Elec and Eltek Co Ltd v. Auto Process Enterprises and Another

HCA005398/1983

IN THE HIGH COURT OF JUSTICE

BETWEEN

Coram: Hon. Power, J.

Date: 16th August 1983.

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JUDGMENT

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1. In this matter the plaintiff company, Elee & Eltek Company Limited, is a designer, manufacturer and seller of a large variety of communications equipment including electronic, handheld telephones. The plaintiff claims to be the owner of the copyright in respect of 38 original design drawings for electronic, handheld telephones which are manufactured and sold as models MH100 and MH250. There is, in my view, nothing in either fact or law to occasion me any doubt that the plaintiff does have copyright in the said drawings and that the telephone of the plaintiff is a three-dimensional representation thereof as was stated by Robert Ian Campbell in the first affidavit filed by the plaintiff. The plaintiff alleges in this action that the 2 defendants, Auto Process Company and Kwanasia Tele-Computers Ltd. have infringed its copyright in the said drawings by the reproduction and/or authorization of reproduction of the said works. The allegation is that the 2nd defendant manufactured or caused to be manufactured handheld telephones, the design of which was an infringement of the copyright held by the plaintiff in the drawings, and that both the 2nd defendant and the 1st defendant offered these infringing telephones for sale.

2. The plaintiff in this action claims an injunction restraining the defendants from dealing further with the telephones. The plaintiff now come before this Court asking for summary judgment under Order 14.

3. There is no issue that the 2nd defendant has been manufacturing, or causing to have manufactured, electronic, handheld telephones and that it and the 1st defendant sell those telephones and that those telephones are similar in appearance to those manufactured by the plaintiff'.

4. The defendants relied upon the affidavit of a Mr. Lee Shu Kwan who said that he was the sole proprietor of the first defendant and the executive director of the second defendant and Mr. Liao, who appeared for the defendants, did not seek to suggest that the knowledge of one defendant would not be the knowledge of the other.

5. Mr. Clayton, who appeared for the plaintiff, relied strongly on the close similarity between the defendants' telephones and the drawings of the plaintiff as reproduced in the plaintiff's telephone. He demonstrated this close similarity by exhibiting one of the plaintiff's telephones, Model MH100, manufactured in accordance with their drawings, and comparing it to 2 of the telephones, Models KA300 and KA330, manufactured by the 2nd defendant. He submitted that the similarity was so close that on any commonsense assessment one must arrive at the conclusion that the defendants' telephone was a direct copy of that of the plaintiff and, therefore, infringed the plaintiff's copyright in their drawing.

6. The defendants through Mr. Lee Shu-kwan said that the design of the defendant's Models KA330 and KA300 originated from

"an idea to design a one piece hand-free electronic mini-phone which could be operated without holding the phone in the hand. The idea appealed to us as almost 98% of the one piece electronic mini phones in the market were handheld. By May 1982 when I was still with a firm called Auto Process Company, I conceived the idea of employing a built-in amplifier (to) achieve the hand-free operation. I verily believe that this was a novel design at the time. In the first few months, I spent a lot of time to study the circuit for the built-in amplifier which was to be incorporated in the phone. By June, 1982, the design of the circuit was completed. Meanwhile, I began to collect telephone products in the markets and magazines therefor. Until July 1982, one Mr. Auyeung Fan Han, a mechanical engineer of Manhatten Electronic Ltd. carried out mechanical and structural design for this hand-free phone. For such a purpose, I gave Mr. Auyeung all the samples and information I collected from the market. Mr. Auyeung then started on the design of the housing and had work on the provisional dimensions by August 1982."

7. The essential functional difference between the 2 telephones is not clear from the above description. It lies in the fact that the defendants' telephone can be operated without being held in the hand at all. The built-in amplifier referred to is necessary to allow the incoming voice to be heard. It is battery operated and space had, therefore, to be provided in the defendant's telephone to accommodate these batteries.

8. Mr. Clayton submitted that, as the telephone manufactured by the plaintiff was already on the market and being advertised at the time when Mr. Auyeung began "to collect telephone products in the markets and magazines therefor", this statement by Mr. Auyeung contained an implicit but clear admission that the design of the plaintiff's telephone was part of the material used in the design of the defendants' telephone. He submitted, therefore, that the defendant, by saying that they had designed their telephone by using "all the samples and information collected from the market", had not raised any real defence to the allegation of copying.

9. He submitted that to successfully resist an 0.14 application a defendant must "condescend upon particulars" and that in an action of this type, where there was a manifest similarity, an affidavit which implicitly admitted copying, but failed to specific the extent thereof, wholly failed. in this regard.

