The High Court has transferred an intellectual property claim to the Intellectual Property Enterprise Court (“IPEC”), demonstrating that while the choice of venue for intellectual property claims is typically selected by the claimant, certain circumstances can permit the court to overrule such a decision where there are compelling reasons to do so.
Such a reason was identified by Master Teverson in the matter of Shazam Productions Ltd v Only Fools The Dining Experience Ltd and Ors, a claim for copyright infringement and passing off in relation to an interactive theatrical dining experience. Initially issued in the High Court, the defendants sought to have the case transferred to the IPEC, where damages are limited to £500,000 and costs recovery is capped at £50,000 in the interests of access to justice. An application was brought before Master Teverson, who held in his judgment of 19 October 2020 that the overriding objective would be best served if the case were transferred to the IPEC and directed such transfer accordingly.
The dispute centres on “Only Fools The (cushty) Dining Experience”, an interactive dining experience run by the defendants featuring characters from the TV sitcom Only Fools and Horses and described by Master Teverson as “a part-scripted, part- improvised dramatic performance which takes place while the audience eats a three-course dinner and involves interactions between the cast and the audience”. The claimant, Shazam Productions Ltd, is a company established by John Sullivan, the late creator and scriptwriter of the sitcom. The claimant is concerned with exploiting and protecting Mr Sullivan’s intellectual property rights and is controlled by members of his family.
The claimant contended that it owns copyright in the sitcom’s scripts, principal characters and the lyrics of the opening theme song, and claimed that the defendants’ show amounted to copyright infringement and passing off. The defendants denied any copyright infringement and also relied upon the defences of fair dealing for the purposes of parody or pastiche under s.30A of the Copyright, Designs and Patents Act 1988.
The defendants submitted that the value of the claim is likely to be less than the High Court minimum claim for damages of £100,000, and consequently also below the IPEC damages cap. The defendants adduced witness evidence exhibiting a profit and loss account for a four-month period, amounting to a net loss of £51,417.78, and asserted that none of them could afford the costs of defending a claim in the High Court.
Many of the defendants possessed financial debt and a lack of liquid assets, which underscored their position of being unable to afford the costs of a High Court case and formed part of the defendants’ case for transferring the claim to the IPEC. The precarious financial position of the defendants was also compared with the considerably greater financial strength of the claimant.
The claimant argued that the claim was too complex to be fairly tried within the 3-day time limit imposed on trials in the IPEC. The claimant compared the complexity of the claim to the Da Vinci Code case (Baigent v Random House Publishing) and referred to the latter case’s 11-day trial as being far beyond the scope of the IPEC. As a proposed practical solution to the defendants’ lack of means, the claimant also offered costs protection to certain of the defendants to limit the any costs order against them to the sums it would obtain in the IPEC.
Master Teverson referred to the Practice Direction 30 which provides that the court will consider a claim’s value and complexity together with the parties’ means to bring or defend a claim when determining whether to transfer to the IPEC. The Master considered Floyd LJ’s judgment in Kogan v Martin and others, emphasising that the IPEC’s rationale is to provide access to justice for parties who would not otherwise be able afford the costs associated with intellectual property litigation in the High Court. He also highlighted the differences in procedure between the High Court and the IPEC, namely: (1) that statements of case in the IPEC rely on a party to plead all the facts and arguments on which they intend to rely rather than just material facts; and (2) that, unless otherwise ordered at the case management conference, there are no witness statements, expert reports or cross-examination at trials in the IPEC.
Master Teverson considered that it had been shown by the defendants that they could not afford to defend a case in the High Court and would only be able to defend the claim if it were transferred to the IPEC. The Master was not persuaded that the case was comparable to the Da Vinci Code case in either value or evidential weight and held that the case could be fairly tried in three days with active case management. Master Teverson also considered the claimant’s offer of costs protection for some (but not all) of the defendants insufficient. He held that in the absence of costs protection being extended to all of the defendants, there would be a real risk of access to justice being undermined. This latter factor was highlighted by Master Teverson as a particularly powerful reason for the case to be transferred to the IPEC.
Master Teveson concluded that that the overriding objective would likely be better served by transferring the claim to the IPEC for a case management conference. He cautioned the defendants that if they did not participate fully in the IPEC case management process, designed to focus the issues for trial and streamline the case, the possibility of the claim being transferred out of the IPEC remained open.
This decision clarifies and reinforces the role of the IPEC in dealing with claims which fall within its scope for complexity and the length of time the case will take to try. The significance placed on access to justice by Master Teverson makes clear that if one of the parties will struggle with the financial burden of either bringing or defending litigation in the High Court, that may constitute a compelling reason for the claim to be reassigned, provided the claim’s value and complexity permits such transfer.
This claim will be one to watch as it progresses through the IPEC. An important issue in the claim will be whether copyright protection can extend to the body of the scripts for Only Fools and Horses as opposed to the individual scripts, and to the principal characters featured in the sitcom. If the case proceeds to trial and the court decides in favour of the claimant, John Sullivan’s creative work will be protected without any of his actual text being used, which could have important implications for authors seeking to extend copyright protection from their works to the more nebulous “worlds” they create around them.
To read the judgment in full please click here.
Co-authored by Greg Moreton-Smith and Hannah Torpey.