Scottish Court of Session Decisions

[1] This is an action for interdict based on the alleged infringement of a design right protected by the Copyright Designs and Patents Act 1988. Interim interdict was granted ex parte by Lord Nimmo Smith on 14 April 2000. The defenders' motion for the recall of that interim interdict came before me on 12 May 2000. After hearing counsel, I indicated that I was minded to recall the interim interdict pronounced by Lord Nimmo Smith and to grant interim interdict of new in substantially the same terms, but restricted in scope to Scotland. Mr Currie on behalf of the pursuers then sought, and was granted, leave to amend the summons at the Bar so as to restrict the interdict sought to Scotland. I then recalled the existing interim interdict and granted interim interdict of new in terms of the first conclusion of the summons as amended.

[2] The basis on which interdict is sought is set out in the pursuers' pleadings, but can be briefly summarised. The pursuers, who are based in England, design and make ambulance bodies to be fitted on to vehicle chassis manufactured by vehicle manufacturers. Broadly speaking (this matter is explained in greater detail later), the pursuers sell the ambulances to organisations responsible for providing ambulance services, including the Scottish Ambulance Service. The defenders are a competing firm, based in Ireland.

[3] According to their averments, the pursuers in 1998 designed a new piece of apparatus for providing access to vehicles such as ambulances. The access apparatus combines a step and a ramp. It can be moved from a closed position to a position in which a step is provided or to a position in which a ramp is provided. It is thus suitable either for persons on foot or for trolleys. The apparatus can be operated electrically. No previous designs had combined a step and a ramp. The defenders, for example, had in the past supplied ambulances which had a step and also a ramp which could be manually operated. The pursuers have applied for UK and European patents in respect of their design.

[4] From about August 1998 the Scottish Ambulance Service had on trial from the pursuers an ambulance fitted with the new design. On about 25 February 1999 the Scottish Ambulance Service issued invitations to tender for the supply of 65 "accident and emergency vehicle" conversions. Tenders were required to comply with the specifications issued by the Scottish Ambulance Service. Two separate specifications were issued, one of which made no reference to a step-ramp feature, and the other of which contained an outline of such a feature. The pursuers tendered to supply all 65 ambulances. On about 24 November 1999 they were informed by the Scottish Ambulance Service that they were to be awarded a contract to supply 32 ambulances, and that the contract to supply the remaining 33 was to be awarded to the defenders. The pursuers were not aware of the basis on which the defenders had tendered for the contract, and in particular whether the defenders' design included a step-ramp feature.

[5] In about July 1999 the pursuers received information which suggested that the defenders' tender had included a step-ramp feature. By letter dated 11 August 1999 the pursuers' solicitors stated to the defenders that the use of such a step-ramp constituted an infringement of the pursuers' design right, and required undertakings from the defenders to desist from any infringement of the right. There followed correspondence between the respective solicitors for the parties during August and October 1999.

[6] On 22 March 2000 the pursuers received information that the first ambulance manufactured by the defenders for the Scottish Ambulance Service had been delivered to a dealer. The pursuers were able to arrange for photographs of the ambulance to be taken on about 31 March 2000. Putting the matter shortly, the step-ramp incorporated into the defenders' ambulance is said to be extremely similar to the pursuers' design, even in respect of design features which serve no functional purpose.

[7] On behalf of the defender, Mr Moynihan did not dispute that there was a prima facie case that the defenders had copied the pursuers' design. Mr Moynihan argued however that the Court had no jurisdiction to grant interdict in the terms granted by Lord Nimmo Smith, that being an interdict of world-wide scope, and that the balance of convenience in any event favoured the recall of interim interdict.

[8] In relation to the first point, Mr Currie for the pursuers intervened at the outset of the hearing so as to narrow the area in dispute, by indicating that he would be content with an interdict expressly confined to the United Kingdom. Mr Moynihan, however, submitted that any interdict should be confined to Scotland. The greater part of the hearing was devoted to this issue. I will deal with it fairly briefly in this Opinion, as I doubt whether the reclaiming motion will directly concern this point.

