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	England and Wales Patents County Court
You are here: BAILII >> Databases >> England and Wales Patents County Court >> Musion Systems Ltd v Activ8 -3d Ltd & Ors [2011] EWPCC 12 (18 May 2011) URL: http://www.bailii.org/ew/cases/EWPCC/2011/12.html Cite as: [2011] EWPCC 12

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IN THE PATENTS COUNTY COURT

		St. Dunstan's House 133-137 Fetter Lane London EC4A 1HD
		18/05/2011

His Honour Judge Birss QC :

Topic	Paragraph
1. Introduction	1
2. The pleaded case and the order for a preliminary issue	5
3. Vicarious and joint liability	30
4. The witnesses	35
5. The law	38-44
6. My findings	44-53
i) Early days: 2006 until Feb 2007	54
ii) The Trilogix installation: Feb 2007 until 3/4th June 2007	61
iii) The Trilogix demonstrations from June 2007	99
iv) David Dutton becoming a director of Activ8: 26th July 2007	111
v) Trilogix after 26th July 2007	113
vi) Christian Morris	117
vii) Waterside	128
viii) Glass Page.	138
ix) The website	158
x) Simon Humphreys' personal liability	162
7. Conclusion	164
Annexes
Annex 1 Note to the Parties	Annex

1. Introduction

1. This is a preliminary issue in a patent action. The claim form was issued on 27^th July 2009. The claimant owns UK Patent No. 2,427,708 entitled "Projection Apparatus and Method for Pepper's Ghost Illusion". The Pepper's Ghost effect was developed in the 19^th century and was used to create the illusion of people or objects appearing and disappearing on stage using images projected onto an angled sheet of glass. The products alleged to infringe are three dimensional holographic projection systems which function in a similar way.
2. The defendants divide into two camps. The first and fourth defendant form one camp (the Activ8 defendants) and the second and third form the other camp (the C2R defendants). The claimant alleges that all four defendants have committed acts of infringement. Although the two defence camps are separate now, there was a time when they worked together and disentangling that relationship to some extent is one of the issues arising.
3. Before me the claimant was represented by Richard Miller QC leading Geoffrey Pritchard instructed by SNR Denton and the Activ8 defendants were represented by Douglas Campbell instructed by Baker Botts. The C2R defendants were represented by Mr Schneider of Schneider Page but he took almost no part in the proceedings.
4. The preliminary issue arises because although it is not in dispute that the C2R defendants have done the acts which the claimant relies on, the Activ8 defendants deny that they have done most of the acts pleaded against them. The matter came before the court on 9^th July 2010 and a preliminary issue was ordered, essentially to decide whether the Activ8 defendants had done the relevant acts.

2. The pleaded case and the order for a preliminary issue

5. In order to understand the preliminary issue it is necessary to see how the parties' cases are pleaded and how they developed over time. The Particulars of Claim pleads that the first and second defendants (i.e. the companies Activ8 and C2R) are each in the business of making, selling and supplying 3D hologram projection peppers' ghost systems and related services. As for Activ8: the fourth defendant (Simon Humphreys) is a director and major shareholder of that company and always has been. The third defendant (David Dutton) was a director of Activ8 until 14^th August 2008 and a shareholder until 16^th October 2009 but is neither of those things now. As for C2R, David Dutton is and always has been a director and shareholder of that company.
6. The acts pleaded in the Particulars of Infringement are divided into two groups. The first group of pleaded acts are alleged to have been carried out "on the part of the first defendant and the third and/or fourth defendant" are in paragraph 2 (i) – (vii) of the document. They are:

(i) the manufacture, offer to supply and supply and keeping of an image projection apparatus to Trilogix Solutions Limited in or before June 2007.

(ii) The subsequent use by the First Defendant and the Third and/or Fourth Defendant of the image projection apparatus referred to in sub para (i) above to demonstrate the First Defendant's image projection apparatus to potential customers of the First Defendant. The said demonstrations also amounted to an offer to supply customers with an image projection apparatus of the type installed at the premises of Trilogix Solutions Limited.

(iii) The use by the First Defendant and the Third and/or Fourth Defendant of an image projection apparatus at the Waterside Theatre, Stratford to demonstrate the First Defendant's image projection apparatus to potential customers. The said demonstrations also amounted to an offer to supply customers an image projection apparatus of the type installed at the Waterside Theatre.

(iv) The subsequent manufacture and supply of the First Defendant's image projection apparatus to customers to whom it had been demonstrated as referred to in subparas (ii) and (iii) above.

(v) The manufacture, offer to supply, supply and use of image projection apparatus (and in particular the image projection apparatus described as "3D-holoshow" and "Permanent Installations") as demonstrated by the pages on the First defendant's website at http://activ8-3d.com, including those referencing the demonstration theatre referred to at (iii) above.

(vi) The offer to supply image projection apparatus to the National Space Centre in Leicester made by the Fourth Defendant on behalf of the First Defendant.

(vii) The offer to supply an image projection apparatus to Glass page Limited for further supply or use by Transport for London in or around mid 2008.

7. The second group of pleaded acts in the Particulars of Infringement (in sub-paragraph 2(viii)) is a case against the C2R defendants alone, that they manufactured, offered to supply and supplied an image projection apparatus to Glass Page Limited for further supply or use by Transport for London in or around mid 2008. Finally there is a plea of knowledge which does not form part of the preliminary issue.
8. The above is the form of the Particulars of Infringement as originally served. An amendment was made in July 2010 but that only related to the C2R defendants, adding a further instance of infringement (2 (ix)).
9. The case on joint liability and common design relevant to the first group of pleaded acts is that:

i) Simon Humphreys and David Dutton were both responsible for procuring and directing the acts of Activ8 while David Dutton was a director. Thereafter Simon Humphreys continued to be responsible for procuring and directing the acts of Activ8.

ii) The infringing acts were carried out pursuant to a common design between Activ8, Simon Humphreys and David Dutton so as to render each of them jointly and severally liable for those acts.

