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You are here: BAILII >> Databases >> Intellectual Property Enterprise Court >> Vertical Leisure Ltd v Poleplus Ltd & Anor [2015] EWHC 841 (IPEC) (27 March 2015) URL: https://www.bailii.org/ew/cases/EWHC/IPEC/2015/841.html Cite as: [2015] EWHC 841 (IPEC) |
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CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
____________________
VERTICAL LEISURE LIMITED |
Claimant |
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- and - |
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(1) POLEPLUS LIMITED (2) PETER BOWLEY |
Defendants |
____________________
Aaron Wood (Trade Mark Advocate of Swindell & Pearson Limited) for the Defendants
Hearing dates: 17 February 2015
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Crown Copyright ©
Judge Hacon :
(1) done pursuant to a common design with Poleplus;
(2) acts for which Poleplus was vicariously liable as employer of Mr Bowley;
(3) done by Mr Bowley acting as agent for Poleplus;
(4) acts 'adopted' by Poleplus.
The facts in dispute
The witnesses
Poleplus's knowledge
Whether Mr Bowley made the registrations in his own interest
"Question you where looking for Silkii well as I was emailed when x pole show cased it in germany in march I immediately bought the .com and .co.uk so should I put a forwarding on these to our site to capture traffic like urs?"
It was agreed that here Mr Bowley was informing Ms Hudson that he had registered various 'Silkii' domain names shortly after Vertical Leisure had launched the Silkii product in Germany (which in fact was in April 2013) and was asking whether messages to those sites should be forwarded to the Poleplus sites to capture traffic, such as that from customers like Ms Hudson. Ms Hudson responded about 20 minutes later:
"Lol smart cookie! Serves them right!"
Liability as joint tortfeasor through common design
"The underlying concept for joint tortfeasance must be that the joint tortfeasor has been so involved in the commission of the tort as to make himself liable for the tort. Unless he has made the infringing act his own, he has not himself committed the tort. That notion seems to us what underlies all the decisions to which we were referred. If there is a common design or concerted action or otherwise a combination to secure the doing of the infringing acts, then each of the combiners has made the act his own and will be liable."
This aspect of the judgment was not appealed but in the subsequent judgment of the House of Lords Lord Hoffmann (with whom the rest of the House agreed) summarised the law in relation to joint tortfeasance in a short sentence (SABAF Spa v MFI Furniture Centres Ltd [2004] UKHL 45; [2005] RPC 10, at [40]):
"The test for such liability in English law is whether the acts were done pursuant to a common design so that the secondary party has made the act his own."
Common design
"I use the words 'common design' because they are readily to hand, but there are other expressions in the cases, such as 'concerted action' or 'agreed on common action' which will serve just as well. The words are not to be construed as if they formed part of a statute. They all convey the same idea. This idea does not, as it seems to me, call for any finding that the secondary party has explicitly mapped out a plan with the primary offender. Their tacit agreement will be sufficient. Nor, as it seems to me, is there any need for a common design to infringe. It is enough if the parties combine to secure the doing of acts which in the event prove to be infringements."
Procurement
"My Lords, I accept that a defendant who procures a breach of copyright is liable jointly and severally with the infringer for the damages suffered by the plaintiff as a result of the infringement. The defendant is a joint infringer; he intends and procures and shares a common design that infringement shall take place. A defendant may procure an infringement by inducement, incitement or persuasion. Buckley L.J. observed in Belegging-en Exploitatiemaatschappij Lavender B.V. v. Witten Industrial Diamonds Ltd., at p. 65, that "Facilitating the doing of an act is obviously different from procuring the doing of the act." Sales and advertisements to the public generally of a machine which may be used for lawful or unlawful purposes, including infringement of copyright, cannot be said to 'procure' all breaches of copyright thereafter by members of the public who use the machine. Generally speaking, inducement, incitement or persuasion to infringe must be by a defendant to an individual infringer and must identifiably procure a particular infringement in order to make the defendant liable as a joint infringer."
"In summary, the defendant operates a site which is designed and intended to make infringing copies of films readily available to its premium members; the site is structured in such a way as to promote such infringement by guiding the premium members to infringing copies of their choice and then providing them with the means to download those infringing copies by using the NZB facility; the activation of the NZB facility in relation to one of the claimants' copyright films will inevitably result in the production of an infringing copy; the defendant has encouraged and induced its editors to make reports of films protected by copyright, including those of the claimants; the defendant has further assisted its premium members to engage in infringement by giving advice through the sharing forums; the defendant has profited from the infringement; and finally, the claimants are not able to identify particular infringements by particular members only because the defendant keeps no records of the NZB files they have downloaded."
Making the act his own
"In order to show infringement by common design it is necessary for the plaintiff to show some act in furtherance of the common design not merely an agreement."
In that case the fact that a parent company controlled a subsidiary which had infringed a patent did not of itself make the parent liable as joint tortfeasor.
This case
Vicarious liability
"The question is whether the [employee's] torts were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable."
In similar vein Lord Millett stated at [70]:
"What is critical is that attention should be directed to the closeness of the connection between the employee's duties and his wrongdoing and not to verbal formulae. This is the principle on which the Supreme Court of Canada recently decided the important cases of Bazley v Curry 174 DLR (4th) 45 and Jacobi v Griffiths 174 DLR (4th) 71 which provide many helpful insights into this branch of the law and from which I have derived much assistance."
