Case No: IP-2014-000035
Neutral Citation Number: [2015] EWHC 2888 (IPEC)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT

Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL

Date: 23rd October 2015

Before :

DOUGLAS CAMPBELL
Sitting as a Deputy High Court Judge (IPEC)
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Between :

	T & A TEXTILES AND HOSIERY LIMITED 	Claimant	
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	(1) HALA TEXTILE UK LIMITED
(2) ABDUL HADI SHEHEZAD
(3) IRFAN AHMAD  	Defendants	

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Tim Austen (instructed by Myerson Solicitors LLP) for the Claimant
Ashton Chantrielle (instructed by Verdant Solicitors) for the Defendants

Hearing date: 24th September 2015
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Judgment
Douglas Campbell sitting as a Deputy High Court Judge (IPEC): 
Introduction 
1.	This is an action for infringement of copyright in certain artistic works, and for infringement of United Kingdom registered design no. 4 010 499.  The Claimant’s complaint concerns bed linen sets marketed by the First Defendant.  For reasons which will appear, it is not necessary to distinguish between the Defendants save as regards the liability of the Third Defendant, and save in that context I will refer to the Defendants generally.  Mr Tim Austen, instructed by Myerson Solicitors LLP, appeared for the Claimant and Miss Ashton Chantrielle, instructed by Verdant Solicitors, appeared for the Defendants.  
2.	As regards the copyright claim, eleven distinct bed linen products sold by the First Defendant are said to infringe copyright with respect to eleven original artistic works created by Mr Muhammad Adnan Aslam (“Mr Aslam”), a director and employee of the Claimant.  The evidence at trial focussed on two works in particular, namely those referred to as “Chantilly” and “Manhatten” by the Claimant.  The Defendants’ alleged infringing products with respect to these were called “Richmond” and “Stephanie” respectively.  The products were obtained by the First Defendant from a Pakistani company which was variously called Hala Exports or Hala Industries.  I shall refer to it as Hala Exports for convenience.  
3.	Much less time was spent on the registered design case.  The design in question is registered in respect of a label for packaging and the Defendants accepted at trial that if the design was validly registered, it was infringed.  However validity was challenged by the Defendants on the grounds of two alleged prior uses.  One prior use was said to have been made by the Defendants themselves, in that they claimed to have been using the same packaging since around 2004 and in any event before March 2009 (the 10th March 2009 being the date as of which the design was registered).  The other prior use was said to have been made by another company, Imperial Packaging (“Imperial”).  
4.	The Defendants counterclaim for invalidity of the registered design, and for groundless threats of proceedings for infringement of registered design.  The alleged threats fall into two categories: threats to third party companies (including in particular two companies called Designer Textiles and Nice Carpets), and “a letter sent to eBay” about the First Defendant’s listing.  It turned out that there were in fact a number of documents passing between eBay and the Claimant, as I explain below.  The Claimant says that such threats were justified, and that the Defendants have not suffered any loss or damage resulting therefrom.  
5.	At the case management conference held before HHJ Hacon on 5th March 2015, the Claimant was given permission to serve 1 witness statement of fact and the Defendants were given permission to serve 3 witness statements of fact.  No directions were made for reply evidence but both sides were given permission by the Judge to apply for the same.  
6.	In accordance with that order the Claimant served a witness statement from Mr Aslam.  The Defendant however served 4 witness statements, from Mr Abdul Hadi Shehezad (the Second Defendant, and also a director of the First Defendant); Mr Muhammad Amin (who claimed to have been in charge of designing Hala Exports’ designs for its bed linen since 2008, and in particular to have designed the alleged infringing products); Mr Muhammad Sarfraz (operations manager at Virginia Packages, which packaged the Defendants’ alleged infringing products); and from Mr Ahtram-ul-Haq (partner owner of Imperial) under a Civil Evidence Act notice.
7.	Events then took an unusual turn.  Mr Aslam travelled to Pakistan on 7 August 2015 for a work trip and met Mr Amin there.  Mr Aslam said that Mr Amin told him he never saw or signed the witness statement in his name, and that he would not be coming to the UK to attend trial.  Mr Shehezad then received a video recording from Mr Amin about a week later.  In this video recording Mr Amin claimed to have been offered cash incentives by Mr Aslam to sign various documents, and to have been threatened upon Mr Amin’s refusal to do so.  
8.	On Tuesday 22nd September 2015 both sides applied to serve extra evidence, and neither opposed the application of the other.  This evidence fell into 3 categories.  The first category was conventional reply evidence.  Since permission for such an application had been given at the case management conference, Part 63.23(2) was not engaged and no exceptional circumstances had to be shown.  I was satisfied that the evidence in this category was genuinely evidence in reply and admitted it.  The second category was the evidence relating to Mr Amin which I have summarised above and in relation to which both sides accepted Part 63.23(2) was engaged.  Both sides argued not just that the evidence was important to their respective cases, but that the circumstances were exceptional having regard to the serious allegations made on both sides (ie the Claimant’s allegation that the Defendants had fabricated important evidence and the Defendants’ allegation that the Claimant had intimidated a key defence witness into withdrawing from the case).  I agreed that these circumstances were exceptional and permitted both sides to rely on evidence on this issue.  The third category was expert evidence which the Defendants sought to adduce in relation to electronic files of the artistic works relied upon, which files had been disclosed by the Claimant on 7th July 2015.  Part 63.23(2) was again engaged but this time the circumstances were not exceptional, hence I refused permission in that respect.  Neither side sought permission to appeal from any of these decisions.  