10. In summary the allegations fall into five categories: Trilogix, Waterside, the website, the National Space Centre and Glass Page. Each category contains sub-issues and I will deal with those in detail below.
11. Further information was sought by the Activ8 defendants in relation to the case pleaded against them. It was provided on 29^th October 2009. As regards sub-paragraph (ii) above, the claimant was asked to identify the potential customers to whom the demonstrations were said to have been directed. The claimant's response was to plead a case based on inference given that there had been at least one demonstration, albeit to Sylvie Garat of Musion (not therefore a potential customer), to point out that the identity of the potential customers was a matter in the Activ8 defendants' knowledge and to mention a demonstration to a Christian Morris of Accelerant Marketing.
12. On 17^th November 2009 the Activ8 defendants' solicitors Baker Botts wrote an important letter to the claimant's solicitors. That letter summarised the Activ8 defendants' position in the proceedings. It explained that there are two 3D hologram projections systems in issue, one associated with Activ8 and the other associated with C2R. It asserts that the Activ8 system clearly does not infringe and asserts that that is the only system the Activ8 defendants have been involved with in the UK. The letter states that it is unclear which system the claimant is complaining about. The letter appends a drawing ("the Baker Botts drawing") of the arrangement the letter calls the Activ8 system. It is common ground that an apparatus constructed that way does not infringe. Sometimes this system is described as a "vertical" system to distinguish it from a "horizontal" system like the one in the claimant's patent.
13. The labels "vertical" and "horizontal" are useful but can lead to trouble. Musion are careful to state that, as drawn, the vertical system in the Baker Botts drawing does not infringe but that does not mean (as I understand it) that one could not construct some kind of vertical system which did infringe. Furthermore not all horizontal systems necessarily infringe either. The C2R defendants' case is that their system – which is a horizontal system - does not infringe the patent in any event as a result (at least) of the way in which the foil is fixed.
14. Another distinction drawn in the papers in this case is between small sized systems and large sized systems. Generally (but not necessarily as I understand it) small systems are a form of vertical system. One sold by Activ8 is called a Holopod. The Holopods do not infringe on any view. Again generally (but not necessarily) larger, theatre sized systems are horizontal systems. They may or may not infringe, for example depending at least on the C2R foil fixing point. Another expression used in the materials is a "large scale Pepper's Ghost" system. That refers to a horizontal system which Musion allege infringes the patent. Musion sell a system in accordance with the patent under the name "Eyeliner" and a vertical system under the name "Eye Candy".
15. The Activ8 defendants' Defence and Counterclaim was then served on 19^th November 2009. The counterclaim relates to invalidity of the patent and is not germane to this preliminary issue. The defence (para 4) states that Activ8 and C2R trade in different areas, Activ8 in small sized systems and C2R in large systems. The defence makes no admissions about allegations against the C2R defendants. The key to the defence (as served) is a denial that the Activ8 defendants have done any relevant acts. The acts that took place were done by the C2R defendants. Mr Humphreys signed the statement of truth on the document.
16. The C2R defendants' Defence and Counterclaim was served on 18^th December 2009. It bears a statement of truth by Mr Schneider, their solicitor. It is more or less the opposite of the one from the Activ8 defendants. On the facts, most of the acts are said to have been carried out by Activ8.
17. On the pleadings at this stage the issues were (in summary):

i) For Trilogix, the existence of the apparatus itself was admitted. The main questions were: who installed the apparatus, who demonstrated it and to whom (including Sylvie Garat and Christian Morris), and did those demonstrations amount to offers to supply apparatus of that kind? The apparatus itself was a horizontal system. It was not as per the Baker Botts drawing. Whether it fell within the claims of the patent is not before me.

ii) For Waterside: the apparatus was one of the claimant's own systems and (I presume but do not have to decide) was in accordance with the patent. The C2R defendants admitted using it but said it was used under licence. They also contended that potential customers were told the system they would buy would be different. The Activ8 defendants denied using it at all. The location (the Waterside Theatre in Stratford on Avon) was a visitor attraction operated by David Dutton through his company Dynamic Attractions Ltd. One of the issues raised by Waterside is whether whatever acts were carried out were within the scope of the licence. That is a matter for trial.

iii) On the Activ8 website: the Activ8 defendants' case is and was that although horizontal systems may be shown on it, the only systems offered are non-infringing vertical type systems.

iv) On the National Space Centre (NSC), all the defendants denied the allegation. Mr Humphreys says there was contact between him and NSC but it was irrelevant since it was earlier in time and while he was a consultant for the claimant, Musion.

v) On Glass Page: there is common ground between the defendants. The Activ8 defendants' Defence denies there was an offer to supply by Activ8 and states that to the best of the Activ8 defendants' knowledge, C2R did so. The C2R defendants' defence states that the Activ8 defendants had no involvement in the Glass Page project and admits that C2R offered and supplied the apparatus to Glass Page.

18. On 9^th July 2010 the matter came before HH Judge Fysh QC for directions. At that stage there was a draft amended Defence and Counterclaim of the Activ8 defendants. The relevant amendment for present purposes is that the Activ8 defendants withdrew a denial that they had ever used the apparatus in the Waterside theatre at all and replaced it with a qualified admission that the apparatus had been used but not in a manner which led to infringement. The Activ8 defendants maintained their denial offering to supply any such apparatus.
19. The Activ8 defendants submitted that a trial of a preliminary issue should be conducted and the court accepted that submission. The preliminary issue was to be tried on 2^nd February 2011 for three days and the trial was to be heard on 18^th July 2011. In the event, as a result of the service of late evidence, the hearing of date for the preliminary issue was moved to 15^th March.
20. The preliminary issue order made on July 2010 was:

9. There shall be a preliminary issue in this action that will determine the following matters:

i) Whether the First Defendant, or the Fourth Defendant acting on its behalf, have in the United Kingdom used any image projection apparatus other than that (a) referred to in the letter sent by their solicitors Baker Botts to the solicitors for the Claimant on 17^th November 2009 or (b) the image projection apparatus which was supplied by the claimant to Dynamic Attractions Limited and installed at the Waterside Theatre, Stratford , and if so what other image projection apparatus.

ii) whether the First Defendant, or the Fourth Defendant acting on its behalf, have in the United Kingdom manufactured, offered to supply, supplied and/or kept any image projection apparatus other than that referred to in the letter sent by their solicitors Baker Botts to the solicitors for the Claimant on 17^th November 2009 and if so what other image projection apparatus.

