England and Wales Patents County Court

IN THE PATENTS COUNTY COURT

		Rolls Building 7 Rolls Buildings London EC4A 1NL
		15th May 2013

Miss Recorder Michaels:

1. This is a claim for passing off and infringement of copyright.
2. The Claimant is an artist, writer and puppeteer. In 1978 he and his then business partner, John Thirtle, devised a stage puppet show called "Mr Spoon on Button Moon". The Claimant designed the puppets, sets and props for the show. He produced numerous individual drawings and paintings for the show, and for posters, badges etc featuring the characters, props and sets from the show. Mr Allen also wrote the script and produced live theatre puppet shows which ran during the 1980s and early 1990s.
3. In about 1980, Thames Television commissioned a Button Moon television series aimed at pre-school children based upon the stage show. The TV show was a success and 7 series of 13 episodes were broadcast between 1980 and 1988. The programs were subsequently repeated on the UK Gold channel and continue to be broadcast on satellite channels. The shows remain available on DVD. The Claimant receives royalties from these programs. Mr Allen does not own the copyright in the television programmes but owns the rights in the underlying artistic works. Upon Mr Thirtle's death in 1995, he left all of his interest in the show to the Claimant.
4. Since the television show was broadcast, the underlying rights in Button Moon have been exploited by the Claimant by the grant of merchandising rights to others inter alia for the manufacture of T-shirts. In particular, Mr Allen granted an exclusive licence to produce Button Moon T-shirts to Truffle Shuffle in about 2007, with a lump sum payment at the outset and a 12% royalty of which Mr Allen contributes 2% to the Dyslexia Association. That licence continues in force, and Mr Allen continues to receive royalties based on sales of around £30,000 p.a.
5. It is common ground that in about July 2007 Mr Redshaw contacted Mr Allen expressing an interest in taking a licence from him to produce Button Moon merchandise. In an e-mail dated 23 July 2007, Mr Redshaw suggested that he would be interested in selling a range of around 5 Button Moon T-shirt designs and 3 mugs, with a run of 1000 products each. He offered to pay a 10% royalty on trade prices; his estimated sales were £35,350 so he offered to pay a royalty "upfront" of £3,535. Mr Allen responded that he could not grant a licence for T-shirts, but could do for bags and marks. Mr Redshaw responded that he was mainly interested in T-shirts and invited Mr Allen to get back to him about it. The matter was not taken further at that time.
6. Mr Redshaw appeared in person at the trial and gave evidence from which it appears that after having been refused a licence by Mr Allen in 2007, he decided that it was too expensive to take licences of IP rights, and that instead he would produce what he described as generic novelty items. He described having taken some advice at a trade mark and copyright roadshow from which he understood that he could produce goods featuring celebrities or characters if he did not copy original artwork or photographs. It was at this stage, therefore, that he designed the mugs, T-shirts and hooded sweatshirts of which Mr Allen complains in these proceedings and which I describe further below.
7. Strangely, Mr Redshaw nevertheless got back into contact with Mr Allen in August 2008 and again enquired about the possibility of having a combined merchandise licence. At that point he suggested that the potential sales were in the region of £42,000 and would he would be happy to pay £4,227.50 in advance as a 10% royalty. A similar e-mail was written on 17 August 2009.
8. However, by about August 2009, Mr Allen had discovered that Mr Redshaw had started producing and selling the items of which he complains; these were available for sale on various third party internet sites, including Amazon.co.uk and on Mr Redshaw's own Kapow Gifts site on eBay. A letter of claim was sent to Mr Redshaw by solicitors acting for Mr Allen on 7 September 2009, complaining of infringement of copyright and passing off and seeking undertakings, details of the number of infringing items sold by Mr Redshaw, damages and legal costs. Despite denying any infringement or passing off, and suggesting that he had been advised that he had not infringed any copyright or trade mark, Mr Redshaw stated in an email dated 14 October 2009 to Mr Allen's solicitor that the products had been taken off the market. No formal undertakings were offered. Mr Allen was not happy to leave the matter there and pursued the point. Mr Redshaw reiterated in e-mail correspondence his claim to have been advised that he was not breaching any of Mr Allen's IP rights, that the goods were a form of parody and had been produced from his own independent artwork. He did not offer any compensation to Mr Allen, whose correspondence continued.
