INTELLECTUAL PROPERTY ENTERPRISE COURT
Fetter Lane, London, EC4A 1NL
B e f o r e :
| VICTOR GEORGE LILLEY
|- and -
|DMG EVENTS LIMITED
(formerly DMG WORLD MEDIA (UK) LIMITED)
Douglas Campbell (instructed by Thomas Eggar LLP) for the Defendant
Hearing dates: 27th February 2014
Crown Copyright ©
Judge Hacon :
These proceedings to date
"Unlawfully resisting the infringement claim"
"(1) This was a flat fee rather than a royalty fee per publication.
(2) DMG is entitled to provide copies to the distributors.
(3) LIS is not now entitled to vary the original agreement and claim royalty payments from DMG"
Mr Lilley's pleadings
Not worth the candle
"An abuse of process is of concern not merely to the parties but to the court. It is no longer the role of the court simply to provide a level playing field and to referee whatever game the parties choose to play upon it. The court is concerned to ensure that judicial and court resources are appropriately and proportionately used in accordance with the requirements of justice."
The Master of the Rolls took the view that the potential value of a claim to a claimant could be too meagre to justify committing the resources of the court to the action.
" If the claimant succeeds in this action and is awarded a small amount of damages, it can perhaps be said that he will have achieved vindication for the damage done to his reputation in this country, but both the damage and the vindication will be minimal. The cost of the exercise will have been out of all proportion to what has been achieved. The game will not merely not have been worth the candle, it will not have been worth the wick.
 … It would be an abuse of process to continue to commit the resources of the English court, including substantial judge and possibly jury time, to an action where so little is now seen to be at stake."
"In my judgment in principle a claim like Mr Soloman's could have been tried in the PCC if its true value had been recognised at the outset. When in future a judge is confronted by an application to strike out a claim on the ground that the game is not worth the candle he or she should consider carefully whether there is a means by which the claim can be adjudicated without disproportionate expenditure. As I have said, in addition to the PCC the claim could also have proceeded in the Bristol County Court."
"Since the small claims track is the normal track for claim which has a value of not more than £5,000, I am inclined to think that the best solution would have been for a small claim for copyright infringement to have been allocated to that track in the Bristol County Court."
Maximum arguable damages
General Tire and the 3 approaches to the assessment of damages
DMG's calculation of arguable damages
(a) DMG authorised EBSCO to publish 3705 articles between 2000 and 2006, of which 37 (it is assumed) were authored by Mr Lilley, i.e. 1%. DMG was paid $11,662.82 from EBSCO, of which $116.63 is to be taken to have been in respect of Mr Lilley's articles, about £72 at the current exchange rate.
(b) DMG authorised Gale to publish 67,835 articles between 2000 and 2006, of which 37 were authored by Mr Lilley, i.e. 0.05%. DMG was paid $34,785.76, of which $17.39 is to be taken to have been in respect of Mr Lilley's articles, about £11 at the current exchange rate.
(c) This adds up to a payment of £83 in all, and constitutes a ceiling on the sum that DMG would have been prepared to pay to Mr Lilley and thus the maximum damages to which Mr Lilley could arguably be entitled in these proceedings.
(d) If assumptions are made which remove from consideration all authorisations done before 26 April 2006 because they are statute barred, the relevant payments to DMG for articles published by EBSCO is $11.73 and for articles published by Gale $3.32, a total of about £9.32 at current exchange rates.
Mr Lilley's submissions regarding DMG's calculation of damages
Mr Lilley's calculation of damages on the Group 2 approach
"Two classic cases under this heading are Penn v. Jack (1866) 14 L.T. 495; (1867) L.R. 5 Eq. 81 and Aktiengesellschaft fur Autogene Aluminium Schweissung v. London Aluminium Co. Ltd. (No. 2) (1923) 40 R.P.C. 107 . In Penn v. Jack the patentee was shown to have approached all users of the invention and to have successfully required the vast majority to pay him a royalty of 2s 6d per horse power. The defendant was one of the few who refused and it was held that he should pay damages for infringement based on the accepted royalty rate on the basis that he might have expected to have got a licence at the same rate. The Aluminium case contains a clear statement by Sargant J., at pp. 113–114:
"… what has to be ascertained is that which the infringer would have had to pay if, instead of infringing the patent, he had come to be licensed under the patent. I do not mean by that that the successful patentee can ascribe any fancy sum which he says he might have charged, but in those cases where he has dealt with his property merely by way of licence, and there have been licences at certain definite rates, there prima facie, apart from any reason to the contrary, the price or royalty which has been arrived at by means of a free bargain between the patentee and the person desiring to use the patented article has been taken as being the price or royalty that presumably would have to be paid by the infringer. In doing that, it seems to me that the court is certainly not treating the infringer unduly harshly; he should at least, in my judgment, have to pay as much as he would in all probability have had to pay had he to deal with the patentee by way of free bargain in the way in which other persons who took licences did in fact pay."
These are very useful guidelines, but the principle of them must not be misapplied. Before a "going rate" of royalty can be taken as the basis on which an infringer should be held liable, it must be shown that the circumstances in which the going rate was paid are the same as or at least comparable with those in which the patentee and the infringer are assumed to strike their bargain."
(a) around £300-400 per month was payable in royalties for 'first rights' in one country;
(b) the same sum per month, less a discount of about 8%, was payable for first rights publication in all other countries;
(c) the sum payable under (b) was to be multiplied by the number of countries in which the article would be accessible on the internet, up to 194 or so countries in all;
(d) around £160-185 per month was payable for 'second rights' publication in each country;
(e) the sum payable under (d) was to be multiplied by the number of countries in which the article would be accessible on the internet, up to 195 or so countries in all.