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HCA001196/1978
| IN THE HIGH COURT |
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1978 No. 1196 |
| BETWEEN |
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Kemtron Properties Pty. Ltd. |
1st Plaintiff |
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Weiss Engineering Co. Ltd. |
2nd Plaintiff |
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and |
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Jimmy's Company Limited |
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Coram: Leonard, J. in Chambers.
Date of Judgment: 11th August, 1978.
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JUDGMENT
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1. In this application the plaintiffs claim the following relief:
" An injunction to restrain the Defendant whether acting by itself, its Directors, officers, servants or agents or otherwise howsoever from ordering, selling, offering for sale, supplying or otherwise howsoever dealing in the course of trade with electric fans of the type exhibited and marked 'JERK-2' in the Affidavit of JOHN EDWIN RAYMOND KITE sworn and filed herein on the 24th day of April 1978 or otherwise howsoever from
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infringing United Kingdom Letters Patent No. 1251880 registered in Hong Kong as No. 34 of 1975; |
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passing off or attempting to pass off, or causing, enabling or assisting others to pass off electric fans not the goods of the Plaintiffs as and for the goods of the Plaintiffs." |
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They also claim orders for discovery on affidavit of the names and addresses of persons with whom the defendant has dealt in relation to the fans it claims infringe its patent and the numbers of the fans that have been dealt with and are presently in the defendant's possession.
2. I will refer to the plaintiffs' fan as the "Mistral" fan and the defendant's fan as the "Koolaire" fan where it is necessary to distinguish them for the fans are almost identical and it is only by the names that they are distinguishable. The first plaintiffs are the owners of U.K. Patent No. 1251880 registered in Hong Kong as No. 34 of 1975 and market the Mistral fan in Hong Kong under this patent. The Mistral fan is designed to deliver an air flow substantially the same as that produced by a gyratory head fan without the rotary motion. It consists of a housing, the front and back of which are roughly square in ouline with the corners rounded off. It is about 1'9" x 1'9" in height and width and about 6" in depth. Its front is for the most part taken up by a circular rotating grille in which are arranged at varying angles a number of louvres; the rotating grille is driven by the same electric motor that drives the fan blades but it revolves more slowly than do the fan blades so as to direct the air to various parts of the room in which the fan is used; immediately behind the grille is a means of straightening the blast of air directed towards the grille by the fan blades which are in their turn enclosed in a "cage" or "air-intake" also circular which takes up the greater part of the back of the housing. The sides, top and bottom of the "housing" are rectangular with the corners again rounded off. On the top is a hinged handle which can be depressed so as to fit into slots supplied in the housing to receive it and a rectangular switch panel on which is the name "Mistral" and a sliding switch to vary the speed of the fan blades. The "Koolaire" fan is identical in shape and size save that a slightly larger rectangular switch panel bears the name "Koolaire" instead of the name "Mistral" and the switch which varies the speed of the fan operates differently. A careful examination of the two leads are inevitably to the conclusion that they come from identical moulds; it is quite clear that the one is a copy of the other and an almost exact copy at that.
3. I am told that at the trial the validity of the patent is to be challenged. I have no doubt but that there is a substantial question to be decided as to the patent on the papers before me, and that they disclose as Lord Diplock put it in American Cyanamid v. Ethicon Ltd(1) that the plaintiff has a "real prospect of succeeding in his claim for a permanent injunction at the trial". Equally I have no doubt that the balance of convenience is in favour of granting an injunction rather than refusing it. Indeed with one reservation which I shall consider later Mr. Rogers did not challenge this.
4. The difficult question as I see it is whether the plaintiff has shown that there is a substantial question to be tried as to passing off. The plaintiff has suggested, and comparison of the two fans compells me to agree, the most blatant copying. But to copy is not to pass off.
"Anyone is entitled, subject to some monopoly or statutory right preventing him, to copy and sell any article on the market, and false representation and passing off only arise when a defendant does something further which suggests that the article which he is selling is that of the plaintiff. This he may do by a direct representation to that effect such as by the use of the plaintiff's name or mark, or by an indirect representation such as by imitation of get-up." (Graham, J. in Benchairs Ltd. v. Chair Centre Ltd. 1974 R.P.C. 429 at 435).