9. Mr Redshaw said in evidence and in his filed witness statement that he considered that Mr Allen was harassing him, and decided that in the circumstances he might as well put the goods back on the market. At some stage after autumn 2009, therefore, he produced some additional mugs and sold them. Even after his main direct sales ceased, at a date which is not clear to me, he continued to sell the products as part of some mixed lots of stock.
10. Mr Allen had asked the trading standards officers in the East Riding of Yorkshire to investigate Mr Redshaw's activities. After some delay, Mr John Bryan, a Senior Trading Standards Officer, visited the Kapow Gift shop in Queen Street, Bridlington on 14 September 2010 and purchased a T-shirt and a mug bearing the allegedly infringing designs. Pop Art Products Ltd trades as Kapow Gifts and Mr Redshaw is a director of that company. Whilst Mr Redshaw sought to persuade me that any continuing sales were a result of third parties selling off stock supplied to them at earlier dates, it is clear that his own sales were therefore continuing, or had resumed, a year after Mr Allen's first complaint and Mr Redshaw's assurance that he had taken the products off sale.
11. On 30 March 2012, Mr Allen issued proceedings against Mr Redshaw in the Norwich County Court for passing off and infringement of copyright. It was transferred from Norwich to the High Court by order dated 26 April 2012 and was transferred to the Patents County Court by order of Master Bragge dated 25 May 2012. Mr Allen issued an application for a case management conference on 3 August 2012 which took place on 30 October 2012. It was attended by the Claimant but not by the Defendant. His Honour Judge Birss QC gave directions for the Claimant to file and serve full Particulars of Claim by 28 November 2011 and for the Defendant to file a Defence by 4 January 2013. The Particulars of Claim which were filed dated 27 November 2012 were settled by solicitors then acting for the Claimant (who has otherwise acted as a litigant in person throughout these proceedings) and alleged that by selling items bearing the Button Moon designs the Defendant both passed off the goods as authorised merchandise and infringed the Claimant's copyright.
12. The case management conference was adjourned to 17 January 2013. It was again attended only by the Claimant, as the Defendant had informed the court that he could not attend as a result of a hospital appointment the previous day. At that case management conference, His Honour Judge Birss QC set the date of the trial for 29 April 2013 and ordered that all issues should be decided on that date including questions of copyright infringement, passing off and quantum of damage. He further ordered the parties to give standard disclosure to include copies of the original artwork relied upon by the Claimant and records and other documents showing the quantity and value of all sales made by the Defendant. Witness statements were to be served and filed by 22 March 2013, and witnesses were to attend for cross-examination.
13. On 10 April 2013 the Defendant made an application to transfer or re-allocate the case, alternatively to have it heard on the paper or by telephone. That application was refused by order of His Honour Judge Birss QC dated 12 April 2013. Subsequently, an informal application was made by e-mail sent from the accounts department of the Defendant's company, Pop Art Products Ltd, on behalf of the Defendant to adjourn the trial on the ground that he was 'away on holiday' and would not be able to attend. That application was also dismissed by His Honour Judge Birss QC, on 23 April 2013.
14. Nevertheless, Mr Redshaw attended the trial on 29 April 2013.

