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England and Wales High Court (Patents Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> Oren and Tiny Love Limited v. Red Box Toy Factory Limited, Red Box Toy (U.K.) Limited, Index Limited, Martin Yaffe International Limited, Argos Distributors Limited [1999] EWHC Patents 255 (1st February, 1999) URL: http://www.bailii.org/ew/cases/EWHC/Patents/1999/255.html Cite as: [1999] EWHC Patents 255, [1999] FSR 785 |
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CH 1998 O No. 1102
CH 1998 O No. 1103
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Before: THE HON. MR. JUSTICE JACOB
B E T W E E N
(1) Isaac Oren
(2) Tiny Love Limited
Plaintiffs
- and -
(1) Red Box Toy Factory Limited
(2) Red Box Toy (U.K.) Limited
(3) Index Limited
Defendants
AND BETWEEN
(1) Isaac Oren
(2) Tiny Love Limited
Plaintiffs
- and -
(1) Martin Yaffe International Limited
(2) Argos Distributors Limited
Defendants
Hearing date: 25 January 1999
JUDGMENT
1. This is the official judgment of the court and I direct that no further note or transcript be made
THE HON MR JUSTICE JACOB
Jacob J
1. Mr Isaac Oren and Tiny Love Ltd sue for infringement of registered design number 2,037060. Mr Oren is an Israeli citizen and Tiny Love Ltd is an Israeli company. It claims to have an exclusive licence under the registered design. There are two actions. The first (number 1102) is against Martin Yaffe Ltd and Argos Distributors Ltd. Argos have settled with the plaintiffs and play no part in the remainder of the action. The other action (number 1103) is against Red Box Toy Factory Ltd, Red Box Toy (UK) Ltd and Index Ltd. It is common ground that the three defendants stand or fall together.
2. Mr Oren's design registration is in respect of the application of the design to a "foldable mattress". The registration certificate has attached to it representations consisting of eleven drawings. The most important are of the unfolded configuration. I reproduce them here:
3. There are also drawings of the unfolded configuration from above, below and from two sides. No one suggests these drawings add anything of significance save that they make it clear that the hoops are not, as at first sight appears, of different cross-sections. There are also five drawings of the folded configuration. The most important of these I reproduce:
4. The statement of novelty reads as follows:
"The novelty of the design resides in the features of shape or configuration applied to the article as shown in the representations".
5. I have an actual embodiment of the plaintiff's product which is called "The Gymini 3D Activity Gym". There is unchallenged evidence that since its introduction in 1994 the Gymini has been immensely successful. On a world-wide basis sales have in five years reached nearly 500,000 in all. Gymini has received several awards, for instance a "toy of the year award" in 1994 by Parenting Magazine of the USA. Other awards are cited in the affidavit of Mrs Oren, the wife of the first plaintiff and the managing director of the second plaintiff. She also gives unchallenged evidence that imitations of the Gymini followed very quickly upon its success. Clearly that success is due to a number of factors. These include function but in my judgment also include the design of the article - it is an elegant shape.
6. The Gymini, and its rivals, are sold for use with small babies. The baby is laid on its back underneath the hoops from which attractive things are dangled. Mr Oren was not the first to have the idea of such a product, expressed at this level of generality. Some examples of earlier products are exhibited to Mrs Oren's affidavit. They are rather clumsy by comparison with the Gymini.
Validity7. The validity of the registration is attacked on two grounds, alleged lack of novelty and an allegation that the design covers a method or principle of construction.
8. Section 1 of the Registered Designs Act 1949 as amended by the Copyright Designs and Patents Act 1988, reads as follows:
"In this Act "design" means features of shape, configuration, pattern or ornament applied to an article by any industrial process, being features which in the finished article appeal to and are judged by the eye, but does not include -
(a) a method or principle of construction, or
(b) features of shape or configuration of an article which -
(i) are dictated solely by the function which the article has to perform, or
(ii) are dependent upon the appearance of another article of which the article is intended by the author of the design to form an integral part."