9.	I also pointed out to the Defendants at that hearing that since permission had only been given for 3 witness statements, they could not rely on all 4 which they had served.  The Defendants subsequently dropped reliance on the statement of Mr Ahtram-ul-Haq. 
Witnesses
10.	As will become apparent, most of the issues in this case are issues of fact not law; and both sides made headway in attacking the fact evidence of the other.  I will start with an assessment of the witnesses who gave live evidence.  
11.	Mr Aslam was subjected to a searching cross-examination covering a wide variety of ground.  The Defendants submitted that he was aggressive in his answers, citing Mr Aslam’s response to an allegation of VAT fraud.  I reject this criticism.  Mr Aslam was entitled to provide a robust response to this allegation, which was not made out and in any event irrelevant to the issues in the case.  
12.	Mr Shehezad was a good witness who gave clear answers and readily made concessions.  A week after the hearing took place, the Claimant filed a document raising a number of detailed criticisms relating to Mr Shehezad’s evidence about certain delivery notes and submitting that his evidence should be disbelieved.  As the Defendants submitted, and as I accept, this is far too late.  These criticisms could and should have been put to Mr Shehezad in cross-examination at the trial in order to give him an opportunity to deal with them but the Claimant did not do so.  Moreover the importance of those delivery notes to the Defendants’ case was apparent from Mr Shehezad’s witness statement itself, dated 1st May 2015, and had also been stressed by the Defendants in their skeleton argument for the trial.  In these circumstances I decline to consider any of these criticisms, and I specifically reject the submission that I should disbelieve any of Mr Shehezad’s evidence as a result.  
13.	Mr Dev Rajasani was the Defendants’ interpreter for purposes of the cross-examination of Mr Sarfraz.  I am grateful to him for his assistance.  
14.	Mr Sarfraz gave evidence by video link from Pakistan.  He was plainly keen to help, although his answers were not always concise.  However it became apparent during his cross-examination and re-examination that he could not really remember for how long the Defendants had been using the alleged infringing packaging.  In closing submissions, the Defendants understandably did not rely on his evidence.  
15.	Mr Amin did not attend, and was not offered for cross-examination by video link.  Instead the Defendants served a Civil Evidence Act notice in respect of his evidence.  I consider the substance of this evidence below.  
Subsistence of copyright
Legal context
16.	The relevant law was not disputed.  Both sides agreed that the works in question were to be treated as artistic works within section 4 of the Copyright Designs and Patents Act 1988, and neither side suggested there was a material difference so far as originality was concerned between the “author’s own intellectual creation” test and the traditional UK “skill and labour” test: see SAS Institute Inc v World Programming Ltd [2014] RPC 8, CA.  I will use the former test.  
The evidence 
17.	Mr Aslam gave various creation dates for the bedding designs relied on in this action: see Aslam I at [16].  For instance he said that he created the Chantilly designs on 11 January 2010 and the Manhatten designs on 6 March 2012.  He was cross examined on this evidence at trial, with particular reference to these two designs.  They are shown at Annex 1 to this judgment.  As will be seen the dates shown on these design documents are the same as those given by Mr Aslam in his evidence.  
18.	Ms Aslam said that the starting point for his Manhatten drawing was the table linen which he saw when having a meal at a friend’s house.  He then went to a photograph library and obtained an image which he liked.  Next he created a design in Photoshop using the image from the photograph library.  He did not identify any changes which he made between the image in the photograph library and his Photoshop image.  
19.	He explained that the Chantilly drawing, and “most of” the other designs, had been created differently.  They were still created by him in Photoshop but these were not just taken from the photolibrary.  For instance with the Chantilly he had also used a “mood board” as a source of inspiration.  He had then drawn the flower himself with a stylus, and he had also added the leaves.  
20.	Mr Aslam offered in cross-examination to give the Defendants the name of the photography library which he had used.  The Defendants did not take up that offer.  I was not told what library it was or shown any images from it. 
21.	Mr Aslam also explained how his drawings came to be turned into actual products.  Once he created his drawing, he would send to the factory a JPEG or TIFF version, and the factory would send him a JPEG computer file for his approval.  Some designs were created in various colour variations and if time was short he would ask the factory to assist him with any colour variations.  For instance in relation to the Chantilly design the red version was a TIFF file which he had sent to the factory, whereas the black and purple versions were JPEG colour variations which the factory had sent back to him.  
22.	It was pointed out to Mr Aslam that the red Chantilly drawing contained the text “white paste texture should be used good quality”, and that the Claimant’s Chantilly product did not have a white paste texture.  Mr Aslam agreed but explained that whilst the very first shipment of Chantilly products had indeed had a white paste texture, he had told the factory not to use it.  It was also pointed out to Mr Aslam that the same document also contained the text “applique and embroidery duvet cover” whereas the Claimant’s Chantilly product actually had a printed duvet cover instead.  Mr Aslam said that this was subsequently changed too.  Mr Aslam’s attention was also drawn to another version of the Chantilly design document, and he agreed that this was different with respect to a pink pattern on the fold.  
