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Robert Welch Designs Ltd (RWD) has recently agreed to a confidential out of court settlement with Marks & Spencer plc (MS) over the alleged infringement of a design right in the packaging for a cutlery product. MS have not admitted liability and maintain that their packaging design (which RWD claim substantially copied the packaging for the ‘Radford’ cutlery range) was promulgated by independent means.

RWD are known to take a robust approach to enforcing their intellectual property rights. In 2005 RWD secured a settlement worth over £150,000 against Argos Ltd due to an alleged infringement by the high street retailer of RWD’s design rights in a range of cutlery. As part of the settlement, Argos Ltd agreed to a licensing agreement under which they were permitted to produce a cutlery range that incorporated RWD’s design in return for royalty payments.

In reaching the latest settlement against MS, RWD were assisted by the Anti Copying in Design group (ACID), a trade organisation that advises its members in cases of alleged intellectual property abuse. However, in a statement issued by ACID’s CEO, Dids Macdonald, the not-for-profit organisation gave a scathing account of the inadequacy of intellectual property litigation to support the rights of smaller companies, alluding to an equality of arms critique*. The CEO stated:

“... One of the most difficult aspects to prove in any alleged copying is copyright infringement in packaging where the images have been changed sufficiently so that legal challenge is difficult (and costly!). This is a subject about which ACID has lobbied for some time now – a case for unlawful imitation. In these situations often designers have to rely on “passing off”.

If a company has to rely on “passing off” it is necessary to provide independent evidence of consumer confusion. What chance does any small, successful, niche, design led company have with major retail brands? This is why it is so difficult to prove and why, as in some cases it would appear companies have to settle out of court and agree a joint statement...”

Whilst any small business will endorse these claims, high costs in litigation have been a problem in this country for some time, and it is certainly not a problem distinct to intellectual property enforcement. Indeed, tackling the issue of high costs was a central theme of the Woolf reforms of civil justice in the Civil Procedure Rules 1998 (whether these reforms have made an effective difference is another matter entirely).

Inevitably, high costs will suit those with the deepest pockets, and impecunious litigants (or litigants with less financial strength) can be priced out of the litigation game. However, out of court settlement should not necessarily be perceived as a negative outcome. Although liability has not been conceded by MS, RWD will have presumably reached a reasonably satisfactory outcome, and MS will receive condemnation in the form of negative press and industry opinion.

http://www.acidnews.info/?p=375