The basis of the claim

15. The copyright works relied upon by the Claimant in the Particulars of Claim and of which he claims to be the author are:

i) the Button Moon stage show, an original dramatic work;

ii) original drawings for the puppets, sets and props of the stage show as original artistic works or as works of artistic craftsmanship; in particular the Claimant relies upon the design of three elements of the show, subsequently replicated in the TV show, namely

a) the Mr Spoon character: Mr Spoon is a stylised cartoon character with a blue upturned dish for a hat, a white pudding basin shaped head with hollow black eyes and a red handle shaped nose, a body made from a bottle and arms made from wooden spoons;

b) the Rocket: the nose cone is made from a kitchen funnel, the body is made from a Heinz baked bean can with the distinctive jar shaped outline and the base is made from another can;

c) the Moon: this is made from a large flat yellow button with four holes and an incomplete line partially encircling the holes.

and

iii) The dramatic works underlying the TV series.

16. The claim before me rightly concentrated upon the artistic works. Mr Redshaw challenged the subsistence of copyright in the button and of the use of the bean can in the rocket. I do not accept that challenge. The test for originality of artistic works is low and it is clear to me that Mr Allen created original works for the shows and the associated posters etc. The fact that he may have incorporated items such as the design of a Heinz bean can or a common kitchen funnel into the works does not in my view preclude them from having copyright protection.
17. The Claimant complained of the sale of china mugs, T-shirts and sweatshirts decorated with a design which copies the Mr Spoon character, the rocket and the button moon. The Particulars of Claim state that the Claimant did not know precisely which of his artistic works the Defendant had copied to make his infringing copies but relied upon direct or indirect copying from one or more of his pleaded works.
18. In addition, the Claimant claimed to own goodwill associated inter alia with the words Button Moon and Mr Spoon and goodwill associated with the puppets, sets and props used in the stage show and the TV series, whether individually or used together so as to evoke the 'characters or world' of Button Moon.
19. The Claimant complained that the Defendant's goods misrepresented that the items were authorised for sale by the Claimant as proprietor of the rights mentioned above, leading to passing off, and causing damage to the Claimant in particular by the loss of potential licensing deals.

The Defence

20. Mr Redshaw has acted in person throughout these proceedings. The thrust of Mr Redshaw's defence, reiterated in his evidence, was that he did not intend to copy Mr Allen's copyright works but intended to create a parody. He considered that his designs were only loosely based upon Mr Allen's works so that they did not reproduce a substantial part of them. He also appeared to consider that the fact that he had undertaken design work of his own meant that he had not infringed Mr Allen's copyright. As for the passing off claim, Mr Redshaw's position was that he had taken care not to use the name Button Moon so as not to mislead, and he had not produced counterfeit goods, but had put a disclaimer on all of the goods indicating that they were not "official" merchandise. Mr Redshaw also claimed that the reference on the merchandise to a government recycling slogan would prevent passing off.
21. In his Defence received by the court on 24 May 2012, Mr Redshaw said "it differs greatly, mostly in the fact that his artwork is a 3D "stop-go" animation using puppets, and ours is a blatantly a 2D drawing. Its composition is totally made by ourselves and has several unique elements. It has no reference to Button Moon or Mr Allen or any other trademark or copyright. It was intended as a joke item … It bears only a passing resemblance to his works …"
22. In a further Defence (dated 2 January 2013, though date-stamped 4 December 2012 by the Court) Mr Redshaw admitted that the three items alleged to have been copied by him "all have a similarity to Mr Allen's creations but have distinct differences which set them apart." He also stated "… the aim was that there is some degree of recognisable features of the claimant's show button moon in order to make the parody joke work. But we purposely made it distinct and different enough to avoid any infringement of copyright." He went on "Whilst parody is not an excuse for copyright theft, my argument here overall is that we created the artwork ourselves and did not copied the artwork. The only thing is its [sic] loosely based on a parody."
