is clear from these examples that there are many ways to deploy these design ideas, most of which create very different finished products.

6.2

In conclusion, there does not appear to have been any style from which the Defendants could have drawn inspiration that would have resulted in the group of nine styles that they produced; there are in my view too many similarities to the ARC and the Iceman and Mavrick for the cutting patterns and resulting shapes of the finished products to be a co-incidence.”

In cross-examination, Mr Browne accepted that he may have misunderstood one aspect of the Defendants’ case concerning the way in which they had created the “Iceman” and “Mavrick” styles. However, he said that any such error on his part had not affected his general perception of the plausibility of the Defendants’ case.

Mr Hill was also very critical of the fact that, in re-examination, Mr Browne said that he had been asked by River Island, at a time when G-Star had approached River Island, whether G-Star “would have a case” (meaning, in context, in relation to infringement of the Arc Pant) and he had said “Yes, definitely”, when there was no hint of this in Mr Browne’s report. In my judgment, however, this was simply an instance of how further evidence can sometimes emerge in the course of oral testimony. In any event, I do not consider that it has any impact on the reliability of Mr Browne’s evidence on other topics.

In my judgment, to the extent that it was challenged, Mr Browne’s evidence was not materially dented by cross-examination. As a witness, he was clear, credible and balanced. I found Mr Browne’s evidence cogent and reliable, and, where they differ, I prefer it to the evidence of Mr Sajid, whether as expressed in his reports or orally.

Between the date of production of Mr Sajid’s first report and the production of his second report, dated 8 August 2014, Ms Moore carried out an exercise for the purpose of comparing the shapes of the panels of the Arc Pant with the shapes of the panels of each the Rhodi Styles. Ms Moore was a freelance fashion designer at the time, although she now works for the Fifth Defendant. The exercise, in short, involved placing garments in a box with straight sides, and then measuring the distances at various points between the sides of the box and the edges of the garments. The measurements she took

At first blush, these exhibits suggest a significant difference between these respective panel shapes. However, even a brief examination reveals that this initial impression is misleading. The reason is that, even on the face of the exhibits, the shapes of the garment pieces contained in the exhibits do not match the measurements that are shown in the exhibits. Thus, for example, in some instances where measurements from the edge of the box would suggest that the garment piece is curving one way, it is shown as curving another way; in some instances where the measurements would suggest that the garment piece is straight or almost straight, it is shown as curving significantly; and so forth.

These matters were explored in cross-examination with Ms Moore. So, also, was the question of whether some of her measurements, as recorded in these exhibits, were simply, and significantly, wrong. I do not consider that there was anything sinister in this, and I believe Ms Moore did her best to produce helpful comparisons. However, she was constrained to accept that the visual depiction of the results of her work was misleading and unreliable, and that in a number of instances her recorded measurements were wrong.

During the course of the trial, G-Star produced examples of the result of re-working Ms Moore’s exhibits so that the visual depictions matched her measurements. The results were quite different from those depicted visually in the exhibits to Ms Moore’s witness statement. In addition, the re-worked results showed greater similarities between the shape of the pattern pieces of the Arc Pant and those of the exampled Rhodi Styles. Appended to this judgment are examples of Ms Moore’s originals and these reworkings overlaid.

I should say that Mr Cuddigan made clear that G-Star did not accept that Ms Moore’s methodology was anything like as accurate as that used by Ms Van Der Tol in any event.

In his second report, Mr Sajid explains that he was asked to consider the above exhibits to Ms Moore’s witness statement and that he “reviewed and considered Estelle Moore’s evidence and compared the pattern cuts for each of the 9 Voi styles in suit to the shapes produced by the pattern cuts of G-Star’s design”.

Mr Sajid explains that he was also asked to consider exhibit “CW02” to the first witness statement of Ms Wittkampf. He states that he reviewed and considered the shapes of the garments displayed on a mannequin shown in that exhibit, and “As a general observation, I would note that the designs shown in the images of the garments as displayed on the mannequin do look similar. However that sort of comparison, in my opinion, does not show the detail of the designs or the shape of the pattern cuts from which they are formed. When examined closely, differences in the designs become apparent”.

Mr Sajid explains that he was also asked to consider Mr Browne’s expert report.

At paragraphs 5-13 of his second report, Mr Sajid then sets out a detailed comparison of the pattern cuts in Ms Moore’s exhibits with those of the Arc Pant. His conclusions, at paragraphs 14-17, include the following:

“14.

The Voi garments might have got inspiration or indirect inspiration from the GStar Arc but this seems to me to be the sort of trend following … [that] is nothing out of the ordinary, as almost every modern fashion company follows trends in the market to keep relevant – especially high street fashion brands such as Voi. In my opinion it looks like two different designers independently coming to a similar conclusion as to how to implement some generalised design ideas.

15.

The pattern cuts of the Voi styles have numerous differences when compared with the G-Star Arc pattern cuts and in my opinion these differences are significant; especially when considering the narrow design freedom within which the designers have had to work. The narrow design freedom is as a result of the nature of the garment and the ergonomic considerations which must be taken into account for the jean to fit round a human waist and limbs. In general I would say the Voi pattern cuts are cruder cuts as opposed to the more refined Arc cuts.

16.

I would always expect there to be a certain amount of similarity between the garments when considered at a high level of abstraction, owing to the narrow design freedom, and it is true that the Voi styles look similar to the Arc when considered from a distance, as for example in the mannequin photographs. However, when considered in greater detail, the differences become apparent, especially in relation to the more prominent inseam when considering the mannequin photographs. Furthermore, the pattern cuts of the Voi styles have been cut in very different ways, and in some cases bend and twist in opposite directions to the Arc (see the Carton (Exhibit EM04), Jurien (Exhibit EM06) Vale (Exhibit EM08) and Vobar (Exhibit EM09)).

17.

Mr Browne too accepts that he can see some slight alteration to the precise shapes of the panels. However, in my opinion the differences in the shapes are not slight but significant and I do not share Mr Browne’s opinion that the shape and appearance of the garments along with the pattern pieces mean that any similarity is too much of a coincidence. If the Voi designs were copied from the Arc I would expect the pattern shapes to be a lot closer. In my opinion the Voi designs are their own interpretation of the general arc style or concept, rather than copies of the G-Star Arc itself.”

Mr Sajid was knowledgeable, and engagingly enthusiastic, about garment design. In my judgment, however, there are a number of problems about the reliability of his evidence:

There were some other interesting exchanges in the course of Mr Sajid’s crossexamination. At one point, when he was being asked about a version of one of the third panel piece shapes, he said “It is a very streamlined version – I would say it is the GStar Arc, from my understanding”. In fact, it was a panel piece “reverse engineered” by Ms Van Der Tol from the “Iceman” style. At another point, when Mr Sajid was being asked whether he had been told the whole story of the 2010 proceedings, he said that it had been brought to his attention that “they did copy previously” and that he believed that he had been instructed that the “Iceman” and “Mavrick” were copied from G-Star.

