FALL OF AN EMPIRE: A BIG WIN FOR thebigword, ~4X IPEC COSTS CAP AWARDED

LINK UP MITAKA LTD. t/a thebigword v LANGUAGE EMPIRE LIMITED AND YASAR ZAMAN; : VIRTUOSO LEGAL SECURE LANDMARK COSTS DECISION IN THE IPEC, NEARLY 4X THE COSTS CAP AWARDED
thebigword

A BIG Win for thebigword

Virtuoso Legal’s intellectual property litigation team led by Philip Partington and Liz Ward have secured a landmark ruling in the Intellectual Property Enterprise Court (IPEC). In this case, team achieve a record-breaking award of damages, in excess of £140,000 (more than double the amount asked for), but also, for the first time in the history of the IPEC, successfully obtained a costs award of over £98,000. The normal cap on legal costs being £25,000 for an inquiry as to damages.

The unusually high recovery of legal costs was directed by the Court because of the Defendant’s unreasonable conduct.

A copy of the judgment can be found here.

Background

Virtuoso Legal’s client, Link Up Mitaka Ltd. (trading as thebigword) are a Leeds-based translation and transcription business with a global reach. thebigword brought a claim against Rochdale-based competitor Language Empire Limited and company director Yasar Zaman for use of its registered trade marks on a series of web domains and passing off in relation to online activity dating back to 2010.

In February 2017, thebigword (the Claimant) alleged that Language Empire and its director Yasar Zaman (the 1st and 2nd Defendant, respectively) had operated and maintained two websites (“the Websites”) which both infringed the Claimant’s registered trade marks and amounted to passing off.

The Domains were registered in August 2010, and held a holding page until launched in May 2014. The landing pages of the Websites were shown to display the sign “Big Word Translation” and a logo containing the same, as well as a number of written uses of the mark in website copy and a copyright notice at the bottom of the page, asserting copyright on behalf of thebigword.

Upon receipt of the pre-action correspondence from the Claimant, the Defendants failed to reply. However the websites were taken down shortly after this letter was received – this was later confirmed to be upon the 2nd Defendant’s instruction.

Following this, our Mr Partington prepared and served Particulars of Claim in March 2017 which alleged that the Defendants’ creation and maintenance of the Websites had deliberately infringed thebigword’s trade marks and as such passed off the websites as belonging to the Claimant – in order to divert prospective customers from the Claimant to the Defendant.  The Claimant successfully obtained judgment on infringement in May 2017.

On 27 September 2017, the Claimant elected for an inquiry as to damages in the matter and served points of claim. The issues brought to this inquiry were:

  1. Whether the Defendants (or agents of) made any sales of translation and/or interpretations were made as a result of enquiries made from potential customers who had visited the Websites;
  2. If so, the reasonable royalty that would have been payable on those sales was a willing licensor in the position of the Claimant and willing licensee in the position of the 1st Defendant;
  3. Whether the Claimant is entitled to an award of damages in respect to the Defendants’ unfair profits in relation to Regulation 3 of the Intellectual Property Regulations 2006, and articles 3(2) and 13(1) of the Enforcement Directive 2004/48 EC – and if so an assessment of those damages.

Judgment

Her Honour Judge Clarke, sitting on this inquiry trial, found against the Defendants; and in doing so sought to identify the “sum of money which will put him (the Claimant) in the same position he would have been if he had not sustained the wrong.”

Judge Clarke noted from the Claimant’s evidence that there was a 50% increase in website traffic on the Claimant’s own website after the infringing websites had been taken down. It was noted that a significant proportion of traffic would have made an enquiry on the website, of which some 75% would have been converted into sales (as per Mr. Daly’s testimony).

Further information about the quantum aspect of this decision is provided below and in forthcoming separate posts pertaining to the key issues of the ruling.

In total, Judge Clarke awarded damages of £142,044 – including an uplift of 33% as a result of an undervaluation of the value of lost sales to the Claimant as a consequence of the infringing websites.

Lifting of the IPEC costs cap

Further to damages awarded by the courts in relation to this case, it is notable that Judge Clarke took a view upon lifting the costs cap within the IPEC, as the nature of the case fits within the scope of such cases where this has been seen in the IPEC before.

The normal cap for the inquiry stage of IPEC proceedings is £25, 000. There is little to no guidance in respect of lifting that cap, save that it is only possible in “truly exceptional” cases.

The Claimant’s argument for the cap being lifted was that the Defendants’ conduct was so unreasonable that it amounted to an abuse of process. The judge accepted this and awarded the Claimant a costs award in excess of £98,000; close to four times the IPEC cap.

A post examining this aspect of the case is forthcoming.

Conclusion

Ultimately, this judgment represents another landmark success for Virtuoso Legal’s litigation team – who having guided the Claimant through an incredibly challenging litigation, have secured a ground-breaking result.

Philip Partington, Director and head of IP Protect, Virtuoso Legal’s litigation team stated:

In the face of highly uncooperative defendants, missing and/or obfuscated evidence, the team had to strategise in a way that maximised the chances of a substantial damages award while minimising risk of being left with a nominal damages award and a large bill of costs to the client. My team has done this extremely successfully, setting precedent in the IPEC not only in relation to the damages achieved by the Claimant, but also in relation to the costs they were entitled to over and above the usual caps. It can only be described as a great result for our client!”

Philip Partington, Head of IP Protect, Virtuoso Legal

Chairman of thebigword Larry Gould stated:

We are trusted around the world and the integrity of our brand remains intact. We are, of course, deeply disappointed and concerned at the impact that this potentially had on our business and the reputation of our industry.”

Larry Gould, Chairman, thebigword

For more information about this judgment, please contact Philip Partington via email, or call:

02074 128 372

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