23.	I have already referred to the electronic files of the artistic works which the Claimant had disclosed on 7th July 2015.  I should explain the circumstances in which this happened.  At the case management conference on 5th March 2015, the Claimant had been ordered to disclose, inter alia, computer files relating to the dates of creation of the works in question and their metadata.  The Claimant failed to do so, although it did provide computer printouts showing the properties of the relevant computer files.  On 2nd July 2015 HHJ Hacon made an order that unless the Claimant disclosed the actual computer files within 21 days its claim would be struck out.  The Claimant then supplied a memory stick on 7th July 2015.  On 23rd July 2015, the Defendants’ solicitors wrote to the Claimant pointing out that the creation dates associated with the electronic files which had actually been supplied were all substantially later than the dates on which the works were said to have been created.  On 27th July 2015 the Defendants’ solicitors elaborated: the Chantilly file creation date was 1st June 2015 (not 11th January 2010); the Manhatten file creation date was 31st May 2015 (not 6th March 2012); and even the earliest, El Paso, was 30th January 2014 whereas the date on the pleaded El Paso document was 26th March 2010.  
24.	In his cross-examination Mr Aslam was asked to explain the discrepancy between the file creation dates and the pleaded dates.  He thought it might have something to do with the act of copying the files on to the memory stick.  In response to that suggestion, which he had made for the first time in his cross-examination, Counsel for the Defendants copied the files in question from a laptop on to which they had previously been copied, to the same memory stick which had originally been supplied by the Claimant.  Following this particular exercise, the file creation date was unchanged.  I gave the Claimant an opportunity to repeat this exercise once Mr Aslam’s cross-examination was finished, but the Claimant did not report obtaining any different results.  
25.	It was put to Mr Aslam that the dates of creation of the computer files supplied on the memory stick did not match the pleaded dates “because he did not create the original files”.  He said that the files which had been supplied to the Defendants had been copied from his computer on to the memory stick and he was not sure if they were original or not original.  It was not put to Mr Aslam that he had fabricated the computer files so as to deceive the Court.  Such an allegation would not in any event have been open to the Defendants to make, having regard to CPR Part 32.19(1).  It is in any event difficult to see how the creation date of the El Paso design, ie 30th January 2014, would have fitted into such an allegation, given that it substantially predates the issue of proceedings on 24th October 2014.  
26.	I should mention one other area of evidence.  It was not disputed that Mr Shehezad had visited the Claimant’s warehouse in 2011.  In his witness statement Mr Shehezad said that the Defendants ordered bed linens from the Claimant after that visit, and that he recalled seeing some of the Claimant’s bed linen which is the subject of these proceedings during this relationship.  In cross examination Mr Shehezad was asked about what he had seen during the actual visit.  Mr Shehezad agreed that he had seen the Claimant’s designs during the visit, which he said were similar to the products he was already selling.  This evidence is consistent with Mr Aslam’s creation dates for the Chantilly design and a number of others (El Paso, Grandeur, Milan, Mirage, and Tropic).  
Assessment 
27.	I find as follows.  Mr Aslam did create the designs, and he did so on the dates given in his witness statement.  Although Mr Aslam was unable to explain why the creation dates on the electronic files supplied to the Defendants post-dated the dates which he had given, the only logical explanations appear to be some sort of computer error, or fabrication of evidence, and the latter possibility is not open to me.  Mr Aslam thought it was the former and I accept his explanation.  I now turn to whether they are original in the sense required by the Act.  
28.	The evidence on the Manhatten drawing is limited to that I identify above.  I find that it is not an original artistic work since Mr Aslam accepts that he took the relevant image from the photolibrary, and he did not suggest that he made any additions or modifications thereto.  I cannot identify any act of intellectual creation by Mr Aslam.  
29.	The Chantilly drawing is an original artistic work, due to the additions and modifications which were done by Mr Aslam on the image taken from the photolibrary.  I find that these additions and modifications did involve an act of intellectual creation.  The Claimant’s Chantilly product is not (or rather, is no longer) manufactured in accordance with the text on this drawing but that does not matter for present purposes.  
30.	The position on the other pleaded drawings is unclear.  All I have to go on is Mr Aslam’s evidence in chief that he created them all, and his statement in cross-examination that “most of” them were created in the same way as the Chantilly.  Absent any challenge by the Defendants save in relation to the Manhatten drawing, I find that all of the other drawings were original artistic works as well.  
Title to copyright 
31.	The Defendants accepted that if copyright subsisted, it was owned by the Claimant.
Infringement 
Legal context 
32.	The Claimant relied on infringement under each of ss 22 and 23 of the Act.  These provide as follows:
22. The copyright in a work is infringed by a person who, without the licence of the copyright owner, imports into the United Kingdom, otherwise than for his private and domestic use, an article which is, and which he knows or has reason to believe is, an infringing copy of the work.
23. The copyright in a work is infringed by a person who, without the licence of the copyright owner—
(a) possesses in the course of a business,
(b) sells or lets for hire, or offers or exposes for sale or hire,
(c) in the course of a business exhibits in public or distributes, or
(d) distributes otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright,
an article which is, and which he knows or has reason to believe is, an infringing copy of the work.
33.	Being provisions for secondary infringement, sections 22 and 23 Act both require knowledge or constructive knowledge on the part of the alleged infringer that the article in question is an “infringing copy”.  It was not disputed that the relevant mental state was to be assessed as in LA Gear v Hi-Tech Sports plc [1992] FSR 121, ZYX Music GmbH v King [1997] 2 All ER 129.
