Betty Boop: a belated sequel

It's a little while since the sequel to the first ruling in the recent British Betty Boop litigation [noted here by the IPKat] came to light, but the Kats have had a very busy month, so we apologise to anyone who has been waiting to discover what happened next in this curious dispute.  Anyway, now we can put you out of your misery: the sequel is Hearst Holdings Inc & Another v A.V.E.L.A. Inc & Others [2014] EWHC 1553 (Ch), a High Court of Justice, England and Wales (Chancery Division) and Community Trade Mark Court ruling by Mr Justice Birss which was delivered on 19 May 2014.

To bring new readers up to speed: these proceedings formed part of a complex dispute involving copyright and trade mark rights in the cartoon character Betty Boop, not to mention an action for passing off (in short, both parties were licensing the use of Betty Boop images, and the claimants said that they, not the defendants, were entitled to do so). In December 2013 the trial of the legal issues in this dispute was split, the main trade mark and passing off case being heard in January 2014 with judgment in February. Then, the Chancery Division held that the defendants were liable for trade mark infringement and passing off. Two issues were however held over for consideration at a later date, these being the claimants' action for copyright infringement and the defendants' claim that the claimants’ registered trade marks were invalid on the ground that they had been applied for in bad faith.

After the February 2014 judgment , the defendants raised a fresh point that, at the time when the claim form had been issued in England, proceedings concerning Betty Boop merchandise had already been commenced in Italy, and these proceedings involved Italian companies which had been granted a licence by the first defendant to use Betty Boop imagery in much the same way as happened in the proceedings in England and Wales, where other companies had been granted similar licences. On this basis the defendants, making an application to the court that it should decline jurisdiction, sought summary judgement in their favour.

In these proceedings, three applications were before the court.

The first application was made under Article 109 of Regulation 207/2009 on the Community Trade Mark Regulation, which governs simultaneous and successive civil actions on the basis of Community trade marks and national trade marks. This application was based on the argument that the proceedings in Italy and England and Wales involved the same cause of action and the same parties and that, therefore, Article 109 of the Regulation applied and, since the Italian court was the court first seised of the dispute, the court in England and Wales had to decline jurisdiction.

The second application was made under Article 104(1) of the same Regulation, which sets out special rules in respect of related actions. On this basis the defendants submitted that the proceedings in England and Wales had to be stayed, because the validity of two of the claimants’ Community trade marks that were relevant to this action had already been put in issue in Italy.

The third application was for summary judgment on the basis of bad faith. According to the defendants, in the light of the judgment in the other applications made in these proceedings, there was no basis upon which the claimants’ action could succeed and that, therefore, summary judgment should be given to dispose of it. According to the defendants, the bad faith claim was a good claim and should be investigated in the course of a full trial. Moreover, if the allegations regarding copyright were decided in the defendants' favour, what had really happened was that the claimants had built up goodwill and reputation in the Betty Boop cartoons that was founded on a misrepresentation concerning the ownership of copyright in them: such goodwill had not been built up in a legitimate way.

Birss J dismissed the application for a stay and the application for a declaration of invalidity of the claimants’ trade marks. He then entered summary judgment in favour of the claimants. His analysis ran as follows:

The Article 109 application

While the acts before the court in the Italian proceedings were very similar to those in the proceedings in England and Wales, they were not the same. Further, the images in the Italian proceedings were different to those in the proceedings in England and Wales. The same cause of action was not involved in the respective proceedings. It was clear that the relief sought in the proceedings in England and Wales overlapped with that sought in the Italian proceedings. However, the fact that relief arising from an action commenced in one country might overlap with the issues litigated in another country did not necessarily mean that the ends in view were identical in respect of the two sets of proceedings. Indeed, the objective of the court in England and Wales was to grant proper relief to compensate the claimants for the acts proved in the litigation in that jurisdiction, while the objective of the Italian court would be correspondingly focused on the proper relief arising from the acts proved before the Italian court.  This being so, Article 109 of Regulation 207/2009 did not apply.

The Article 104(1) application

In the circumstances, it would be absurd to stay the proceedings in England and Wales. It was true that the issues which were under consideration in Italy and the issues considered by the court in England and Wales were clearly related and it was possible that the court first seised, this being the Italian court, might come to different conclusions on some or all of those related issues. While there was a risk of irreconcilable results, that risk could not be avoided or reduced by staying the proceedings in England and Wales. Accordingly, the application for a stay would be refused.

The bad faith application 

With regard to the application for summary judgment, even on the assumption that everything pleaded in relation to copyright was found in the defendants' favour, the fact remained that the court had found that, at the relevant time, the trade marks were distinctive in relation to the goods and services for which they were registered and that this was the result of the efforts of the claimants and their licensees. Since the case as pleaded by the defendants was hopeless, it was appropriate that summary judgment be given in favour of the claimants.

It would not be appropriate to allow the defendants’ misrepresentation argument to be advanced. Apart from the fact that it would amount to a collateral attack on the judgment that had already been given in February, it would be wrong to allow the defendants to raise the misrepresentation issue at such a very late stage, given the way in which the proceedings had been conducted. In any event, it did not appear to be a strong argument.

This Kat thinks that the court has got this right.  There is no new law here, nor ground-breaking restatement of previously-established principles, but just a very determined and concerted effort on the part of the defendants to make the most of a set of facts and a bundle of legal rules that were not, on the face of it, hugely promising.

Betty Boop's biography here
Dress your own Betty Boop here
Make your own Betty Boop here
Betty Boop: a belated sequel Betty Boop: a belated sequel Reviewed by Jeremy on Monday, June 16, 2014 Rating: 5

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