Mr Hill attached a detailed Schedule to his opening Skeleton Argument, in which, building in large part, but not exclusively, on Mr Sajid’s comparisons, Mr Hill submitted in respect of each of the “Capel”, “Carton”, “Jurien”, “Maleny”, “Vale”, “Vobar” and “Winton” styles that it is clear that “none of the 5 claimed designs are reproduced exactly or substantially in the shape or configuration of [that style] or in any composite part of it”.

Mr Hill did not repeat that submission with regard to the “Bowral” and “Ibaraki” styles, in respect of which he accepted that there is “a greater level of similarity to the Arc Pant”. However, he submitted (a) that these similarities were “at the level of ideas, concepts and general shape”, which is not protected by the rights claimed by G-Star, and (b) that, when considered at the proper level of detail and having regard to the ambit of G-Star’s claimed rights, these styles, also, were not made exactly or substantially to the Arc Pant Designs.

It is clear from section 226(2) of the CDPA, and was not in issue between the parties, that the test of infringement of unregistered design right is different to that of infringement of copyright. As Aldous J said in C& H Engineering v F Klucznik & Sons Ltd [1992] FSR 421 at 428: “Under section 16 copyright will be infringed if the work, or a substantial part of the work, is copied. Under section 226 there will only be infringement if the design is copied so as to produce articles exactly or substantially to the design”. That passage was approved by the Court of Appeal in L. Woolley Jewellers Ltd v A & A Jewellery Ltd [2003] FSR 255 (Arden LJ at [19]). Accordingly, it would not be right to say that reproducing a substantial part of a design will, without more, amount to an infringement.

In my judgment, however, the extent to which the two different approaches will produce a different result in practice will often depend upon how the design right claim is framed.

The C& H Engineering case provides an illustration. That case concerned pig fenders, which have the purpose of providing open-air spaces in which piglets are retained while the sows are able to step out. The design in issue concerned a commonplace pig fender which incorporated a tube around the top edge (the purpose of which was to protect sows from injury when stepping over the side). This was the subject of a counterclaim by the defendant. Aldous J held that the defendant had not established that it was the owner of that design, and the counterclaim therefore failed on that ground.

Aldous J went on to say (at p429) that even if the defendant had established that it owned that design, he would have held that the plaintiff had not infringed that design because the plaintiff’s pig fenders were not made exactly or substantially to that design. This was because, although the two designs had in common “a tube as the roll bar” and in that respect were “substantially the same”, nevertheless “taken as a whole the two designs are not substantially the same” because of “the design features which enable the plaintiff’s pig fender to be stacked” which “contrast with the overall design features of the defendant’s pig fender”. If the defendant had identified the roll bar as being the part of its design which it claimed to have been taken exactly or substantially, and had established ownership of design right in that part of its design, the result might have been different.

I am therefore broadly in agreement with the analysis of the author of Russell-Clarke and Howe on Industrial Designs, 8^th edn, para 4-096A and, in particular, with the suggestion that, in the case of unregistered design rights: “The question of “part” thus comes in at the stage of subsistence of the right, rather than at the stage of infringement”.

I also agree with the authors of The Modern Law of Copyright and Designs, 4^th edn, para 48.5 that the C& H Engineering case “illustrates the importance of carefully defining the scope of the unregistered design which is sued upon. The owner should restrict its claim to the part(s) of its design which (a) is arguably not commonplace, and (b) appears to have been copied by the alleged infringer”.

Although Mr Cuddigan accepted that there is a conceptual difference between the test of infringement of copyright and that of infringement of design right, he nevertheless submitted that reasoning concerning substantiality and copyright works is helpful for purposes of the present case. His argument, in outline, went as follows:

Mr Hill disputed the validity of this approach. He submitted, in outline, as follows:

Mr Cuddigan countered Mr Hill’s submission based on Ocular Sciences v Aspect Vision [1997] RPC 289 by saying that this decision does not establish that details which are invisible to the consumer count, but instead establishes that such details can, in particular circumstances (where the consumer would be blind to any design features), be relevant. Mr Cuddigan also submitted that, on proper analysis, the CJEU’s reasoning in Infopaq is derived expressly from the Berne Convention, to which the United Kingdom is a signatory, and pursuant to which the CDPA was enacted.

In my judgment, the similarities between the Arc Pant and the Rhodi Styles are striking.

Assessing the level of similarity by comparing the shape of the respective pattern pieces, I consider (in agreement with Mr Browne) that (a) the cutting patterns for the Arc Pant and the “Bowral” and “Ibaraki” styles (and, coming before them in time, the “Iceman” and “Mavrick” styles) are almost identical and (b) although the cutting patterns for the “Capel”, “Carton”, “Jurien”, “Maleny”, “Vale”, “Vobar” and “Winton”

Paraphrasing Mr Hill’s submissions, I consider that any changes are insubstantial, in that they will not be significant in the eyes of consumers to whom the designs are directed.

In my judgment, a consideration of the shape and configuration of the garments by conducting a detailed examination of the garments, in particular as shown by the photographs to which I have referred, leads to the same conclusion in respect of all the Rhodi Styles. In short, the substantial reproduction of the shape and configuration of the Arc Pant Designs and, indeed, the Arc Pant, is evident from comparing the photographs of the Arc Pant and the photographs of each of the Rhodi Styles with one another.

In reaching these conclusions I have not lost sight of Mr Hill’s submission that the first of the Arc Pant Designs, namely “the shape of each of the legs of the Arc Pant, that is to say the shape of the legs in the most capacious arrangement that the arrangement of their fabric allows” is one that is for practical purposes impossible to determine, because (he submits) no evidence has been provided showing the “most capacious arrangement” of the Arc Pant and it is not possible to place the sample in such an arrangement by hand. I consider that it is possible to determine this shape from the arrangement of the Arc Pant on the mannequins (as shown in the photographs). However, even if that was wrong, such that this claim ought not to succeed, that would not affect G-Star’s other bases of claim.

In addition, these conclusions do not depend upon the validity of Mr Cuddigan’s argument that the reasoning which underlies the approach to substantiality in copyright cases is of assistance for purposes of a design right case such as the present. I have reached my conclusions without the need to have recourse to that reasoning.

