In its first intellectual property decision, the Supreme Court of the United Kingdom has confirmed that, provided there is a basis for personal jurisdiction over a defendant, the English courts have jurisdiction to try a claim for infringement of foreign intellectual property rights.

Business Impact

The effect of this decision is that it will now be easier for foreign rights owners to bring infringement proceedings in England, even though an English intellectual property right may not have been infringed. The Supreme Court made it clear that such actions could extend to injunctions to enforce foreign intellectual property law, provided that final judgment of such infringing acts are anticipated to achieve success in another country. The court also said that there was no objection in principle to extra-territorial injunctions to restrain acts in another country.

However, these observations by the Supreme Court do not necessarily open the floodgates – enforcement of foreign intellectual property rights in England will only occur in cases where the validity of those rights is not in issue. In trade mark cases it is very often the case, and in patent cases almost always the case, that the validity of the right is put in issue. Copyright, where subsistence and validity can often be straightforward, may therefore be the main beneficiary of this judgment of the Supreme Court.

Background to the case

This case related to the intellectual property rights in the Imperial Stormtrooper helmets made for use in the first Stars Wars film "Stars Wars Episode IV – A New Hope" released in 1977. The story-line and characters of the film were conceived by George Lucas. In particular Lucas designed a concept of Imperial Stormtroopers as threatening characters in "fascist white armour suits". Designers then took over, creating drawings and paintings, a clay model of the helmet, and subsequently 50 vacuum-moulded helmets for the film. Those vacuum-moulded helmets were made by Andrew Ainsworth in England.

In 2004, Ainsworth used his original tools to make versions of the Imperial Stormtrooper helmet and armour. Ainsworth sold the goods in the United States for between $8,000 and $30,000. In 2005, Lucas, through his company Lucasfilm, successfully sued Ainsworth in the Californian courts obtaining default judgment for $20 million, $10 million of which was triple damages. Lucasfilm also commenced proceedings in England for infringement of copyright, enforcement of the US judgment to the extent of $10 million, and a claim under US copyright laws.

At first instance in England, Mann J dismissed the claims based on English copyright law on the basis that the helmet was not a work of sculpture and hence not an artistic work under the Copyright, Designs and Patents Act 1988 (the "CDPA"). Furthermore, he found that Ainsworth had defences to infringement under sections 51 and 52 of the CDPA. In addition, Mann J decided that the US judgment was unenforceable in England as there was no personal jurisdiction of the Court over Ainsworth. However, the judge held that Lucas' US copyright claim was triable in England, and that Ainsworth had infringed those rights.

The Court of Appeal agreed that the US judgment was unenforceable, and that the helmet was not a sculpture (and in any event Ainsworth had the benefit of defences). The Court of Appeal disagreed that Lucas' US copyright claims were justiciable in England.

Is the helmet an artistic work?

Copyright in the UK can subsist in a number of types of work, including an artistic work. Section 4(1) of the CDPA states that an artistic work includes a sculpture, and section 4(2) provides that a sculpture can include a cast or model made for the purposes of sculpture. The Supreme Court considered the English copyright law in relation to artistic works and sculptures, including an analysis of the legislation dating from the Copyright Act 1709 to the CDPA, as well as a number of cases under those statutes. The judge at first instance had undertaken the same review and derived guidelines as to the meaning of "sculpture" under the CDPA. The Court of Appeal agreed with these guidelines.

A number of those guidelines were deemed uncontroversial by the Supreme Court (for example that no judgment is to be made by the court as to artistic worth). The Supreme Court identified that the majority of the arguments centred on the approach to take for 3-dimensional objects that have both an artistic purpose (of some sort) and a utilitarian function (of some sort). In the Supreme Court, Lucas contended that the helmet had no practical function at all – it is a sculpture because its purpose is wholly artistic in that it was designed to make a visual impression on the filmgoer. As Lucas' counsel put it: "The helmet did not exist in order to keep their wearers warm or decent or to protect them from injury in an inter-planetary war." However, the judge at first instance and the Court of Appeal thought that the helmet's primary function was utilitarian, and it was designed to express something utilitarian.

