When dirt bike seller Quads advertised on eBay, bike designer Campbell used eBay’s VERO procedure to file his allegation that Quads’ bikes infringed his design. But groundless threats of design infringement are actionable. And Quads took action.
Topic: Intellectual property
Who: Quads 4 Kids v Campbell
Where: In the Patents court
When: 13 October 2006
Quads 4 Kids ("Quads") sold dirt bikes for children via the eBay website. Campbell had applied to register a design for children's dirt bikes as a Community design right, but had asked for deferment of publication of that application. Campbell complained to eBay, using its Verified Rights Owner ("VeRO") procedure, claiming that the dirt bikes sold by Quads infringed his Community design right.
eBay immediately removed the Quads bikes from its website listings without ascertaining whether the items did actually infringe any rights owned by Campbell and simply informed Quads of the fact that its goods had been de-listed. Campbell took no further steps to enforce his purported design rights. Quads denied the VeRO infringement allegations and commenced a High Court claim against Campbell for bringing a groundless threat under the UK's Community Design Regulations 2005. Quads sought an interim injunction to stop Campbell interfering with its eBay sales pending a hearing of the main action.
The preliminary question to be decided was whether Campbell's instigation of the VeRO procedure could be regarded as a threat to bring infringement proceedings. It was decided that the proper test in this case was whether eBay would have understood that it could be subject to future infringement proceedings if it had not adopted the policy of removing any allegedly infringing items. That being the case, there was a serious issue to be tried. The risk of damage to Quads, and Campbell's inability to meet any future damages award, led to the balance of convenience falling in favour of granting the injunction. The injunction was therefore granted, providing relief against the attempt to prevent Quads from selling its goods on eBay.
Why this matters:
This decision demonstrates that relying on a non-legal forum to assert what you believe are your IP rights can backfire if you are not prepared to, or are unable to, follow through on your threats with formal infringement proceedings in the courts. The courts are not willing to allow baseless threats, which interfere with a party's legitimate commercial interests, to be made. Furthermore, while this case dealt only with allegations of design right infringement, there is scope for application of the same test to threats over trade mark and patent rights.