In November 2009 the Star Wars case, Lucasfilm v Ainsworth, is due to come before the Court of Appeal. Sometimes billed as the ‘Stormtrooper Helmet Battle’, this will continue the fight over whether Andrew Ainsworth is free to sell replicas of the armour worn by the Imperial Stormtroopers in the epic films. The case raises interesting points of law on the enforceability of US law and judgments by the UK courts, and of UK copyright law in relation to mass-produced articles, in this case mini Stormtrooper toys.
The battle has raged on both sides of the Atlantic, although so far with little success for Lucasfilm. The first victory was won in the US courts on a default judgment. Lucasfilm was awarded $20m (£12.3m) for copyright and trademark infringement in respect of Ainsworth’s internet sales of replicas to the US – a staggering amount given that Ainsworth’s US sales were admitted to be around £30,000 and were said by Mr Justice Mann to be “material though not great”.
That judgment was a Pyrrhic victory, however, as Ainsworth had no assets in the US against which it could be enforced.
In the second battle, this time in the UK courts, Lucasfilm also faced difficulties as it began.
First, any design rights had expired before the UK action started. Second, under s51 of the Copyright Designs and Patents Act 1988 (CDPA) Ainsworth would not infringe copyright unless Lucasfilm could show he had copied a design for a sculpture or a work of artistic craftsmanship. Furthermore, unless Ainsworth had copied a sculpture, he had a potential defence under s52 of the CDPA, because Lucasfilm had sold various replicas of the Stormtroopers for many years before Ainsworth came on the market. Lucasfilm therefore had to try to find a sculpture, or other artistic work, to rely on.
As for enforcing the US judgment in the UK, Lucasfilm would not succeed if Ainsworth had not been subject to the US court’s jurisdiction and/or if the sums awarded were penal in nature or were for multiple damages. Part of the Lucasfilm damages were indeed multiple in nature and the amounts certainly look punitive on their face.
In addition, although Lucasfilm wants the UK court to hear its US copyright claim itself, UK courts have been reluctant to hear cases involving infringement of overseas IP rights, save in limited circumstances.
For the UK copyright infringement claim Lucasfilm argued that the original Stormtrooper helmet, the armour and a toy model of a Stormtrooper were each sculptures. The court disagreed. It was essential that a sculpture might be enjoyed for its visual appeal alone. None of the items met that requirement. Nor were the helmet and armour works of artistic craftsmanship. Ainsworth, then, had not infringed UK copyright.
A new hope
Next, Lucasfilm tried to enforce part of its default US judgment against Ainsworth. It did not try to recover $10m, which was undeniably multiple in nature. But it did seek to recover the remaining $10m.
Foreign judgments cannot be enforced in the UK unless they are awarded by a court of competent jurisdiction. Lucasfilm had to show that Ainsworth was present in the US voluntarily when the US action began, even though he had no physical presence there. It argued that it was enough that he had advertised his goods for sale and had targeted the US market via his website. The judge held that this would be a radical departure from the recognised concepts of presence, and dismissed the argument. The judgment was unenforceable.
The judge did not accept Ainsworth’s defence that the $5m for trademark infringement was unrecoverable under the Protection of Trading Interests Act 1980, under which multiple damages are not recoverable. He held that, as the $5m was expressed to be compensatory in nature, it was not caught.
Ainsworth did not argue that recovery of any of the sums would be contrary to public policy. This may be because, although penal sums cannot be recovered, ‘penal sums’ usually means something equivalent to a fine payable to a state. However, there seems some force in the view expressed by Philip Wood in his book Conflict of Laws and International Finance that such high damages awards are “contrary to fundamental morality and public policy” and should therefore be unrecoverable.
Finally the judge considered whether the UK court should entertain Lucasfilm’s claim that Ainsworth had infringed US copyright law. He held that not only was that course open to him, but he had no hesitation in saying that in forum conveniens terms it was appropriate for him to take it. The most compelling point for his view was that the US judgment could not be brought home to Ainsworth.
Lucasfilm strikes back
There would appear to be counter-arguments to that view. The US judgment against Ainsworth remains binding. If he sets foot in the US, or has assets there, it will be enforceable against him. If he attempts to sell his products in the US they may be seized. He is therefore already effectively cut out of the US market. Thus, it is only the damages that are not available to Lucasfilm.
Whether that is enough for a finding of forum conveniens is one which the Court of Appeal will no doubt tackle, and it will be well aware of the wider consequences if it does.
Karen Fong is managing partner at Rouse Legal