EUPillar Hearst Holdings Plc and Fleischer Studios Inc v AVELA Inc, Poeticgem Ltd, The Partnership (Trading) Ltd, U Wear Ltd and J Fox Ltd [2014] EWHC 1553 (Ch)

Summary

The claimants, Hearst and Fleischer, were suing for IP infringements. The dispute concerned copyright and trade mark rights in cartoon character Betty Boop. There was also an action for passing off. Following amendments to the claim form, the main trade mark and passing off issues were dealt with in a judgment rendered in February. However, some other issues were to be tried in 2015. After the first judgment had been rendered, the defendants, AVELA and others, challenged the jurisdiction of the English court, noting that it should decline jurisdiction and stay the remaining proceedings because the Italian court was first seised. It turned out that, on 4th April 2012 when the claim form was issue, the Italian court had been seised for the purposes of Brussels I. The English court dismissed the defendants’ application for a stay of legal proceedings. Mr Justice Birss held: 38 [...] Two further particular matters arise. First is that the existence of a passing off claim is not regarded as a special feature since it is a commonplace in infringement claims (para 115). I accept that. Second Ms Himsworth argues that mere lateness cannot create a special ground for refusing a stay. I will consider that below. Overall she submits that there are no special grounds for refusing a stay in this case and I should stay the proceedings on the Community trade marks. 39 I reject Ms Himsworth's characterisation of this situation. To describe what has happened in this case as mere lateness is unreal. In this case the court has already given judgment both on infringement and on the validity of the CTMs in issue on the points which were in issue at trial. In my judgment for this point to be raised at this stage in these proceedings is wholly unprecedented and is certainly “rare and exceptional”. 40 How either party could have permitted this situation to arise is beyond me. Both parties deserve serious criticism for allowing this to happen. Neither party has sought to explain why they failed to draw this matter to the court's attention in these proceedings. I infer that it suited Hearst not to bring this matter to the court's attention because it wanted the English court to rule on the matter. That does not excuse their failure to do so. However, I make exactly the same inference about AVELA. I infer that AVELA then changed its mind and decided to raise this point after the judgment had been given. AVELA hoped to win in England and now it has lost it wants to raise the Italian proceedings as a way of trying to salvage something. 41 Whatever the parties' respective motives were or are, since the policy behind these Articles is to avoid irreconcilable judgments or at least the risk of irreconcilable judgments, the policy is wholly defeated if the point is only taken after a judgment in the court second seised has been given. That is what has happened in this case.” [38-41].