Two IPs In A Pod
With... Dr Tim Sampson
Get ready to explore groundbreaking legal insights with Dr Tim Sampson, a seasoned barrister specialising in intellectual property and construction law.
In this episode, Tim joins Lee and Gwilym to discuss a landmark Supreme Court case involving trade mark infringement. Tune in to hear about the complexities of defending his clients and gain an understanding of how the court's fresh perspective on director liability in IP law offers a fairer playing field for honest directors.
Get ready to explore groundbreaking legal insights with Dr Tim Sampson, a seasoned barrister specialising in intellectual property and construction law.
In this episode, Tim joins Lee and Gwilym to discuss a landmark Supreme Court case involving trade mark infringement. Tune in to hear about the complexities of defending his clients and gain an understanding of how the court's fresh perspective on director liability in IP law offers a fairer playing field for honest directors.
Hello mate. I've not seen you for well, not since yesterday when we were at a council meeting, but on the podcast I've not seen you since we were in a pub a few weeks back doing our last podcast.
Speaker 2:I've completely forgotten what we do and how we do it.
Speaker 1:Well, and that moment's a little bit different, wasn't it? Because we were doing that in real life with a real audience. A guest sat in front of us and not on Zoom and things like that.
Speaker 2:How's your life been recently? You've been quite busy, haven't you, I think? Yeah, I've been zipping around quite a lot. I'm more tired than usual, um, but very, um, enjoying. Actually. It's good to be back, lee. It's good to be back doing this. Apparently, I'm not allowed to talk about the wallpaper that's behind your head, is this correct?
Speaker 1:well, no one can see it, so there's no point, is there, unless I take a little photograph of it?
Speaker 2:we add it to the to the socials for the podcast well, it's like a nuclear war in the broccoli factory is how I describe it well, my wife would be telling you it's william morris or something like that.
Speaker 1:But uh, I don't, I don't know, I I just hang the stuff. I get told, I get told what to do and I, I just hang the stuff. Yeah, I'm just back from holiday.
Speaker 1:I took, took the time out to have a little break so I hear, I hear that you um bought a joke I bought a joke yeah, it's on in St Ives and we went out on a little kind of like drive-aroundy thing and ended up finding ourselves in Penzance, just stopping for guacamole we were looking for for the evening's fajita meal and we were walking down Penzance High Street, whatever it might be called and there was a homeless guy sat outside one of the shops there and as we walked by he said something. I didn't quite catch what he said and he shouted it a little bit louder and it was like do you want to buy a joke, mate? And I thought I've never, ever, had anyone on the street trying to kind of catch money off me, say anything like that. So I turned around and I bought a joke off him. Go on, are you, are you ready for it?
Speaker 1:so so he only wanted a pound for this, but it was so good, so good. I gave him a five on okay, well, we can. We can value the joke at the end so, and he put an accent on it, and it was what's a parrot's favourite letter.
Speaker 2:I don't know, eddie, what's a parrot's favourite letter?
Speaker 1:Well, I of course said to him that's not a good joke, mate, because it's R, and he went. I know it be C. And I thought that was so funny. Parrots go to sea with pirates. Yeah, and I'm imagining he's developed this joke so it doesn't matter what you answer, he can flip it.
Speaker 2:So if I said, ah, it be sea, he would have gone ah, okay, yeah, no, it's the multi-purpose use that maybe gets the extra four quid. I see it now.
Speaker 1:Yeah, yeah, yeah.
Speaker 2:Should we get our guest on? No it quid? I see it now. Yeah, yeah, yeah, should we? I guess not. That's good. That's good. Lee Davis and Gwilym Roberts are the two IPs in a pod and you are listening to a podcast on intellectual property brought to you by the Chartered Institute of Patent Determination.
Speaker 3:Hey, tim, welcome to the podcast, sir. Well, thanks for having me. It's the first time I'll be on one of your podcasts, so for a quick introduction, I'm Tim Sampson. I'm a barrister at Lamb Chambers. I specialise in intellectual property and construction law. Bit of a strange combination, but I've been doing that for the last 25 years now, so I'm unlikely to change. Obviously, we're here today because of a Supreme Court case that I was involved in, led by Peter Knox, and we got judged two months ago now. But my involvement goes back more than five years on this case, when the amids staggered into chambers with a dozen boxes of papers and a panicked look on their face saying tim, we don't know what to do and so um guillen was explaining to you, before we we started the podcast pop-up, that we have quite a quite a mix of an audience.
