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Intellectual Property Law

: IPKat

No abuse to sue company chairmen in second action

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

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Abuse of process is all the rage these days. Only a few short hours ago the IPKat was reflecting as to whether an appeal by a successful party in trade mark opposition proceedings against a decision in which he was actually victorious might constitute an abuse of process and now, in Ashley Wilde Group Ltd v Kocak and others, a decision in the Chancery Division (England and Wales) from John Baldwin QC, sitting as a Deputy High Court judge, abuse issues are raised in copyright infringement proceedings (note: this decision is not available on BAILII, but was conveniently summarised by Lawtel, to which subscribers may turn if they wish to order the full text).

In these proceedings the second and third defendants applied (i) to set aside an order which struck out their earlier application to challenge the court's jurisdiction to hear a claim against them and (ii) to set aside an order that they be liable for costs incurred in separate proceedings.

The background to this is that the claimant, whom Lawtel designate as "W", had obtained judgment, injunctive relief and an award of damages against a Turkish company for infringing the copyright in the design of a cushion. Having failed to execute judgment against the Turkish company, W went after the second and third defendants on the basis that, as the Turkish company's chairman and vice-chairman respectively, they were sufficiently involved in the infringement of copyright to be made personally liable. After W succeeded against them, gaining an order that they pay the Turkish company's costs in the first action since they had caused the first action to be carried on in the way that it was, the defendants applied to have the orders struck out (the application to set aside the costs order being made after a time-lag of five months from the application relating to liability). The defendants maintained that they should not have been proceeded against since the action against them was barred by res judicata or as an abuse of process; after all, the issue of infringement of copyright had already been the subject of a decision against the Turkish company and it was inappropriate to litigate it a second time. They also argued that the factual basis for the costs order was incorrect, not least because they had not caused the Turkish company to dispose of its assets in order to avoid W's judgment.

John Baldwin QC dismissed the applications. In his view

* Res judicata was no defence where neither party was relying on a decision on the merits in the original action. The defendants might just have got some help from res judicata if W had lost in the first action, but that was not the case.

* There was nothing to support the contention that this was vexatious litigation.

* The requirement that a claimant bring all its claims arising out of the same incident against a defendant at once did not mean that a claimant could not sue other parties who might have been involved in the same tort but who were not parties to the earlier litigation.

* There were insufficient details from which it could be shown that the defendants had a real prospect of successfully defending the costs order and the court was not satisfied that things would have turned out any differently if the defendants had been parties to the first action.

The IPKat, admittedly without sight of the full text of the decision, thinks that this must be the correct approach. Merpel adds, at times when substantive copyright law seems to be creaking at the joints and it can be difficult for an injured party to obtain relief, the courts generally seem to take a more flexible and pro-rights-owner position when considering procedural issues.

Make your own Turkish Delight here

Full post as published by IPKat on March 18, 2010 (boomark / email).