23. In addition, in his application dated 10 April 2013, Mr Redshaw stated "I agree the copyright held by Mr Allen is similar to the style I have used, and I have openly admitted this because it's a parody based on his shows/creation. My argument has always been clear that the actual physical artwork was not copied but created by myself … The content clearly as depicting his style of artwork as its [sic] meant to be 'similar' as that's the point … It's a parody… It was not ever meant to be a blatant sole 100% copy of his style of artwork, but used elements of his creation in conjunction with other things to create a combined parody/joke product."
24. Mr Redshaw made similar points in his evidence to the court: he accepted that his products were loosely based upon the Button Moon designs but pointed to a number of differences which he said distinguish one from the other and prevent them from being copies. He was keen to emphasise the amount of work which he said had been done on his part to produce the artwork used on his designs. However, even if that was sufficient work to have generated a fresh copyright in those designs, that would not prevent them infringing Mr Allen's copyrights if there had been copying of a substantial part of the copyright works.
25. Mr Redshaw also stated in the Defence that he had ceased selling the products of which complaint was made in 2009; he claimed that any later sales were beyond his control.
26. The Defendant's products which have been produced to the court consist of a T-shirt and a china mug packaged in a cardboard box. The T-shirt is folded into a plastic bag in such a way that the design on the chest of the T-shirt is clearly visible. The design is broadly rectangular, with the slogan above and below the major artistic features of the design which are a golden button moon and a stylised rocket heading towards the moon. The features of the moon and the rocket are identical or very similar to those of Mr Allen's design. A porthole in the rocket shows the head/shoulders of a cartoon man, whose head, hat, nose and body, so far as shown, appear to me to be identical to or at least extremely similar to the Mr Spoon character. The wording on the T-shirt does not refer to any element of the Button Moon show, it says "Recycle the possibilities are endless … Even space travel will stop."
27. Mr Redshaw admitted that he had also produced and sold some hooded sweatshirts. No sample of this product was produced to me. However, Mr Redshaw stated that the sweatshirts were printed with the same transfer as the T-shirts.
28. In my judgment, the rocket and the cartoon man on the Defendant's T-shirt undoubtedly reproduce a substantial part or parts of the Claimant's designs as shown, for example, on theatre posters for "Mr Spoon on Button Moon" shows. The moon is also well-nigh identical to at least one form of the moon used by Mr Allen.
29. Mr Redshaw claims that the design of his character is not similar to Mr Spoon or is not a copy in particular because it does not reproduce one of Mr Spoon's major features, the wooden spoons used as his arms. I do not accept that this prevents there being an infringement of copyright in this case. The elements of the original design copied by the Defendant are substantial. Moreover, whilst the copying may have been indirect, there is no doubt from the admissions made in the Defence and by Mr Redshaw in his evidence and submissions that there is a causal connection between the parties' respective works, there being direct or indirect copying of Mr Allen's works.
30. As to the parody defence, first, I should say that I do not see that the Defendant's designs can properly be described as a parody of the Claimant's designs at all. The fact that Mr Redshaw combined the rocket, etc with the wording of a recycling slogan does not, in my judgment, put the artistic works in the category of a parody. In addition, as Mr Redshaw accepted, there is no defence of parody to an infringement of copyright claim, if what has been taken is a substantial part of the claimant's work (Schweppes Ltd v Wellingtons Ltd [1984] F.S.R. 210). The test of whether there is substantial reproduction of the copied work is unaffected by the Defendant's motives. I find that there is a substantial reproduction of the copyright works, and there is no defence to such infringement. There is no doubt in my mind that the Defendant has infringed the Claimant's copyright.
31. The same or a substantially similar design appears on the mug and on the cardboard box in which the mug is presented. Again, this appears to me clearly to be an infringement of copyright as a substantial part of Mr Allen's artistic works has been taken by the Defendant.