Speaker 1:We obviously have seepers, members, ip professionals who, whilst they wouldn't be over the detail of this, they're going to understand it from a legal context. But we also get inventors and students and all sorts of others listening. So do you want to, do you want to kind of ground us in this from basic first principles, so we understand the case and where it originates?
Speaker 3:Right. Well, this case, many moons ago now, 2017 in fact started off as a bum fight between lifestyle equities, who are brand owners, so essentially they have a stable of trademarks which they license on to other people. My clients, the amateurs and the companies that they were running at the time were alleged to have carried out acts of basic trademark infringement 10-2, 10-3, and passing off to the common law rights provisions. They were found, or the companies were found to have infringed the trademarks. They were found, or the companies were found to have infringed the trademarks. There was an order for an account of profits to be taken. So the standard remedy at the end of that trial. But Lifestyle weren't happy to just go against the company. They wanted to wrap the amids the directors of the companies into the case and pursue them for an account as well. So the company side of it was all dealt with. Post-trial, monies were paid over, the companies were wound up, all gone.
Speaker 3:Second trial happens just against the directors, which is where I get involved, and the point Lifestyle were making is that not only did they want to come after the directors for the salaries that they'd earned whilst the infringing activities were taking place had gone on, so six years worth of salary, or a proportion of that salary. They also wanted to to say that company loans made to Kashif Ali were also recoverable as a profit. And then the big one the fact that there was monies to be had out of the companies in the account that hadn't been recovered, and Lifestyle said well, actually, that's fine, We'll have that money out of the amulets as well as part of the account, which meant they were liable for enormous, potentially enormous sums of money millions of pounds and, the crucial point being, most of that money had never been in their hands.
Speaker 1:So, in your experience, is it unusual for litigation to proceed like this? Is it unusual to go after directors having achieved a settlement at a company level?
Speaker 3:No, it has become more and more common to try and wrap directors into IP proceedings. Because you can imagine the problem. You've got a big claimant company, small defendant company with a couple of directors. If the directors are named personally in the proceedings, they're going to sit there and think ah, if we lose this case, not only is the company going to go down, I'm going to personally lose everything down, I'm going to personally lose everything.
Speaker 3:So it puts a huge amount of pressure on directors and the crucial thing before this decision in the Supreme Court was that the liability as joint-taught visas, which is what is alleged against these directors was straight. So trademark infringement was proved or patent infringement was approved against the company. There was no defence for the directors to say we didn't know we were infringing anyone's rights, we didn't act with any improper motive, we were just running the company and we made a mistake, and the court would go well, that's lovely, but unfortunately you're still liable. Running the company and we made a mistake and the court would go well, that's lovely, but unfortunately you're still liable.
Speaker 1:So there was no escape for the directors william your witness thank you very much.
Speaker 2:That's interesting. So people were going for the directors more for tactical reasons to kind of maybe pressurise a settlement, or was it because they actually wanted to go for the liability recovery?
Speaker 3:Well, it could be for a number of reasons. I mean, I've dealt with cases like this where the director and it was a single director set up the company and it was quite obvious the sole purpose was to trade in infringing goods and pocket the money. The company itself had no assets. All the money disappeared into the pocket of the director and in those circumstances a claim against the director was entirely appropriate. But there are many cases where it seems to be extremely difficult to justify why the directors are being brought in, unless it is to pressurise the new settlement. And the difficulty there is you've got directors going. My duty under the Companies Act is to protect the interests of the company. If I go all out to protect the company, I throw myself under a bus. So I'm going to throw the company under the bus first and that can't be a satisfactory outcome.
Speaker 2:In some ways, it seems odd that in 2024, this comes to a head. Why has it taken so long for this to get settled?
Speaker 3:when you put it like that, Well, I think it's a combination of more and more of these planes are being brought.