3. A design may be registered only if it is "new" (see s.1(2)). By s.1(4):
"A design shall not be regarded as new for the purposes of this Act if it is the same as a design -
(a) registered in respect of the same or any other article in pursuance of a prior application, or
(b) published in the United Kingdom in respect of the same or any other article before the date of the application, or
if it differs from such a design only in immaterial details or in features which are variants commonly used in the trade."
9. The defendants attack novelty on the basis of a picture of a "Children's Dream House" illustrated in a magazine called "Asian Resources". The plaintiffs accept that this was published in August 1991 which was prior to the design registration date of 11th August 1993. Is the "Children's Dream House" the same as the registered design or does it differ from it only in immaterial details? The parties accepted that this is a matter to be judged by the eye and particularly the eye of a consumer or potential consumer - an ordinary parent or grandparent would do.
10. The defendants put in affidavits from two experts, Mr Anslow and Ms Stevenson. I have to say that I did not find either report helpful. This design is not for a technical product. The eye of the ordinary consumer needs no education from experts for this sort of article. Ms Stevenson, for instance, asserts that the registered design has "very little that is visually appealing" at all because colour print on the mat and the toys are all missing. That the colour, print and toys are missing is not a matter upon which I need expert evidence. As to her assertion that the actual shape is not visually appealing, her opinion is no better than mine. For myself I think there is distinct visual appeal in Mr Oren's design. It has an elegance which appeals to the eye, or at least to my eye. As Lord Reid said in
AMP v Utilux [1972] RPC 103 at 107 and 108:"Those who wish to purchase an article for use are often influenced in their choice not only by practical efficiency but by appearance. Common experience shows that not all are influenced in the same way. Some look for artistic merit. Some are attracted by a design which is strange or bizarre. Many simply choose the article which catches their eye. Whatever the reason may be one article with a particular design may sell better than one without it; then it is profitable to use the design".
4. Referring to finished articles sold to members of the public, he said:
"The onus is on the person who attacks the validity of the registration of the design. So he would have to show on the balance of probability that an article with the design would have no greater appeal by reason of its appearance to any member of the public than an article which did not have this design. Looking to the great variety of popular tastes this would seem an almost impossible burden to discharge."
11. I do not think, generally speaking, that "expert" evidence of this opinion sort (i.e. as to what ordinary consumers would see) in cases involving registered designs for consumer products is ever likely to be useful. There is a feeling amongst lawyers that one must always have an expert, but this is not so. No-one should feel that their case might be disadvantaged by not having an expert in an area when expert evidence is unnecessary. Evidence of technical or factual matters, as opposed to consumer "eye appeal" may, on the other hand, sometimes have a part to play - that would be to give the court information or understanding which it could not provide itself.
12. The "Dream House" photographs are as follows (the originals are in colour):
5. To my eye doing the best I can to envisage the "Children's Dream House" it is not only different from the registered design but materially so. The "Dream House" has blow up ribs attached to a material to make a kind of tent. The ribs form two hoops actually joined together rather than overlapping. There is not so far as I can see a mattress at all but merely a material square base. Visually one would see the hoops only as part of the whole tent whereas in Mr Oren's design one sees only the hoops. To my mind they are visually different as well as functionally different things and I believe that parents would see them as such. I bear in mind that according to the catalogue a variant of the "Dream House" was available with "see through nylon mesh roofing". I imagine the mesh would be something like muslin. I am not sure you will be able to see all of each of the "hoops" unless you looked from on top. In making my assessment I have disregarded the printing on the "roofing" actually illustrated. I think the attack on novelty fails.
13. I turn to the other attack, namely the suggestion that the registered design is to a "method or principle of construction". Mr Wyand's real point here was in the nature of "a squeeze". The "Red Box" alleged infringement collapses in a different way from that shown in the registered design. So, he said, if the scope of the design is wide enough to catch the "Red Box", then the design is to the principle of a baby gym with two crossing hoops which can be folded in some manner or other.
14. I reject that argument. It is clear that it is possible to make a device which is visually very different from Mr Oren's design but which works the same way. See for example the three alternatives illustrated schematically by Mrs Oren. One of these is a pyramid shaped device, another has hoops looking like goal posts and the third has hoops consisting of four sides of a pentagon. I illustrate them below.
