INTELLECTUAL PROPERTY ENTERPRISE COURT
Fetter Lane, London, EC4A 1NL
B e f o r e :
| (1) UWUG LIMITED (in liquidation)
(2) UWE HAISS
|- and -
|DEREK BALL t/a RED
Guy Adams (instructed directly by the Defendant)
Hearing dates: 28 October 2014
Crown Copyright ©
Judge Hacon :
"You have taken out a bank loan for manufacturing, that is now due for repayment and UWUG is currently not in a position to pay your invoice pro-forma."
Mr Haiss's letter was co-operative in tone and at the end suggested that he and Mr Ball take a couple of days to work out a solution to their respective difficulties.
"The last 8 frames of [the first] batch have been rectified and are still to be sold. For the second batch of 45 frames [Mr Ball] changed the payment terms from 50% on delivery and 50% on 30 days to payment upfront. This batch is invoiced and ready for delivery. UWUG LTD is currently not able to pay for the whole batch up-front. In addition the approach of the summer months means that business is getting low and most buyers are on holiday."
"The manufacturer [Mr Ball], unable to hold the goods for a further month, declared he wants to take on the distribution of the frame for himself. The distributor [UWUG] offered to engage him as an agent to increase sales. The manufacturer declined. Other agreements could not be reached.
Both parties agree, however, that for the sake of the continuation of the frame, an agreement needs to be signed that allows the manufacturer to market the frame and the distributor to get reimbursed for his efforts in developing and marketing the frame."
The proposed terms included the following:
• Mr Ball would supply UWUG for onward sale to retailers at a price of £160 per frame.
• UWUG would not sell frames directly to other retailers.
• Sales of frames by Mr Ball which were not related to direct efforts by UWUG would incur a royalty of 10% of Mr Ball's sales price payable to UWUG.
• Mr Ball could sell other UWUG products subject to a commission of 15% of sales price.
Heads of claim
(1) Loss of profit from sales of frames that UWUG would have made had Mr Ball not supplied third parties with infringing frames.
(2) Loss of profit from sales of convoyed goods that would have accompanied such sales of frames by UWUG.
(3) To the extent that Mr Ball made sales of infringing frames which did not affect UWUG's sales, damages on the 'user principle'.
(4) Damages from UWUG's loss of opportunity to make sales of frames in the future.
Whether Mr Ball's infringing sales affected UWUG's sales of frames
(i) UWUG had concerns about the quality of the frames.
(ii) Mr Ball had not made the frames (presumably this means by July 2010).
(iii) Alternatively Mr Haiss believed that Mr Ball had not made the frames or obtained the bags for them.
(iv) Had UWUG paid for the frames, they would not have been delivered.
(v) The relationship between UWUG and Mr Haiss on the one hand, and Mr Ball on the other, had broken down such that Mr Haiss no longer wished to do business with Mr Ball if alternative sources of frames were available.
Paragraph 5 also pleads that retail sales by UWUG were not disappointing.
Loss of profit on the 'user principle'
"As a founding retailer I think it fair to give you 30% discount for all your retail sales and 10% commission on sale agreements you have already made to date but I will need to agree each one on an individual basis depending on terms agreed."
Loss of profits on future sales