Director refused permission to represent company in intellectual property dispute

A managing director has been refused permission to represent his company in a dispute over an alleged breach of copyright.

Pablo Star Media Limited, acting through its managing director Mr Haydn Price and not through a solicitor, had filed a claim with the District Court, seeking €3,000 damages from E.W. Scripps Company for placing a photograph on its website which it was claimed was the property of Pablo Star Media Limited.

Following the absence of an appearance being filed, the applicant certified that “the sum of €3,000 is now actually due by the respondent to the claimant.”

Delivering the High Court judgment, Mr Justice Richard Humphreys observed that it was not clear why the District Court Office had accepted the applicant’s filings without a solicitor, but that the decision appeared to be incorrect.

The matter proceeded to the District Court and a preliminary issue arose as to whether Mr Price should be allowed to represent the company.

Although in the first instance this was allowed, the issue was appealed to the Circuit Court, at which time Judge Sarah Berkeley ruled that Mr Price did not have such a right of audience.

The applicant then sought judicial review of this decision. It was noted that Mr Price relied on the fact that a number of judges had allowed him to address them, but Justice Humphreys explained that this was only in relation to his contention that he has a right to be heard on the merits.

In Battle v. Irish Arts Promotion Centre I.R. 252, the Supreme Court held that “in the absence of statutory exception, a limited company cannot be represented in court proceedings by its managing director or other officer or servant”.

However, as the claim was based on EU law-related intellectual property rights, Mr Price sought to rely on articles 2, 3 and 4 and recital 17 of the Intellectual Property Rights Enforcement Directive (2004/48/EC). Article 3.1 of the directive is particularly relevant, insofar as it provides that enforcement measures “shall not be unnecessarily complicated or costly”.

Mr Price argued that national courts should not allow a situation to arise where it was going to cost more than the plaintiff would recover, or if the balance was 50/50 as regards what it would cost versus what one would recover.

In his own case, he argued that claiming €3,000 was going to cost the company between €5,000 and €8,000, and that this was at odds with the directive.

He further argued that Ireland has not implemented the prohibition on unnecessarily complicated or costly proceedings, and that therefore the Directive provision was directly effective.

The Judge summarised his position was being “that if there is a bona fide claim of copyright infringement with a claim for €3,000 in damages, and if to remedy that matter before the courts will cost between €5,000 and €8,000, then there is no point in pursuing the litigation.”

He cited R. (Edwards) v. Environment Agency, 11th April, 2013, which concerned the related, although not identical, requirement in the EIA directive (95/337/EEC) that judicial proceedings should not be “prohibitively expensive.”

However, the Judge noted that it was clear from the Battle case that the bar on directors representing a company in court arises from the very nature of the company itself.

The Judge did not accept that the court has the sort of wide discretion contended for by Mr Price, but rather that the Court’s discretion was a narrow one, as demonstrated in Re Coffey IESC 11.

Further, he found a number of separate reasons why the Battle approach should not be departed from.

First, Mr Price’s argument regarding the costs of the action outweighing the damages to be recovered is predicated on the applicant bearing those costs itself, however costs normally follow the event, so even if they were more than the sum claimed, the applicant would not necessarily be disadvantaged.

Second, the directive does not prohibit costly measures, but only “unnecessarily” costly ones.

Third, he did not accept that the general language of article 3.1 of the directive is sufficiently “clear and unconditional” and “does not require any legislative intervention on the part of the states” so as to engage the doctrine of direct effect as envisaged by Case 26/62 van Gend en Loos v. Nederlandse Administratie der Belastingen ECR 1 at p. 13.

If Ireland’s transposition of the directive is defective, he stated that it was a matter that the plaintiff could take up in separate proceedings, or by way of complaint to the European Commission. He noted in passing that it did appear that Mr Price was pursuing the matter through those methods.

He further observed that there is the policy consideration that actions for breach of copyright impose burdens on defendants also, and to make such actions significantly easier may be oppressive on defendants, particularly those who inadvertently breach copyright in re-publishing photographs that are already elsewhere on the web.

It was noted that the “user principle” measure of damages would normally be the cost to the user of legitimately obtaining an alternative photograph, which was often nil.

The Judge cited Absolute Lofts South West London Ltd. v. Artisan Home Improvements Ltd. EWHC 2608 (IPEC), in which replacement stock photographs cost £300, which was the level of damages under normal heading based on cost to the user.

Additional damages would only be in cases where the defendant unfairly attracted business, and that a level of damages above the nominal would seem proportionate only if the defendant persisted in publication despite a request (unaccompanied by a demand for damages) to remove the material, or if the publication could be proven to have occasioned genuine and real damage or clearly in itself occasioned real and unfair profit to the defendant above and beyond the fact that it was used for commercial purposes.

The Judge concluded that he could not allow Mr Price to represent the applicant company. He noted that in the aftermath of this decision, he adjourned the matter to allow legal representation to be obtained.

Although solicitor and counsel were obtained, the matter was further adjourned due to incomplete paperwork, after which Mr Price attended and informed the Judge that it was now felt by the applicant that legal representation would make the claim too expensive. In the circumstances I struck out the application for leave for non-attendance on behalf of the applicant.

  • by Rachel Killean for Irish Legal News
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