21. Mr Miller QC explained how the issues were structured in the order. Sub-paragraph (i) relates to use while sub-paragraph (ii) relates to manufacture, offer to supply, supply and/or keeping. These are all acts as defined by s60(1)(a) of the Patents Act 1977. The key difference between (i) and (ii) is that the Waterside apparatus is excluded from (i) because use of that apparatus by the Activ8 defendants was admitted by the amended pleading. That will be a matter for trial and will involve (inter alia) the scope of the claimant's licence. It does mean however that whatever the outcome of the preliminary issue, the Activ8 defendants will attend the trial.
22. Subject to the Waterside/use point, in essence the preliminary issue is to decide the Activ8 defendants' case that all they have done by way of relevant acts has been done in relation to a vertical system as per the Baker Botts drawing. The point is that it is common ground the Baker Botts drawing does not correspond to an infringing system. Both the claimant and the C2R defendants deny the Activ8 defendants' case although the extents of those two denials are not co-extensive, at least as at July 2010.
23. The case progressed, with the parties preparing for the preliminary issue.
24. On 3^rd November 2010 the C2R defendants served an amended defence. The relevant amendments were, first a removal of the averment that Activ8 had "supplied" the apparatus to Trilogix while maintaining their case that Activ8 had installed it at the Trilogix premises and had demonstrated it; second a change from a denial to a non-admission concerning the NSC, and third an adjustment to the assertion that the Activ8 defendants had no involvement in the Glass Page project, to now contend only that Mr Humphreys had no involvement in the Glass Page project.
25. The parties' witness statements were exchanged in early December. The claimant was relying on statements from Christian Morris, Alex Jeffrey, Sylvie Garat, Graham Law and Ian O'Connell. The Activ8 defendants served a statement from Simon Humphreys. In early January statements in reply were served by both sides: second statements from Christian Morris, Sylvie Garat, Graham Law, Ian O'Connell and Simon Humphreys.
26. On 20^th January, four days before the hearing of the preliminary issue was due to start, the claimant served a full statement from David Dutton, the third defendant. The matter came before me on 21^st January 2011. The Activ8 defendants submitted that the David Dutton evidence was too late and should not be admitted. I decided to admit the evidence. It appeared to be crucial to the preliminary issue. The preliminary issue was adjourned until March.
27. In early March further statements were served: the claimant served statements from new witnesses David Small and Martijn Adema (Adema being under a hearsay notice), the Activ8 defendants served a third statement of Simon Humphreys and a statement from a new witness – Nigel Knight. Finally on 10^th March the claimant served a second statement from David Dutton. The case was opened before me on 15^th March.
28. At the hearing Mr Campbell for the Activ8 defendants submitted that the statements from Mr Adema and Mr Small should not be admitted and made a submission that the claimant's pleadings were defective in that they did not properly set out the identities of all the people to whom the Activ8 defendants were said to have demonstrated the Trilogix or Waterside apparatus. I rejected that application in a short ex tempore judgment given on 15^th March and the trial proceeded. In the course of the trial, at the very end of Mr Humphreys cross-examination, Mr Miller sought to put to a new document to the witnesses. Mr Campbell objected and I ruled it out, with reasons to follow in this judgment. I will deal with it in context.
29. Following Mr Law's cross-examination, Musion abandoned their case that an offer had been made to the NSC. Mr Humphreys' first witness statement firmly denied offering to supply an image projection apparatus to the NSC (at the relevant time). He explained that he understood the NSC were going to build their own system and so he offered to supply them with foil. Mr Law's second witness statement addressed that particular paragraph of Mr Humphreys evidence and stated "my recollection is that he [Mr Humphreys] offered to supply a Peppers Ghost system to NSC." However in cross-examination it because clear that he had no such recollection at all. He did remember being offered foil and technical support but he did not recall being offer a large system. Mr Miller characterised it as a case in which his witness Mr Law "just did not come up to proof". That is not an accurate submission. A witness statement is not a proof of evidence. In any case the NSC point was rightly abandoned by Musion.

3. Vicarious and joint liability

30. Before going further I need to digress to address the question of vicarious and joint liability in relation to the preliminary issue. The point of the preliminary issue ordered is to determine (albeit not completely) the potential liability of the Activ8 defendants as distinct to the C2R defendants. However the allegations of vicarious and joint liability cut across the distinction between the Activ8 defendants and the C2R defendants. As drafted the ordered issues relate to whether Activ8 itself committed the various acts (use, offer, manufacture etc.). That is all. It is clear (and pleaded) that Activ8 is alleged to have done things as a result of the actions of Simon Humphreys working on its behalf. So far so good and that is reflected in the order. It is also pleaded by the claimant that at times David Dutton was acting on behalf of Activ8 and so acts of David Dutton carried out in that capacity are acts of Activ8. Although not mentioned in terms in the order (unlike the reference to Simon Humphreys), it is clear that that is one of the issues I have to decide: were certain things which were done by David Dutton, acts of Activ8? It is also clear that other people may have done things in a capacity working for Activ8 (such as Paul Andrews, Raj Balasundaram etc.). They also fall into the preliminary issue. Thus in effect the vicarious liability of Activ8 for the actions of individuals working on its behalf is within the preliminary issue.
31. The order does not mention joint liability of anyone. At the hearing various aspect of joint liability were addressed in submissions and evidence but on reflection it was not clear what the precise scope of the issue of joint liability were or whether any joint liability was included at all. The claimant had been stressing the narrow and careful wording of the Order but was also contending that joint liability was to be considered. After the trial I sent a note to the parties, inviting them to make submissions on this. The note is set out in an annex to this judgment.
32. A particular concern I had was that it appeared that the joint liability of David Dutton was potentially in issue by a side wind when he had not taken part in the preliminary issue other than as a witness. No submissions on his behalf had been made. I received useful notes from the representatives of all three of the claimant, the Activ8 defendants and the C2R defendants. Substantial common ground emerged as follows:

3(a). Does the issue include deciding if David Dutton was responsible for procuring the relevant acts of Activ8? Answer: No.

3(b). Does the issue include deciding if Simon Humphreys is liable for the relevant acts of Activ8? Answer: Yes

4. Does the issue include deciding whether either or both of the Activ8 defendants are liable for acts of David Dutton jointly and severally on the common design principle? Answer: Yes

But – does this mean that the issue includes deciding whether David Dutton is liable on the corresponding basis for acts of the Activ8 defendants on the same joint and several liability principle? Answer: No

33. The claimant's note makes the point that the findings the court is being asked to make may therefore be relevant to the liability of David Dutton in various ways but "insofar as this may be so, it cannot be helped. [David Dutton] has had every opportunity to appear and make submissions upon this Preliminary Issue but has not done so." I also note that Mr Schneider's note on behalf of the C2R defendants (i.e. C2R and David Dutton) makes it clear that from his clients' perspective "it follows from joint tortfeasance being an integral part of the Preliminary Issue that the liability of [the Activ8 defendants] for acts committed by [David Dutton] should be decided now. However … [David Dutton's] liability falls outside the scope of the Preliminary Issue."
34. Thus the issue includes deciding whether three people Activ8, Simon Humphreys and David Dutton were working together. The point of that is to decide whether two of them are liable for the acts of the third but at the same time excludes deciding whether the third is liable for the acts of either of the other two. I will approach it this way only because all three parties urge me to do so.