I consider that this is as it should be, as I am not convinced that this reasoning takes matters any further in the context of unregistered design rights claims. Provided the claimant identifies correctly the part(s) of his design which he claims to have been taken exactly or substantially, he will obtain protection against unfair misappropriation of the time, skill and effort that he has expended on creating that design. In those circumstances, no purpose is likely to be served by investigating the extent to which other aspects of his design are also “original”. Conversely, if he pleads his design right case too widely, that may cause the claim to fail even if it might have succeeded if it had been advanced on a narrower basis, and the day will not be saved by saying that there are some aspects within the claimed right that are “original”. The C&H Engineering case appears to be an example of this. In my view, all this is the corollary of the proposition, which I believe to be correct, that, in the case of unregistered design rights: “The question of “part” comes in at the stage of subsistence of the right, rather than at the stage of infringement”.

In any event, I agree with Mr Hill that, whatever the rights and wrongs of that argument, the less detail that is taken, the more likely that any copying relates to generalised ideas, and that would not be infringement. In the present case, my conclusion is that a large amount of detail is replicated in each of the Rhodi Styles. It is that consideration which impresses me. However, if the test also embraced whether protection should be accorded to the product of intellectual creation, I consider this would weigh heavily in favour of G-Star, in particular in light of the evidence of Ms Van Der Tol.

The nature and extent of the similarities in the present case, coupled with the opportunity which the Defendants had for access to the designs in suit, raises a rebuttable inference that the Rhodi Styles were produced by copying those designs.

The expert evidence as to the similarities and differences between the Arc Pant and the Rhodi Styles is sufficiently rehearsed above. In line with my conclusion that the evidence of Mr Browne is more reliable and of more assistance than that of Mr Sajid on the issue of whether the Rhodi Styles were made substantially to the Arc Pant Designs, I consider that Mr Browne’s reasons for believing that there was copying in the present case are far more coherent and persuasive than Mr Sajid’s reasons for suggesting the reverse.

However, the more important evidence is that of the Defendants’ witnesses of fact.

The starting point is the Defendants’ pleaded case that the Rhodi Styles were “the product of the Second Defendant’s designers’ own skill and judgment, and involved their own design ideas as well as the application (in particular forms created by them) of general design ideas fashionable in the design field in 2011 and 2012” (see paragraph 11 of the Amended Defence and Counterclaim).

The Defendants’ main witness in support of this case was Salim Bux. In his witness statement, he describes himself as being “of Rhodi Inc. Imports Limited” (i.e. the Second Defendant, and the distributor of the Rhodi Styles), but says that he is currently employed by RMS Limited (which is not a Defendant) and provides services as a designer to Rhodi Suppliers Limited (i.e. the Fifth Defendant, and the importer of the Rhodi Styles), which he refers to as “Rhodi”. He says he has been employed by Rhodi for 11 years, and that: “For the last 5 or 6 years I have been involved in the design of jeans for the company”.

According to his witness statement, between about 2009 and August 2013 Salim Bux worked with another designer, Dale Thorpe, who left the company around November 2013. They generally worked together on the designs of jeans, and did so in respect of the Rhodi Styles. They both had input into the design process, they discussed the designs with each other, and they both instructed their colleagues who operated the

Salim Bux states that “In total Rhodi put around 250-300 styles on the market each season; this includes t-shirts and other lines. There are two seasons for each year, Spring/Summer and Autumn/Winter. Rhodi puts 40 plus styles of jeans on the market per season. Additional to this Rhodi also produces around 100 styles for two midseason ranges, otherwise known as ‘injections’”. He explains that the Rhodi Styles were produced over a number of different seasons, and for this reason, and in light of the number of designs produced each year, that “it is difficult for me to remember specific details about particular styles, for example exactly what designs we would have researched and sampled or which fabric samples we would have sent to the factory”.

Nevertheless, he explains that as part of the design process for the Autumn-Winter 2012 season it became clear that a very popular general trend was jeans with a twisted leg effect, and that various examples of twisted leg styles were on the market sourced from various different designers and retailers. Accordingly, the Defendants “decided that it would be important to incorporate this into our range to keep pace with the market”.

He further states: “All of the designs at issue in this claim were created by cutting the seam at a bend, additionally often using a dart at the knee and an additional panel. This method was used by a number of other designs on the market to create this effect. For example, jeans by Jack and Jones, Michiko Koshino and River Island would have used this method. We would have looked at samples of these types of jeans, although we do not tend to retain them after the style has been completed and gone on to the market, as I have explained above”.

Salim Bux then addresses each of the Rhodi Styles, stating in respect of each (a) that he created the design for this style working with Dale Thorpe and (b) that the design process which was followed accorded with the general pattern described above.

In cross-examination, Salim Bux confirmed that he had no training as a designer, and said at one stage that he did not consider himself a designer although he did contribute his input and his ideas. When asked about the creation of the Rhodi Styles, he confirmed that Dale Thorpe was the “lead designer” and said “mainly, it was just Dale Thorpe, obviously, and then, obviously, I was just liaising with the factories”.

He stated, further, that he was not knowledgeable about computers and that he was bad at drawing. When asked to explain how he communicated his design ideas he said: “Obviously, with the samples that we have”.

A series of questions were put to Salim Bux concerning the Defendants’ disclosure.

One of the documents disclosed by the Defendants is an email dated 1 September 2011 from Salim Bux to Scotts Garments, commenting on “pp samples” for (among other things) the “Ibaraki” style. In accordance with the design process described in Salim Bux’s witness statement, this email must have been preceded by other documents which would have been sent to Scotts Garments concerning the “Ibaraki” style. Salim Bux confirmed that a technical note would have been sent, and that he would have sent it. When asked whether he knew of the whereabouts of the email by which this technical note was sent, Salim Bux explained that he always deletes his emails (both incoming and outgoing) at, probably, the end of the year; and that he also deletes them from his deleted email folder. He also confirmed that he did not have a CAD which reflects the “Ibaraki”.

Similarly, when asked for an explanation as to why the Defendants had not disclosed any email or document which pre-dates the provision of pre-production samples for any of the “Bowral”, “Capel”, “Ibaraki”, “Maleny”, “Vobar” and “Winton” styles, Salim Bux replied “I could have deleted them. I cannot recall”.

When asked why, if he deleted his emails as he claimed, an email from him dated 20 November 2011 had been disclosed, he initially replied “I must have left that one. I have no idea. I cannot recall …” He later suggested that: “Probably this factory I did not delete the emails … because mostly they are all Scott garments”.

When asked how it had come about that an email from Dale Thorpe dated 18 November 2011 which includes “sms requests” concerning the “Capel”, “Jurien”, “Maleny”, “Vale” and “Winton” styles had been disclosed by the Defendants when at the same time they had disclosed no other earlier documents relating to any of these styles, Salim Bux replied “You will have to ask [Dale Thorpe] that”.