[9] Mr Moynihan referred me to the Brussels Convention of 1968 as amended, as set out in Schedule 1 to the Civil Jurisdiction and Judgments Act 1982, and in particular to Article 5(3). Mr Moynihan submitted that the present case related to delict, and that jurisdiction therefore resided in the Courts for the place where the harmful event occurred. Under reference to the judgment of the European Court of Justice in case C-68/93 Shevill v Presse Alliance SA [1995] ECRI 415, Mr Moynihan submitted that where a harmful event occurred in a number of countries, the Courts of each of those countries had jurisdiction which was confined to the consequences suffered within that jurisdiction. In the present case, therefore, the Court of Session could only deal with the harmful event which occurred in Scotland. Mr Currie, on the other hand, argued that the Court was given by the 1988 Act the power to pronounce an interdict covering the entirety of the United Kingdom. Mr Currie referred in that regard to section 227(1) of the 1988 Act, which is in the following terms:

Mr Currie pointed out that sub-section (1)(a) refers expressly to the United Kingdom rather than to any of its particular jurisdictions, and he submitted that the words "in the United Kingdom" should be implied also in sub-section (1)(b) and (c), given the presumption against extra-territorial effect. Mr Currie submitted that there were practical advantages in avoiding the necessity, for a victim of UK-wide infringement of a design right, of repeated litigation in each of the three jurisdictions of the United Kingdom. He submitted that Parliament had intended to confer on the Scottish Courts, as also on those of Northern Ireland and of England and Wales, the power to restrain infringements throughout the whole of the United Kingdom. At the least, he submitted, the pursuers had an arguable case to that effect. No authority other than the case of Shevill was cited on behalf of either party.

[10] It appeared to me that, in the absence of any statutory power extending its jurisdiction, this Court would only grant interdict to prevent the commission of threatened wrongs within its jurisdiction. I was not persuaded that section 227 of the 1988 Act had the effect, or arguably had the effect, contended for. It appeared to me that the reference to the United Kingdom in section 227(1)(a) was intended merely to define a particular infringement and was not intended to extend the jurisdiction of the Courts so as to enable them to pronounce interdicts or injunctions in respect of actings in other parts of the United Kingdom (any more than, in a criminal context, the prohibition on the importation of controlled drugs into the United Kingdom could be regarded as conferring on the Scottish Courts a general power to try offences committed by importation into England and Wales). I therefore considered that any interim interdict should be confined in its scope to Scotland.

[11] In relation to the balance of convenience, Mr Moynihan argued, first, that the pursuers had delayed unreasonably in bringing the present proceedings and, secondly, that the loss occasioned to the defenders as a result of the interim interdict would be disproportionate and in all likelihood irrecoverable.

[12] So far as delay is concerned, Mr Moynihan pointed out that the parties had been in correspondence about the alleged infringement since about August 1999 and that the pursuers had known since 24 November 1999, at the latest, that the Scottish Ambulance Service had decided to buy 32 ambulances from themselves and 33 from the defenders. Nevertheless, it was not until April 2000, shortly after the delivery of the first ambulance by the defenders, that the present action had been commenced. Mr Moynihan however accepted that the defenders had been aware of the pursuers' claim to exclusive design rights in respect of the step-ramp since at least their receipt of the letters from the pursuers' solicitors, and that they had entered into their contractual and manufacturing commitments in full awareness of the risk of proceedings being taken.

[13] In reply, Mr Currie submitted that until the pursuers had had an opportunity to see and inspect one of the infringing ambulances, which first occurred on 31 March 2000, they did not have any solid evidence that the defenders were infringing their rights. That submission was in accordance with the pursuers' averments, and was not contradicted by Mr Moynihan. The pursuers' solicitors had warned those acting for the defenders on 8 October 1999 that their clients' position was uncertain and that they ran the risk of action being taken against them if they commenced to supply ambulances incorporating a copy of the pursuers' design. That is a point to which I shall return. In those circumstances, I did not consider that the pursuers had delayed unreasonably.

[14] In relation to loss, Mr Moynihan emphasised that the defenders had undertaken a contractual commitment to supply the 33 ambulances in question to the Scottish Ambulance Service and would incur a liability in damages if they were prevented from fulfilling that commitment. In addition, the manufacturing costs had already been incurred. The pursuers, on the other hand, could have only a modest claim for lost profit or royalties.