Speaker 3:I think it's a combination of more and more of these claims are being brought and it took somebody in this case the Amnesty, within preparedness, to actually say no, this is wrong and we're going to fight it out. And there has been a view in the courts certainly the High Court and Court of Appeal that the question of the liability or the standard of liability for directors joint tort fees has been dealt with and that's it. It's strict liability, just as it is for the tort itself the trademark infringement, patent infringement and this is really the first time the Supreme Court has sat down and gone no, let's look at this from first principles. What is it that makes someone an accessory to the tort? And if you look at the law, the way it's developed and Lord David goes through this in quite some detail it was never the case that the fact that the tort trademark infringement, whatever was a strict liability meant that the accessory liability of the directors was also strict. It had become accepted without anyone really thinking why.
Speaker 2:Which I guess can happen, and it's good that it's the kind of outcome, in more plain words, that if you have a situation where a director has been siphoning money using the company as a front, so going for the company doesn't get you the fair address it addresses, that kind of that activity would still be effectively caught.
Speaker 3:but if you've got somebody who's just basically being a director and didn't realize the implications of no-transcript, yes, and of course you've got to remember that the company will always remain liable, because it's strict liability on the company. So it's not as if you escape scot-free and the poor claimant is left with no one to go after.
Speaker 3:But you've got a situation where if well, what the court has said is that if you knew of the essential features of the court or you deliberately turned a blind eye to what you were doing, you're going to be caught as the director.
Speaker 3:But what you're not going to have is situations where directors who behaved honestly and completely within a sort of frame of directorial probity but just got it wrong on the law are not now going to face personal ruin off the back of it. And this has been the situation for many, many years. In Canada, one of the cases that was considered by the Supreme Court was a case called Mintmop, and there the directors were. The company was found liable for patent infringement, but the directors were not. Because the court said it took the court four days to work out whether there was patent infringement. How could lay directors possibly understand what they were doing was infringement? Otherwise, you've got to say that even if there's the slightest chance of infringement, you can't do what you want to do, which is a very stifling way to run business. So you have to have that fair balance. Yeah, so if you take the example, the Amex case is a good example. When they started using the trademarks, there was no question in anyone's mind they were infringing. They weren't even aware of the claimant's marks to start with. They also got advice or the companies got advice from reputable trademark agents saying no, no problem here. Trademarks saying no problem here. Your only slight issue might be you're using polo players and a polo sounding brand and, of course, we all know that the granddaddy of those brands is Ralph Lauren. But there we go. That's the market you're in. It goes to the European Trademark Office and there's a challenge when they're registering some of these marks. All the issues that eventually came up in the 2017 trial were ventilated and the Trademark Office said no, not a problem, you can register those marks. There's no confusion in lifestyles marks.
Speaker 3:So they behaved in a completely appropriate and honest way. Why would you think, having been told by your professional advisors and then advised the same thing effectively by the European Trade Mark Office, oh yeah, you can do all this and you go. You know what? We better stop because we might be infringing someone's rights. So that is where the ad libs were, but then they get caught several years later for trademark infringement and they're then on the hook personally for the account of profits, supposedly, certainly according to lifestyle.
Speaker 3:So where we are now is a situation where an honest director who goes off and gets advice and acts on that advice can say look, I did not know what I was going to do would be infringement. And it's even equally important that directors that choose not to take advice or don't consider the possibility ie they've turned a blind eye they can get caught as well. So the answer is to find out what it is you're doing and get advice if necessary, and then you're protected, whereas prior to this judgment, you could be in a situation where you got advice, you've done everything right or parried everything right and you're still liable. So the guilty party, the person that deliberately set out to infringe, and the innocent party who didn't want to infringe are equally held liable. There's no distinction between the good and the bad, and that really brings the law into disrepute.