The documents disclosed by the Defendants include a Rhodi plc “Technical Sheet” dated 14 October 2011 relating to the “Bowral” style, the third page of which depicts a third panel piece which ends at the crotch, and the fourth page of which depicts a third panel piece which ends well below the crotch. It was suggested to him that, in particular in light of this inconsistency, and having regard to the actual configuration of the Defendants’ “Bowral” style garments, the factory must have been sent another document recording the actual shape that it was expected to produce. Salim Bux did not accept this, saying among other things, “We were not really bothered about the shape of the inside panel, as long as the panel was there … As long as it had an inside panel it was good enough for us”.

When asked about the “Technical Sheets” disclosed by the Defendants relating to the “Bowral”, “Capel”, “Ibaraki”, “Maleny”, “Vobar” and “Winton” styles, Salim Bux accepted that they all showed a similar shape for the third panel piece, but maintained that “The inside panel piece will be all different if you cut them all up”. He denied that this was because the shape was recorded on another document sent to the factory, and claimed that “the actual shape the factories have done it” and that the shapes would differ according to the factory the documents went to.

Salim Bux confirmed that no document had been disclosed in respect of the “Jurien” style. When asked why not a single email had been disclosed relating to JMB and Artistic Mills, in spite of the fact that similar processes would be followed with them and Scotts Garments, Salim Bux said: “On those styles we probably only sent it to one factory”.

In his witness statement, Salim Bux explains that he and other staff were told by Yusuf Valli that Rhodi had previously been involved in litigation with G-Star and that they should not base designs on G-Star jeans. When he was buying in and reviewing samples he therefore made a deliberate effort not to look at jeans originating from G-Star.

However, the technical sheet disclosed by the Defendants relating to the “Bowral” style includes the words “Colourway2: Dark Sand as G-Star Riley Loose”. Salim Bux explains that this is a reference to the colour way that Rhodi wanted to produce and was not a reference to the shape and configuration of the design, and he adhered to that explanation in cross-examination. He also states “As far as I can remember I had a sample of the G-Star Riley from before the original proceedings brought by G-Star. I did not buy this in specifically”. It appears that this recollection is wrong, because it

The G-Star Riley was an Arc Pant, and, according to Ms Wittkampf’s second witness statement: “the Riley is made from the same cutting pattern as the ARC pant that is the subject of these proceedings. It differs from the ARC only in relation to trim details … and so it has the same shape and configuration as the ARC”.

Mr Hill submitted that this evidence should be discounted because G-Star did not adduce evidence of the pattern cuts of the G-Star Riley, and in light of Ms Wittkampf’s evidence in cross-examination, which, it was suggested, showed that she could not say how close the design of the G-Star Riley was to the Arc Pant. I do not accept those contentions. Ms Wittkampf’s evidence is supported by the redacted copy of G-Star’s original production file for the “Riley Loose Tapered Style” which is exhibited to her second witness statement. If the Defendants considered that further documents ought to have been disclosed by G-Star, they could and should have sought further disclosure. I consider that, viewed compendiously, the answers which she gave in cross-examination (including her acceptance that G-Star Riley “may not have exactly the same dimensions as the original Arc put on sale in 2008”) do not undermine her written evidence.

The description of the design at the top of the same technical sheet is “ARC FIT DENIM WITH EMBOSSED SWIRL”. Salim Bux explained that the word “ARC” is a reference to the arc shape of the leg and the fit of the jean, and not to the Arc Pant. He referred to Internet searches in support of his contention that, at the material time, ARC was a well-known and commonly used word in the industry to refer to this shape generally. However, it was put to him in cross-examination that the fruits of those searches related to data that was available in 2014, not 2011.

During the cross-examination of Mr Browne, there was a revealing exchange concerning the thrust of the Defendants’ case as to how the Rhodi Styles were created. Mr Hill asked Mr Browne the following question: “If, for example, one were to give the following instructions to an experienced jeans factory: “(1), give us jeans with Arced legs, with twisting seams, which corkscrew around the leg when worn, bending inwards and backwards from the knee; (2) use three pattern pieces, with the third pattern piece tapering up the inside leg; (3) add a dart on the knee to help gather fabric there and; (4) foreshorten the back panel using the seam between the back panel and the third panel”, would it not be likely that the factory would come up with something looking very like the Arc Pant?” Mr Browne disagreed. He replied: “Where would that factory be, because in my experience they would not understand those instructions without reference to some form of garment or detailed tech packs or diagrams”. He later said of the documents disclosed by the Defendants comprising the written instructions that they say they provided to the factories “I think if you were to give this tech pack as it stands, you would receive a two-dimensional garment with panelling and darts, and I do not believe that you would have the corkscrew effect”. When Mr Hill asked about combining those documents with the verbal instructions which he had earlier suggested, Mr Browne replied “I do not think that is enough, certainly not dealing with China, Pakistan and India, no”.

In answer to a question from me as to whether it was the Defendants’ case that verbal instructions of that sort were in fact given to the factories, Mr Hill replied: “We do not know precisely what happened because they give evidence that they cannot recall because there are many designs, so what I am not seeking to understand is whether it is possible that a factory can [make garments on the basis of such instructions]”.

Salim Bux’s evidence about the Defendants’ design process was confirmed by a witness statement of Jan Vincent Goddard, who states that he is employed by RMS (Preston) Limited, but that he has worked for the Second Defendant for several years, at one time as UK Account Manager and more recently as made Head of Sales. However, he gives no detail of any involvement that he may have had in the design process for the Rhodi Styles.

Salim Bux’s evidence that, following the 2010 proceedings, instructions were given to the Defendants’ staff that no G-Star designs were to be used is confirmed by Yusuf Valli, whose duties are to manage the legal and financial matters of the corporate Defendants. He explains that “Having paid out heavily financially, it was of paramount importance that appropriate safeguards were put in place so as to minimise the risk that G-star would sue again”. Mr Valli also said in cross-examination that before requesting a statement from Pakistan he had checked that they had done a production run of the “Vale” style. However, this check was by reference to a document that had not been disclosed.

Finally, on this aspect of the case, the Defendants relied upon the evidence of Syed Muhammad Jasimullah. He is employed as “head general” by Freeway Exports, of Karachi, Pakistan, which has been producing Voi jeans garments for over 4 years. He states that “We have never copied, nor have been requested to copy, any G-Star jeans for Voi in over 4 years of working with them”.