15 Manifestly, designs of that shape are not within the scope of the registration. It follows that there is no principle monopolised here - only a visual embodiment of a device constructed in accordance with a principle. That is so whether one regards the principle as being two crossed hoops and mattress which folds as specifically shown or as a wider principle - such as a device which folds flat somehow. I do not think the registration is to a method or principle of construction.
16. In its unfolded configuration the "Red Box" is to my eye extremely close to the registered design. It uses a rectangular rather than square mat, the ends of the hoops are situated at the longer edge of the rectangle but so that the four ends form a square. The thing looks like Mr Oren's with two small flaps protruding at each end. In the unfolded configuration I hold that the "Red Box" falls within s.7 of the Act. It is:
"An article in respect of which the design is registered and to which that design or design not substantially different from it has been applied".
17. To be fair, Mr Wyand did not heavily press differences in relation to the unfolded configuration. He relied upon the folded configuration. The "Red Box" hoops are fixed at their point of intersection whereas the plaintiffs are fitted together by a popper which is undone to fold it. The fixing means that when you fold the "Red Box" you have to twist the hoops so that they are nested. The mat folds in half as a consequence. You can then fold it up more or less within the arc formed by the hoops though the folded mat only extends about half way. The result looks different from the folded configuration of the registered design in which the hoops remain visibly attached to opposite corners. Moreover, in the registered design, the mattress and hoops all have much the same "footprint" and the folded hoops have a different configuration
18. Mr Wyand said that these differences were material. There are no less than five drawings of the folded configuration. Of these three make it plain exactly how the device is to be folded. The "Red Box" is not folded that way so there can be no infringement. I do not think anything turns on the side and edge views of the folded configurations which are particularly uninstructive but Mr Wyand's point is clearly apparent from the other three folded configuration views.
19. Mr Wyand reinforced his point by a reference to
Portable Concrete Buildings v Bathcrete [1962] RPC 49. In that case the registered design was for a fairly mundane looking portable building - a garage. The proprietor said that the "novelty lies in the shape of the article having the ends coloured blue shaped in the representation." The defendant made a garage in which only one end looked like that shown in the design registration. Lloyd-Jacob J said as follows:"But the real distinction between the designs as applied to garages or portable buildings for use as garages arises, as I see it, from the presence of the design feature at both ends in the construction to which the registered design relates and only at the entrance end in the defendants' Senator construction. It is no doubt true that in actual use the entrance face of structures such as this will be more frequently observed, not only by the user but possibly also by passers by and persons in the neighbourhood; but that, in my judgment, can be no proper reason for omitting the special shaping of the rear end when forming the mind's eye picture of the registered design, against which the question of infringement must necessarily be posed. To take a parallel, a substantial identity between the breeches or trousers and boots worn by two men would not obscure the marked differentiation that would be observable in their appearance, were one of them to have only one leg and the other two legs."
20. Mr Wyand said that just as in the garage case where the proprietor had specifically made the appearance of both ends part of his monopoly, so here the proprietor has made the appearance of the folded configuration part of his monopoly and he should be held to it. Mr Wyand postulated an alternative alleged infringement whose folded form looked very much like the pictures but whose unfolded form was different. Would that infringe he asked forensically? He suggested that if the plaintiffs were right and one could ignore the folded configuration drawings then the opposite would also be true and one could ignore the unfolded drawings.
21. I do not accept these submissions. The Act concentrates on "features which in the finished article appeal to and are judged by the eye". Suppose one had a design registration of a vase which included a picture of the underside, never seen in use. An exact imitation, even if it had a wildly different underside, would surely infringe. It would do so because the features which appeal to and are judged by the eye had been taken. Much the same approach was taken by Falconer J in
Kevi v Suspa-Verein [1982] RPC 173, where the differing undersides of the caster of the registered design and the caster of the alleged infringement did not matter.22. What matters in the case of this article is what it looks like when unfolded. I do not think looking at this through the eye of the consumer that any particular significance is attached to the appearance of the folded article. As a matter of convenience the article does fold and can be put away. Both articles fold flat and to my mind considering the design as a whole from a visual point of view, the "Red Box" is not substantially different. It infringes.
