Stars Wars case clarifies enforceability of "multiple damages"

Readers may recall headlines in local newspapers at the beginning of the Star Wars trial (see IP Finance here) reporting that Lucasfilm Ltd, Star Wars Production Ltd and Lucasfilm Entertainment Co Ltd were, amongst other claims, trying to enforce a judgement obtained in the US against Ainsworth and Shepperton Design Studios Ltd for millions in damages. After 17 days of full trial, during which rights to replica Jedi knights, witches, and princesses were scrutinised, Judge Mann held on the issue of enforceability of the US Judgement, that the judgment of the US court was not enforceable against Ainsworth. The findings on the recovery of "multiple damages" are worth noting:

There were two asserted defences to the specific claim:

(a) That Mr Ainsworth did not submit to the jurisdiction of the US courts, and did not have a sufficient presence in the US, so as to enable Lucas to rely on the judgment in an English action.

(b) If he is liable to be sued on that judgment, the Lanham Act element ($5m of the $10m sued for) cannot be relied on because of the Protection of Trading Interests Act 1980 ("PTIA").

Albeit that Mann J upheld the first defence, he went on to consider Section 5 of the PTIA which limits the recovery of "multiple damages" (damages obtained by multiplying another sum) under Section 5. For the benefit of the reader the relevant part of the formal US judgment was in the following terms:

"1. On the First Claim for Relief for copyright infringement, actual damages and profits in the amount of $5,000,000.

2. On the Second, Third and Fourth Claims for unfair competition under the Lanham Act, trademark infringement and unfair competition under State law, $5,000,000 in compensatory damages.

3. On the Second and Third Claims for unfair competition and trademark infringement under the Lanham Act, an additional $10,000,000 to treble the compensatory damages awarded on those claims."

Mann J concluded, in what appears to be a first on this specific point (see para 226 and 228), that:

*genuinely compensatory elements of an award subject to multiplication should be recoverable. In this context the split of the actual judgment contained in paragraphs 2 and 3 acquires significance. It makes it plain that the relevant head of damages does have a compensatory element and identifies it. There is a real sense in which this part of the judgment contains two separate and severable elements – the compensatory and the punitive, or exaggerated (or whatever adjective one chooses to apply to the multiplied damages). The paragraph 2 damages are not barred by the Act; only the paragraph 3 damages are.

There was no dispute on the first head of damages.

For a worthwhile review of the entire decision see IPKAT post here.

For the 60 page judgement click here.

For the wording of Section 5 PTIA see paragraph 225 of the Judgement.

Incidentally, "questions of relief [in this judgement] are due to be decided at a further hearing, for which directions can be given if necessary" - so we wait for another Star Wars episode, this time directed by the High Court it seems.

Star Wars damages enforcement case

George Lucas, the creator of the films, is suing prop designer Andrew Ainsworth who made the first helmets and suits for the original 1977 film and is now selling replicas made at his studio in Twickenham, south west London. According to the Daily Telegraph article George Lucas is trying to enforce the £10 million damages awarded to him by a California judge in 2006. However, Andrew Ainsworth is counterclaiming for a slice of the £6 billion in merchandising generated by Star Wars since 1977. The case deals with ownership and the existence of IP rights in the props as well as the quantum of damages to be awarded/enforced.

According to a quip in The Metro, the case which started this morning and is expected to last for ten days, commenced in amusing fashion with a stormtrooper staring down the judge:

Michael Bloch QC, representing Lucasfilm, looked at the armour and helmets surrounding him and told Mr Justice Mann today: "The gentlemen sitting in front of me and around me, who are known throughout the world, are the subject matter of the entire case."

The judge, looking at the white armour of the Stormtrooper in front of him, asked: "Will they be there for the entire case?"

Mr Bloch continued: "You will hear a lot about helmets and armour. As far as we know they are half human and half non-human and are known as Stormtroopers. What we are dealing with are characters of the imagination."