34.	The meaning of “infringing copy” is set out in subsections 27(2) and (3) of the Act.  Although the Defendants’ products were made in Pakistan, they were imported in the United Kingdom and are deemed to be infringing copies for the purposes of the Act, if their making in the United Kingdom would have constituted an infringement of copyright in the work in question.
35.	I was referred, inter alia, to Designers Guild Ltd v Russell Williams (Textiles) Ltd [2001] FSR 11 in support of the proposition that once the Claimant proves sufficient similarity of the features said to have been copied, and that the Defendant had prior access to the copyright work, the burden passes to the Defendant to satisfy the Court that despite the similarities, they did not result from copying.  I was also referred to IPC Media Ltd v Highbury Leisure Publishing Ltd [2005] FSR 20 in support of the proposition that similarities do not necessarily indicate copying, but may arise from both the author and the Defendant working independently from common sources in similar environments using similar common design techniques. 
36.	This Court’s approach in relation to copying was recently summarised by HHJ Hacon in John Kaldor Fabricmaker UK v Lee Ann Fashions [2015] ECDR 2 at [22] as follows:
22 I draw the following from the foregoing cases:
(1) The first stage is to consider whether the claimant has established a prima facie inference of direct or indirect copying by reason of the similarities between the copyright work and the defendant’s work.
(2) Similarities which constitute the expression of ideas that have no connection with the literary, dramatic, musical or artistic nature of the work are to be disregarded.
(3) Similarities not thus excluded but which are shown to be commonplace give rise to little or no inference of copying; the nearer a similarity approaches the strikingly original end of the spectrum, the greater weight it carries in supporting an inference of copying.
(4) If the claimant establishes a prima facie case of inferred copying, this may be rebutted by the defendant’s evidence of independent design. The stronger the prima facie case, the more cogent the defendant’s evidence must be to rebut the inference.
(5) If there is no finding of copying, there is no infringement. If there is a finding of fact that there has been copying, the next stage is to consider whether copying was done either in relation to the copyright work as a whole or any substantial part of it.
(6) Designers Guild [2001] E.C.D.R. 10 sanctions two alternative approaches to the question of substantial part. They are alternatives because neither was expressly endorsed by a majority. The first is to disregard the defendant’s work and to assess whether the similarities from which an inference of copying was drawn constitute a substantial part of the copyright work. This is a qualitative, not a quantitative assessment. The second, which applies only in an instance of altered copying, is to determine whether the infringer has incorporated a substantial part of the intellectual creation of the author of the work. In many cases the difference between the two approaches to an allegation of altered copying may be limited.
(7) To the extent that it has not already been excluded under step (3), a commonplace similarity can in any event make no contribution to any substantial part of the copyright work alleged to have been copied since it is not capable of attracting copyright protection.
(8) Assessment of whether there has been copying of a substantial part of the copyright work is a necessary and distinct step in the determination of whether the defendant has infringed. However, where copying has been established, on the facts it may be that this will almost inevitably lead to the conclusion that a substantial part of the copyright work has been copied. This may be influenced by the degree to which the finding of copying depended on the similarities between the two works.
37.	John Kaldor was recently applied in Bodo Sperlein v Sabichi [2015] EWHC 1242 (IPEC).  
38.	The Defendants did not rely on s 51 of the Copyright Designs and Patents Act 1988, so the issues considered in Lambretta Clothing Company Ltd v Teddy Smith (UK) Limited [2004] EWCA (Civ) 886 did not arise.  
The evidence 
39.	Both sides approached the issue of infringement on the basis that all eleven works stood or fell together: ie, either all of them had been copied or none of them had been.  
40.	The infringement case was restricted to the Chantilly design.  Two physical samples were put in evidence and I attach photographs of each.  Annex 2 is a photograph of the Claimant’s Chantilly product and Annex 3 is a photograph of the Defendants’ Richmond product.  As will be seen – and as was common ground at the trial – there are obvious similarities in appearance but they are not identical.  For instance the stems are more vertical in the Richmond product, and the arrangement of leaves and flowers with respect to the stems is different.  There are also some differences of detail in respect of the leaves and flowers themselves. Neither side put in any evidence as to the extent to which any of these features is commonplace, or as to how far the Claimant’s design approached the strikingly original end of the spectrum.  
41.	I also bear in mind that the comparison which I have to perform is between the Claimant’s design document and the Defendants’ product, not between the respective products.  Neither side made any detailed submissions about that comparison at trial.  Instead both approached the issue of infringement more broadly, as follows.  
42.	The Defendants accepted that they had had access to the Claimant’s designs (ie that they had had access to the Claimant’s products, which they did not dispute were made according to the Claimant’s designs).  Given that the Defendants’ access to the Claimant’s designs is accepted by them, I do not need to resolve the satellite disputes about what products the Defendants actually bought from the Claimant or how that commercial relationship came to an end.  
43.	The Defendants’ key argument was that they had been selling the particular products alleged to infringe, in the UK, since before the dates given by the Claimant for the creation of its designs, and accordingly the Defendants’ products could not be infringing.  This defence rested on two main limbs: Mr Amin’s evidence as the designer of their alleged infringing products, and Mr Shehezad’s evidence as the UK importer and distributor thereof.  