Infringement - Telly Tubbies23. This product differs from the registered design in that it has a circular mattress and its hoops relative to the mattress stand higher. To my eye these differences create a different visual impact from that of the registered design. I do not think the Telly Tubbies infringes and there is really no more to be said about it.
Entitlement of Exclusive Licensee to Sue24. Mr Oren entered in to an agreement of March 31st 1994 with Tiny Love and two other companies, Shilav and Shesek. Clause 5.14 provides (in English translation):
"By signing this Agreement, Isaac Oren grants herewith to the Companies, a perpetual exclusive license, irrevocable, for unlimited use (including the manner of use and/or territory), including the right to grant sub licenses, in all of his rights (the registered and the none registered), in all Patents, Trademarks and Trade names, Designs and/or Copyrights which are related to the products, and/or businesses of the Companies. Isaac Oren is obliged to sign any document and take any action which will be needed in order to bring in to force or to maintain the validity of the License according to this Section".
6. The registered design is one of the rights subject to this clause. The evidence discloses that Shilav and Shesek only operate in Israel. So the registered design is not related to their businesses or products. The result is that exclusivity in the registered design is granted only to Tiny Love.
25. The original of this agreement is in Hebrew. The defendants' lawyers have seen the full text but with figures redacted. Fairly obviously the agreement is governed by Israeli law (being in Hebrew, between an Israeli citizen and Israeli companies and made in Israel). It was accepted that consideration is not a doctrine of Israeli law and it was accordingly accepted that the agreement is in force.
26. The defendants take two points in relation to the agreement, first that being unstamped the plaintiffs may not rely upon it by virtue of the provisions of s.14(4) of the Stamp Act 1891 which provides:
"Save as aforesaid, an instrument ...shall not, except in criminal proceedings, be given in evidence, or be available for any purpose whatever, unless it is duly stamped ..."
7. Mr Prescott QC for the plaintiffs said that his clients had considered whether or not to give an undertaking to get the document stamped but that they had concluded that the document did not need stamping. Accordingly he said the point failed from the outset. Mr Wyand was unable to specify in detail why the document needed stamping. I think the point was not made out and that accordingly Tiny Love are entitled to rely upon their exclusive licence.
27. The Registered Designs Act 1949, as amended by the Copyright, Designs and Patents Act 1988, contains no provision entitling an exclusive licensee to bring proceedings. The only reference to the position of the licensee is contained in s.19(1) which provides that:
"Where any person becomes entitled by assignment, transmission or operation of law to a registered design or to a share in the registered design or becomes entitled as mortgagee, licence or otherwise to any other interest in a registered design, he shall apply to the Registrar in the prescribed manner for the registration of is title as proprietor or co-proprietor or, if the case may be, of notice of his interest, in the register of designs."
s.19(2) enables the licensor also to apply for registration. The sanction for non-registration is no more than that the document of title:
"Shall not be admitted in any court as evidence of the title of any person to a registered design or share of or interest in a registered design unless the court otherwise directs - (s.19/5)."
8. This document has been duly registered as a licensee and so no point under s.19(5) arises.
28. By contrast other intellectual property statutes do make provision for an exclusive licensee to sue. Most notably s.67 of the Patents Act 1977 (following on from s.63 of the 1949 Act) and s.101 of the Copyright, Designs and Patents Act 1988 do so. In relation to patents, there is a much stronger sanction in respect of failure to register the exclusive licence: subject to a narrow exception, the right to damages is lost if the transaction is not registered within six months (see s.68).
29. And so the question of law arises: can an exclusive licensee of a registered design sue, even though the only person given an exclusive right is the registered proprietor (see s.7)? Mr Prescott asserted that he could provided that the defendant had been given notice of the exclusive licence. He said that an infringer who had such notice, from the time of such notice would be guilty of the tort of interference with contractual relations by unlawful means. He relied upon the well known passage in the judgment of Jenkins LJ in
Thomson v Deakin: [1952] 1 Ch. 646 at p.693"With these two propositions in mind I turn to consider what are the necessary ingredients of an actionable interference with contractual rights.