There is no allegation here of any direct representation. The course taken by the plaintiff has been to seek to establish the reputation of its fan. There is evidence from a retailer of electrical goods who says he is aware of no other fans of similar appearance on the market and that the Mistral fan "is distinctive in appearance and greatly different from the appearance of other fans." This falls far short of establishing reputation but the Mistral fan has also been widely advertised locally and large sums have been spent in promoting it. It is certainly (if I may use the vulgarism) a "money-spinner" for its sales are substantial and since its introduction here in 1975 its sales figures have increased in geometrical progression. It is claimed to be distincitive in design and appearance "a unique product", a "type of fan never before developed". The defendant has imported and is selling copies of it and therefore say the plaintiffs it is guilty of passing off.
5. The question is I fear not so simply disposed of. The judgment of Graham, J. in Benchairs Ltd. v. Chair Centre Ltd.(2) continues at page 435:
" In Williams v. Bronnley (1909) 26 R.P.C. 765 at 773, Fletcher Moulton, L.J., as he then was, said this:
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The get-up of an article means a capricious addition to the article itself - the colour, or shape, it may be, of the wrapper, or anything of that kind; but I strongly object to look at anything, that has a value in use, as part of the get-up of the article. Anything which is in itself useful appears to me rightly to belong to the article itself. For instance, supposing that a firm had been, say for 20 years, the only firm to sell wooden chairs in which the natural wood was simply varnished, and not painted at all, that would not give them the slightest right to complain of a person putting on the market chairs simply varnished, even though they had been the only persons who had sold them for so long that such chairs might at first be supposed to be their manufacture. The reason is that the newcomer has not in any way imitated the get-up; he has only produced the article.' |
The distinction drawn by Fletcher Moulton, L.J. was followed by the Court of Appeal in Terrapin Ltd. v. Ariston Buildings Ltd. (1964) F.S.R. 218, in upholding Lloyd-Jacob, J., who deals with this question at page 221 in the following words:
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It is the fact, established by the evidence and not questioned, that that which is distributed is a building in the collapsed form: that it is part of the ingenuity of the construction that what appears to be the lid of the collapsed article sent out is part of the construction itself, being that which is ultimately intended to form the roof. In consequence, I can find nothing in the distribution of the buildings by the defendant which at any rate for present purposes would justify me in treating any similarity or even identity between goods in that form and the goods put out by the plaintiffs as justifying the grant of relief. |
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What I can and indeed must look at is anything associated with the distribution of the article or in the form in which it is offered for sale in which there exists any possibility of confusion between the business and goods of the defendants and the plaintiffs.' |
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These cases are binding on this court amd make it quite clear in my judgment that there must be something more than mere similarity between the goods themselves to amount to a representation constituting the Haig. Coca-Cola and Hoffmann cases in what in each of them the article which the purchaser wanted and was really paying for was, for sale purposes, associated with a particular get-up characteristic of the plaintiff, namely a peculiarly shaped bottle or a distinctively coloured capsule. |
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The only qualification I would wish to make to the propositions of law set out above is that I think there might be a case where an article itself is shaped in an unusual way not primarily for the purpose of giving some benefit in use or for any other practical purpose, but in order purely to give the article a distinctive appearance characteristic of the particular manufacturer's goods. In such an event it seems to me possible that such manufacturer must be able in course of time to establish such a reputation in such distinctive appearance of the article itself as would give him a cause of action in passing off if his goods were copied, because in the circumstances assumed the putting of the copy on the market would amount to a representation that it emanated from the plaintiff. Such a possibility is no doubt remote but it is not impossible, and the holding of passing off would not be inconsistent with any of the cases quoted above, as I read them, and would merely add a rider to the very general words of Fletcher Moulton, L.J. quoted above." |
I consider that it is clear from an examination of the exterior of the Mistral fan that almost all peculiarities in its shape are there for practical purposes. The greater part of such distinctiveness as there is, is conferred not to create a characteristic of the manufacturers fan but to give effect to the idea or invention embodied in it.