Mr Jasimullah describes Freeway’s processes in a way that broadly mirrors Salim Bux’s description of the Defendants’ processes, and illustrates them by reference to one of the Rhodi Styles which Freeway was involved in making, at least at the sample stage, namely the “Vale” style. He states: “The process follows a very basic concept of cutting the front and back panel into a bow shape rather than straight, in order to achieve a bow shaped leg. Voi also requested that they would like the design to contain an inside panel, this was created merely by taking some of the fabric from the front and back panels, in the same bow shape as the front and back panel which resulted in the creation of an extra panel in the middle. This is a very basic concept and the way we created a bow legged, 3 panel pieced jean where the additional panel is on the inside of the leg”.

Mr Jasimullah ends by stating that Freeway definitely produced styles containing the concepts complained of in the present claim, and that the last such style which they produced for Voi was the “Vale” style, but “we do not retain records of product samples or designs from our customers unless they are for items which are currently in production”.

In cross-examination, Mr Jasimullah confirmed that he deals with Mr Salman Valliani, who is Rhodi’s exclusive agent in Pakistan. He said that he had received the sketches, specifications and designs relevant to the present case by email from Mr Valliani, that he had communicated by email with Mr Valliani, and that he had retained copies of those emails but had not been asked to produce them for the purposes of this litigation. He said that he had retained the cutting patterns for the various pairs of jeans that Freeway had made for Rhodi (which existed in physical form only, as Freeway did not use computers for patterns), that he had been asked to return them to Rhodi for the purposes of the present case, and that he had sent them to Salim Bux through the medium of Mr Valliani.

Mr Jasimullah agreed with Salim Bux’s description of the design process, but when it was suggested to him that Rhodi therefore has control of the shape of the garments that are produced at the end of that process he replied “Maybe, I do not know”. He said that he did not think that he would put the label “Made in India” on any products that were made by Freeway in Pakistan, but when it was suggested to him, on the basis that the “Vale” style garments in the present case were labelled “Made in India”, that the production run of those garments had come from India, he replied that he did not know about it. On the face of it, these answers are a little surprising. However, Mr Jasimullah gave evidence by video link and through an interpreter. Allowance needs to be made for those factors. In addition, those factors made it difficult to form a reliable assessment of his demeanour.

Pulling all these strands together, I do not consider that the Defendants have provided a satisfactory explanation of how the Rhodi Styles were produced, or come anywhere near rebutting the inference that they were produced by copying the Arc Pant Designs. In my judgment, the similarities between the Arc Pant and the Rhodi Styles arose from copying.

My principal reasons for reaching these conclusions may be summarised as follows:

It is accepted that the Second and Fifth Defendants, respectively, marketed and imported the Rhodi Styles. According to the evidence of Mr Valli, and the records at Companies House, the Third Defendant is a dormant company that does not trade, and the Sixth Defendant is the parent company of a trading group that holds property and does not itself trade. It is for these reasons that I said near the beginning of this judgment that G-Star did not appear to have any real case against the Third and Sixth Defendants. I shall address the individual Defendants separately below, when considering overall the case against them of common design. Therefore, the live issues under this heading concern the First Defendant, Rhodi Limited, and the Fourth Defendant, Rhodi Marketing LLP.

Rhodi Limited was formerly called Rhodi Plc. According to the records at Companies House, the turnover of Rhodi Limited for the year ended 30 September 2013 was £12,120,072, made up of (a) the supply of management services of £10,880,072 to the Second Defendant (b) the supply of management services of £1,135,000 to the Fifth Defendant and (c) an additional sum of £105,000. According to the records of other group companies at Companies House in 2012 (a) the Second Defendant paid £10,880,072 to another group company, RMS Preston Limited, for administration services and (b) the Fifth Defendant paid £1,135,000 to RMS Preston Limited for administration services. It seems that RMS Preston Limited simply paid these sums on to Rhodi Limited.

In addition, it appears that both the Second and Fifth Defendants have no staff costs, because they have no staff. Mr Valli was asked about this in cross-examination. He accepted that the Second Defendant has no staff, but he said that Rhodi Limited is only providing management services and did not accept that Rhodi Limited is running the Second Defendant’s business. He said that the Second Defendant’s business is run by the Second Defendant, albeit (of necessity) entirely with staff provided by Rhodi Limited.

In substance, therefore, as Firoz Bux accepted in cross-examination, the entire turnover of Rhodi Limited is attributable to administrative services charged to the Second and Fifth Defendants. Further, the Second and Fifth Defendants effectively divest themselves of all profits by these means: for example, the Second Defendant’s gross profit on turnover after cost of sales for 2012 was £11,783,834, but after deduction of administration expenses, and certain other minor adjustments, its operating profit was only £16,247.

As reflected in the evidence of Salim Bux and Mr Valli concerning the companies that they are employed by and the companies they work for, and by Salim Bux’s acceptance

According to Mr Valli’s witness statement, Rhodi Marketing LLP was incorporated on 17 October 2012 and “It is a newly incorporated company and the registered owner of the domain www.voijeans.com so as to promote our products”. Mr Valli did not suggest, and nor is that my understanding from any other evidence, that this excludes the Rhodi Styles. In cross-examination, Mr Valli confirmed that Rhodi Marketing LLP (a) trades from the same premises as the Second and Fifth Defendants and (b) had that domain name transferred to it by the previous owner, that is to say the Second Defendant.

The evidence before me included pages from that website. Those pages offer the “Voi” range of garments for sale, bear the name and address of Rhodi Marketing LLP, and include a copyright notice asserting that “All content and images” are the copyright of Rhodi Marketing LLP.

On this basis, I consider that both Rhodi Limited and Rhodi Marketing LLP participated in the material acts of secondary infringement. However, the extent of their participation is, in my judgment, a matter that is at large on the inquiry as to damages or account of profits (depending on which avenue of recovery G-Star elects to pursue). In particular, if Rhodi Marketing LLP did not begin operating the website until part way through the events of which G-Star complains, its liability may be limited accordingly.

Section 227 of the CDPA provides:

“(1)

Design right is infringed by a person who, without the licence of the design right owner—

(a)

imports into the United Kingdom for commercial purposes, or

(b)

has in his possession for commercial purposes, or

(c)

sells, lets for hire, or offers or exposes for sale or hire, in the course of a business, an article which is, and which he knows or has reason to believe is, an infringing article”.

Section 228 of the CDPA provides:

“(1)

In this Part “infringing article”, in relation to a design, shall be construed in accordance with this section.

(2)

An article is an infringing article if its making to that design was an infringement of design right in the design.