The breach of contract complained of must be brought about by some act of a third party (whether alone or in concert with the contract breaker), which is in itself unlawful, but that act need not necessarily take the form of persuasion or procurement or inducement of the contract breaker, in the sense above indicated.
Direct persuasion or procurement or inducement applied by the third party to the contract breaker, with knowledge of the contract and the intention of bringing about its breach, is clearly to be regarded as a wrongful act in itself, and where this is shown a case of actionable interference in its primary form is made out:
Lumley v Gye 2 El. & Bl. 216 .But the contract breaker may himself be a willing party to the breach, without any persuasion by the third party, and there seems to be no doubt that if a third party, with knowledge of a contract between the contract breaker and another, has dealings with the contract breaker which the third party knows to be inconsistent with the contract, he has committed an actionable interference: see, for example,
British Industrial Plastics Ltd v Ferguson [1940] 1 All ER 479, where the necessary knowledge was held not to have been brought home to the third party; and British Motor Trade Association v Salvadori [1949] Ch. 556. The inconsistent dealing between the third party and the contract breaker may, indeed, be commenced without knowledge by the third party of the contract thus broken; but, if it is continued after the third party has notice of the contract, an actionable interference has been committed by him: see, for example, De Francesco v Barnum [1890] 45 ChD 430.Again, so far from persuading or inducing or procuring one of the parties to the contract to break it, the third party may commit an actionable interference with the contract, against the will of both and without the knowledge of either, if, with knowledge of the contract, he does an act which, if done by one of the parties to it, would have been a breach. Of this type of interference the case of
G.W.K. Ltd v Dunlop Rubber Co Ltd 42 T.L.R. 376 affords a striking example.Further, I apprehend that an actionable interference would undoubtedly be committed if a third party, with knowledge of a contract and intent to bring about its breach, placed physical restraint upon one of the parties to the contract so as to prevent him from carrying it out.
It is to be observed that in all these cases there is something amounting to a direct invasion by the third party of the rights of one of the parties to the contract by prevailing upon the other party to do, or doing in concert with him, or doing without reference to either party, that which is inconsistent with the contract; or by preventing, by means of actual physical restraint, one of the parties from being where he should be, or doing what he should do, under the contract".
30. Mr Prescott also relied upon
G.W.K., Jenkins LJ's "striking example". What happened there was that GWK, who made cars had agreed with the other plaintiff who made "Bal-lon-ette" tyres that all new cars made by GWK should, when sold or offered for sale, be fitted with "Bal-lon-ettes" except in cases where a customer gave express instructions to the contrary. Prior to an important exhibition, agents of Dunlop snuck in and swapped the "Bal-lon-ette" tyres for Dunlop tyres. So when the exhibition opened the GWK car had the wrong tyres on. The substitution of the tyres was a trespass to goods and it is not surprising that the plaintiffs succeeded against Dunlop. The report of Lord Hewart CJ' judgment reads as follows:"In Quinn v Leathem 17 The Times L.R., 749; [1901] A.C., 495, Lord Macnaghten said, at p.510:
"Speaking for myself, I have no hesitation in saying that I think the decision [i.e., in Lumley v Gye, 2 E. and B., 216] was right, not on the ground of malicious intention - that was not, I think, the gist of the action - but on the ground that a violation of legal right committed knowingly is a cause of action, and that it is a violation of legal right to interfere with contractual relations recognised by law, if there be no sufficient justification for the interference."
9. Lord Lindley, at p. 535 of the same case, said:
"But if the interference is wrongful and is intended to damage a third person, and he is damaged in fact - in other words, if he is wrongfully and intentionally struck at through others, and is thereby damnified - the whole aspect of the case is changed: the wrong done to others reaches him, his rights are infringed although indirectly, and damage to him is not remote or unforeseen, but is the direct consequence of what has been done. Our law, as I understand it, is not so defective as to refuse him a remedy by an action under such circumstances ... The principle which underlies the decision [i.e., in Lumley v Gye, supra] reaches all wrongful acts done intentionally to damage a particular individual and actually damaging him".
