Enforcement by representative bodies

English law has always been reluctant to allow strangers to become involved in legal proceedings. In relation to private rights, it has typically only been the person damaged by the relevant act who can bring the claim, and in public law matters some interest has to be established to give locus standi. However, there is a Continental idea that sometimes claims can be best pursued by representative bodies, rather than the person directly affected.

Changes, therefore, to the way in which intellectual property rights can be litigated – not just by the rights owner, but also by representative associations – would not only be a powerful boost to enforcing IP rights, but also a startling change to the very basis of civil litigation in the UK.

Intellectual property rights are, of course, owned by individual rights owners. However, the infringement of those rights, particularly in serious cases of piracy or counterfeiting, is indiscriminate and usually directed at any product which can be copied profitably rather than being an attack on a single rights holder.

A recent seizure by Leicester Trading Standards, for instance, uncovered some 30,500 counterfeit boxed clothes, perfume and jewellery with 36 different trade marks. And a joint operation between the Department of Work and Pensions and the music collecting society, MCPS, saw £1.1 million of fake DVDs, CDs seized from 57 people covering hundreds of differing trade marks and copyrights.

Such infringements are difficult for individual IP rights owners to investigate, and if legal proceedings follow, then generally it is only the legal owner, or an exclusive licensee, that can bring them. Accordingly, search and seizure orders as well as claims for damages and delivery up can only be brought by relevant rights owner, either on their own or joining with others.Inevitably this means that much counterfeit and pirate product is ignored in favour of the specific
claims by single rights owners.

The difficulty is that even if such litigation is managed by a collecting society or enforcement body, the urgent need to obtain instructions, share evidence of title and agree on strategy can slow up the desperate need for quick action. Costs are also an issue; there may be agreement relating to contribution, but there is also the worry regarding adverse cost orders should the action fail or simply not proceed.

A further difficulty is the protection of marks of geographical origin. For example, the Scotch Whisky Association and other trade associations were rebuffed in their attempts to protect their industry’s trade rights. The Court of Appeal, in a 1999 case brought by Chocosuisse, the Swiss union of chocolate producers, found it ‘impossible’ to conclude that such trade associations could bring claims for their members.

Often, simply to avoid unwieldy and delayed proceedings, just one or two affected parties are named as claimants rather than asserting the complete range of property interests taken or misused by the infringer. This may be understandable, but abandoning claims on a whole raft of infringing activity is not really much of a deterrent.

Proposals in the 2004 EC Directive on the Enforcement of Intellectual Property Rights were
therefore welcomed by industry bodies. The Directive contemplates that representative organisations such as enforcement bodies and other persons ‘regularly recognised as having a right to represent holders of intellectual property rights’ should be able to utilise the measures, procedures and remedies that IP owners need and exercise. The Directive extends to all intellectual property rights and is limited to civil proceedings. The UK law, therefore only needed to introduce a handful of changes.

The Patent Office, however, although issuing an early draft of the required regulations, including
provisions for enforcement by representative associations, withdrew this after realising that there were some difficult questions to confront. What kind of consent or authorisation, if any, would the body need to bring proceedings? Does there need to be a register of such bodies? If damages were to be recovered by the claimant, to whom should or could they be applied?

Other concerns included whether the rights holders, not being designated as claimants, could be exposed to adverse cost orders, and if any orders were made, such as delivery up or an injunction, who would be able to enforce this. And what title would need to be proved in the proceedings?

One response was that nothing significant needed to be done. There simply needed to be an enlargement of the definition of ‘representative actions’ within the Civil Procedure Rules. However, this was clearly never going to work, given that representative actions are limited to persons who have the same identifiable interest as others. A drafting change to the relevant part of the CPR (Part19) was never going to be on the cards. Any meaningful implementation of the Directive would also need not only a right to bring claims for infringement of the relevant intellectual property right, but also related actions such as applications for Norwich Pharmacal orders. There, only the ‘victim’ can be the applicant. Although the ambit of that regime is protean, there have been no successful cases brought which offer up information alone to a representative body, although orders have been made in favour of both a rights holder and a trade organisation jointly.

Paradoxically, a far more potent and aggressive form of claim – namely the right to bring a private prosecution – is available to any person even without legal title. This was a dominating factor in the decision by Design and Artists’ Copyright Society to bring their controversial private prosecution in 1994 against Thames and Hudson asserting that a series of monographs on 20th century artists were infringing articles.

The Patent Office is currently consulting on the proposal for actions by representative bodies
and has requested comment by 18 December on four options:

  • No change
  • Representative actions allowed but with a prior permission stage
  • Using a court-approved list of representative bodies
  • Actions permitted but with a provision for the court to dismiss the action if the judge

considers it appropriate

The last one is indicated as the preferred option, provided that the Patent Office has the evidence “to demonstrate that the introduction of representative action is justified and will not impose undue costs on business”.

There is no doubt that, for civil proceedings, there is considerable need to level the playing field
against an unpleasant, devious and well-funded opposition. In the area of counterfeiting, infringements are often large-scale with many trade marks infringed. For copyright and designs, rights holders are often individuals or SMEs with particular need for support by a major enforcement body.

The concept being put forward is strange to our belief that private property interests should only
be litigated personally. Nevertheless, it is very welcome and, if brought into force, may later be
seen as a prescient signpost to the way other litigation may develop in the future.

Beachcroft LLP + J. P. Karsenty Et Associés