ATB Sales Ltd v Rich Energy Ltd & Anor

Factual and Procedural Background

This judgment concerns a copyright infringement claim brought by the Plaintiff, a bicycle designer and manufacturer trading since 1994 under the name ‘Whytes Bikes’. The Plaintiff alleges that the Defendants, comprising Company A (an energy drink marketer), its director and sole shareholder (Defendant Two), and a digital marketing company (Defendant Three), infringed its copyright in a stag’s head logo (“Plaintiff’s Device”) by using a substantially similar stag’s head logo (“Defendant’s Device”) without consent. The Defendant’s Device has been used on products, websites, promotional materials, and sponsorships, including on a Formula 1 racing team. The Defendants deny infringement, asserting independent creation of their logo. The case proceeded to trial before Judge Clarke, with issues narrowed to whether the Defendant’s Device was copied or independently designed, whether it reproduces a substantial part of the Plaintiff’s Device, and whether the second and third Defendants are jointly liable as tortfeasors. The Plaintiff also seeks invalidation of a UK trade mark registration incorporating the Defendant’s Device.

Legal Issues Presented

1. Whether the Defendant’s Device was copied from the Plaintiff’s Device or independently designed.
2. If copied, whether the Defendant’s Device reproduces the whole or a substantial part of the Plaintiff’s Device.
3. Whether the second and third Defendants are jointly liable for the copyright infringement.

Arguments of the Parties

Plaintiff's Arguments

• The Defendant’s Device is overwhelmingly similar to the Plaintiff’s Device, with only minor differences, evidencing copying.
• The Plaintiff’s Device is an original artistic work in which copyright subsists and is owned by the Plaintiff.
• The Defendants had access to the Plaintiff’s Device because it was publicly available on the internet and the Defendants conducted extensive research into stag logos.
• The Defendants’ attempts to claim independent creation are undermined by inconsistencies and dishonest conduct in evidence and document disclosure.
• The second and third Defendants are liable as joint tortfeasors for knowingly copying the Plaintiff’s Device.
• The Defendant’s trade mark incorporating the infringing Device should be declared invalid under UK law.

Defendants' Arguments

• The Defendant’s Device was independently created without reference to the Plaintiff’s Device.
• The Defendants deny having seen the Plaintiff’s Device prior to litigation and assert honest belief in their independent creation.
• The similarities between the two logos arise from common, simple, stylised representations of stag heads, not copying.
• The Plaintiff has not pleaded fraud or dishonesty and has not challenged the authenticity of documents disclosed, thus the Defendants’ evidence should be accepted as honest and authentic.
• The Defendants have a positive motive to avoid copying and took steps such as trade mark searches and payment for design services, inconsistent with copying.
• The Defendants submitted that the Plaintiff’s case relies on an inference of copying without direct evidence of access.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by accepting the Plaintiff’s copyright subsists in the Plaintiff’s Device, undisputed by the Defendants. The primary legal inquiry was whether the Defendant’s Device was copied or independently created. The court applied the established test from Designers Guild, focusing on detailed visual comparison of the logos’ features, not just overall appearance. The court found the logos strikingly similar, with minor differences insufficient to negate copying.

The Defendants’ assertion of independent creation was critically examined. The court found inconsistencies and contradictions in the oral and documentary evidence of the Defendants’ witnesses, including conflicting accounts of the design process, research conducted, and provenance of documents. The court found that key documents, including a “Brand Document” purporting to evidence the design journey, were largely fabricated or backdated for litigation purposes. The court also found evidence of digital manipulation of sketches and misleading presentation of technical renderings, undermining the credibility of the Defendants’ case.

The court rejected the Defendants’ submission that absence of pleaded fraud or challenge to document authenticity required acceptance of their evidence at face value, emphasizing that credibility and reliability are matters for the court’s judgment after testing evidence at trial.

Regarding access, although there was no direct evidence that the Defendants saw the Plaintiff’s Device, the court found it more likely than not that they did, given their extensive internet research into stag logos, the availability of the Plaintiff’s Device online, and their misleading denials. The court considered and rejected the Defendants' alternative explanations and found that the Defendants knowingly copied the Plaintiff’s Device.

On the question of whether the whole or a substantial part was copied, the court applied the principle that copyright protects the author’s intellectual creation embodied in the work or part thereof. The court found that the Defendant’s Device copied the whole or, at minimum, a substantial part of the Plaintiff’s Device, as the similarities extended beyond commonplace features to the particular expression of the Plaintiff’s design.

Finally, the court considered joint tortfeasor liability, applying the Supreme Court’s test that a joint tortfeasor must actively cooperate with intent to bring about the tortious act. The court found Defendant Two was fully involved in the design process and intended the infringement, and Defendant Three was aware or should have foreseen the infringing use, thus both were jointly liable with Defendant One.

Holding and Implications

The court held that the Plaintiff’s claim succeeds. The Defendant’s Device is an infringing copy of the Plaintiff’s Device pursuant to section 17 of the Copyright, Designs and Patents Act 1988, and the Defendants’ use constitutes copyright infringement under sections 18 and 20 of the Act.

Defendant Two and Defendant Three are jointly liable as joint tortfeasors for the infringement. The Plaintiff is entitled to injunctive relief and damages or an account of profits, at its election. The Plaintiff is also entitled to a declaration invalidating the Defendant’s registered trade mark incorporating the infringing Device under section 47(2) of the Trade Marks Act 1994.

No broader precedent was established beyond the application of settled copyright and tort principles to the facts of this case. Issues of costs, consequential relief, and permission to appeal were adjourned to a later hearing.