6. It will be noted that in the course of the extract from the judgment from which I have quoted the emphasis is placed on the "representation". In Jarman & Platt Ltd. v. I. Barget Ltd.(3) the Court of Appeal concerned itself rather with the "reputation" aspect. I would emphasize however that in that case the court was concerned not with interlocutory proceedings but with findings after trial: nevertheless the following observations from the judgment of the court appear to me to be relevant:
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Every passing-off case at common law involves two propositions, each of which must be established by a plaintiff before he can succeed. The first proposition is that the plaintiff has a legal right, in the nature of a monopoly: an exclusive right to a particular name for his goods or a particular trade description or a particular 'get-up'. In the present case the property - the reputation - claimed by the plaintiffs was in respect of the 'get-up' of their Louis furniture, consisting of its appearance in shape, colour and fittings. The second proposition is that the defendant has infringed that right, by selling goods under a name or trade to confusion: which is likely to lead buyers to buy the defendant's goods in the belief that they are the plaintiff's goods. |
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It is clear from many authorities, and it has not been challenged on behalf of the plaintiffs in this appeal, that the question of confusion - the second proposition - does not arise unless and until the plaintiffs have established the reputation of the goods - the first proposition. That is something which is sometimes forgotten, and which the defendants submit may have been forgotten, or not correctly appreciated, by the learned judge in the present case. That danger was emphasized by Lord Evershed M.R. in Tavener Rutledge Ltd. v. Specters Ltd. (1959) R.P.C. 355 at 362, where he said: |
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I shall, I hope, be forgiven if I say that sometimes I cannot help thinking that the additional requirement is forgotten, and that it is regarded now as a matter of common form that if you have a case like this you sue for copyright, trade mark, and passing off, and regard the whole thing really as all turning on one and the same set of facts. That is not so. It was laid down many years ago that the first necessity for a plaintiff trying to make out a case of passing off is that he must establish that the particular get-up which he has been using has become associated exclusively with his business: what, in brief, is called reputation.' |
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If reputation is not established, the question of confusion does not arise. There is in that event no valid reason why any other trader should not, if he wishes, copy the 'get-up' of the plaintiff's goods. There is no resulting infringement of any right of the plaintiff, for he has no monopoly right in the 'get-up' of his goods. 'Intent to deceive' has no relevance, if indeed it has any meaning, at this stage of the inquiry in a passing-off action. The authorities indicate that it may be relevant in the investigation of the second stage: that is, the question of confusion. Before that stage it is not relevant. |
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What, then is required as a matter of law to establish reputation? That question has been considered recently by Graham J. in G. Hensher Ltd. v. Restawhile Ltd. (1973) 1 W.L.R. 144. There was no appeal from Graham J.'s judgment in respect of the issue of passing off. In that case, as in the present case, there was a claim by the plaintiff company, furniture manufacturers, that the defendant company, competing furniture manufacturers, were passing off their goods as the plaintiffs' goods. As in the present case, also, the claim in respect of reputation was based on the distinctive appearance - the 'get-up' - of the plaintiffs' goods. It was the shape of the plaintiffs' suites of furniture which was claimed to be distinctive of the plaintiffs' manufacture and to give it its reputation which the defendants, by copying the distinctive shape, were said to have infringed. |
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Graham J. at page 148, stated 'the basic requirement' of a passing-off action in a way which has not been challenged in this court and which appears to be completely in accordance with the authorities. He says, at page 148/F: |
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The basic requirement in a passing-off action of the present type is that the plaintiff should have such a reputation in the goods in question that they are distinctive of him, and are recognised as being so by the relevant members of the trade and of the public. It is only if the plaintiff succeeds, first of all, in establishing this sine qua non requirement, that he is able to go on to try to establish the further requirement, that there has been a representation by the defendant that his goods are the goods of, or connected with, the plaintiff.' |
The question of recognition by 'the relevant members of the trade' is not of relevance in this case. It is the question of recognition by the public which is alone relevant."
