Low value, high tech
Emily Scott reviews a counterfeit case transferred from Small Claims.  EWHC 1902 (IPEC), NXP BV v ID Management Systems, High Court, 31st July 2019.
 EWHC 1902 (IPEC), NXP BV v ID Management Systems, High Court, 31st July 2019
This trade mark infringement case concerns two occasions on which the Defendant, ID Management Systems, was alleged to have sold counterfeit MIFARE-branded smart cards. The Claimant, NXP BV, claimed infringement of various EUTM registrations for marks comprising and containing MIFARE, covering, inter alia, smart cards in class 9. The case was transferred from the Small Claims Track to the IPEC Multi-Track, where it was treated as a low-value claim.
Were the Defendant’s cards counterfeit? The Claimant relied on in-house technical reports on tests carried out on samples of the Defendant’s cards. The reports concluded that the Claimant did not make either set of cards; however, the report on the second set contained some ambiguities.
The Defendant did not attack the report on the first set of cards in its pleadings but raised unpleaded arguments in its skeleton argument for trial. It relied on a disclaimer at the end of the report, in which the Claimant made no representations or warranties as to the information. The Defendant submitted that the Claimant had failed to prove the cards were counterfeit and that a finding in the Claimant’s favour would be “tantamount to accepting the Claimant’s say-so”.
The Court found that the cards were counterfeit, holding, inter alia, that:
- A sense of proportionality was required when assessing the Claimant’s evidence. The IPEC provides “low-cost access to justice rather than insisting on perfection”.
- The report was produced by a department whose job it was to check for counterfeits of the Claimant’s products in the real world; the Court had been given no reason to suppose that its reports had been questioned by anyone else.
- The Defendant could and should have pleaded its arguments if it had wanted to attack the report (eg the techniques and equipment used).
- The disclaimer makes no difference as it made clear that the information itself “is believed to be accurate and reliable”.
The Defendant ran its own tests on the second set of cards using the Claimant’s hardware and software. The cards were found to be genuine (or 80 per cent likely to be so). As the Claimant’s and Defendant’s evidence was in conflict, the Court held on the balance of probabilities that the Claimant had not proven the cards to be counterfeit.
The Defendant claimed that the Claimant had given unequivocal consent to both sets of cards being put on the market under the MIFARE mark in the European Economic Area. As per Davidoff1 and Mastercigars2, consent must be unequivocal to demonstrate that a trade mark proprietor has renounced its intention to enforce its rights.
The Defendant relied on a white paper sent to it by the Claimant, warning the Defendant against using unauthorised or counterfeit MIFARE products. The Court held that the Claimant’s advice in the paper was “unexceptional” and did not begin to amount to unequivocal consent to either cards being put on the market in the EEA.
The action, therefore, succeeded in relation to both sets of cards.
- Proportionality is a key consideration in IPEC cases – the IPEC will take a pragmatic view
- of evidence
- Pleadings should contain all facts and arguments
Consent must be unequivocal
- Case C-414/99 Zino Davidoff v A&G Imports
- Mastercigars Direct v Hunters & Frankau EWCA Civ 176,  RPC 24
Emily Scott is a Chartered Trade Mark Attorney at Boult Wade Tennant LLP
Boult Wade Tennant LLP