"[30] I turn, then, to cases such as the present where there is no question of reliance or 'holding out', or of the employer having assumed a direct responsibility to the wronged person. Take a case where an employee does an act of a type for which he is employed but, perhaps through a misplaced excess of zeal, he does so dishonestly. He seeks to promote his employer's interests, in the sphere in which he is employed, but using dishonest means. Not surprisingly, the courts have held that in such a case the employer may be liable to the injured third party just as much as in a case where the employee acted negligently. Whether done negligently or dishonestly the wrongful act comprised a wrongful and unauthorised mode of doing an act authorised by the employer, in the oft repeated language of the 'Salmond' formulation: see Salmond, Law of Torts, 1st ed (1907), p83. As Willes J said, in Barwick v English Joint Stock Bank (1867) LR 2 Ex 259, 266:
"It is true, [the master] has not authorized the particular act, but he has put the agent in his place to do that class of acts, and he must be answerable for the manner in which the agent has conducted himself in doing the business which it was the act of his master to place him in."
[31] In Hamlyn v John Houston & Co [1903] 1 KB 81, 85, one aspect of the business of the defendant firm of grain merchants was to obtain, by lawful means, information about its competitors' activities. Houston, a partner in the firm, obtained confidential information on the plaintiff Hamlyn's business by bribing one of Hamlyn's employees. The Court of Appeal held the firm was liable for the loss suffered by Hamlyn. Sir Richard Henn Collins MR said that if it was within the scope of Houston's authority to obtain the information by legitimate means, then for the purpose of vicarious liability it was within the scope of his authority to obtain it by illegitimate means and the firm was liable accordingly. Sir Richard Henn Collins MR rested his decision on the broad 'risk' principle: the principal having selected the agent, and being the person who will have the benefit of his efforts if successful, it is not unjust he should bear the risk of the agent "exceeding his authority in matters incidental to the doing of the acts the performance of which has been delegated to him".
[32] The limits of this broad principle should be noted. A distinction is to be drawn between cases such as Hamlyn v John Houston & Co [1903] 1 KB 81, where the employee was engaged, however misguidedly, in furthering his employer's business, and cases where the employee is engaged solely in pursuing his own interests: on a 'frolic of his own', in the language of the time-honoured catch phrase. In the former type of case the employee, while seeking to promote his employer's interests, does an act of a kind he is authorised to do. Then it may well be appropriate to attribute responsibility for his act to the employer, even though the manner of performance was not authorised or, indeed, was prohibited. The matter stands differently when the employee is engaged only in furthering his own interests, as distinct from those of his employer. Then he "acts as to be in effect a stranger in relation to his employer with respect to the act he has committed": see Isaacs J in Bugge v Brown (1919) 26 CLR 110, 118. Then the mere fact that the act was of a kind the employee was authorised to do will not, of itself, fasten liability on the employer. In the absence of 'holding out' and reliance, there is no reason in principle why it should. Nor would this accord with authority. To attribute vicarious liability to the employer in such a case of dishonesty would be contrary to the familiar line of 'driver' cases, where an employer has been held not liable for the negligent driving of an employee who was employed as a driver but at the time of the accident was engaged in driving his employer's vehicle on a frolic of his own.
[33] In Kooragang Investments Pty Ltd v Richardson & Wrench Ltd [1982] AC 462, 473-475, Lord Wilberforce drew this distinction with his accustomed lucidity and authority. He rejected the broad proposition that so long as the employee is doing acts of the same kind as those it is within his authority to do, the employer is liable and he is not entitled to show the employee had no authority to do them. Lord Wilberforce said:
"the underlying principle remains that a servant, even while performing acts of the class which he was authorised, or employed, to do, may so clearly depart from the scope of his employment that his master will not be liable for his wrongful acts."
In the Kooragang case the employee, authorised to carry out valuations, negligently carried out a valuation without authority from his employers and not on their behalf. In doing so he was not acting as an employee of the defendant company. The company was not liable for his wrongful acts. That was a case of negligence, but a similar approach is no less applicable in cases of dishonesty."
Mr Bowley as agent of Poleplus
Poleplus 'adopted' the acts of Mr Bowley
Conclusion
Postscript
"[21] To establish accessory liability in tort it is not enough to show that D did acts which facilitated P's commission of the tort. D will be jointly liable with P if they combined to do or secure the doing of acts which constituted a tort. This requires proof of two elements. D must have acted in a way which furthered the commission of the tort by P; and D must have done so in pursuance of a common design to do or secure the doing of the acts which constituted the tort. I do not consider it necessary or desirable to gloss the principle further."
" the defendant will be liable as a joint tortfeasor if (i) he has assisted the commission of the tort by another person, (ii) pursuant to a common design with that person, (iii) to do an act which is, or turns out to be, tortious."
"It seems to me that, in order for the defendant to be liable to the claimant in such circumstances, three conditions must be satisfied. First, the defendant must have assisted the commission of an act by the primary tortfeasor; secondly, the assistance must have been pursuant to a common design on the part of the defendant and the primary tortfeasor that the act be committed; and, thirdly, the act must constitute a tort as against the claimant."
"Inducing or procuring a tort necessarily involves common intent if the tort is then committed."
"[44] Intent in the law of tort is commonly relevant as a control mechanism limiting the ambit of a person's obligation to safeguard the rights of others, where this would constrict his freedom to engage in activities which are otherwise lawful. The economic torts are a classic illustration of this. The cases on joint torts have had to grapple with the same problem, and intent performs the same role. What the authorities, taken as a whole, demonstrate is that the additional element which is required to establish liability, over and above mere knowledge that an otherwise lawful act will assist the tort, is a shared intention that it should do so."
"The required limitation on the scope of liability is achieved by the combination of active co-operation and commonality of intention. It is encapsulated in Scrutton LJ's distinction between concerted action to a common end and independent action to a similar end, and between either of these things and mere knowledge of the consequences of one's acts." (at [44])