and later at page 271:
"One other authority to which brief reference may be made is John Haig & Co. Ltd. v. Forth Blending Co. Ltd. (1953) 70 R.P.C. 259, a decision of the Court of Session. The Lord Ordinary, Lord Hill Watson, set out a number of legal propositions. Proposition 5, at page 261, contains this sentence:
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No trader by adopting and using a particular style of get-up thereby acquires a right to prevent a rival or second trader using the same or a similar get-up, unless the get-up of the first trader has become so associated in the minds of the public with the first trader's goods as to be distinctive of the goods of the first trader and of no other.' |
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Mr. Sparrow for the defendants summarised his submissions on this aspect of the case in a form which was not challenged on behalf of the plaintiffs, and which in any event appears to be wholly consistent with the authorities, as follows: |
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A plaintiff must show more than mere prior user by him of the particular 'get-up'. He must show that the 'get-up' has become in the mind of the public distinctive of one particular trader and no other trader; so that the 'get-up' has come to mean, to the public, a product coming from a particular commercial source. They, the public, do not have to know the name of the trader. But it has to be shown that the product is, in the minds of individual members of the public who are buyers or potential buyers of the goods, 'the product of that manufacturer with whom I have become familiar.' That is the test, The property arising from the reputation, must be actual proven goodwill in the mind of the public towards the owner of the reputation. The ownership of that reputation must be proved. Where the 'get-up' consists of characteristics of the product itself, such as the shape and colour of the article itself, such proof is not easy. The common law leans against the recognition of a monopoly right. (There is, of course, no question here of any registration under statute of a mark or design.) The task of a plaintiff seeking to establish such a right is particularly difficult where, as here, the distinctiveness claimed for the product itself in some degree involves a copy of, or supposed resemblance to, some pre-existing artistic style: such as French bedroom furniture, white in colour and with gold coloured ornamentation and with more or less standardised shapes of various parts of the articles of furniture." |
Great reliance was placed by counsel for the plaintiff on Edge v. Niccolls(4) the case in which the owner of a revoked patent had, during the continuance of the patent and for many years after its revocation, sold blue die put up in a calico bag with a wooden stick attached to it. The wooden stick had utility - to keep the hands of the user out of water. It was the distinctive feature of the get-up. The defendants adopted the same form and size of the stick and the same type of calico bag but labelled their bag "Niccolls". Lord Gorell said:
"The second point made by the defendants was that the plaintiffs were seeking to restrain them from selling an article of utility."
After discussing disclaimers made he went on:
"If they (the defendants) chose to use something to keep the hands of the user out of water (they) could have done so in many different ways and .. if they chose to use a stick they could use one in a different form or shape or size so as not to be liable to produce deception."
At page 708 Lord Robson had this to say:
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The confusion that has arisen in the case is mainly due to the inconsistent contentions put forward by the plaintiffs themselves. In their patent they claimed that the use of a stick, in any way described, was a device of utility. It was, indeed, the substance of their alleged invention. In their action, and at the hearing before Swinfen Eady J., they apparently treated the stick as mere get-up; that is to say, as a means only of distinguishing and identifying the goods. That was the footing on which Swinfen Eady J. dealt with the case. |
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Throughout his judgment he refers to the stick merely as a distinguishing feature in the appearance of the goods and not in its aspect as a handle or device of utility. He granted an injunction in general terms, but it specifically restrained the defendants from supplying or enabling others to supply to persons asking for blue 'with the stick in it' any blue not being goods of the plaintiffs. It does not, as the Master of the Rolls points out, contain the words usually found in such cases 'without sufficiently distinguishing the defendants' goods from the goods of the plaintiffs.' I think the effect of the injunction, especially when read with Swinfen Eady J.'s judgment, is seriously to interfere with the defendants in making bags with any kind whatever of stick or wooden handle in them. Such an injunction cannot, in my opinion, be supported in its present form. |
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On the other hand, the Court of Appeal regarded the stick merely in its aspect as a useful handle, and gave no effect to its shape or style as part of the get-up. |
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It is admitted that the defendantd deliberately appropriated the complete get-up of the plaintiffs' goods, such as it was, with the addition only of their own label. They even registered the design as a new and original design of their own, and on some of the labels they affixed to the bags they asserted that 'The design of this article with handle attached is the registered property of William Niccolls & Sons, Limited.' No explanation in the evidence is given of this remarkable proceedings. The defendants evidently attached importance, not only to the stick as a device of utility, and as such open in one form or another to public use, but also to the design of the article as a whole, including the shape of the stick, and they copied it almost exactly. This was going too far. I agree that the get-up of the plaintiffs' bags was of such a simple and elementary character that it was perhaps the cheapest form possible, and any differentiation might possibly have involved some expense, but differentiation within reasonable and economical limits was undoubtedly possible and was omitted because the defendants said they were entitled to take, and certainly meant to take, and did take, the design as it stood. |
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However, they urge that they put their name on the labels stuck on the bags, and so differentiated their goods from those of the plaintiffs by the most direct and conclusive of all methods. In fact, the attachment of their name to the plaintiffs' design or get-up amounted, in the circumstances of this case, to a deliberate appropriation of that get-up as their own. The bags of the plaintiffs had been unnamed. They were sold on their appearance or get-up alone, so when the name of the defendants was put on them, with an intimation that the design, by which the public were accustomed to identify them, was their property and an indication of their goods, customers would naturally suppose that, in buying them, they were getting the same goods as they had previously bought in the unnamed bags. Instead of differentiating their goods from those of the plaintiffs the name on the bags had the effect of making the customers believe that they were the same people as the plaintiffs." |
From this I would conclude that a distinctive feature of an article which has utility may be a feature of "get-up". So that although it is not unlawful to copy and although as Kerly has observed "courts have shown themselves astute to reject attempts to prevent copying of goods under the guise of passing off actions" (10th Edition page 420) the copying of a combination of features each of them utilitarian may amount to the appropriation of "get-up".