(3)An article is also an infringing article if—

It was common ground before me (a) that, pursuant to section 227 of the CDPA, in order to succeed against any Defendant, G-Star has to prove either actual knowledge that the Rhodi Styles comprised infringing articles or that, objectively, that Defendant had “reason to believe” that this was so and (b) that the correct legal approach to the latter issue is as stated in LA Gear Inc v Hi-Tec Sports plc [1992] FSR 121, per Morritt J at 129:

“Nevertheless, it seems to me that “reason to believe” must involve the concept of knowledge of facts from which a reasonable man would arrive at the relevant belief. Facts from which a reasonable man might suspect the relevant conclusion cannot be enough. Moreover, as it seems to me, the phrase does connote the allowance of a period of time to enable the reasonable man to evaluate those facts so as to convert the facts into a reasonable belief.”

Mr Cuddigan also referred me to Nouveau Fabrics Ltd v Voyage Decoration Ltd [2004] EWHC 895 (Ch) at [47], where Mann J first cited the above passage from the judgment of Morritt J and then continued as follows:

“Accordingly, “reason to believe” requires more than “reason to suspect”, and it requires an evaluation of all factors known to the defendant in order to see whether he fulfils the test. He does not have to accept a claimant’s assertions at face value, but he cannot ignore them either. Having been made aware of the claim of copyright and copying, he has to evaluate it. What start as grounds for suspicion have to harden into grounds for belief, whether or not the defendant actually believes it. His evaluation will, in many cases (and certainly in the present) have to include making reasonable inquiries, and the answer to the question of whether he has reason to believe will have to take the result of those inquiries into account”.

The parties’ opening submissions on these topics were relatively brief.

Mr Cuddigan submitted that: “The corporate Defendants’ objective knowledge for the purposes of secondary infringement must result from their involvement (or the involvement of their directors) in the [2010] proceedings. The Particulars of Claim in those proceedings asserted unregistered design right in the Arc Pant. That must be sufficient to fix all the Defendants with knowledge”. He observed that Asif Ibrahim Bux and Firoz Ibrahim Bux were Defendants to the 2010 proceedings, and that they were personally served with the Order recording the terms of settlement of those proceedings.

Mr Hill submitted that “[all the Defendants] say they did not know the articles were infringing, and G-Star have advanced no direct evidence to say that they did”. He also submitted: “specific steps were taken to avoid the influences of G-Star on the Rhodi design process after the conclusion of the [2010 proceedings]. This is strong evidence against knowledge or reason to believe that styles produced after that first claim were infringing. This evidence serves to underscore the implausibility of [the corporate Defendants] having actual knowledge that the articles in question were infringing, and what they could reasonably be expected to have known in the circumstances”.

Mr Cuddigan’s oral closing submissions did not take matters significantly further.

Mr Hill’s oral closing submissions were replicated in a written Closing Note. His main arguments were as follows:

Mr Cuddigan countered these points in a written Reply Note, as follows:

It seems to me that the heart of the matter is as follows.

First, the Defendants accept that, although infringement was neither found nor admitted, as a result of the 2010 proceedings they were well aware that G-Star claimed (a) subsistence and ownership of unregistered design right in the Arc Pant, and (b) that the “Iceman” and “Mavrick” styles infringed that design right.

Second, there is a difference between the 2010 proceedings and the current claim, in that if design right is claimed in respect of the design of the whole of an article (in the 2010 proceedings, the Arc Pant), it is the design of the whole of the allegedly offending articles (in the 2010 proceedings, the “Iceman” and “Mavrick” styles) which must be considered, whereas if design right is claimed only in respect of parts of an article (in the present case, the Arc Pant Designs), it is the design of the equivalent parts in the allegedly offending articles (in the present case, the Rhodi Styles) which must be considered.

Third, however, the greater includes the lesser in the sense that, if there is a case of subsistence and ownership in respect of the design of the whole of the Arc Pant and of infringement of design right by the design of the whole of the “Iceman” and “Mavrick” styles, there must be or is at least very likely to be a case of subsistence and ownership in respect of some parts of the Arc Pant and of infringement by the design of the equivalent parts of garments made to or substantially to the design of the whole of the Arc Pant.

Fourth, the fact that the Rhodi Styles were made substantially to the design of both the Arc Pant and the Arc Pant Designs was, in my judgment, apparent from comparing the shape and configuration of the Rhodi Styles with those of the Arc Pant, versions of which were available to the Defendants, and at least one version of which (the G-Star Riley) was either acquired or retained by Salim Bux after the conclusion of the 2010 proceedings.

Fifth, the making of the Rhodi Styles involved copying the Arc Pant Designs.

Sixth, in my judgment, this would have been apparent from a comparison of the Arc Pant Designs with the equivalent parts of the Rhodi Styles, bearing in mind the unusual shape and configuration of the Arc Pant Designs and the extent to which those aspects of the Arc Pant were replicated in the Rhodi Styles, and a fortiori from a comparison made by someone with knowledge of the 2010 proceedings and who was concerned to avoid importing and marketing garments which G-Star might claim to be “infringing articles”.

Seventh, these matters were sufficient to give those who could and should have made such a comparison at least “reason to believe” even if (a) I had not rejected, as I have, the Defendants’ case that they did no more than adopt a trend that was already being followed by other High Street brands such as River Island, leaving it to their manufacturers to decide upon and create the precise pattern shapes in response to general “high level” design input from the Defendants, (b) I had not found, as I have, that, on the balance of probabilities, Salim Bux used a sample of the G-Star Riley to communicate his design ideas in connection with the production of the Rhodi Styles, and (c) Salim Bux’s design input was based on the River Island jean, and neither he nor Dale Thorpe realised from the similarity of this jean with the Arc Pant that it had been plagiarised from the Arc Pant.

Eighth, I consider that the individuals whose state of knowledge is material in the present case are those to whom the Defendants delegated responsibility for the relevant activities, namely carrying out the design process, liaising with manufacturers, placing orders, and importing and marketing, all in respect of the Rhodi Styles (see Tesco Stores Ltd v Brent London Borough Council [1993] 1 WLR 1037). Those individuals were, or included (as Leigh Manton may also form part of his cohort), Dale Thorpe and Salim Bux. In my judgment, Salim Bux, and, I infer, Dale Thorpe (a) knew that the Rhodi Styles were infringing articles, and (b) in any event, knew facts (including that G-Star had brought the 2010 proceedings, and the existence of the similarities referred to above) from which a reasonable man would arrive at the belief that they were infringing articles.

