Philips Domestic Appliances & Personal Care BV v Salton Europe Ltd & Ors

For service out and third-party proceedings, a person may be a necessary or proper party where the claims involve a connected investigation, even though the person is not liable for the same cause of action as the existing defendant. The court’s power is not confined to cases of co-liability.

Copyright authorisation requires more than supplying articles or knowing that they will be distributed and used infringly. The critical question is whether the alleged authoriser granted, or purported to grant, the right to carry out the infringing act, including whether it retained control over use after sale.

A stay to allow foreign proceedings to proceed first should be ordered only for compelling reasons, particularly where the claimant has chosen the English forum and the foreign proceedings have not been pursued with comparable vigour.

The claimant brought English copyright proceedings against Salton Europe concerning coffee makers allegedly containing software copied from the claimant’s product. Salton Europe brought a Part 20 claim against Salton Hong Kong, which sought to join Electrical & Electronics Limited, a Hong Kong company involved in manufacture and development.

Electrical & Electronics challenged service out, resisted an amendment alleging authorisation of copyright infringement, and sought a stay pending related copyright proceedings in Hong Kong. The court therefore considered the scope of service-out provisions for Part 20 claims, whether the proposed authorisation claim was arguable, and whether the English proceedings should be delayed.

1. Service out and joinder. Electrical & Electronics was a proper party to the Part 20 claim. The expression “necessary or proper party” is not limited to a person co-liable for the same cause of action. The relevant question is whether the connected issues should be resolved in one set of proceedings. The reasoning in United Film Distribution v Chabria [2001] EWCA Civ 416 was directly applicable. Part 6, rule 20(3A), read with the court’s broad joinder powers, permitted service out.

2. Authorisation. The proposed claim that Electrical & Electronics had authorised infringement was not arguable on the pleaded facts. Under the Copyright, Patents & Designs Act 1988, authorisation involves granting or purporting to grant the right to do the infringing act. Mere supply of goods, knowledge of their intended destination, or enabling their use is insufficient. The controlling guidance in CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] 1 AC 1013 required more than sale and focused on control over use after sale. The amendment was refused.

3. Stay. The court assumed, without deciding, that it possessed case-management power to stay the English proceedings pending the Hong Kong actions. Copyright is territorial, so proceedings in different jurisdictions may be necessary. A sequential approach may reduce inconsistent decisions and costs, but the claimant is ordinarily entitled to choose where and in what order to pursue its claims.

4. No compelling reason justified putting the Hong Kong proceedings first. They had made little progress, witness-location and cost arguments were weak, and the English summary-judgment application was bona fide rather than doomed to fail. The stay applications were refused. Electrical & Electronics remained a party, but without the authorisation claim.