Passing off

32. In order to establish a case of passing off, Mr Allen first needs to show that he has goodwill in the Button Moon characters. Although the characters were originally developed many years ago, it is clear that they were very well-known at least in the 1980s when the television series was being broadcast and the theatre shows performed. The series was successful and long-running. Furthermore, Mr Allen has continued to exploit the characters through a number of licences and the 1980s television series have continued to be broadcast. I do not think that Mr Redshaw disputed the continuing goodwill generated by the shows. In the circumstances, in my judgment there was and continues to be goodwill in relation to the Button Moon characters
33. The second element of the claim to goodwill is that there is a misrepresentation on the part of the Defendant and thirdly that the misrepresentation causes damage. The allegation is that the Defendant's activities in producing the mugs and garments described above amount to a misrepresentation that they are licensed or official merchandise, produced by or connected in the course of trade with Mr Allen. That allegation appears to me to be correct. In my view there is indeed such a misrepresentation both made and facilitated by Mr Redshaw's use of the copies of the Button Moon designs.
34. The impact of the misrepresentation made by the nature of the Defendant's designs is clear from the evidence which I discuss further below that several third parties to whom the goods have been supplied by Mr Redshaw have advertised the goods for sale as Button Moon goods.
35. The main defence put forward to the passing off claim is that the merchandise does not carry the Button Moon name and is clearly marked with a disclaimer. Whilst an appropriately worded and sufficiently prominent disclaimer may prevent a misrepresentation arising, it does not seem to me that the disclaimer provides a good defence in this case. It took me some time to identify where the disclaimer appeared on the packaging for the T-shirt. The disclaimer is in very small print on the back of the wrapper and is particularly difficult to see because it is printed in black and the body of the T-shirt is also black.
36. The wording of the disclaimer is as follows "100% unofficial, produced from original artwork & photographs independently produced without endorsement or affiliation with artists & persons depicted within." The words "100% unofficial," if sufficiently prominent and not otherwise qualified might, I accept, suffice to prevent any misrepresentation arising. However, in this case first it is difficult to see the disclaimer on the T-shirt packaging, and, secondly, in my judgment the words "produced from original artwork & photographs" counteract the effect of the words "100% unofficial," and suggest some sort of link to the owner of the original artwork. In my judgment this is not an adequate disclaimer to prevent the misrepresentation described above from arising.
37. Mr Redshaw pointed out to me that the T-shirt itself also bears a disclaimer. I had not noticed this when examining the T-shirt, which is not surprising as the disclaimer is in tiny print and well-nigh invisible, even in good light. In my view it is obviously inadequate to prevent a misrepresentation being made.
38. A disclaimer in the same terms as on the T-shirt is to be found on the side of the box in which the mug is sold. It is certainly easier to read than on the T-shirt packaging as it is in white letters on a dark background. The disclaimer also appears vertically on the mug itself. Again, I had not spotted the latter point until Mr Redshaw pointed it out to me. However, in any event, my views as to the adequacy of the wording of the disclaimer set out above still lead me to the conclusion that the disclaimer would not preclude a misrepresentation being made.
39. Moreover the difficulty with the Defendant's attempt to rely upon the disclaimer is that his both own and third party websites selling his products have made direct and in my view obviously misleading reference to both Mr Spoon and Button Moon. An advertisement for the mug on eBay placed by Kapow Gifts, that is, Mr Redshaw's own website, downloaded on 28 February 2009, describes it as a "button moon recycle mug." There is no disclaimer on the page. On the contrary, the description given reads: "Limited edition – only 1000 made! Funky Retro Licensed durable dishwasher proof mugs with vivid prints ..." Mr Redshaw was unable to give any explanation as to why there was a reference to Button Moon or the claim that the goods were licensed. The description of the Kapow business is equally misleading: "Kapow Gifts The No 1 in Licensed Retro Funky Gifts." This appears to me clearly to be passing off, undertaken deliberately by Mr Redshaw or someone within his employment.
40. A similar advertisement for the mug downloaded on 2 September 2010 from Amazon.co.uk described the product as "Recycle The Possibilities are Endless Mug – Button Moon" and again no disclaimer was visible. A more recent example of a third party advertisement is from www.mugbug.co.uk, downloaded on 25 June 2012, which advertised the mug under the heading "Mr Spoon & Button Moon Mug" with a description of the product mentioning the Button Moon TV series.
41. For all of these reasons, in my view even though Mr Redshaw's goods do not bear the Button Moon name, and bear the disclaimers described above, they so closely copy the Button Moon characters/designs as to make a misrepresentation that the goods are licensed or official products. Indeed, Mr Redshaw's own website contained a clear example of such misrepresentation.
42. The case of passing off is made out.