4. The witnesses

35. For the claimant I heard evidence from David Small (by video link), David Dutton, Graham Law, Ian O'Connell and Christian Morris (by video link). For the claimant I also had witness statements from Sylvie Garat and Alex Jeffrey which were admitted in evidence without cross-examination. I also had a witness statement of Martijn Adema served by the claimant under a Civil Evidence Act notice. For the Activ8 defendants I heard evidence from Simon Humphreys and Nigel Knight.
36. David Small gave brief evidence about an occasion on which he visit Trilogix premises and was shown the large scale Pepper's Ghost system apparatus there. He gave his evidence entirely fairly. Graham Law gave his evidence entirely fairly too but I do not need to consider his testimony since the relevant point was dropped. Ian O'Connell is a director of the claimant. Once they had served a statement from David Dutton, much of Ian O'Connell's witness statement took on a lesser degree of significance. However some of his evidence was important in any case. Mr Campbell submitted that Ian O'Connell was litigious and was bitter about David Dutton and Simon Humphreys. Neither point (even if correct) amounts to a substantive criticism of him as a witness. In my judgment he is a director taking steps (as he sees it) to defend his company's legitimate rights. There was some question of whether he and Christian Morris had spoken about the case on a mobile phone call while Mr O'Connell was in Russia in 2009 but in my judgment it did not amount to anything of substance. I make no criticism of Mr O'Connell as a witness.
37. Christian Morris was a potential investor in Activ8 who might then operate a US sales office for the company. His evidence was about two visits he made to the UK in 2008. The issue was whether he was shown the large scale Pepper's Ghost system at Trilogix. He said that he had but this was denied by the Activ8 defendants. He was pressed firmly (but I should record entirely properly) by Mr Campbell in cross-examination. Mr Morris gave his evidence fairly but it was clear that at least one aspect of his recollection of the surrounding circumstances was not right (about the significance of holopods). However that did not undermine his evidence on other matters and I reject the submission that it shows that Mr Morris' evidence as a whole is unreliable. In my judgment, Mr Morris' recollection on other things may be perfectly reliable. In considering a given point I should however bear in mind that his recollection was not correct on some points.
38. Nigel Knight gave his evidence fairly. He was not criticised by Mr Miller.
39. So far I have not addressed the two key witnesses – David Dutton for the claimant and Simon Humphreys for the Activ8 defendants. David Dutton is of course the third defendant albeit giving evidence at this hearing for the claimant. Simon Humphreys is the fourth defendant. Both David Dutton and Simon Humphreys have a vested interest in their version of events. Simon Humphreys' evidence minimises the risk to himself and his company from the Musion patent save for the narrow Waterside use point. If David Dutton's version is accepted then he and his company share the risk of these proceedings with the Activ8 defendants. He clearly regarded it as to his company's benefit to ensure that the Activ8 defendants were potentially liable to Musion as well. Moreover the distinct impression I was left with at the end of the hearing, having heard all the submissions but in particular having heard them both as witnesses, was that David Dutton and Simon Humphreys have a degree of mutual personal animosity.
40. David Dutton frankly admitted in cross-examination that during early August 2008 at the time of the Glass Page project, he had deliberately lied to Simon Humphreys about his holiday plans at that time to further his own (David Dutton's) interests. However Mr Campbell submitted that David Dutton's evidence about Glass Page in his witness statement was untrue as well. David Dutton's second witness statement gave evidence that it was only after he discovered that he had been removed as a director of Activ8 that he decided to take the Glass Page project with him back to C2R and away from Activ8. That would have been on about 17/18^th August. In cross-examination Mr Campbell put to him that he had already decided to take the Glass Page job on or before 1^st August (and before the holiday) because he had fallen out with Simon Humphreys. David Dutton denied that and I suspect he has convinced himself of that position but in my judgment the evidence points the other way and I did not find the denial convincing. It is an example of David Dutton's testimony being coloured by his own convictions about his position.
41. Mr Miller submitted that Simon Humphreys had clearly made false statements in the course of these proceedings which could not be justified. One example pressed by Mr Miller was the statement of truth on the original defence of the the Activ8 defendants. It had "specifically denied" that the Activ8 defendants had used the image projection apparatus at the Waterside Theatre and that stance was maintained until July 2010 despite a letter from the claimant's solicitors in February 2010 stating that they had an independent witness directly contradicting the position. In July 2010 the Activ8 defendants amended the defence to admit the use of the apparatus (again with a statement of truth signed by Simon Humphreys). Another example was paragraph 50 of Simon Humphreys first witness statement. There Simon Humphreys stated that "at no time have I or Activ8 demonstrated the Trilogix apparatus to any third party". Simon Humphreys also took a point that various alleged demonstrations could not have taken place because no foil was available until a later date. After that witness statement was served the claimant obtained an email dated 10^th June 2007 in which Simon Humphreys is enthusing about "our first client demo" of the Trilogix apparatus. It was clear the foil was indeed in place and it was clear that demonstrations had taken place. In his oral evidence in chief Simon Humphreys accepted that the foil was in place and that the "first client demo" had taken place.
42. In my judgment Simon Humphreys approach to evidence in this case has not been satisfactory. On important points he has taken a firm line in his and his company's favour when there is no proof of a point only to retreat in the face of evidence against him. I do not need to decide whether this is the product of deliberate deceit or simply an incredibly cavalier approach by someone convinced of the correctness of his position.
43. I am not satisfied that I can accept without question the testimony of either Simon Humphreys or David Dutton on any of the major issues when that testimony supports their own case. Each has convinced himself of his own position and the justice of his cause. In my judgment the only safe way to proceed is to work with the contemporaneous documents and evidence from other sources and then consider separately what the two individuals have said. In taking this course I will also necessarily consider specific testimony of Simon Humphreys or David Dutton on detailed issues in context.

5. The law

44. As regards liability as a joint tortfeasor, there was no dispute as to the law. The claimant relied on the judgment of the Court of Appeal given by Peter Gibson LJ in SABAF v Menegetti [2002] EWCA 976 which indicates that the underlying concept is that the party must make the infringing act his own in order to become liable and the presence of common design, concerted action or other combination to secure the act will make the combiners liable. In relation to director's liability the claimant cited MCA v Charly Records [2001] EWCA 1441 (paragraphs 49-53). That case made it clear that a director or other officer of a company may in certain circumstances be personally liable with the company as a joint tortfeasor. A director will not be liable merely because he is an officer, he must be personally involved in the commission of the tort to an extent sufficient to render him liable as a joint tortfeasor. Whether he is sufficiently involved is a question of fact, requiring an examination of the particular role played by him in the commission of the tort. The approach to this joint liability is the same as the approach to joint liability in the field of intellectual property generally. In a case in which a company is found be the primary infringer a director will be liable as a joint tortfeasor if he procured or induced those acts to be done by the company or if, in some other way, he and the company joined together in concerted action to secure that those acts were done (see Chadwick LJ paragraph 53).
45. Two questions of patent law arise:-

i) What is the proper scope of "offer for disposal" within the terms of s60(1)(a) of the Patents Act 1977?

ii) What is the proper scope of "make" within the terms of s60(1)(a) of the Patents Act 1977?

46. On the scope of "offer for disposal" the claimant relied on the judgment of Jacob J (as he then was) in Gerber v Lectra [1995] RPC 383. In that case Jacob J. construed the words "offer to dispose of" in section 60(1)(a) in the light of the corresponding wording in Article 25(a) of the Community Patent Convention (namely "putting on the market"). Jacob J. said (at p411):

A party who approaches potential customers individually or by advertisement saying he is willing to supply a machine, terms to be agreed, is offering it or putting it on the market. If that happens during the life of the patent he infringes. He is disturbing the patentee's monopoly which he ought not to do.