Mr Amin’s evidence
44.	I have already set out the unusual background to Mr Amin’s evidence and I now turn to its content.  His statement states that he has been employed by Hala Exports as a textile designer since 2008, and has been in charge of designing Hala Exports’ designs for its bed linen since 2008.  He states that he designed all the Hala Exports bed linens which the Claimant claims are copies of their designs.  He states that he had not been given permission by Hala Exports to provide the Claimant with computer files of his designs, but he did have permission to exhibit screenshots of the properties of these files.  
45.	Mr Aslam had recorded his conversation with Mr Amin in August 2015, as in fact did Mr Amin.  Both sides urged me to review the transcript of the conversation between Mr Aslam and Mr Amin, the translation of which was agreed.  Having done so I found it of little assistance.  For instance it is not clear what documents are being referred to at any given time.  
46.	It was put to Mr Aslam in cross-examination that he went to Pakistan to intimidate and scare Mr Amin.  Mr Aslam denied this.  Mr Aslam also said that as soon as he (Mr Aslam) showed Mr Amin the papers in the case, Mr Amin said that it was not his signature on his witness statement and that Mr Amin had left Hala Exports 4-5 years ago. 
47.	Mr Aslam also exhibited a copy of Mr Amin’s cv (which did not mention Mr Amin’s work as an employee of Hala Exports), Mr Amin’s Pakistani identity card (bearing Mr Amin’s signature), and a social security document for Hala Exports which did not mention Mr Amin as an employee.  None of these documents was disputed.  Indeed the ID card was expressly accepted by Mr Amin to be correct.  In the video which he sent to Mr Shehezad, Mr Amin said Mr Aslam had obtained that ID card from his place of work, and Mr Amin did not dispute that the signature on this ID card was different to the signature on Mr Amin’s statement.  
48.	I should also say that Mr Shehezad gave evidence as to the relationship between the First Defendant and Hala Exports.  I return to this below but for present purposes it should be noted that he said Hala Exports was helping the Defendants with this litigation.  When asked why Hala Exports had not provided electronic copies of their design documents, he said that he had asked for them but that his request had been denied.  
Assessment of Mr Amin’s evidence 
49.	In assessing the weight of this hearsay evidence I bear in mind the statutory considerations set out in s 4(2) of the Civil Evidence Act 1995.  I also bear in mind the need to be fair to the Claimant, which has not had the opportunity to test Mr Amin’s evidence in cross-examination in the same way as it was able to test the evidence of Mr Sarfraz via the videolink.
50.	I have not heard anything directly from Mr Amin himself, but I did see Mr Aslam’s cross-examination on this topic.  I found Mr Aslam’s account to be entirely credible and I accept his evidence.  
51.	I am also troubled by the inconsistencies between Mr Amin’s witness statement and the undisputed documents which were produced by Mr Aslam, and the lack of any explanation by the Defendants for such inconsistencies.  For instance Hala Exports should have been well placed to help the Defendants if there had been some point on the Hala Exports social security document.  Nor did the Defendants attempt to grapple with Mr Aslam’s points about the discrepancy in the signatures, and about Mr Amin’s cv.  There is also the point that Hala Exports appear prepared to offer the Defendants assistance with their litigation generally, except for the one thing which the Claimant actually wanted – ie, their computer design files.  This last point is given extra significance by the fact these same Defendants had repeatedly criticised Mr Aslam for relying on screenshots of files, rather than disclosing the relevant computer files themselves.  Taking all the above matters, including Mr Aslam’s evidence, into account I am not prepared to place any weight on Mr Amin’s hearsay statement.  
52.	The only evidential support for the allegation that Mr Aslam had intimidated and scared Mr Amin is the video message which Mr Amin sent to Mr Shehezad.  Having heard and seen Mr Aslam I reject this allegation.  I also note that whilst it is not clear what precise documents are being discussed in the transcripts of the conversation between Mr Aslam and Mr Amin in August 2015, the Defendants did not even suggest that those transcripts showed any signs of intimidation.  
Mr Shehezad’s evidence 
53.	Mr Shehezad explained that the First Defendant started trading in bed linens in June 2004.  When it started, most of its products were sourced in the UK but in 2007 he realised that most of these products were actually manufactured in Pakistan.  Mr Shehezad travelled to Pakistan to meet potential suppliers and visited Hala Exports’ warehouse in 2008.  He explained that despite the similarity in the name, there was no connection between the First Defendant and this Pakistani company.  Instead the relationship was one of supplier and customer.  A sole and exclusive distribution agreement was agreed and signed in January 2009 and remained in force until the end of 2014.  The commercial relationship grew over time, and Hala Exports took over responsibility for the First Defendant’s existing website (www.halatextile.co.uk) in 2012.  None of this evidence was disputed.  
54.	Mr Shehezad also gave evidence about the supply of products to the First Defendant and the sale thereof in the UK.  There were no formal documentary orders from the First Defendant to Hala Exports, but instead he would place orders orally on his visits and Hala Exports would produce a delivery note which he would sign.  As soon as the products were ready for shipment, Hala Exports would issue a commercial invoice and packaging list which was sent with the shipment.  Upon arrival in the UK, a bill of lading would be provided by the shipping company to Hala Exports.  He said that the commercial invoices, packaging lists, and bill of lading did not set out the names of the bed linen, but this was not uncommon in the industry as there was no requirement to do so.  The delivery notes, however, did set out the names.  He would also receive something called a U card showing the picture of the product, plus a hanger with a sample of all the products.  Most of the products were sold within a few months of delivery.  The First Defendant’s invoices to its own customers (most of whom were market traders) would not provide a full description of the products sold, but only referred to the quantity and size of the bed linen, which he said was also normal industry practice.