In substance, I agree with Mr Cuddigan’s reply submissions made in closing. I do not go all the way with him on his final submission, in particular. However, I consider that there is force in the argument that it would be an unfortunate result, and one which I do not believe is produced in the present case, if a person who is aware of the risk that his mode of conducting business may result in copying other people’s designs could escape liability for infringement by giving general instructions to foreign manufacturers to produce articles similar to popular designs and then say that if those manufacturers choose to fulfil those instructions by copying other people’s designs that is not something that can be laid at his door if he has not looked to see whether copying has occurred. That would seem to be the reverse of making reasonable enquiries - and, if the making of inquiries is relevant, even on their own case the Defendants did not do that in this case.

I am not impressed with Mr Hill’s submission that while the directors of the First, Second, Fourth and Fifth Defendants may have known the details of G-Star’s claims in the 2010 proceedings, other individuals, such as Mr Valli and Salim Bux, had no such knowledge. In particular, in his letter to Habib Bank, Mr Valli wrote “As we have implemented many improvements and changes, we can guarantee and reduce any possibility of such proceedings ever being experienced by us in the future”. I consider that Mr Valli must have had an understanding of the details of those claims in order to be able to write as he did. Further, it would not accord with that letter, and would not make sense in terms of protecting the Defendants and minimising the risk of future claims, for Mr Valli and Salim Bux (and other staff) to be given only general instructions to “stay away from G-Star”, without being told why they should do that and what problems they should be trying to avoid. On the basis that the Defendants gave instructions, I consider that it is probable that they were more detailed than Mr Hill suggests. The other possibility is that, contrary to the Defendants’ case, no such instructions were given. In any event, I do not consider that the Defendants’ employees did “stay away from G-Star”. Even if they did, they could and should have looked at the garments which were coming back from their manufacturers and seen that their manufacturers had not “stayed away from G-Star”.

For these reasons, I hold that G-Star has made out the knowledge requirement in section 227(1) of the CDPA in respect of the First, Second, Fourth and Fifth Defendants.

As Mr Cuddigan submitted, the authorities on common design are well-known, and are helpfully summarised in L’Oreal SA v eBay International AG [2009] EWHC 1094 (Ch), per Arnold J at [347]-[352]. In a nutshell, the question is whether there was a common design between the alleged joint tortfeasors to do acts which amounted to infringements, and, if so, whether those sought to be made liable acted in furtherance of that design.

Another helpful summary of the law as to who may be sued either as joint tortfeasors or as company directors is contained in Laddie, Prescott and Vitoria, The Modern Law of Copyright and Designs, 4^th edn at paragraphs 62.20 and 62.21 respectively. With regard to joint tortfeasors, the authors state (among other things) that “the underlying concept is that the joint tortfeasor has made the infringing act his own”. With regard to company directors, they state (among other things):

“Directors are not liable, as such, for infringements committed by their company without their sanction or involvement; but they are liable if they procure the infringement by the company or the company acts pursuant to a common design to which they are a party; in essence, liability arises if it would arise regardless of the fact that the relationship is one of director and company”.

The case which is, perhaps, most often cited in the context of claims against directors is MCA Records Inc v Charly Records Ltd [2002] FSR 26. In that case, Chadwick LJ (with whom Tuckey LJ and Simon Brown LJ agreed), while acknowledging that it is dangerous to take an overly prescriptive approach, identified the following propositions at [48]-[53]:

“First, a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the governance of the company – that is to say, by voting at board meetings. …

Second, there is no reason why a person who happens to be a director or controlling shareholder of a company should not be liable with the company as a joint tortfeasor if he is not exercising control through the constitutional organs of the company and the circumstances are such that he would be so liable if he were not a director or controlling shareholder. …

Third, the question whether the individual is liable with the company as a joint tortfeasor – at least in the field of intellectual property - is to be determined under principles identified in CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013 and Unilever Plc v Gillette (UK) Limited [1989] RPC 583. In particular, liability as a joint tortfeasor may arise where, in the words of Lord Templeman in CBS Songs v Amstrad at page 1058E to which I have already referred, the individual “intends and procures and shares a common design that the infringement takes place”.

Fourth, whether or not there is a separate tort of procuring an infringement of a statutory right, actionable at common law, an individual who does “intend, procure and share a common design” that the infringement should take place may be liable as a joint tortfeasor. …”

Further, Mr Cuddigan accepted that, in light of the reasoning of the Supreme Court in Vestergaard Frandsen A/S v Bestnet Europe Ltd [2013] 1 WLR 1556, in a case in which the alleged joint liability relates to secondary infringement, it is necessary to prove actual knowledge or “reason to believe” against the accessory as well as his principal.

At the outset of the case, Mr Cuddigan put at the forefront of his submissions the fact that the group accounts of the corporate Defendants show that of the turnover of Rhodi Limited of £12,120,072 to which I have referred above, Rhodi Limited paid £3,733,333 to each of the Seventh Defendant, Asif Ibrahim Bux, the Eighth Defendant, Firoz Ibrahim Bux, and Rizwan Ibrahim Bux (a fellow director until September 2013). Those accounts state that “During the year the services of [each of those individuals], other than his fiduciary duties, have been supplied to the company under a separate distinct contract”. Those accounts also show that the group had additional staff costs not far in excess of £1m. When G-Star requested copies of the contracts with these individuals, the Defendants’ solicitors replied on 23 October 2014 stating that “there are no written contracts for services”, and that “the payments were a means of profit extraction”.

In essence, therefore, the position disclosed by the company accounts is that, at least in 2012, one-third of the profits generated by the importing and marketing operations of the Second and Fifth Defendants was paid to each of the above individuals (albeit that there are no written “separate distinct contracts” which explain the basis for these payments).

These points were taken up in cross-examination. Firoz Ibrahim Buz was called first, and, in answer to questions about the sum of over £3.7m apparently paid to him, he said that (a) the payment was a “tax scheme”, (b) “Basically, we have not seen a single penny of that money. It just comes through”, (c) he did not know where it had gone, because it was in an EBT (i.e. employee benefit trust), and (d) it was not held for his benefit.

Asif Ibrahim Bux’s evidence was different. He accepted that he and his two brothers, Firoz and Rizwan, were, in 2012, the ultimate controlling parties of the Second and Fifth Defendants. He also accepted that the sum of over £3.7m was paid to each of them for running the companies in the Defendants’ group. Although he said that the way of showing the profits was “a tax scheme”, and although he said that he could not say whether the same applied to his brothers, he accepted that the sum of £3.7m that was shown in the accounts as paid to him had gone into a fund that was under his control.