47. In this passage Jacob J was rejecting a submission that anything short of an offer capable of acceptance in terms of the English law of contract was outside the 1977 Act and on the basis of his decision on the law he found on the facts that the defendant's advertisements were acts on infringement. I am bound by Jacob J's decision in any case but if I may say so I agree with it.
48. A particular point which arises in this case and was not before Jacob J is a situation in which a defendant shows a customer one machine (machine A) for demonstrations but contends that a somewhat different machine (B) is what would be supplied to the customer if they are interested. In my judgment although this might raise a question of fact, it does not raise a point of principle. I must decide on the facts what was actually offered – A or B, both or perhaps the offer was so vague as to not amount to an offer of anything specific at all.
49. In my judgment the law does not require, for s60(1)(a) of the 1977 Act to be satisfied, that the person to whom the offer is made necessarily knows anything about how the product works or is configured. Offers to supply products are routinely made in business, without condescending to a detailed exposition of how a product works or is constructed. So long as a particular design is what is on offer, then in my judgment a product to that design is being offered. The customer does not need to know.
50. On the issue of "making" the question is how much involvement in the construction of an apparatus is sufficient for the person involved to become a maker of that apparatus within the terms of s60(1)(a)? Neither party addressed the issue in any depth but it is a question which arises in this case. In my judgment two aspects can be considered (although they will overlap) – one as to the quantity or degree of an individual's contribution and the other as to its quality. I should say that I regard joint tortfeasance as a different matter. This point is concerned with primary liability.
51. As regards the degree of someone's involvement, some real contribution to the finished apparatus is required. A minor and insubstantial contribution to a construction project does not, it seems to me, turn a minor contributor into a person for whom it can be fairly said that they made the thing in question.
52. As regards the quality of the work an individual carried out (although neither party addressed the point) in my judgment "making" must be focussed on the product, as it is defined by the claim. In the recent Schütz v Werit case [2011] EWCA Civ 303 the Court of Appeal considered a case in which the claim required three elements – a pallet, a bottle and a cage. On appeal the Court of Appeal held that when Werit put one of their bottles in a Schütz cage, they were making a claimed product and therefore infringed. The fact that the inventive concept might be said to reside in the cage and not the bottle was irrelevant. The terms of the claim were decisive. It seems to me that in a case in which someone may have made a substantial contribution overall, it will still be necessary to identify whether what they have done has anything to do with any of the features of the claim. This is similar to but different from the "re-stringing problem" discussed in Schütz v Werit. Imagine a claim for a car with a certain specific kind of engine. A company which makes the engine and installs it in the car has made the claimed product. But what about an individual who did nothing more than put the wheels on the chassis (assuming wheels are not mentioned in the claim) or the fabric in the seats? Are those acts of manufacture of the claimed product? I will address this in more detail if I need to.

My findings

53. I will deal with the issues in roughly chronological order as follows:-

i) Early days: 2006 until Feb 2007

ii) The Trilogix installation: Feb 2007 until 3/4^th June 2007

iii) The Trilogix demonstrations from June 2007

iv) David Dutton becoming a director of Activ8: 26^th July 2007

v) Trilogix after 26^th July 2007

vi) Waterside

vii) Glass Page.

viii) The website

i) Early days: 2006 until Feb 2007

54. In 2004 Musion installed two Pepper's Ghost displays at Dynamic Attraction's Waterside theatre. These were Eyeliner systems (i.e. horizontal). In 2005 David Dutton started working for Musion under contract. He had expertise designing image projection systems. The second defendant C2R was used as a vehicle for his work. His role at Musion was "technical director". He was not a company director.
55. At the end of 2005 Simon Humphreys too began working for Musion under contract. His main role was to generate sales.
56. An email of 4^th July 2006 shows Simon Humphreys and David Dutton (then both working for Musion) coming in contact with Trilogix. Trilogix make motion simulation capsules of the kind seen at theme parks (for example). The capsules have seats inside and a screen at one end. The audience sitting in the seats feel as if they are moving when of course the capsule stays where it is. The owner of Trilogix was Vik Tara and a director of that company was Raj Balasundaram. Mr Balasundaram visited Musion at Simon Humphreys's invitation. Trilogix proposed to launch a 14 seater motion simulation capsule with a 67 inch rear projections screen and wanted to work with Musion on it. Musion were not interested but Simon Humphreys clearly was. An email dated 1^st August 2006 from Simon Humphreys to Ian O'Connell and James Rock (another Musion director) describes the idea in enthusiastic terms, mentions the costs and says:

Lets not let this opportunity slip without really considering it. We always wanted a state-of-the-art demo studio and this is peanuts in the grand scheme of things. [D1/28]

57. Also in 2006 Simon Humphreys and Paul Andrews (who had worked on Musion's website with Simon Humphreys) were discussing a much smaller holographic display system as compared to the ones sold by Musion. They would be 2m x 0.7m x 0.7m and Simon Humphreys called them holopods. Musion were not interested. As Simon Humphreys was not working full time for Musion he had time to develop Holopods and in October 2006 Activ8 had been incorporated for that purpose. The directors at that stage were Simon Humphreys, Paul Andrews and Raj Balasundaram (who remained a director of Trilogix too). Raj Balasundaram said that he could arrange for holopods to be built in India.
58. Mr Dutton says that in November 2006 he was invited to "join" Activ8 after they had developed two prototype holopods which "still had optical issues". David Dutton did not become a director of Activ8 until later but I find that David Dutton did start working with Activ8 in late 2006 at least in relation to holopods.
59. In February 2007 the relationship between Musion and Simon Humphreys' ended acrimoniously, leading to a case in the Central London County Court heard in 2008.
60. Also in February 2007 Activ8's first holopod system was built in India. At about the same time discussions took place between (at least) Simon Humphreys and Vik Tara of Trilogix regarding the possibility of Trilogix investing in Activ8 by funding the cost of building demonstration holopods in return for 10% of the shares in Activ8.

ii) The Trilogix installation: Feb 2007 until 3/4^th June 2007

61. The events of Feb/March 2007 through until about July/August 2007 are crucial to the various "Trilogix" allegations. What is common ground is that (a) at some stage Trilogix wanted to build a large scale Pepper's Ghost system which could be used in conjunction with their motion simulation technology and (b) by early June 2007 (the first "client demo" was on the 13^th June) the various items had been installed and were usable for demonstrations at the Trilogix premises near Leamington Spa. They included a large scale Pepper's Ghost image projection apparatus but they also included a holopod. (It was not clear whether it was disputed or not that there was also a holopod at Trilogix premises but the evidence was clear that there was and I so find.) The holopod does not infringe but Musion contends that the large apparatus at Trilogix does (or did). Whether it does or not is a matter for trial. Simon Humphreys says the large apparatus was installed for Trilogix by David Dutton through his company C2R. David Dutton said it was built by Activ8 at cost for Trilogix. That is the first major issue to be decided: who manufactured, offered to supply and supplied the Trilogix large scale Pepper's Ghost system?
62. In summary Simon Humphreys position is:

i) The project as a whole was a three-way collaboration between Trilogix, Activ8 and C2R/David Dutton.

ii) Activ8's involvement was as regards the holopods. David Dutton's involvement with Activ8 at that time was limited to holopods.

iii) The large system was designed by David Dutton and he led the installation work.

iv) C2R charged Trilogix for the design and installation of the large apparatus. In that regard David Dutton's work was done via C2R.

v) David Dutton only became a director of Activ8 on 26^th July 2007, replacing Raj Balasundaram.

vi) Although Simon Humphreys and Paul Andrews were present when the large installation was being installed at Trilogix, essentially all Simon Humphreys did was make the tea and a little stapling of cloth. All Paul Andrews did was stapling cloth too. That involvement does not amount to a material contribution to manufacturing the apparatus.