55.	Mr Shehezad exhibited a number of documents to support the above evidence.  For instance commercial invoice III/006/09, dated 26th March 2009, contains entries relating to 530, 1 414, and 1 078 items of products described only as “Single Complete Bed Set Print”, “Double Complete Bed Set Print”, and “King Complete Bed Set Print” respectively.  Bill of lading number MSCUKI096641  dated 30th March 2009, provided by Mediterranean Shipping Company SA, contains the same information.  The delivery note dated 28th March 2009, signed by Mr Shehezad on 30th March 2009, shows a total of 530 single sets, 1 414 double sets, and 1 078 king sets and also shows what the individual products were.  In particular this shows that the quantities of “Richmond Red” were 30, 45, and 35 respectively.  
56.	I was also referred to a similar set of documents referring to the Defendants’ Stephanie product.  Commercial invoice HI/04/10 dated 29th March 2010 gives figures of 763, 1 902, and 1 160 for single, double, and king bed sets respectively; the same figures appear on bill of lading 752053668 dated 7th April 2010 and issued by Safmarine; and the delivery note signed on 16th May 2010 also contain figures of 763, 1 902, and 1 160 for the total number of sets, with 28, 36, and 25 sets shown as being for “Stephanie Black”.  In addition the Defendants provided a schedule for all of the other alleged infringing products, from which it can be seen that they were all shipped to the UK before the date of creation of the design which each is alleged to infringe.  
Assessment of Mr Shehezad’s evidence
57.	It is true that these documents do not show what the Richmond Red and Stephanie Black products looked like in 2009/2010, and it is also true that I was not shown any U cards or samples.  However Mr Shehezad’s evidence was only subjected to a limited degree of challenge at trial.  Specifically it was put to him, and he agreed, that the commercial invoices did not identify specific products but his evidence about the delivery notes and the bill of lading was not challenged and nor was his evidence that these were the same products as were alleged to infringe.  As I have said above the Claimant did attempt to raise criticisms of this evidence in the written submissions which it served a week after the trial had concluded, but this was far too late and I have declined to consider those submissions.  I therefore accept Mr Shehezad’s evidence that all of the products complained of were imported by the Defendants before the Claimant created its corresponding designs.  
Photographs on the First Defendant’s website
58.	Mr Shehezad was also asked about various photographs appearing on the First Defendant’s website, which as he explained was actually run by Hala Exports.  In particular it was put to him that one such photograph of the First Defendant’s Stephanie product had been “Photoshopped” from a photograph of the Manhatten appearing on the Claimant’s website.  It certainly appeared that the two photographs showed a common origin, given the similarities in incidental details.  For example there was a bedside table in the background, with a particular design of clock in a particular location and orientation and showing a particular time.  However the Claimant had never pleaded that it owned copyright in any such photographs.  Indeed the Claimant’s evidence did not even establish that its Manhatten photograph predated the image used by Hala Exports.  For that reason I do not propose to make any findings about this or to take it into account.  
Conclusion on copyright infringement 
59.	Given that I have accepted Mr Shehezad’s evidence that all of the alleged infringing designs were imported into the UK prior to the creation of the Claimant’s drawings, it follows that the allegation of copying fails.  So too does the case of copyright infringement, and the issue of knowledge does not arise.  The fact that I have placed no weight on the evidence of Mr Amin makes no difference.  
60.	In reaching my conclusion that there is no copying, I have gone back to look at the Defendants’ alleged infringing Richmond design.  In my judgment it is not so similar to the Chantilly design that I nevertheless have to reject Mr Shehezad’s evidence.  I was not directed to any of the other alleged infringing designs.
Registered design 
61.	As stated above the only live issue remaining by time of closing speeches was whether the Defendants’ alleged infringing packaging had been made available to the public prior to March 2009.  There was very little evidence on this.  Only Mr Sarfraz was cross-examined on this issue, and as I say above the Defendants did not rely on his evidence in closing.  The remaining evidence was as follows.
62.	First Mr Shehezad signed a Statement of Truth on the Grounds of Invalidity alleging that the First Defendant’s own packaging formed part of the state of the art in that it had “been made available, and has remained unchanged since … around 2004”: see paragraph 1(a) thereto.  This stood as evidence in chief by virtue of paragraph 4 of the case management conference order made by HHJ Hacon.  
63.	Secondly, Mr Shehezad said in his witness statement that “As far as I am aware, Hala Exports have used their current packaging since [the First Defendant] became involved with them.  I have not seen any change in the packaging since [the First Defendant] began trading with them”.  Elsewhere in his evidence Mr Shehezad explained when such trading began.  For instance he said he visited Hala Export’s warehouse in 2008 and that the first shipment of products (not said to be copies of the Claimant’s products) was also in 2008.  I also note that the agreement was signed on 10th January 2009 and that the first documentation relating to infringing products consists of a delivery note dated 27th January 2009, a commercial invoice also dated 27th January 2009, and a bill of lading dated 1st February 2009.  