7. In saying "the essence of passing off is in misrepresentation" on the one hand and "to prove passing off one must prove reputation" on the other one is saying essentially the same thing. Any difference is in approach or viewpoint and is dependant upon whether one considers what wrong the defendant may have done or what right the plaintiff has to protect. Both are facets of the same stone. To prove reputation here the plaintiffs point to the sums spent on advertising and the progressively increased sales of its product. It is true that the plaintiffs have not produced any affidavit from any member of the public saying "I bought the Koolaire fan thinking I was buying the Mistral fan" or when I saw the Koolaire fan I thought it was the fan I saw advertised on T.V. last night which I thought to be from a well-known trade source". That however is a matter for the trial rather than for interlocutory proceedings and I do not consider that it would be open to me on the papers before me to say that the plaintiffs have not shown that there is a substantial question to be decided or that they have no real chance of ultimate success.
8. As to the argument that there has been no misrepresentation because the get up of the two fans has no peculiarity apart from those dictated by considerations of utility I must say I found this most appealling but on mature consideration I have concluded that firstly there are peculiarities in the get up of the plaintiffs fan that are not so dictated although the general appearance of it is. The peculiarities are in the shape of the handle and the manner in which it can be recessed, in the colour and in the feet on which the fan stands. The aesthetic value of these peculiarities may be nil indeed they may be offensive but they are part and parcel of the plaintiffs fan, they are unusual and not, it seems to me, wholly dictated by utility. It is also as I have sought to demonstrate open to argument despite the observations of Fletcher Moulton L.J., that the combination of a number of features each of which subscribes to utility and to nothing else can amount to "get-up" in the accepted meaning of that term. I am certainly not prepared to hold the contrary in interlocutory proceedings. I would for all these reasons hold that the plaintiff has shown a substantial issue to be tried as to passing off.
9. The second plaintiff has a substantial and increasing business in these fans. It is claimed that large sums are regularly spent in consumer protection and in ensuing the safety and efficiency of the product and its durability. The affidavits filed on behalf of the plaintiff claim that the Koolaire fans are inefficient and unsafe. That is a claim which may or may not be substantiated at the trial. Apart altogether from the damage which would accrue to be plaintiffs by the presence on the market of this rival product there is to be taken into account the possibility remote though it may be and as the defendant claims it is, that consumers thinking that they have bought the Mistral fan may find themselves with a product which breaks down on use or causes an accident. The plaintiffs have satisfied me that they stand to suffer severely in goodwill. Mr. Rogers has argued that the defendant has a number of these fans in stock and that it should be permitted to dispose of them - that any damage to the plaintiff, could be met by the defendant keeping accounts the defendant being a limited company of substance. This is to ignore the loss in goodwill to the plaintiffs and the possible additional loss in goodwill anticipated by them in the event of the Koolaire fan being inefficient or dangerous.