10. Mr. Clayton submitted that this implicit admission by the defendants established a prima facie case of copying which the defendants. had to answer and that nowhere had they made or, indeed, even attempted to make any answer thereto. He relied, when making this submission, upon the statement of Lord Wilberforce in L.B. (Plastics) Ltd. v. Swish Products Ltd. ⁽¹⁾ at 619 where his Lordship stated:-

"      It is obvious to the eye, testified by expert witnesses, and held by the judge, that, though on inspection there are differences, there is a striking general similarity between the respondents' drawer and those of the appellants. Moreover, it is clear, and was so held by the judge, that the respondents had the opportunity to copy the appellants' drawer. They had specimens of the appellants' components (based of course on the appellants' drawings) in their possession, and later, before finally designing their own, they had re-drawings and even tracings of some of the appellants' drawings passed to them by an assocaited company, Grovewood, to whom the appellants supplied Sheerglide drawers. These components and drawings the respondents must have known were components and drawings of the appellants. These facts establish a prima facie case of copying which the respondents had to answer. They could do this by bringing forward some alternative explanation of the similarities such as would convince the judge. His task would then, on the evidence as a whole, be to decide whether there had been copying or not."

11. Mr. Liao did not take direct issue with Mr. Clayton's submission that there was a prima facie case of copying but rested his case, in this regard, upon the contention that there were so many differences between the 2 telephones that no case had been made out to show that there was any substantial copying. He argued that, at worst for him, there was a triable issue as to whether there had been any such copying.

12. Mr. Liao's submission that there was a triable issue rested very largely upon the differences which he said were observable upon a close examination of the 2 telephones. He asked the Court to look again at the two telephones. After making the careful-examination suggested by Mr. Liao I was satisfied that there were a number of differences between' the 2 telephones.

13. He submitted that some similarities are inevitable  given that the product is a handheld telephone. In this regard I was asked to bear in mind : -

14. Mr. Liao suggested that this was "a common article of trade" and referred to Nicol v. Barranger⁽²⁾ in this regard. It is true that a telephone is "a common article of trade" but it is one that can appear in an almost infinite number of variations which will be more or less pleasing in appearance and useful in operation depending upon the skill of the designer.

15. The differences which Mr. Liao suggests are most' significant are : -

16. He also pointed to a number of differences, which I did not consider to be of any real significance, between the bottom shell of the defendant's telephone and that of the plaintiff's.

17. Mr. Liao submits that the differences, particularly the 4 significant ones, are of great importance as their combined effect is to produce an article so different from that of the plaintiff that there has been no substantial reproduction. He further submits that the plaintiff has no copyright in the ideas that produce the design of a handheld telephone and that the most the defendants can be said to have done was to incorporate into their design such ideas which are, anway, common to many handheld phones. He referred in this regard to Kenrick & Co. v. Lawrence & Co.⁽³⁾.

18. He submits further in this regard that when one comes to design a handheld telephone functional considerations give little scope for variation. In this regard he referred to Leco Instruments (U.K.) Ltd. v. Land Pyrometers Ltd. ⁽⁴⁾ and Catnic Components Limited and Another v. Hill & Smith Ltd. ⁽⁵⁾ and the Appeal ⁽⁶⁾. I find myself unable to agree with this submission. It is true that functional considerations play an important part in the design of a handheld telephone but am quite satisfied that they do not dominate its design to the extent that little scope is left to the designer. Indeed the evidence before me indicated that there was considerable scope left to the designer.

19. What I have in the present case is a telephone which, although slightly different in size, is very similar to that of the plaintiff. I must say that it is, in my view, somewhat more elegant in appearance than that of the plaintiff.

20. I have, however, no doubt that the telephone of the defendants is a direct copy of that of the plaintiff and is in breach of the plaintiff's copyright in the 38 drawings. Indeed I do not consider that the oft-used words "colourable imitation" are really appropriate to describe it. It is a reproduction of the design into which minor changes were introduced. There has, I am satisfied, been an appropriation not of ideas but of design. The changes, as I have said, do produce a slightly more elegant article but they are, nonetheless, minor and were, I have no doubt, necessitated in large degree by the fact that the defendant needed an area, not in the original design, in which to fit the batteries. I have no doubt that there has been substantial reproduction and that the defendants have not shown any triable issue.

(1)    (1979) R.P.C. 551

(2)    (1921) Copyright Cases 219.

(3)    (1890) XXV Q.B.D. 99.

(4)    (1982) R.P.C. 133.

(5)    (1978) Fleet Street Reports 405.

(6)    (1979) Fleet Street Reports 619.

Representation:

Mr. Peter Clayton, instructed by Johnson, Stokes & Master, for Plaintifff.

Mr. Andrew Liao, instructed by W.S. Lo & Co., for Defendants.