63. In summary the position of Musion and David Dutton is:

i) It was really a two-way collaboration between Trilogix and Activ8.

ii) Activ8's involvement was in relation to both the large apparatus and the holopods.

iii) The large system was indeed designed by David Dutton although there was some input from Simon Humphreys. As far as installation is concerned David Dutton's actions were carried out on behalf of Activ8.

iv) C2R's name is on the invoices to Trilogix but they were not for design and installation, they were just for the cost of the equipment. The costs were charged to Trilogix via C2R because C2R bought the goods because it was registered for VAT whereas Activ8 was not. David Dutton's design and installation work was not charged to Trilogix.

v) David Dutton was working with and for Activ8 the whole time albeit he only became a director on 26^th July 2007, replacing Raj Balasundaram.

vi) Simon Humphreys only made the tea at the time of installation because he had broken his arm. He did what he was able to do. Activ8 did manufacture the large apparatus.

64. For the relevant period (Feb-June 2007) there are only a few contemporaneous documents. Musion submitted that this was primarily due to a failure to give proper disclosure by Activ8 and Simon Humphreys but Simon Humphreys did not accept that, and explained there had been problems with computers and the like. Musion's submission on this was in effect that the explanation was incredible but I cannot resolve that.
65. David Dutton was the source of a number of the relevant documents. David Dutton's approach to disclosure was unsatisfactory in that plainly relevant documents were produced very shortly before trial and indeed were being produced during the trial.

The documents and other sources:

66. First, minutes of an Activ8 meeting dated 27^th March 2007 are available. At the meeting were Simon Humphreys, David Dutton and Deepak Chandrababu. (Deepak Chandrababu worked for Trilogix.) Recorded as not present were Paul Andrews, Raj Balasundaram and Vik Tara. The minutes refer to version 3 of the holopods, patents (including mention of Musion), obtaining foil, compliance by the pods with health and safety regulations, equity in Activ8 and the supply of foil to the NSC. The minutes state that Simon Humphreys "agreed that DD would be offered equity in the business as (sic) would become the 4^th partner and join SDH, PA and Trilogix". This minute reflects the close relationship which then existed between Activ8 (including Simon Humphreys and Paul Andrews), Trilogix (including the individuals associated with that company) and David Dutton. Mr Humphreys said that at the time of this minute Trilogix were going to invest in Activ8 and Activ8 were going to use that money to build holopods, but that never happened. He said all it amounted to was friends working together. Activ8 had their holopods and were making those. Trilogix were making a large system, and David Dutton was a freelancer. David Dutton says that his design work in the large system was done on behalf of Activ8.
67. There is however no mention of large scale Pepper's Ghost systems in these minutes. That seems to be a strange omission if the large scale Pepper's Ghost system was specifically an Activ8 project. In my judgment the minutes support Simon Humphreys.
68. Second, on 29^th March 2007 an email chain starts with David Dutton contacting a company in Hong Kong as a source of foil. The email is clearly from David Dutton at C2R Ltd, Waterside Theatre, Stratford on Avon and uses a [email protected]. The exchange continues until May 2007. The penultimate message from David Dutton to his contact in China copies in [email protected] (i.e. Simon Humphreys).
69. Third, on 23^rd April 2007 there was an exchange of emails [D1/61]. It starts with an email from David Dutton using his C2R email and giving his address as C2R. The subject of the email must have been "Design for demo unit" and it obviously refers to the large scale Pepper's Ghost system to be installed at Trilogix. The message discusses the possible projectors and their costs. From his reply, the email seems to have been sent to Raj Balasundaram at Trilogix, copied to Simon Humphreys and to Deepak Chandrababu at an email address given as [email protected]. Mr Humphreys explained that Deepak Chandrababu never worked for Activ8 but he asserted that this approach to email addresses was not uncommon when a group of freelancers were working together.
70. Mr Dutton said that he tended unintentionally to use his C2R email address and would often forget to use his Activ8 address. He said however that he did use the activ8 address and pointed to emails in 2008. However after July 2007 he was a director of Activ8 and the situation was different. The question at present is about the period before that.
71. Whether individuals used an email address "@c2r.uk.com" or one "@activ8.com" is a matter which cannot bear a great deal of weight but which, in my judgment, it would be wrong to ignore. It is not without significance that in this email exchange David Dutton is clearly operating via C2R Ltd. These emails provide some support for Simon Humphreys.
72. Fourth, in the papers [F/215 or E/110] is a C2R Ltd invoice dated 24^th April 2007 to Trilogix for £26,000 plus £4,550 VAT. On its face the invoice is for "Demo Suite Design and Construction". Mr Dutton's testimony was that the description on this invoice was false. The sum represented only the costs of various items of equipment which could more easily be sourced through C2R because of its trade contacts. He said that no labour was included (expect for a minor point about an electrician). He said that the system was designed by him acting for Activ8. No time for labour spent on the installation was invoiced to Trilogix. He denied that any of his time for design work was included despite the terms of this invoice. In cross-examination Mr Campbell put to Mr Dutton that the invoice truly reflected C2R charging Trilogix for design and construction and that his denial was untrue. Mr Dutton maintained his position and said that the invoice would have been larger if it had included labour. There is an undated spreadsheet list of equipment with costs which are close to the level of the invoice, when VAT is taken into account.
73. The invoice has two aspects, both supportive of Simon Humphreys. The first aspect is the simple point that the invoice is undoubtedly a C2R invoice. Although Musion and David Dutton sought to explain that away as being a convenience, the only evidence I have for that involves preferring David Dutton's testimony to that of Simon Humphreys. In my judgment I am not in a position to do that. I do not trust either of them on this sort of issue. The other aspect is the description on the invoice of what the invoice was for. The description was written by Mr Dutton's partner Kim Clarke. If Mr Dutton's evidence today was to be accepted entirely then the description on the invoice is not just slightly inaccurate, it is wholly false. No plausible reason why such a false invoice should have been prepared was given. When it was put to him that he must be saying that Kim Clarke made up the description, Mr Dutton said "Possibly yes. I really cannot recall".
74. There are other later C2R invoices [F/232 or E/111] including one dated 21^st July 2007 to Trilogix for £3,310.53 plus £579.34 VAT. On its face the invoice is for "Final Balance for Studio Install". Although later in time, the same points arise. They are consistent with the 24^th April invoice.
75. Fifth, there is an email dated 10^th May from David Dutton at C2R Ltd telling Raj at Trilogix that the screen material will probably arrive on 25^th May. It refers to fitting the optics in the weekend of 25^th May. There is no mention of Activ8.
76. The only other contemporaneous documents up to and including the installation are another email chain dating from March 2007 [F/5/1] The messages are entitled "Locomotion visit" and passed between Simon Humphreys and Alex Jeffries on 7^th and 8^th March 2007, copied to various Activ8 email addresses, David Dutton at "@c2r.uk.com" and Vik "@trilogix.co.uk". They do not add anything to the other documents.
77. The installation itself took place in early June 2007. The following points are common ground:

i) David Dutton took the lead on the installation but that labour was provided by other individuals too.