Quantum

43. HHJ Birss QC ordered that the trial should deal with both liability and quantum and he ordered both parties to provide disclosure, in particular he ordered Mr Redshaw to provide documents showing the quantities of infringing products which he had made and sold. Unhappily, it was clear at the hearing that both parties had some documents relevant to quantum which they had not disclosed; they each criticised the other for failing to provide copy documents. I have inadequate information as to the sales made by made by Mr Redshaw and no evidence at all as to any profits he may have made. Nor did I have any evidence about the sums which Mr Allen would have expected to earn from the potential mug licensing deal which he said had been lost by reason of Mr Redshaw's activities.
44. However, neither party wished the trial of quantum to be adjourned for further evidence to be filed, and I took the view that to do so would have been likely to be disproportionate. I shall therefore assess quantum as best I can on the limited information before me.
45. Where a copyright owner has a business of exploiting his rights by the grant of licence the measure of damages is generally the amount the defendant would have had to pay by way of royalties instead of acting illegally.
46. Mr Allen gave evidence that his existing licence to Truffle Shuffle for T-shirts had generated sales in the region of £30,000 last year. The royalty rate is 12% of which he donates 2% to the Dyslexia Association. He had also received a lump sum payment on account of royalties at the outset of the licence. Those licensing terms appear to be broadly compatible with the proposals made to Mr Allen by Mr Redshaw in both 2007 and 2008 for payment of a royalty of 10% on sales of all kinds of merchandise, with a lump sum payment by way of advance. Mr Allen claimed damages should be assessed on the basis of the higher of the advances mentioned by Mr Redshaw, whilst Mr Redshaw suggested that damages should be calculated on the basis of the 10% royalty applied to the numbers of goods which he had actually sold, not least because he said that the lump sum payment proposal was based upon a five year deal but he had sold the goods for a much shorter period. In fact, it does not seem to me that the e-mails sent in 2007 or 2008 specified a five year term, whilst a follow-up e-mail of 70 August 2009 suggested a three-year deal.
47. I have insufficient evidence satisfactorily to assess the number of goods made or sold by Mr Redshaw. Mr Allen pointed to the various sources which had been identified as selling the infringing products and to the claim that the mug was a "limited edition of 1000." His view was that the market had been swamped with Mr Redshaw's products, but he could not prove it. He could show that the mugs and T-shirts had been sold by a number of different retailers, but how many each had sold was not known. He had received a few emails from some retailers, in each case suggesting that sales were of minimal amounts. His witness, Mrs. Bradley, who had carried out some research online for him had not reached any more specific conclusions as to the scale of use. What is clear, though, is that even if, as Mr Redshaw said, he had ceased making sales at some date in about 2010, third parties were still selling the mugs as late as 2012. This suggests to me that the numbers were not minimal.
48. Mr Redshaw stated that he imported the blank mugs from China to which he applied the decal transfers in the UK; he had the boxes printed in China. He said that "generally" he imported 1000 boxes and mugs at a time.
49. In his defence, in December 2012, Mr Redshaw had claimed that he had only made and sold 98 mugs worth £220, 43 T-shirts worth £247 and 4 sweatshirts worth £50. However, in part compliance with the disclosure direction, Mr Redshaw produced some further figures in the form of a table, "Figure 1". He stated that he had previously missed "a chunk of mug sales which had been sold at a reduced price." It seems likely that the sales which he had previously disclosed were those made by his retail business Kapow, whilst those which he had "missed" were all of the sales made by his wholesale business, WG Retro, since Figure 1 showed sales of 98 mugs by Kapow and 485 mugs by WG Retro. He stated that the retail price of the mugs was £4.99, reduced (he did not say when) to £2.50, and the wholesale price was £2.20 later reduced to 66p. Mr Redshaw calculated that the total value of sales amounted to £699.60. In other words, the average price was £1.19.
50. As to T-shirts, again it seems that wholesale sales had previously been ignored. Figure 1 disclosed wholesale sales of 52 T-shirts at £5.75 and retail sales of 42 T-shirts at £12.99 with both prices later reduced to "less than half that". It also disclosed the sale of four sweatshirts totalling £79.96, namely £19.99 each. The total sales of T-shirts were put at around £552.
51. I have some difficulty in understanding how the sales disclosed in the Defence correlate with the figures given in Figure 1. If the 98 mug sales were disclosed in the Defence were sales made by Kapow, the turnover figures in the two documents are hard to understand. Equally, there are unexplained differences between the apparent retail sales price of the sweatshirts and T-shirts as between the two documents.
