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29 July 2016

Magmatic, the manufacturer of the popular children’s ride-on suitcase ‘the Trunki’, has lost its long running legal dispute with rival manufacturer PMS International (“PMS”). This decision is likely to have far reaching implications for the enforceability of community registered designs against copycat products. 

The Supreme Court concluded PMS’ Kiddee Case range didn't infringe the registered design rights of Magmatic’s Trunki range, which features small, brightly coloured suitcases designed to look like animals.

Magmatic originally won in the High Court, only for that decision to be overturned by the Court of Appeal. The Supreme Court has now decided that the Kiddee Case doesn’t infringe the intellectual property contained in the design of the Trunki.

Lord Neuberger concluded that whilst it was clear that the Kiddee Case was inspired by the Trunki, what matters for design disputes is not the novelty of the idea but the details of the design. Key differences included the different use of colour and texture and the fact that the Kiddee Case has plastic covered wheels.

This decision confirms that design rights create legal protection for specific designs, not the idea that created that design. The Supreme Court found that Magmatic’s inclusion of very specific design features, including dark uncovered plastic wheels, specific texture/shading and a dark stripe meant that these features became a core part of the design. By designing the Kidde Case slightly differently, the court concluded that PMS had sufficiently distinguished its case from the Trunki so that the Kiddee Case did not infringe on the Trunki community registered design.

Magmatic contended that these specific features should be ignored, but the court ultimately decided that these specific features, in addition to the “animal with horns” aspect of the Trunki, meant that the Kiddee Case, with its covered wheels, different features and “insect with antennae” face, is sufficiently different to the Trunki.

The important point for businesses to note is how careful they need to be when first registering their designs. In hindsight, Magmatic may have been successful if the six computer-aided design (CAD) drawings used in its design application had been more generic and considered in more detail. Ultimately, the effect of this decision is that if a business does want to protect a design, any application for a community registered design must be carefully thought through and only made with the assistance of specialist advice.  

26 July 2016

The gender pay gap. Three little words with very big meaning and although it's not immediately obvious which is the most contentious, when you look at the allusion as a whole, it's a sad and sorry affair that we are still talking about it in the 21st Century.

And so, the entire corporate world is waiting, eagle-eyed, for all companies with more than 250 employees, whether private or third sector, to be required to publish the difference between what they pay their male employees and what they pay their female employees. Employment lawyers may be expecting a potential slew of equal pay claims beginning to appear on the horizon, but it doesn't feel like it's going to wipe out the issue for women in the workplace. For real change to occur, it has to be within the commercial sector. If there's nothing to chase, then the hounds won't run. And commercial lawyers know this.

It seems faintly ridiculous that in 2016 a gender bias continues to exist or that legislative powers have allowed this to continue. Forty-six years ago the Equal Pay Act 1970 came into force, making it unlawful to pay different amounts to men and women working the same jobs. Despite this, there remains an estimated 19.2% pay gap between male and female employees according to the Office for National Statistics. It seems commercial employers have been shadowing the murky truth for more than four decades. So, now mandatory pay gap reporting, conferred by sec.78 of the Equality Act 2010, is being implemented, what impact is it going to have on commercial clients and their lawyers?

22 July 2016

In this fast changing business climate, more and more companies are coming into contact with Trusts and Trustees than ever before.

This may be in the form of pensions and pension providers, investment companies or simply business models to enable assets to be managed more efficiently.

However, it is likely that as some point in our business lives we will need, or use, Trustees.

What is the role of a Trustee?

A Trustee’s responsibility is to act in the best interest of the Trust as a whole and to be as impartial as possible.

They are sometimes, unfortunately, placed in a position of making incredibly controversial decisions in an attempt to protect assets for long-term goals rather than short-term gain.

The Trustees’ powers are governed by the terms of the Trust and the terms of the Trustee Act, but in brief they must protect and handle trust assets for the benefit of the beneficiaries (this could be a single beneficiary, or a small or large group of individuals).

The aims of the Trust and any restrictions placed on the Trustees will be set out the terms of the trust agreement. This is where is it important to be aware that poorly drafted Trust documents which fail to supply sufficient leeway for the Trustees to carry out their duties as custodians of the Trust funds, simply hamper rather than assist the efficiency of the trust as a whole.

The Trustees do not own any of the Trust assets personally, but they are expected to invest Trust funds prudently and productively taking professional advice if required. They will also have, unless specifically prohibited, the ability to lease, mortgage, or sell any trust asset if deemed necessary in fulfilment of the trust's objectives.

Choosing a trustee

Bearing this in mind, the Trustees must be chosen with great care and after accepting the role may not delegate, renounce, or resign their responsibility unless an acceptable successor consents to being the replacement.

Unless specifically prohibited by the terms of the Trust, a professional Trustee can be paid for their services, and any support assistance required by the Trustee as part of carrying out their duties (which can include legal services, financial services or investment advice required to carry out the responsibilities of a Trustee).

So if asked to be a Trustee, it is advisable that an individual should consider whether they feel able to deal with the duties, and whether they can put aside their personal views, if required to do so. 

Contact Oratto on 0845 3883765 to speak with an adviser or use our contact form to arrange a call-back.

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21 July 2016

House of Commons Justice Committee reports on court and tribunal fees

The House of Commons Justice Committee has recently published its critical review of Court and Tribunal Fees. The review covers the impact of Employment Tribunal Fees and notes there has been a steep decline (a drop of 70%) in the number of claims being brought. The report states that ET fees have had a significant adverse impact on access to justice for meritorious claims.

 The report sets out four main recommendations:

21 July 2016

The Small Business, Enterprise and Employment Act 2015 (SBEE) introduces several significant changes to the Companies Act 2006 (CA 2006) including a prohibition on corporate directors (namely, a director who is not an actual person).

The prohibition is expected to come into force in October 2016 (although, like many other provisions of SBEE, this is subject to change). Once in force, it will be a criminal offence to appoint a corporate director and any such appointments will be void.

According to Companies House Data from 2013, when the Department for Business, Skills and Innovation (BIS) initially proposed increased transparency for UK companies, only 1.2% of UK companies used corporate directors.  However, this still equated to about 38,000 companies that would be affected by the ban.

Fortunately the changes to CA 2006 also allow the government to introduce further regulations allowing for exceptions to the ban. 

Although no such regulations have yet been published, the Department of Business, Innovation and Skills (BIS) has canvassed the possibility of corporate directors in limited circumstances and provided certain conditions are met (e.g. in March 2015, the current consideration was that corporate directors may be permissible where all the directors of the corporate director are actual people (or natural persons) and details of those natural persons are held in a publicly maintained and accessible register). 

As no further guidance or regulations have yet been published, it is a case of waiting to see how the legislation will be implemented. However, it is safe to say that even if an exception is introduced, all companies will still have to have at least one director who is an actual person, as is currently the case.

So what does this mean for UK companies?

Assuming the changes to CA 2006 come into force in October 2016, it will be an offence to appoint a corporate director after this date unless exempt under further regulations published by the Secretary of State. 

For any companies with corporate directors appointed before October 2016, there will be a transitional 12 month grace period.  If by October 2017 it appears that the corporate director will not be exempt under further regulations, it will automatically cease to be a director.  Companies should update their registers at this point and notify Companies House accordingly.


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