ii) Simon Humphreys and Paul Andrews were present and so were Raj Balasundaram and Deepak Chandrababu. There may have been more Trilogix staff too.

iii) Simon Humphreys had had surgery and could do very little physical work. Whether he just made the tea (his version) or did some light stapling (David Dutton's evidence) was disputed. Paul Andrews did carry out stapling work putting up the back cloth.

78. The two minor factual disputes were about what Simon Humphreys and Paul Andrews actually did. On this point I found David Dutton's evidence about what Simon Humphreys did rather more convincing than Simon Humphreys' denial and so I find as a fact that Simon Humphreys did do some light stapling as well as making the tea. As for Paul Andrews, Mr Campbell was right in my judgment that David Dutton's evidence about Paul Andrews' role magnified from his witness statement (in which he was merely mentioned in a list) to his position in cross-examination (when he asserted that Paul Andrews did a lot of woodwork). I found that less convincing. It is clear that Paul Andrews was present and did some work but in my judgment the amount of work was small.
79. On 3^rd or 4^th June Sylvie Garat of Musion visited the Trilogix premises and saw what was there. She gave two witness statements and they were not cross-examined to. Accordingly she is a witness on whom I can place reliance. The visit occurred because she was working on an installation for a client and David Dutton was also working on that same installation. He offered to take her to "his and Simon's office" where they were setting up a Pepper's Ghost installation". Her evidence is:

i) She was taken to the Trilogix premises, She met Raj "who represented Trilogix". As well as David Dutton, Simon Humphreys, Paul Andrews and a technician were present.

ii) There were no company logos at the premises. There was no mention of the name Activ8. "The way David Dutton talked about the offices gave [her] the impression that it was a new venture between him and Simon Humphreys".

iii) The installation was not complete when she saw it. There was no foil and no projector. It was a large scale Eyeliner type system.

iv) Afterwards Sylvie Garat, Simon Humphreys and David Dutton went to a bar. Simon Humphreys did most of the talking. David Dutton was always much quieter. Simon Humphreys gave [her] the impression that both he and David Dutton were heavily involved in the new venture. Simon Humphreys offered Ms Garat a job in the new business, which was going to compete with Musion. She declined.

v) Sylvie Garat does not remember seeing a holopod at Trilogix nor does she recall any reference to it.

vi) Her recollection is that Simon Humphreys and David Dutton used language to refer to "our thing" and "we will". Her impression was that it was a joint project.

80. Although there was no foil at the time Sylvie Garat visited the installation, it is clear the foil arrived very shortly thereafter because the first client demonstration took place on 13^th June. Although largely common ground by the end of the hearing I should record that I find as a fact that a large scale Pepper's Ghost system, not in accordance with the Baker Botts drawing, was complete and operational at Trilogix sometime between 3^rd and 13^th June 2007.
81. It is perfectly plain that all the individuals concerned were all working together to a degree, but on what terms? Was it a two way collaboration between just Activ8 (including David Dutton on its behalf) and Trilogix or was it a three way collaboration between Trilogix, Activ8 and David Dutton/C2R?
82. One difficulty is that so many of the individuals had multiple capacities in which they could have been operating. Although Simon Humphreys and Paul Andrews both only worked on behalf of Activ8, everyone else wore at least two "hats". Raj Balasundaram and Deepak Chandrababu were Trilogix people (and David Dutton's evidence attributes Deepak Chandrababu's presence to Trilogix [Dutton I para 16]) but both had Activ8 email addresses and Raj Balasundaram was a director of Activ8 too. David Dutton had been using C2R as a vehicle to invoice for his consultancy work for Musion in the past, was using a C2R email address and was corresponding with third parties giving his address and capacity as C2R. Simon Humphreys says the only work David Dutton did at the early stages related to holopods. David Dutton agrees he worked on holopods for Activ8 but says that all his work on the large system for Trilogix was on behalf of Activ8.
83. In early June 2007, just as the installation was completed Simon Humphreys sent an email to a potential client in Holland called Dirk Henst. This exchange forms part of the background to the Vision Impossible demonstration dealt with below. In the email (dated 9^th June) Simon Humphreys says "Spent the last 5 days working flat out, from 8am thru 10pm fitting out the demo studio, which is looking very impressive I must say". Mr Miller put this to Simon Humphreys on the basis that it showed he personally had worked flat out to fit out the studio. Simon Humphreys referred to his surgery and the small amount of work he said he and Paul Andrews did. In my judgment the email was an example of salesman's exaggeration by Simon Humphreys and does not contradict the clear evidence from elsewhere as to the nature of the work Simon Humphreys and Paul Andrews in particular were doing. It does clearly show however that at that stage Simon Humphreys regarded the installation as a venture he was part of. It does not distinguish between the installation being a joint undertaking in which Activ8 participated and an act of Activ8 itself.
84. Overall, the position based on the contemporaneous documents is more consistent with the idea that, from the point of view of design and supply of the apparatus to Trilogix, David Dutton's capacity was independent of Activ8. Trilogix were paying C2R and David Dutton for the apparatus. Simon Humphreys and Activ8 were obviously helping but there is no solid evidence I have been shown that Trilogix were being supplied by Activ8. The documentary evidence suggests Trilogix were being supplied by David Dutton/C2R.
85. Up to this point in time the evidence from the documents is really all one way. David Dutton was not working on behalf of Activ8 in relation to the large scale Pepper's Ghost system, he was working on his own behalf. Sylvie Garat's evidence is not capable of distinguishing between a two way collaboration and a three way collaboration. The fact that Simon Humphreys and David Dutton were working with each other (they clearly were) does not resolve the matter of whether David Dutton was working on behalf of Activ8.
86. An important piece of evidence is to be found in the witness statement of Ian O'Connell. Mr O'Connell explained that in October 2007 he visited Trilogix, saw the installation and met Raj Balasundaram. By that time Raj Balasundaram was no longer a director of Activ8 and was firmly in the Trilogix camp. Mr O'Connell's evidence of the conversation he had with Raj Balasundaram was that:

"34. I was told by Rajan Balasundaram that the installation had been carried out by David Dutton and invoiced by C2R with Simon Humphreys active help and involvement, paid for by Trilogix, though he would not tell me the amount Trilogix had paid.