In National Phonographic Company Limited v Edison-Bell Consolidated Phonograph Company Limited 24 The Times L.R., 201; [1908] 1 Ch., 335, the Court of Appeal held that the principles laid down in the foregoing passages were not confined to cases of conspiracy, and applied them to a case in which, it was true, the facts were different from those in the present case, but in which, in his opinion, there was not, with reference to the application of the principles of law involved, any essential distinction in the facts.
10. In his opinion the defendants had knowingly committed a violation of the A.R.M. Company's legal rights by interfering, without any justification whatever, with the contractual relations existing between them and the G.W.K. Company, and he thought that the defendants so interfered with the intention of damaging the A.R.M Company, and that the company had been thereby damnified."
31. Mr Wyand took two points. First he said that his client's activities did not amount to an interference with contractual relations. Secondly, he said that his clients did not have any relevant intention to interfere with contractual relations. I think he was right on both points.
32. It is important, before considering whether there was an interference, to analyse just what the contract between Mr Oren and Tiny Love provided. It seems to me that it amounted to three elements:
(1) A licence. This in law amounted to no more than rendering lawful any act which might be done by Tiny Love within the scope of protection of the registered design.
(2) A grant of exclusivity. This in law meant that Mr Oren would not licence any other party and not to exploit the design himself.
(3) An obligation on Mr Oren to take all necessary administrative acts to keep the licence valid. Such acts would include, for instance, signing documents or making appropriate registrations.
33. It is not suggested that obligation (3) is affected by anything done by the defendants. Elements (1) and (2) are not matters requiring performance. They merely adjust the legal rights of the parties. Neither of them are altered or impeded in any way by the activities of infringement. It is true that the exploitation of the licence may not have been so successful commercially by reason of the infringement, but the contractual relations and their performance remain completely unaffected. I do not think that there was any interference with the contract between Mr Oren and Tiny Love.
34. By contrast, if one considers the G.W.K. case, one can see that the performance of the contract was affected by Dunlop's trespass. GWK had contracted to exhibit their cars with "bal-lon-ette" tyres. They had exhibited with Dunlop tyres instead. So they had not done what they had contracted to do. It may be that they would have had a defence to a claim for breach of contract based upon the doctrine of frustration but there is no doubt that the performance of the contract was impeded.
35. As to the question of intention, Mr Wyand submitted that his clients had no intention of interfering with contractual relations. Their intention was to sell their products and it remained unaffected by their being informed of the exclusive licence. Mr Prescott said that it was enough for the tort for him to show that interference was the natural and probable consequence of the defendants' activities and that the defendants knew this was so.
36. Natural and probable consequence and intention have always been matters which the law finds difficult. In Gollins v Gollins [1964] AC 644 at 664 Lord Reid observed:
"In fact people often intend something quite different from what they know to be the natural and probable result of what they are doing. To take a trivial example, if I say I intend to reach the green, people will believe me although we all know that the odds are ten to one against my succeeding; and no-one but a lawyer would say that I must be presumed to have intended to put my ball in the bunker because that was the natural and probable result of my shot".
37. Are these defendants, like Lord Reid's golfer, intending to put their ball in the bunker? If Mr Prescott were right then, once a defendant had sufficient notice of a contract, a defendant guilty of any unlawful conduct which affected contractual relations of any third parties, would be liable for the tort. This would be so, however unrelated to the contract the unlawful conduct was. I do not think the cases go that far: the unlawful conduct must in some real sense be "aimed at" the contract.