52. Given those apparent inconsistencies, it is a matter of concern to me that Mr Redshaw did not produce any documents at all to back up the figures given in Figure 1. All that he produced was a list of business customers. This too seemed to raise further questions. It identified purchasers only by name. There are 74 entries in the list although some of the names are repeated, and it is difficult to identify which names relate to the various websites identified by the Claimant as selling the infringing products. This may be because the purchasers' names differ from those shown on their websites/in the domain names, but again this demonstrates to my mind the inadequacies in the disclosure produced by Mr Redshaw.
53. Given those concerns, I consider that it would be wrong to assess the damages for copyright infringement by reference to the figures produced by Mr. Redshaw. I think it more realistic to assess the notional royalty by reference to the amount which Mr Redshaw would have had to pay Mr Allen "up-front" for an appropriate licence for the period during which he sold the goods. Mr Allen identified infringing products in about August 2009 and the Trading Standards Officer found goods still on sale in Mr Allen's shop on 14 September 2010. However, Mr Redshaw suggested in court that he had produced the infringing products by the time he asked Mr Allen for a licence in August 2008 although it was not clear when he put them on the market. In those circumstances, I think, doing the best I can, that I should assess damages on the basis of a notional licence period of two years from September 2008 to September 2010. On the assumption that the figure of £4227 given in Mr Redshaw's e-mail of 22 August 2008 related to an advance for a three-year licence deal, damages based on a two-year deal would be £2818. I am conscious that this figure is very much higher than 10% of the sales figures disclosed by Mr Redshaw, but as I have said, I have serious doubts about the reliability of those figures. Moreover, the figure of £2818 is less than the amount which is currently being generated annually by Mr Allen's existing licence, which relates only to T-shirts. Doing the best I can, therefore, I would award damages for copyright infringement in the sum of £2818.
54. The Particulars of Claim alleged that the infringement of copyright was flagrant. That seems to me plainly to be correct. I do not accept that the limited and non-specific advice which Mr Redshaw said he had taken should have given him or did give him any comfort in thinking that his actions were legitimate. The amount to be paid by way of additional damages will vary according to the circumstances of each case and can go so far as to double the amount of damages (see e.g. Notts Healthcare v News Group Newspapers [2002 RPC 49). I think it right here to increase the damages by a relatively modest amount to a total of £3,250 to reflect the flagrancy of the infringement.
55. In addition, I will award Mr Allen interest on that sum calculated from September 2008, on the basis that an advance of royalties would have been paid then. Interest should reflect the rate at which the Claimant would have had to borrow money to supply the place of that which was withheld (see Tate & Lyle v Greater London Council [1982] 1 WLR 149). That sum is generally taken to be 1% over base rate for the relevant period; base rate reduced from 4.5% to 0.5% by March 2009. Calculating interest relatively simply at 1.5% for the 4 ½ years from September 2008 gives an additional £219.37 for interest.
56. As to damages for passing off, those too might be calculated by reference to a notional licence fee for use of the Button Moon characters. To that extent, such damages would be coterminous with the damages for copyright infringement just set out above. However, Mr Allen also sought to claim damages for a lost licensing deal for mugs, which he said he had lost by reason of the Defendant's activities. I have no doubt that Mr Allen was being truthful about this problem even if, as Mr Redshaw pointed out, he had not granted a licence in respect of mugs at any time prior to this dispute. The difficulty with this evidence was that he did not produce any figures to indicate the quantum of such loss. In the circumstances I do not feel I can award more than a nominal sum in relation to such loss, which I put at £250, with interest of £16.87.
57. Again, Mr Allen sought damages for the damage to the reputation and goodwill in Button Moon caused by the poor quality of the Defendant's goods. There was some sketchy evidence before me of comments posted online about the quality of the Defendant's goods which I do not feel I can rely upon for the purposes of awarding damages. I have been provided with samples of the Defendant's goods and I do not think that they are of such poor quality as to have significantly damaged Mr Allen's goodwill. I do not feel able to award a further sum in respect of such losses.
58. The total sum which I will award in relation to damages for infringement of copyright and passing off, plus interest, is therefore £3736.24.
59. Mr Allen is entitled to an injunction and to his costs. I do not accept that Mr Redshaw's attempts to settle should preclude liability for costs, as at no stage did he offer any compensation to Mr Allen. Mr Allen claimed his solicitors' costs of £2436.88 which included drafting the Particulars of Claim. In addition, he claimed his disbursements amounting to £985 (as set out in an email of 16 January 2013 plus witness costs). Those figures fall well within the Patents County Court limits and I award the total sum of £3421.88 in costs.
60. I will make an Order in those terms.