Speaker 2:It makes a lot of sense and also it kind of mitigates aggressive litigation tactics the other way as well, which is let's go for the directors, because that's going to put them in conflict with their own duties and et cetera, et cetera. So it does sound like a good balance. And, as you said, that due diligence point, that businesses take risks, but when they take considered risks, that's what business is. You have to do that. I think if you personally were, if you personally were additionally liable, then it would change your own risk profile. Business would do their thing. Oh well, it is interesting. I was going to ask, actually, if I may. Getting getting things to the Supreme Court isn't trivial, so this was considered to be in the public interest, presumably. How did, how does one get that far?
Speaker 3:there's the public interest element and also the court will say is this the right time to consider this issue? And obviously the court thought it was the right time to consider it and there are more and more of these cases, uh, as they come before the high court. So it was a situation where you wanted to know is the right test being applied? And the answer was no, it wasn't. And that then feeds into the remedies and how things like accounts of profit actually work and the confusion that's risen with in what's so-called innocent infringers being caught with accounts of profit and whether that's right or wrong. That's dealt with later in the judgment.
Speaker 2:So I think I was interested. What's the comment you've been like from external observers? As the consensus has been, this was a loophole that needed tidying up, or people said it's all gone horribly wrong, or where are people sitting on it?
Speaker 3:A mixed bag wrong or where are people sitting on it? A mixed bag? I think there's been a certain degree of difficulty for the legal profession, certainly barristers, because you've got cases before the courts. You're now being told actually your pleadings will have to be amended to deal with making proper allegations of guilty knowledge or deliberate turning of a blind eye. But that will all pass. A few months, six months, a year from now, everyone will know what the right way to go about it is.
Speaker 3:But there has been some commentary saying this is an infringer's charter and it will let the guilty off the hook. Well, I think that's just not right. Firstly, it's not changed the liability for the companies. So the party that is actually carrying out the illicit trade, the infringement of the patent, the infringement of the general, is still caught and they're still on the hook for damages or a counter profit, just as they always were. And only directors that did not have the knowledge, the essential features of the tour, or turn a blind eye will get off.
Speaker 3:And you could say well, let's look at a jurisdiction where this has been in place. So go back to Canada, metmore, late 70s. They bring in a. It's not quite the same test, although Lord Leggett said he had a great deal of sympathy with what the Canadian courts were trying to achieve, and in many ways it is essentially the same outcome achieved with a slightly different wording. And then you look over the next 40 years of Canadian cases has it let infringers off the hook?
Speaker 3:And there's case after case in the federal courts in Canada where mint more has been applied and directors have been held liable, but in circumstances where you can see the directors were clearly guilty. And it makes it much easier then for infringement proceedings to be brought against guilty parties Because you can say look, you knew what you were doing was an infringement and you carried on and did it anyway. So you're bound to rights, to use the vernacular phrase. So it's certainly not most like canada caused a problem of going after directors who've chosen to behave badly, so it's not an infringer's charter can I ask what might be a daft question?
Speaker 1:but I'm allowed to ask the daft questions, tim, because I'm not. I'm not a proper ip professional like willem, so, um, so I'm, I'm just an enthusiastic amateur. I haven't learned this over the last 13 years. So, um, a lot of talk at the moment at cpa council and around our committees about the uk ipo's intention to consult more widely on designs and particularly unregistered designs. There will be within that at some point the discussion about further criminal sanctions for unregistered designs. So is there a read across? I understand that the case that we're talking about here is the liability and the infringement is clear trademark. How does that read across to the world of designs and maybe particularly unregistered designs?
Speaker 3:Well, the issue is always going to be for the accessory liability. Did the party have the requisite knowledge of the essential features of the tort? So we're just thinking about the director's liability here. But if you go, obviously you're talking about unregistered design.
Speaker 3:But if I can just reverse back in to copyright, for example, let's say that Now the Copyright Act has already dealt with this issue, because under Section 16, it says that if you authorize the acts of infringement, you are guilty of the acts of infringement. So there are statutory provisions that already deal with this situation. It's coming up off my head whether there's an authorization provision. I don't think there is, but that's where we're at. So if you're in a situation where it's copyright infringement, you're not going to be in this. The directors can't say, well, all I did was authorize it because you're already caught by the statute. This case won't help you because you're already caught. This is a common law remedy where there is no statutory provision. But you've got to look at it across the whole gamut of IP rights.