38. Mr Prescott particularly relied upon Miller v Bassey CA (Ralph Gibson, Beldam, Peter Gibson LJJ) 12 January 1993 but I do not think it supports him. Miss Bassey refused to perform her contract with her recording company Dreampace. As a result Dreampace could not deliver an album to the plaintiffs which it had contracted to do. The Court of Appeal was dealing with a strike out application in which it was complained that there was no pleading of a specific intention by Miss Bassey to interfere with the contract between Dreampace and the plaintiffs. Beldam LJ said that Miss Bassey:
"Must have intended that Dreampace would be unable to fulfil its obligations to the appellants. In such circumstances it seems to me unnecessary to assert a specific intention to interfere with the performance of the appellant's contracts which must necessarily follow from her own refusal to perform her obligations to Dreampace. In the absence of any explanation advanced by the respondent for her actions, the only reasonable inference is that in refusing to perform she must have had a purpose of her own to serve which she pursued at the expense of the plaintiff's right to contractual performance by Dreampace of its obligations".
11. Peter Gibson LJ dissented saying:
"In Clerk & Lindsell on Torts 16th ed. (1989) para. 1503 it is said of the tort of procuring a breach of contract:
"The plaintiff must show that there was an intentional invasion of his contractual rights and not merely that the breach of contract was the natural consequence of the defendant's conduct."
(see also para. 1519 and the illuminating article by Hazel Carty: Intentional Violation of Economic Interests (1988) 104 LQR 250).
12. There are strong policy reasons why the law should restrict the ambit of the tort in this way. The tort gives a plaintiff a right of action in respect of a failure to comply with the terms of a contract against a person who is not a party to the contract. This is inconsistent with contractual principles, in particular in breaching the privity rule (see Cane: Tort Law and Economic Interests (1991) pp. 1225). As Hobhouse J said in Rickless v United Artists Corporation [1986] FSR 502 at p. 524 of the tort of wrongful interference with contractual relations:
"Unless the tort is to become virtually equivalent to the enforcement of contracts against third parties, it must remain an essential element of the tort that the interference occurs with the requisite actual intent [sc. To cause a breach of the plaintiff's contract]."
39. Ralph Gibson LJ "inclined" to the view of Peter Gibson LJ but felt it inappropriate to decide the point of law on a strike out application.
40. I, with great respect, think that Peter Gibson LJ was right. If it were necessary I would therefore conclude that the defendants did not have the requisite intention. All they wanted to do was to sell their product: whether or not it affected anyone's contract was a matter of indifference to them.
41. I should refer to one other case, Heap v Hartley (1889) 42 ChD 461. It was decided at a time when Parliament had not conferred a right to sue on an exclusive licensee under a patent. The Court of Appeal held on the facts that notice of the exclusive licence had not been adequately given. It also held that an exclusive licence was not a grant of property like the actual grant of a patent right. It analysed an exclusive licence in just the same way as I have done above. Cotton LJ thought that the consequence (i.e. that the plaintiff had no patent right) meant he should fail. So also did Fry LJ. Whether or not a cause of action lay in unlawful interference with contractual relations remained undecided. The case does not assist.
42. I would add this: the right to sue under intellectual property rights created and governed by statute are inherently governed by the statute concerned. Parliament in various intellectual property statutes has, in some cases, created a right to sue, and in others not. In the case of the 1988 Act it expressly re-conferred the right on a copyright exclusive licensee, conferred the right on an exclusive licensee under the new form of property called an unregistered design right (see s.234) but did not create an independent right to sue on a registered design exclusive licensee. It is not for the courts to invent that which Parliament did not create.
43. That is not to say that those in the position of an exclusive licensee under a registered design necessarily have no remedy of their own. They could, for instance, arrange for a right to sue in the name of the registered proprietor. And they may well have a right themselves to be registered as proprietors, as suggested by Mr Blanco White QC in his still invaluable work "Patents for Inventions and the Protection of Industrial Designs 4th Edn. (1974)" At paragraph 12-102 Mr Blanco White suggests that an exclusive licensee whose exclusivity extends to manufacture is a "proprietor" by virtue of s.2(2) and can accordingly insist on registration and then sue. If that is right then of course there would be no question of outflanking the scheme set up by the Act, merely its implementation. Whether or not, if he can be so registered, an exclusive licensee can sue for past infringements would be a further point to be decided, if and when it arises.
44. In end, however, I conclude that Tiny Love has no cause of action. Mr Oren's claim against Red Box succeeds, that against Martin Yaffe fails, as do the two counterclaims.