[15] In reply, Mr Currie submitted first that the configuration of the step-ramp used on the defenders' vehicle adopted a shape which was not conditioned by the chassis or by any functional requirement but which was also used by the pursuers. In those circumstances, there was a very strong inference of direct copying. That matter was described in greater detail in the pursuers' pleadings. The strength of the pursuers' case was a relevant factor to bear in mind. Moreover, it was apparent from the correspondence, and conceded by Mr Moynihan, that the defenders had made a commercial assessment of the risk of going ahead. In these circumstances the Court should proceed on the basis that there was a strong prima facie case of direct copying, and a conscious decision by the defenders to run the risk of proceedings being taken against them. Mr Currie further informed me that the gross value of the 33 Ambulances was, according to his information, £970,000. The profit element in that sum, which represented the pursuers' loss, was very substantial indeed. It might nevertheless be difficult for the pursuers to prove their loss and damage, especially if the defenders' were to argue that the pursuers would not have received the contract in any event. This was a situation in which the balance of convenience strongly favoured the holder of the design right being infringed. Nor were the pursuers' losses confined to these 33 ambulances. The pursuers' information was that the Scottish Ambulance Service were about to put out a tender for another 40 ambulances. On the other hand, it would be mistaken to suppose that the effect of the interdict would be the writing off of the defenders' investment in the 33 ambulances. The step-ramp formed only a part of the equipment fitted to the chassis. There was no problem in respect of the chassis or indeed the body fitted to it, other than in respect of one particular element. In addition, the Scottish Ambulance Service's specification did not specifically require a step-ramp matching the pursuers' design. Reference was made in this regard to the defenders' averments in Answer 5, at page 13E. According to the pursuers' information, even the infringing elements could be used on ambulances supplied within the Irish Republic, where design rights were not recognised. Reference was made in that regard to the pursuers' averment at page 22E, and the defenders' response at page 23B.

[16] My starting point, in relation to this aspect of the argument, was that there was a prima facie case of direct copying of the pursuers' design. No attempt had been made to dispute that. Indeed, Mr Moynihan did not seek to dispute Mr Currie's submission as to the strength of the pursuers' case, on the basis of averments that even non-functional elements of the design had been copied. It would follow that there was a conscious decision by the defenders to run the risk of the contract being interrupted by legal proceedings. The defenders were indeed on express notice of that from at least 8 October 1999. It also appeared that the pursuers' losses might be substantial. On the other hand, there was no reason to suppose that the defenders' expenditure to date would be wholly or even largely abortive. Any liability in damages which they might incur to the Scottish Ambulance Service would be limited by that Service's obligation to minimise its loss by purchasing equivalent ambulances elsewhere (e.g. from the pursuers). Accordingly, Mr Moynihan's submissions in relation to this branch of the case did not persuade me that interim interdict was inappropriate.

[17] Finally, Mr Moynihan submitted that the parties' respective financial positions, and their ability to pay any damages which might be awarded to the other party, were such that the balance of convenience favoured the defenders. As Mr Moynihan put it, although the defenders did not have a great deal of money, the pursuers had no money. Mr Moynihan referred in that regard to management accounts of the pursuers which he produced (production No 7/1). These accounts indicated that the pursuers' current assets were exceeded by their current liabilities. They were therefore in a state of absolute insolvency. Mr Currie, on the other hand, observed that the pursuers' trading results for 1999 (production No 6/22) demonstrated considerable and growing profitability. The pursuers had made a net profit over the twelve months of £1,274,000 before tax. They had been sole supplier to the Scottish Ambulance Service for the last 11 years. They were a company with a track record.

[18] It appeared to me from the various accounts that the pursuers were a reasonably substantial company. I was not persuaded that they would be unable to meet any liability which they might incur to the defenders. On the other hand, Mr Moynihan readily accepted that the defenders had little money. No details were provided. Mr Moynihan suggested that the offering of caution by the defenders might be a possibility at some future date. He was not however in a position to offer caution at the hearing. In the circumstances, the pursuers' financial position did not appear to me to be a basis for recalling the interim interdict.

[19] There are two further matters which I should mention. First, the precise contractual arrangements between the defenders and the Scottish Ambulance Service were not explained to me. Reference was made to the invitation to offer document which had been issued by the Scottish Ambulance Service in March 1999 (production No 6/3). The document was not discussed in detail. It appears from it, however, that there may be no direct relationship of a contractual nature between either the pursuers or the defenders and the Scottish Ambulance Service. The brief explanation which I was given tended to suggest that the pursuers and defenders fitted bodies to chassis supplied by a company which then leased the vehicles to the Scottish Ambulance Service. The second matter which I should mention is that no suggestion was made that either the Scottish Ambulance Service or the general public would be prejudiced materially by the interim interdict being maintained in force. Mr Currie assured me to the contrary. I proceeded on the basis that there was no public interest at stake.

[20] In the circumstances, and for the reasons which I have explained, I recalled the interim interdict pronounced by Lord Nimmo Smith and granted interim interdict of new in substantially the same terms, but restricted in scope to Scotland.