Of these different accounts, I have no hesitation in preferring that of Asif Ibrahim Bux. I did not consider that Firoz Ibrahim Bux was a satisfactory witness. He was argumentative at times, and did not give straightforward answers to a number of the questions that were asked of him. He also accepted that he and his brother Rizwan had been convicted of 4 offences of perverting the course of justice, which involved signing documents which indicated that individuals other than the true drivers were driving vehicles for their employers, apparently to avoid speeding fines. However, he said that

That said, it emerged in evidence that the reason why both Asif Ibrahim Bux and Firoz Ibrahim Bux had resigned as directors of the corporate Defendants on 13 September 2013 was because they had been disqualified from acting as company directors for a period of 8 years. The background to their disqualification concerns a property company called Goldace Estates Limited. Although this company had sold a property and charged VAT in the sum of £1.3m on the sale, none of that sum had been paid to HMRC, and the company went into administration on 6 July 2011. In addition, HMRC had a further contingent claim against the company for £1.46m. So Asif, also, does not have a clean copybook.

The other main points which were put to Firoz Ibrahim Bux in cross-examination were (a) that he knew the subject of G-Star’s complaint in the 2010 proceedings, (b) that he had sworn an Affidavit confirming that neither he nor any of the 5 corporate Defendants to the 2010 proceedings had in their possession, custody or control various products, materials and implements, and (c) that he was personally served with certain documents on 3 October 2011 at the premises of the First Defendant (which was formerly called Rhodi plc). He accepted all these matters. However, he denied that he was involved in running the Defendants’ clothing business, or, indeed, had any involvement in that business.

Firoz Ibrahim Bux repeated more than once that he and his wife and children had moved to Dubai in 2007. He also said that his brother Rizwan was running everything on the clothing side, and had been doing so since 2011, although Rizwan was not a director of the clothing companies in 2011, and the directors at that time were him and Asif. Although I have expressed reservations about his reliability in other regards, I accept his evidence that he was not involved in running the Defendant clothing companies at any time material to the present action. I do not consider that the points that were put by Mr Cuddigan outweigh the fact, which I accept, that Firoz has been based in Dubai for years.

Turning to the case against Asif Ibrahim Bux, in his oral closing submissions Mr Cuddigan said that the best points that G-Star had on knowledge were derived from Asif’s acceptance in cross-examination that (a) he knew that in the 2010 proceedings G-Star was asserting infringement of its rights by copying the Arc Pant, (b) he was involved in the decisions running up to the settlement of the 2010 proceedings, (c) he was personally served with the Order which resulted from those proceedings at the premises where the clothing business is based, (d) in 2012, he was in charge of (at least) “a small percentage” of the clothing business, and (e) he was one of those “at the top of

Other points that Mr Cuddigan put in cross-examination, and relied on in closing, with regard to Asif Ibrahim Bux were to the effect that (a) he had stopped being involved in property when Goldace Estates Limited went into liquidation (and was therefore able to concentrate on other businesses, such as clothing), (b) he had spotted the potential in Dale Thorpe and had promoted him to designer (which indicated his involvement in the clothing business), (c) when Firoz and Rizwan were sent to prison at the end of 2009, that left Asif to run the clothing business (to which he said “I did not run the business, the business ran itself. We had the right people, the right infrastructure”), and (d) although he denied having relationships with wholesale and retail outlets in the United Kingdom at the day-to-day buying level, and also denied being involved in ensuring the distribution of “Voi” jeans, he accepted that “because I have been in the industry so long, I have made a lot of friends. So, I do have contacts with the CEOs of a few of the companies”.

Asif Ibrahim Bux is blind. I agree with Mr Hill that, on the face of it, this makes it less likely that he would have any role in choosing designs for the “Voi” range or placing or otherwise dealing with any orders placed with manufacturers in respect of them.

I also bear in mind the unchallenged evidence of Salim Bux to the effect that the Defendants put around 250-300 styles on the market each season, and around a further 100 styles for mid-season ranges, and this includes over 40 styles of jeans. Further, according to the evidence before me, Asif Ibrahim Bux played no part in the design process concerning the Rhodi Styles described by Salim Bux. These facts support the conclusion that Asif Ibrahim Bux had no direct involvement with the infringing acts.

In any event, I accept Asif Ibrahim Bux’s evidence to the effect that he was not involved in the corporate Defendants’ clothing businesses at any material time except at a high level, which was detached from its day to day operations. I do not consider that, in the language of Mr Cuddigan’s oral closing submissions, this amounts to “encouraging” the “activities of employees, which happen to be infringing”, and still less that this enables G-Star to establish that Asif “knows about it” so that “he is personally liable”.

For these reasons, I do not consider that G-Star has established with regard to either Firoz Ibrahim Bux or Asif Ibrahim Bux that (a) he intended or procured or shared a common design with the corporate Defendants that the infringements of G-Star’s design rights complained of in this action should take place, (b) he exercised control other than through the constitutional organs of the Defendant companies, (c) the circumstances are such that he would be liable as a joint tortfeasor if he were not a director or one of the persons by which those companies were (ultimately) owned and controlled, or (d) that he had actual knowledge or “reason to believe” as Mr Cuddigan accepted G-Star bears the burden of proving. The claims against the Seventh and Eighth Defendants therefore fail.

In substance, both sides accepted that the counterclaim stands or falls with G-Star’s claim that its design rights were infringed. Mr Hill suggested that this is subject to an argument that G-Star did not provide satisfactory evidence of breach of its rights at the time when it obtained payment under the bank guarantee. Mr Hill says this would sound in interest for the period between the date of payment and the date when evidence was produced. However, as at present advised, and without ruling that there is nothing in this point without affording the parties an opportunity to make further submissions, it seems to me that to argue further over it would be a case of “the game is not worth the candle”.

In summary, G-Star’s claims against the First, Second, Fourth and Fifth Defendants succeed, but the claims against the Third, Sixth, Seventh and Eighth Defendants fail. The counterclaim fails and must be dismissed. Counsel should agree a form of order. Naturally, I will hear submissions on any points on which they are unable to agree.

RHODI LIMITED

RHODI INC. IMPORTS LIMITED

VOI JEANS LIMITED

RHODI MARKETING LLP

RHODI SUPPLIERS LIMITED

RHODI GROUP LIMITED

MR ASIF IBRAHIM BUX (FORMERLY ASIF IBRAHIM PATEL)

MR FIROZ IBRAHIM BUX (FORMERLY FIROZ IBRAHIM PATEL) Defendants

RHODI LIMITED

RHODI INC. IMPORTS LIMITED

VOI JEANS LIMITED

RHODI MARKETING LLP

RHODI SUPPLIERS LIMITED

RHODI GROUP LIMITED

MR ASIF IBRAHIM BUX (FORMERLY ASIF IBRAHIM PATEL)

MR FIROZ IBRAHIM BUX (FORMERLY FIROZ IBRAHIM PATEL)