For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Monday, 4 July 2011

When Edge is on the brink ...

Overwhelmed by the sheer excitement of living-- and by the pile of examination scripts which piteously mew "let me pass, let me pass!" -- this Kat has only just got round to writing up the decision of Mrs Justice Proudman, of the Chancery Division (England and Wales) in Future Publishing Ltd v Edge Interactive Media Inc, Edge Games Inc and Dr Timothy Langdell [2011] EWHC 1489 (Ch), the sort of case which makes this Kat at any rate very pleased he doesn't have to deal with litigants in person (as was the third defendant in this case), despite his fabled patience. The Kat would probably have left it for a bit longer, were it not for a nudge from Mike Lynd (Mark & Clerk).

The facts go back a long way, almost to the dawn of computer games.  Future published various computer gaming magazines, one of which was EDGE.  A popular read with the British games community since its launch in 1993, EDGE bore a logo in which the two letters 'E' extended the cross bar on the left hand side, with a corresponding shortening on the right, and there was a sharp scalpel-like point at the edge of the extension (you can see what it looks like here, on the right). EDGE had a large circulation and its website was visited by over 400,000 visitors every month. Many jobs in the computer gaming industry were advertised in its pages, it had many corporate subscribers and it won a number of awards over the years, including Games Magazine of the Year 2008’.

But now we're jumping the gun. Returning to the 1980s and early 1990s one Dr Timothy Langdell -- who exclusively controlled the first and second defendant companies (EIM and EGI) -- ran a business which composed games software initially as Softek and subsequently as Edge. Langdell was at that time well known for pursuing third parties who used the name ‘Edge’ and sought payment of licence fees, failing which he pursued them for damages for trade mark infringement [Says Merpel, are you trying to tell me that there were trade mark trolls even back in the previous century?]. Langdell was a United States resident and the first and second defendant companies were incorporated in the United States.

In 1993 Langdell commenced passing-off proceedings against Future, alleging that he held unregistered rights in the trade mark EDGE and, in 1994, Langdell applied to register the word EDGE in the UK as a trade mark for printed matter, including gaming magazines, in Class 16. The action was stayed pending payment by Langdell of security for costs and the proceedings were settled by an agreement dated 4 December 1996, by which time Future, as well as EIM, had applied to register the word EDGE for printed matter in Class 16.

Under this agreement EIM would keep its registered mark and would be given Future’s trade mark application in return for a royalty-free licence under which Future would be permitted to use the mark EDGE in relation to EDGE magazine in any form; Future was also to pay EIM £20,000. In return, EIM agreed not to publish or license any other party to publish a magazine substantially similar to EDGE magazine under the name EDGE or under any colourably similar mark. In addition, EIM agreed not to assert the existence of any association or connection with EDGE magazine or with Future save that, in response to an unsolicited request, EIM could confirm that it had licensed the mark EDGE to Future in relation to EDGE magazine.

Cat on the edge, or is it the e***?
As the success of EDGE magazine grew, Langdell’s behaviour became increasingly burdensome to Future, which sought to abrogate the licensing agreement and to buy all the necessary trade marks from the defendants. The mechanism for achieving this was a Concurrent Trading Agreement (the ‘CTA’) between Future on the one side and EIM and Langdell on the other, and a separate deed between the same parties. The main effect of these instruments was to assign to Future those parts of the trade marks owned by EIM which included the word EDGE, and which covered EDGE magazine. The assignment included all rights in the agreed part of the trade marks, including all goodwill attaching to the use of the agreed part of the trade marks and all rights of action, powers and benefits arising from ownership of the agreed part. The CTA defined 'trade marks' as including not only registered trade marks but also all unregistered trade mark rights of EIM in relation to those marks. Under Clause 2.4 of the CTA, EIM undertook not to permit the use by any other person of any of the trade marks in a way which was or could reasonably cause confusion with Future’s use of them.

Langdell, EIM and EGI subsequently used three versions of an EDGE logo, each of which was based on a stretched version of the Franklin Gothic or Helvetica fonts. In all three cases, the slashed middle bar of the 'E' was retained, as well as the stretching effect of the letters. Future accordingly commenced proceedings against all three defendants, claiming breach of contract, infringement of copyright and passing off.

In this action Mrs Justice Proudman was asked to determine among other things, (i) whether the breaches of the CTA and the deed by EIM and Langdell were fundamental breaches of contract and, if so, whether Future had accepted the repudiation. That was an important issue since the claimant was restricted by the CTA from using the mark EDGE for any purpose other than the publication of computer game magazines and certain ancillary uses, (ii) whether Future’s passing off claim was justified and (iii) whether all of EIM’s registered trade marks were invalid for non-use under the Trade Marks Act 1994, s.46.

Proudman J allowed all Future's claims.

First, she concluded that the breaches of contract by the defendants were fundamental and entitled Future to repudiate: they had been deliberately calculated to cause confusion, which necessarily caused substantial damage to Future's reputation. The assignment to Future of the goodwill and registered trade mark rights in the name EDGE and the payments made by Future to EIM and Langdell did not prevent termination of the CTA so far as the future (with a small 'f') was concerned: each side was entitled to retain the benefits which it had already received. By its conduct, Future, having accepted the breaches as being repudiatory in their nature, was thus entitled to treat the contract as being at an end on account.

The passing off claim succeded too.  The judge was content to assume the existence of damage where the goodwill associated with Future’s title was being used and eroded by the defendants’ actions. On the facts, Langdell had sought to appropriate for his own business the goodwill associated with EDGE magazine by making statements which led the public to believe that EIM was responsible for that magazine or that EIM’s games were in some way approved or authorised by it.  Accordingly the pleaded breaches of the CTA which were committed within the jurisdiction of the court also comprised acts of passing off as representations which were likely to lead to confusion. Additionally, being associated with EIM was likely to cause serious damage to Future and to EDGE magazine.

The copyright infringement claim was also upheld.  All three versions of the EDGE logo used by the defendants were copies which infringed Future’s copyright. Langdell’s defence was that he had in fact invented the EDGE logo in 1991. That claim would be rejected on the basis that the evidence given by Future’s creative director that he had designed the logo for the magazine in the course of his employment and that he had been unaware of the existence of any logo used by Langdell at that time. This evidence had not been seriously challenged in cross-examination.

Since the defendants' infringing acts had taken place within the jurisdiction of the court and Langdell had continued to threaten to infringe copyright through use of the EDGE logo, an injunction was both justified and appropriate.

Finally, since on the facts there was no cogent evidence that the defendants had any presence in the United Kingdom market during the relevant period for the purposes of non-use of a trade mark over a continuous period of five years, the defendants' mark would be revoked.

The IPKat believes that every creator of a brand or trade name is entitled to protection against its misappropriation by others, but is deeply saddened by litigation such as this which results from the apparent abuse of the mechanism of a concurrent trading live-and-let-live agreement.

Are you living too close to the edge? here
Timothy Langdell and trade mark trolling here, here, here and here

No comments:

Subscribe to the IPKat's posts by email here

Just pop your email address into the box and click 'Subscribe':