Summary
AGA Rangemaster issued proceedings against UK Innovations Group Ltd and its director, Mr McGinley, for trade mark and copyright infringement in respect of converted AGA cookers, which were marketed and sold under the branding “eControl AGA”. The defendants refurbished and converted traditional oil-based AGA cookers so that they ran on electricity, using an “eControl System”. The defendants asserted that their use of AGA was descriptive and / or that AGA’s trade mark rights were exhausted upon the first sale of the AGA cooker. The defendants denied copyright infringement on the basis that AGA’s control panel depicted a non-artistic article, which was outside the scope of copyright protection.
The descriptive use defence and the exhaustion of rights defence failed and therefore trade mark infringement was established. The defendants did, however, succeed in defending the copyright infringement action as their actions were authorised under s51 of the Copyright, Designs and Patents Act 1988 (“CDPA”) which allows you to create a 3D article from a design document, although the judge gave AGA permission to appeal this point. The second defendant, Mr McGinley, director of UK Innovations, was not held liable as a joint tortfeasor in respect of the trade mark infringement action, as no evidence was adduced to suggest that he had the required knowledge for accessory liability to be established.
Trade mark infringement
AGA claimed that the way in which the defendants had marketed and sold the converted products, infringed its trade marks.
The defendants argued that their use of the word “AGA” was descriptive and/or to indicate that the eControl System could be used to “convert” genuine AGA cookers. However, this defence failed because the defendants referred to the converted product as an “eControl AGA”, which was not purely descriptive, but rather the sign was used as part of the brand. As the use was deemed part of the “badge of origin”, it went beyond descriptive use and so the defence failed.
The defendants also denied trade mark infringement on the basis that the AGA cookers had previously been placed on the market by AGA or with its consent. Therefore, AGA’s trade mark rights were exhausted at the first sale and it could not prevent further dealings. However, the exhaustion defence will fail if the trade mark proprietor has legitimate reasons to object to further dealings, if, for example, the condition of the goods has been changed or impaired after the first sale.
The defendants’ refurbishment and conversion to electric works, even though significant, were not legitimate reasons, per se, for AGA to object to those further dealings. The court then examined how the converted product was marketed and sold, and it was held that AGA did have legitimate reason to object to the further dealings, on the basis that customers and potential customers were given the impression that there was a commercial connection between the converted product and AGA.
As both defences were unsuccessful, liability for infringement of AGA’s trade marks was established.
Copyright infringement
AGA also alleged that the defendants copied a CAD drawing of its electric cooker control panel. Although there were differences, the judge held that the defendants had copied the CAD drawing. The defendants admitted to copying but stated that their actions were authorised under s51 CDPA.
The purpose of s51 is to limit the role of copyright in relation to the protection of “industrial designs” (i.e. non-artistic articles). It is not an infringement to create a 3D article from a design document unless the corresponding 3D article qualifies as an artistic work in itself. As the CAD drawing depicted AGA’s control panel, which was a non-artistic article, the defendants successfully relied on this defence.
Accessory liability of the director
Applying the Supreme Court’s decision of Lifestyle Equities v Ahmed, which we wrote about here, the director was not found to be liable for trade mark infringement as a primary infringer or as an accessory. Although the director was clearly aware of AGA’s trade marks, the judge could not find that he knew that the defendants’ actions were liable to affect the functions of AGA’s trade marks, which is required for accessory liability, notwithstanding that trade mark infringement is strict liability. As the judge found no infringement in respect of copyright, there was no need to examine the director’s liability in respect of this element of the claim.
Key takeaways
Brand owners should be aware that there likely needs to be substantial changes and / or impairment of products that have already been placed on the market, to have legitimate reason to object to those further dealings. However, this should be taken on a case-by-case basis, depending on the product in question. The judge was likely persuaded that a high bar should be adopted in this case given that AGA cookers have a long-life span and customers purchasing one second-hand would expect a certain amount of refurbishment to have occurred.
In relation to how the defendants’ converted product was marketed and sold, had the defendants made it clear that the converted product was not connected to AGA, in terms of how it was marketed, the decision on trade mark infringement would have likely been very different. The issue was with its branding, not its business model.
Perhaps the most important takeaway is that AGA was given permission to appeal the copyright decision and so we may have a Court of Appeal ruling, post-Cofemel, on whether there remains a requirement for artistic quality in UK copyright law, and how this might affect s51 in practice.
For more information or if you have any questions, please contact Emily Roberts or Holly Webb or another member of the IP team.
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