Don't abuse your IP rights!
Introduction
When Quads4Kids were blocked by eBay from selling their children's dirt-bikes on eBay's website, the company was told that a Dr Colin Campbell had used eBay's VeRO service to allege that the company's dirt-bikes infringed his Community registered designs.
Once notified, eBay took the 'line of least resistance' and removed the listings for the dirt-bikes. Understandably, eBay refused to become embroiled in the substance of the dispute, saying that it was a matter between the parties, and that they would not re-list the dirt-bikes in issue unless either Dr Campbell consented (which he did not), or a Court ordered that the dirt-bikes in question did not infringe Dr Campbell's rights.
Thus, Quads4Kids decided to sue Dr Campbell, claiming that his actions in writing to eBay using the VeRo service amounted to an actionable 'threat'.
What is eBay's VeRO service?
VeRO stands for Verified Rights Owner and is an online service provided by eBay to assist Intellectual Property rights owners. Rights owner are able to make an online submission requesting that a listing be removed on the basis that it infringes their Intellectual Property. The alleged infringer then receives a notification from eBay informing them that their listing has been removed together with explanatory information and an email address for the rights owner.
Why is requesting a delisting on eBay a 'threat'?
It may seem strange to suggest that simply using eBay's VeRO service could amount to an actionable 'threat'. To understand this, one first needs to appreciate the purpose of the 'threats' provisions that appear within a number of statues and regulations governing intellectual property rights in the UK.
'Threats' provisions are designed to cater for situations where a person threatens another with legal proceedings for certain types of allegedly infringing acts, in respect of certain IP rights (including Community registered designs). They provide an aggrieved party to the threat with a route to obtain an injunction to prevent the continuation of the threat and to claim damages in respect of any losses incurred as a result of the threat.
In the Quads4kids case, an actionable threat was defined by Judge Pumfrey as:
'a statement from which a reasonable man in the position of a person to whom the statement is made understands is a statement that [he] might well be the subject of infringement proceedings at some point in the future'.
Where someone has made an actionable threat, the maker of the threat can successfully defend himself against legal proceedings where he can show that the person has indeed committed the allegedly infringing act and that his IP rights are valid and in force. In the Quads4kids case, Dr Campbell did not do so.
The outcome of the case
Quads4kids successfully established that, in using the VeRO system and notifying eBay that the dirt-bikes infringed his Community registered designs, Dr Campbell had made 'unsupported and unchallengeable allegations of infringement' and that they were 'potentially an exceedingly damaging abuse of registered rights'.
The judge was satisfied that there was arguably a threat in the notification to eBay using the VeRO service. As a consequence, the judge was minded to grant an injunction to prevent any further interference by Dr Campbell with Quads4Kids sale of its dirt-bikes on eBay.
Lloyd Brina, a solicitor at Ashfords, commenting on the case said:
'Regulars to eBay trading will be aware that a delisting via the VeRO service can happen all too easily. This case provides those whose products are de-listed and who are not in the wrong with some leverage against unruly abusers of the VeRO system.
As the case involved an application for an urgent interim injunction, the judge's decision was made very quickly. It remains to be seen if, at trial, the wider definition of an 'actionable threat' persists. If it does, this judgment is very significant indeed. The threats provisions in the Community Design Regulations are substantially mirrored in similar provisions within UK trade mark, registered designs, unregistered design right and patent legislation. This means that the principle in the case will most likely apply to many other instances of IP infringement, and not just in respect of Community registered designs."
What impact does this case have on my business activities - what should I do now?
- If you believe that your IP rights are being infringed by products being sold on eBay, seek legal advice before contacting eBay, or the person whom you accuse of infringement. It is all too easy to make an 'actionable threat', which could result in you being sued and liable for damages and legal costs.
- If your products are de-listed by eBay, due to someone using the VeRO service, again seek legal advice as you may be able to take legal proceedings against that person in order to get the products re-listed as soon as possible.
Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.
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