64.	None of this evidence was challenged, nor was I given any reason as to why, if I did accept it, a finding of invalidity would not follow.  I therefore accept Mr Shehezad’s evidence on this topic, from which it follows that the registered design is invalid.  
Joint liability of D3
Legal context
65.	I was referred to Sea Shepherd UK v Fish & Fish [2015] UKSC 10 and Vertical Leisure v Poleplus [2015] EWHC 841 (IPEC).  
Assessment 
66.	The Defendants realistically accepted that if the First Defendant was liable then Mr Shehezad, the Second Defendant, was also liable.  However the Defendants did not accept that the Third Defendant was liable at all.  
67.	It was not disputed that the Third Defendant ceased to be a director of the First Defendant since March 2013, and there was no evidence of any personal involvement by him in any infringing activity.  I find that the Third Defendant (Mr Ahmad) would not have been liable as a joint tortfeasor had liability been established.  
Threats 
Legal context 
68.	In this case the Defendants alleged that the relevant letters constituted unlawful threats of proceedings for infringement of copyright and the registered design mentioned above.  The former is not actionable in law and was not pursued.
69.	Both sides approached the threats case on the basis of s 26 of Registered Designs Act 1949 as amended.  That provides as follows:
26 (1)Where any person (whether entitled to or interested in a registered design or an application for registration of a design or not) by circulars, advertisements or otherwise threatens any other person with proceedings for infringement of the right in a registered design, any person aggrieved thereby may bring an action against him for any such relief as is mentioned in the next following subsection.
(2)Unless in any action brought by virtue of this section the defendant proves that the acts in respect of which proceedings were threatened constitute or, if done, would constitute, an infringement of the right in a registered design the registration of which is not shown by the plaintiff to be invalid, the plaintiff shall be entitled to the following relief, that is to say:—
(a)a declaration to the effect that the threats are unjustifiable;
(b)an injunction against the continuance of the threats; and
(c)such damages, if any, as he has sustained thereby.
(2A)Proceedings may not be brought under this section in respect of a threat to bring proceedings for an infringement alleged to consist of the making or importing of anything.
(3)For the avoidance of doubt it is hereby declared that a mere notification that a design is registered does not constitute a threat of proceedings within the meaning of this section.
70.	So far as the letters sent to Designer Textiles and Nice Carpets are concerned the law on threats is clear and well established.  I was referred to Best Buy v Worldwide Sales Corp Espana [2011] FSR 30 at [22], FNM Corporation v Drammock International [2009] EWHC 1294 at [214]; L’Oreal (UK) Ltd v Johnson & Johnson [2000] FSR 686 at [12].  The test as to whether something is a threat is an objective one, and the initial impression which the letters would have on a reasonable addressee is particularly important: see Brain v Ingledew Brown (No. 3) [1997] FSR 5111, 521.  
71.	So far as the letters sent to eBay are concerned the legal position is not so clear.  The issue was considered by Pumfrey J, as he then was, in Quads 4 Kids v Campbell [2006] EWHC 2482 (Ch), in relation to an application for interim injunction and more recently by Richard Spearman QC, sitting as a Deputy Judge of the High Court, in Cassie Creations v Simon Blackmore [2014] EWHC 2941 (Ch), in relation to an application for summary judgment.  This case, like both Quads 4 Kids and Cassie Creations, involves eBay’s VeRO (Verification of Rights Ownership) system.  
72.	The argument is whether the notification sent to eBay is a threat within the meaning of s 26(1), or as merely giving notice asserting the Claimant’s registered design rights.  It is clear that the test as to whether something is a threat is an objective one, but the Judges had different views as to whether this objective test was satisfied.  Pumfrey J held that this was “a remarkably difficult question” and one which raised a “seriously triable point”.  Mr Spearman QC thought that the former view (ie that the notification was a threat) was “much more persuasive” but declined to grant summary judgment, partly upon the basis of what Pumfrey J had said.  
73.	I add that s 26(3) of the Act itself provides that a mere notification that a design is registered does not constitute a threat of proceedings within the meaning of this section.  This has been construed strictly.  For instance in Jaybeam Ltd v Abru Aluminium [1975] FSR 334 the relevant letter threatened proceedings for infringement of copyright and ended with the words “…and as a separate matter we would also drew your attention to the fact that Abru are registered proprietors of registered design no. 940 140”).  It was held that given the context, this additional sentence went beyond the protection of s 26(3) and that any businessman receiving it would think he was being threatened in respect of everything, including the registered design.  
Evidence  
Designer Textiles/Nice Carpets
74.	It appears that both of these companies were sent a similar letter on 13th October 2014, which in each case enclosed details of the registered design.  The Claimant accepted that such documents constituted threats under s 26(1) and relied solely on justification under s 26(2).  Since I have held that the registered design is invalid, it follows that the Defendants are entitled to judgment in relation to this part of their counterclaim.  Mr Shehezad also referred to and exhibited other letters, all in virtually identical terms, which were sent to each of London One Stop, S. Cheveron Limited, Ashley Brown Textile, SS Textiles Limited, Andersen Textile Limited, and Zobayr Sarvari on the same day, ie 13th October 2014.  The Claimant gave no reason as to why the same result would not follow in relation to such other letters, and I find that it does.  
eBay
75.	Neither side filed any evidence in relation to eBay, VeRO notifications, or the process for removal of listing generally.  However both sides agreed that the normal approach to the assessment of threats should be applied to the specific circumstances of this case, and that there was no special rule for VeRO notifications.  I will approach the evidence on that basis.  