The Supreme Court agreed, finding that it was the Stars Wars film that was the work of art that Lucas created, and that the helmet was utilitarian in the sense that it was an element in the process of production of the film. The Supreme Court also made the point that judgmental conclusions of this sort in intellectual property cases are matters on which the appellate courts should be slow to interfere with the decision of the trial judge, who has had the benefit of hearing all of the evidence.

Relationship between copyright and design right

Finally, the Supreme Court made an interesting point about the relationship between copyright and design right for the protection of 3-dimensaional artefacts. The court thought that it was possible to discern an emerging legislative purpose protecting such objects in a graduated manner, and that different periods of protection are afforded to different classes of work: artistic works of art have the most protection, next are works with "eye appeal", and finally are the purely functional objects which are protected by the UK unregistered design right under Part III of the CDPA. The Supreme Court stated that "There are good policy reasons for the differences in periods of protection, and the Court should not, in our view, encourage the boundaries of full copyright protection to creep outwards."

Are foreign intellectual property rights justiciable in England?

The Supreme Court recognised that this was a narrow issue – essentially can the English courts exercise jurisdiction in a claim (i) against a defendant domiciled in England, and (ii) for an infringement of copyright committed outside of the European Union in breach of copyright laws of that country?

The Court of Appeal decided that a claim for breach of US copyright was not justiciable in England, extending to foreign intellectual property rights the rule in British South Africa Co v Companhia de Moçambique [1893] AC 602 that the English court has no jurisdiction to entertain an action for the determination of the title to foreign land, or the recovery of damages for trespass to such foreign land.

The act of state doctrine

Again the Supreme Court carefully considered the relevant authorities, including the Australian case of Potter v Broken Hill Pty Co Ltd [1905] VLR 612 that decided the justiciability of patent infringement actions in different states (at that time patents were granted by several different states in Australia). Key to the conclusion of the Australian court was the act of state doctrine, i.e. that every sovereign state is bound to respect the independence of every other sovereign state, and the courts in one country will not sit in judgment on the acts of the government of another done within its own territory (per Fuller CJ in the United States Supreme Court in Underhill v Hernandez, 168 US 250, 252 (1897)).

New developments in European law

However, the Supreme Court was not persuaded that the act of state doctrine should apply in matters of infringement of intellectual property rights, simply because the action calls into question the decision of a foreign official. The court relied on two developments of European law in reaching its conclusion. First, article 22(4) of the Brussels I Regulation provides that, in proceedings concerned with the registration of validity of registered intellectual property rights, the courts of the member state where registration was applied for have exclusive jurisdiction irrespective of the domicile of the defendant. However, this rule does not apply to actions for infringement of those intellectual property rights where there is no issue as to validity. The Supreme Court concluded that this showed that there is a fundamental distinction between intellectual property rights that involve questions of validity, and those which do not.

The second development is European Regulation 864/2007 on the law applicable to non-contractual obligations (also known as Rome II). This demonstrates that there is no European public policy against the litigation of foreign intellectual property rights – the regulation envisages that actions may be brought in member states for infringement of foreign intellectual property rights.

Conclusion on jurisdiction

The Supreme Court noted that, in the case of the Imperial Stormtrooper helmet, the question was of infringement only, not subsistence of US copyright. The court concluded that such a claim for infringement was justiciable in England, provided that the English court had personal jurisdiction over the defendant (as it did in the case of Ainsworth).

Comment

This is an interesting development to the law on the jurisdiction of the English courts to hear cases involving the infringement of foreign intellectual property rights. The Supreme Court noted the modern trend in favour of enforcement of foreign rights (through Brussels I and Rome II), as well as the older international agreements on the recognition and enforcement of copyrights (the Berne Convention). The court also gave a substantial amount of weight to the conclusions of the American Law Institute and Max Planck Institute both of which favoured the justiciability of foreign intellectual property rights in this country.