Speaker 2:It is interesting when I describe the risk profile shifts because a topic that came up in the meeting Lee and I were at yesterday is criminal sanctions for certain areas of IP infringement and the sharp end of design law and things. And again it makes it quite difficult to run a business if you get that profile wrong. If the sanction is too harsh or unfair, then you make bad decisions, I suppose.
Speaker 3:Well, yes, we mustn't confuse what the Supreme Court were looking at in lifestyle with any criminal provisions Supreme Court were looking at in lifestyle with any criminal provisions. Oh, of course. Of course Criminal mens rea will have to be there, and that's not touched on in this judgment and it obviously wouldn't be, because it's purely a civil matter. But in criminal matters it is tricky. I mean just going off on a tangent.
Speaker 3:I've dealt with counterfeiting cases where you have the client going look, okay, I accept the goods are counterfeit, but I sourced them from what I thought was a completely legitimate source. And now I'm being told I'm criminally liable for having sold them on. So yes, you can see that it's difficult. Now, whether or not that story I was being told I'm criminally liable for having sold them on. So yes, you can see that it's difficult. Now, whether or not that story I was being told by my client was a shabby dog story, it's difficult to persuade the court to believe actually, you could get trapped by other people's dishonesty. Look, you had a short load of counterfeit vodka. Do you want to explain what you were doing with it?
Speaker 2:it does sound like you've had quite an interesting, uh varied um litigation career, and you mentioned at the beginning that you do ip and construction law. They are both about property. For me that's the nexus. But um, how, how, those two unlikely sounding bedfellows in your kind of portfolio?
Speaker 3:Well, I originally spent a year before my pupil age working in a very small solicitors firm attached to a very big QS management firm dealing with construction sites management firm dealing with construction sites. So I went off onto construction sites writing reports about contracts, doing extension of time claims, that sort of thing, and having done it for a year, I rather enjoyed it. So even though I did a pupillage in an intellectual property set, I never quite weaned myself off construction law.
Speaker 3:And in terms of the level of amazing cases that you get involved in, which brings up the more entertaining angle the IP side or the construction side the most challenging are the IP, because they tend to be the more difficult cases in terms of the law, whereas the construction cases they could be complexities, complexities, but they are factual complexities and often, or more often than not in the last few years, it has been because someone can't pour concrete properly. Another expert report dealing with concrete.
Speaker 1:I think I will go mad we've just done a podcast about self-healing. Concrete, haven't we? Oh?
Speaker 2:yes, we have.
Speaker 3:Yes, quite right, the stuff, the romans produced, or some modern variant of it. Yeah, that was one um as a.
Speaker 1:Can you remember how it works? There's some kind of internal vein structure. Wasn't there where it mends itself through?
Speaker 2:um yeah, it leaked out, helant, I think it was something like that. Yeah, but uh, no. And so, in terms of your, again you, I know that litigation always brings out the exciting moments and the characters and everything. Where do you find the big characters coming out? Is it more on the construction side or the ip side?
Speaker 3:uh, it could be. It could be any of it. Any case that fights the trial will usually, somewhere along the line, involve big characters. So in this case, it was Kashif Ahmed who was driving it and he had the gut to say no, we are not going to go down on this. We are like this is wrong, it's got to be challenged. We are like this is wrong, it's got to be challenged, and somehow managed to talk Peter Knox Casey into leading it and me doing it for five years on a no win, no fee, and persuade RFB to act as solicitors for it. I may have told RFB that there was nothing much to be done and it was more a post-Fox position Not that they've quite forgiven me for that. So, yeah, litigation tends to. If it's going to settle, because people are nervous about litigation, that's what happens If you've got people who've got the guts to fight it out.
Speaker 2:they tend to be big characters yeah, and I think I mean one thing I don't believe we've had too many barristers. Uh, we've had quite a few judges on the podcast. I'm not sure we've had that many barristers, and it's such an interesting, interesting world to be in, uh, and in particular, the up on your feet aspect. So I guess that the variety of characters you deal with you're still doing the same job on the on the day, I suppose, which is interesting. One final question for me, actually just in terms of background so what got you moving towards the bar in the first place? How did you come down this route?