76.	The first document which was sent by the Claimant to eBay is headed “Notice of Claimed Infringement – Statutory Declaration” and dated 11th November 2014.  It includes a formal signed declaration from Mr Aslam that “I am the owner, or an agent authorised to act on behalf of the owner, of certain intellectual property rights (IP Owner).  I have a good faith belief that the listings identified below (by item number) offer items or contain materials that are not authorised by the IP Owner, its agent, or the law, and therefore infringe the IP Owner’s rights according to English law”.  The notice then specifies 12 item numbers and in each case gives a “reason code” of 3.2.  The accompanying notes define this reason code as meaning “Copyright – Infringing Item.  Item(s) infringes copyright (eg, a bootleg recording of live performance, pirated copy of media such as software or movies, or unlawful copy of copyrighted works such as text, paintings, or sculptures).  There is no code which refers to design rights, merely codes referring to trade mark rights, other types of copyright infringement, patent rights, and “other”.  The code referring to “other” was not relied on.  It will be seen that despite the common use of the term “notification” to describe this type of document, it is not the same as the “mere notification that a design is registered” which is expressly permitted under s 26(3) of the Act.  
77.	The Notice does not identify what Mr Aslam’s copyright works were.  This point was made by eBay themselves in an email sent to Mr Aslam on 12th November 2014.  That email stated “Unfortunately it isn’t clear in the NOCI what your intellectual property claim is.  We need some more information to help us investigate, such as copyright dated proof of ownership, pictures and any other information you feel may be useful.  Please reply to this email with more details about the intellectual property rights you hold and how these listings infringe your rights.  When we receive your response we’ll be happy to review this matter again”.  
78.	Mr Aslam passed this response to the Claimant’s solicitors and they responded to eBay on 17th November 2014.  That letter stated as follows:
“Thank you for your email dated 12 November 2014 which our client has passed to us to deal with.
We enclose with this letter
1.	Pictures of our client’s bedding.
2.	Our client’s creation designs
3.	Our client’s registered design right in regards to packaging.
Our client considers that the items detailed in Notice of Claimed Infringement infringe our client’s copyright and design rights as detailed in the enclosures.  Court proceedings are afoot in regards to the copyright and design right infringements suffered by our client.  Those courts proceedings have been issued against the manufacturer of the infringing items who has subsequently sold them on to the sellers who are selling the products on your website.
We look forward to receiving confirmation that the infringing items have been removed from your website.  If you have any additional questions or queries, please do not hesitate to contact the writer or our client directly”.  
79.	By email dated 20th November 2014, eBay’s VeRO programme contacted the Claimant’s solicitors to inform them that they had de-listed the items complained of, and also that they had notified the sellers and all participating bidders that the listings had been removed at the Claimant’s request.  
Assessment 
80.	So far as the Notice of Claimed Infringement is concerned, I accept the Claimant’s submission that at most this is threatening proceedings for copyright infringement.  No reason was given as to why this Notice would be taken as threatening eBay, or any other person, with proceedings for infringement of the right in a registered design (or indeed any design).  Accordingly it is not actionable under s 26(1) of the Registered Designs Act 1949 as amended.  
81.	Given that finding, it is not necessary for me to decide whether the Notice of Claimed Infringement amounts to a threat at all.  In addition, I note that this issue is being raised as a small part of a one-day action in the Intellectual Property Enterprise Court and as a result has (entirely understandably and reasonably) been the subject of much less argument than appears to have been the case in either Quads 4 Kids or Cassie Creations, both of which took place in the High Court.  Still further, for reasons appearing in the next paragraph it is not necessary on the facts of this case to reach any concluded view as to whether the Notice was a threat.  I will however say that my provisional view is the same as that of Mr Spearman QC. 
82.	That leaves the letter dated 17th November 2014.  Although this is being written in the context of a complaint about the VeRO system, it is also the sort of letter which one might see in a more conventional case.  The relevant points here are that (a) it is written by the Claimant’s solicitors on their headed notepaper (b) it specifically mentions the Claimant’s registered design right (c) it specifically mentions that “court proceedings have been issued against the manufacturer of the infringing items” (d) it links such “infringing items” to “the sellers who are selling the products on your website”, and (e) invites “confirmation that the infringing items have been removed from your website”.  The first impression of an ordinary reader in the position of this actual recipient would be that this was a clear threat – why else, such a person would ask, am I receiving a letter from solicitors talking about Court proceedings which have already been issued in the context of items which are being sold on my website, and what is likely to happen to me if I do not give the confirmation sought?  Such a person would hope to avoid such proceedings by removing the items from listing but that does not make the letter itself any less of a threat.  I find that this letter does contain a threat within s 26(1), and as with the threats against Designer Textiles and Nice Carpets this has not been justified under 26(2).  
Overall conclusion 
83.	The action for copyright infringement is dismissed.  The registered design is invalid.  The threats action succeeds in relation to the letters sent to Designer Textiles and Nice Carpets.  The threats counterclaim also succeeds in relation to eBay, but because of the follow up letter dated 17th November 2014 and not because of the original Notice dated 11th November 2014.  

Annex 1

Annex 2

Claimant’s “Chantilly” product

Annex 3

Defendant’s “Richmond” product