10. Mr. Rogers raises two further points. A number of fans have already been distributed to retailers on a consignment basis, the retailers have not paid for the fans and property in them has not passed to the retailers, the arrangement being that they may be returned to the defendant if unsold by a given date. A sale by a retailer would in effect be a sale by the defendant. There are a large number of such retailers and an unwitting sale by one of them would offend against the terms of the injunction sought. Secondly he informs me that the solicitors for the plaintiffs sent a circular to a number of retailers in the following terms when the ex parte injunction was obtained:
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NCTICE |
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TO WHOM THIS MAY CONCERN |
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HIGH COURT ACTION NO.1196 OF 1978 |
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Our clients are the manufacturers and distributors of 'MISTRAL GYRO-AIRE' electric fans. |
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We enclose a copy of an Ex-Parte Order of the High Court obtained against the Defendant, Jimmy's Company Limited of U-1, Man Yee Building, Hong Kong, restraining the said Company from (inter alia) further dealing in 'KOOLAIRE' electric fans of an appearance and construction as shown on the sheet attached, until after the hearing of an inter-artes Summons returnable on Wednesday the 3rd day of May 1978. |
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We understand that you have been selling the said 'KOOLAIRE' fans, the subject of the present Order, and that these fans may have been supplied to you by the said Jimmy's Company Limited on a consignment basis. In this event, any offer for sale, sale or supply of such fans during the continuance in force of the said Order would constitute a breach thereof. |
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Please be advised that the Plaintiffs view the recent appearance on the Hong Kong market of the said 'KOOLAIRE' fans with grave concern and that all available legal steps will be taken to stop their unlawful sale. A constant watch is being kept on the market. |
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Dated the 26th day of April 1978." |
The effect on the defendant's goodwill which would be entailed in recalling all the fans in the hands of retailers and by such a circular would he suggests be incalculable. Furthermore he suggests that the plaintiffs' insistence on seeking an injunction for passing off when his client was willing to give an undertaking on the basis that there was a triable issue on the basis of infringement of patent suggests a lack of bona fides on the part of the plaintiffs.
11. As to the difficulties which attend the recall of unsold fans I consider that these are more theoretical than real. Retail dealers are alert and their names and the numbers of fans they have at their disposal are already known to the defendant. Indeed in view of the fact that the solicitors of the plaintiff have publicised the fact that an ex-parte injunction has been obtained, I should be surprised if many of the fans "on consignment" have not already been returned to the defendant. Again although I personally may deprecate a lack of professional dignity indicated by the final paragraph circular I have quoted I cannot say that the plaintiffs have acted incorrectly in instructing that it be sent. As to the criticism of the plaintiffs insistence on seeking an injunction for passing off it must be pointed out that the proposed undertaking was unacceptable not only because of its terms but also because the defendant sought to remove from its ambit fans already in stock. It was not clear to me whether in the expression "fans in stock" Mr. Rogers intended to include fans for which the defendant had already opened an irrevocable letter of credit for $62,790 I take it that he did not but the number "in stock" was not stated. I consider that an injunction must issue in the terms of the first paragraph of the summons.
12. As to the prayer for discovery the general manager of the defendant has this to say:
"In the first place my company is well able to pay any damages which the plaintiffs may suffer in this case. In the second place it is clearly the intention of the plaintiffs to approach my company's customers. Over the years my company has built up a substantial number of customers and, of course, their list is highly confidential and important. If the plaintiffs were to go around and cause a disturbance with all my company's customers the defendant could suffer very great damage indeed. Furthermore, the plaintiffs by a side wind would quite unwarrantably obtain confidential information as to the identity of a substantial number of my company's customers."
I consider these objections may be met by restricting the discovery insofar as it involves customers of the defendant to the plaintiff's legal advisers.
13. Mr. Rogers points out that total discovery as prayed would be oppressive. I propose to limit it to those to whom the defendant has supplied five or more fans. There will be an order in terms of paragraph 1 of the summons.
14. There will be an order in terms of paragraph 2 of the summons save that in (1)(iv) the words "five or more" shall be inserted between the word "supplied" and the word "electric" and that an additional sentence be added reading "The information supplied in consequence of this order shall be regarded as confidential and shall be restricted to the plaintiffs' solicitors and used by them solely for the purposes of this action."
15. The plaintiffs' costs will be costs in the cause.
Certificate for counsel.
Representation:
Mr. Andrew Liao (J.S. & M.) for Plaintiff
Mr. Anthony Rogers (Hastings & Co.) for Defendant
(1) (1975) A.C. 396 at 408.
(2) (1974) R.P.C. 429.
(3) (1977) Fleet Street Patent Law Reports 260.
(4) (1911) A.C. 693.
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