Speaker 3:Well I, when I was finishing up my PhD in Cambridge, I decided that I had sort of fallen out of love with biochemistry at that point and I thought, well, what else can I do? I'm getting a bit long in the tooth to start all over again. And I thought, well, actually the bar sounds quite fun. I didn't know that much about it. That sounds quite an interesting job. So that's really what got me into it. And then you get on the treadmill of doing the conversion course and the bar finals and then 25 years later, you find yourself still doing it. Your first, I think my first case was in Ashford County Court in front of some court Deputy District Judge. And then, you know, you end up in the Supreme Court many moons later. Love it. I was in the Supreme Court on this one for two days, on Monday and Tuesday. On the Thursday I was back in Montford County Court. It's an absolutely minor building case, so the bar can also bring you back down to work.
Speaker 2:It's good to have the balance. Do you ever use your biochemistry, or is that something that's now just tucked away?
Speaker 3:No, I do. From time to time I do advisory work on patents. That can require quite a detailed knowledge of biochemistry, molecular biology. You can't really do the work unless you've got that basic understanding of scientific technology. Otherwise it would just mean nothing to you.
Speaker 1:So, Tim, at the outset of this we characterised our audience as being wide ranging, but let me give you two different constituents in our audience. There will be some people listening to this, perhaps running small businesses, who may find themselves either being infringed or infringing at some point in the future. What would their takeout be from this? First part of the question. So how would you summarize it for them? Second part of the question of course we've got super members listening to this, either running individual or small practices, or some of the biggest practices in the UK. What should the IP professional take out from this?
Speaker 3:Well, the IP professional or anyone involved with IP should, I think, be relieved about this, because it will mean litigation focuses on the parties that have really committed the acts of infringement. Honest directors doing their best are not going to be found liable and in some ways that makes everyone's position much clearer. Uh, if you're not thinking, am I going to be sued or should I be suing mr or Miss X because they're running that company and I think they're infringing my rights? It brings the litigation into focus and for certainly the smaller practitioners, we've got IPEX, interest Property Enterprise Court, which provides a very good venue for not no cost, nicely capped costs. Yeah, so you can see that if you don't start wrapping directors in that framework for a more restricted cost framework for litigation works better. If you suddenly start having the company and directors involved, it becomes more complicated. Costs go up proportionately, not focusing on anything useful, just really going to bite someone for the sake of it.
Speaker 3:So I think this will have a. The judgment should have a salutary effect on the way litigation is being run and in many ways that's good for everyone, because the aim of people exploiting idea and creating ideas not to get involved in instructing people like me to go and have a fight on their behalf or defend them. We are parasitic on the intellectual creations and others, and, yes, there will always be bad people out there that need to be brought to book, but that's not what we're talking about. They'll still be brought to book, it's not. It's not a question of letting the bad go, it's just making sure the goods don't get pursued thank you that.
Speaker 1:thank you so, and thank you so much for um taking time out of your busy schedule to have to come on the podcast and explain the case for the listeners. I'm sure it will be well received. Gwilym, I have a little question for you at the end, if that's OK, of course. So if people have listened to this podcast and found it interesting, what should they do?
Speaker 2:Oh, I could do this one. They should write a review, lee, a good review. Importantly, don't bother writing bad reviews. We don't. We've got plenty of those. We have our final yeah, no, no, yeah, they should. They should write a review, lee.
Speaker 1:It's very important and that's how podcasts grow and thrive, and they will write a good review because it's a great podcast yeah, yeah, yeah, and it's so lovely to see you're learning and um you're, you're becoming quite the podcast host one day, one day yeah, I did, I did, um, I did, I did see, because kilburn and strudge were always very good at promoting the the podcast on on linkedin, and I did see that you were described as star podcast host willem roberts and his co-host lee davis. So thank you, thank you, thank you so much for that.
Speaker 2:I talked to call it a sidekick. How irritating.
Speaker 1:There we go ah, tim Tim, thank you so much for coming on, it's been a pleasure not a pleasure as well.
Speaker 3:So thank you very much for having me.
Speaker 1:Thank you, thank you.