35. Rajan Balasundaram also told me that Activ8 (including David Dutton) had used the installation to demonstrate its capabilities to potential clients. Simon Humphreys would attend the demos equipped with [a High Definition media player] […]"

87. In cross-examination Mr O'Connell reinforced the distinction between installation or manufacture on the one hand and use or demonstration on the other. He maintained that Raj Balasundaram had told him Activ8 had used the suite for demonstrations, saying that Raj Balasundaram "had been very specific about that". However in my judgment Mr O'Connell took care in his oral evidence not to suggest that Raj Balasundaram had reported to him that Activ8 or Simon Humphreys had anything to do with manufacture of the apparatus.
88. In my judgment what Raj Balasundaram told Ian O'Connell is what Ian O' Connell set out in his witness statement and that fits with the contemporaneous documents:

i) Although Simon Humphreys helped and was involved, the manufacture and installation was carried out by David Dutton and invoiced by C2R.

ii) However the installation was used to demonstrate its capabilities to clients by Activ8 (including David Dutton).

89. In March 2008 – well after the event – there was an email from Simon Humphreys to Raj Balasundaram which arose in circumstances in which it was clear that the old relationship with Trilogix had broken down. The email is copied to David Dutton. Paul [Andrews] and Kim Clarke. The relevant part reads:-

1. Trilogix studio

We built this studio for Trilogix at cost with no profit, we sold everything to you at cost only, and David still has an invoice unpaid for £6,000 (ish not sure the exact figure) The agreement was that we could therefore use the studio for our own personal client demos at no cost to us, which you have honoured so far, so thank you for this. We do also have David's theatre too for demos.

90. David Dutton and Musion rely on this email as supporting their case that the installation was done by Activ8. While that is one way of reading the email, in my judgment it is also consistent with what Raj Balasundaram told Ian O'Connell 6 months before.
91. I should also note that much time was taken at trial with the question of whether the word "studio" such as in this email meant the large scale Pepper's Ghost system itself or meant the whole set up at Trilogix which included a large scale Pepper's Ghost system and a holopod. Musion appeared to be contending at one stage that "studio" meant and could only ever mean the large scale Pepper's Ghost system. However it is clear from the documents that the expression has been used in both senses and accordingly care needs to be taken with the argument. In this particular case in my judgment the studio being referred to is indeed the large scale Pepper's Ghost system because the holopod was not sold to Trilogix.
92. I heard evidence from Mr Small who visited the installation at Trilogix on 19^th July (which is a little after the period in question). He thought David Dutton's new company was Trilogix although Mr Miller submitted he was plainly confused and in fact his evidence supports the case that Activ8 installed the system. Mr Small was clearly giving fair and proper evidence but I did not find it of significant assistance in relation to the issues I have to decide.
93. Having considered the other evidence, I now turn to consider what David Dutton and Simon Humphreys say. In summary David Dutton's testimony is that Activ8 built the large scale Pepper's Ghost system for Trilogix. David Dutton was unshaken on this point in cross-examination. I note however that David Dutton's Amended Defence went to the trouble of withdrawing an allegation that Activ8 supplied the system to Trilogix albeit maintaining a case that Activ8 installed it. That was not a distinction David Dutton maintained clearly in cross-examination.
94. Simon Humphreys' testimony is that the system was supplied and installed by David Dutton through his company C2R. In cross-examination Simon Humphreys was unshaken in his evidence too. However what Simon Humphreys did make clear on cross-examination was that in the period from the minutes of the Activ8 board meeting in April until David Dutton became a director of Activ8, "he [David Dutton] was working with us the same as Trilogix were working with us and it was friends working together". Simon Humphreys maintained that the actors (himself, Activ8, Trilogix and David Dutton) were "independent people" but his position was that they were a collection of friends working together on the venture. The venture was to set up a demonstration suite at Trilogix which included a large scale Pepper's Ghost system. He returned to the idea of friends working together a number of times in cross-examination.
95. There was a point taken that if, at that time, David Dutton had taken work on his own behalf on another large scale Pepper's Ghost project for a third party, it would have been a conflict of interest with his duties to Activ8. If Musion are right then that consequence may follow but if they are wrong then it would not. David Dutton was asked about what else he had been doing and that raised arguments about whether the other projects could be explained. I decline to approach the issue this way because it seems to me to be a very second order point.
96. While Simon Humphreys in his testimony denied that David Dutton was working on behalf of Activ8 at this stage, his testimony supports the case that all the relevant people were working together on a joint project with a common purpose.

Conclusions on the Trilogix installation

97. Taking all this evidence into account, my conclusions are as follows:

i) Before 26^th July 2007 David Dutton was neither an employee nor a director of Activ8. David Dutton's position during this phase of design and installation had not been thought through carefully but that does not mean he was really acting on Activ8's behalf.

ii) In early 2007 (and probably in 2006) David Dutton was working for Activ8 in relation to holopods. That is clear but it does not mean he was working for Activ8 on large scale Pepper's Ghost systems.

iii) David Dutton designed the apparatus and I should record that I do not accept David Dutton's evidence that either Simon Humphreys or Paul Andrews had any meaningful design input into the large scale Pepper's Ghost system. Neither of them had any substantial technical experience. David Dutton did not do that design work on Activ8's behalf, he did it on his own behalf (or on behalf of C2R).

iv) The person who "offered to dispose of" the large scale Pepper's Ghost system to Trilogix within the terms of s60(1)(a) of the 1977 Act was David Dutton (and/or C2R), it was not either of the Activ8 defendants.

v) The help and involvement of Simon Humphreys (and I will include Paul Andrews) as far as installation was concerned was the stapling or woodwork carried out by Simon Humphreys and Paul Andrews as well as the tea making. It was a minor and insubstantial contribution to the apparatus itself. This was not sufficient in my judgment to mean that in any meaningful sense the large scale Pepper's Ghost system as a product was actually made by them within the terms of s60(1)(a) of the 1977 Act. I note that there were other individuals involved in the installation too but they were employees of Trilogix. (There is no evidence anything done by Raj Balasundaram at that time was done as a director of Activ8 rather than for Trilogix)

vi) Although Simon Humphreys (and Paul Andrews) helped and were involved, the installation was directed and carried out by David Dutton and invoiced by C2R. I find that David Dutton (and/or C2R) "made" the apparatus within the terms of the 1977 Act.

vii) The large scale Pepper's Ghost system was "disposed of" to Trilogix, within the terms of the 1977 Act, by David Dutton and/or C2R. Although there may have been other factors as well to do with trade contracts and VAT registration, one simple reason why David Dutton's company C2R invoiced Trilogix in relation to the apparatus was because David Dutton was not acting on behalf of Activ8 in that regard. In my judgment the description of the work on the 24^th April invoice was not false, it was an accurate reflection of the basis on which David Dutton was operating at the time.

viii) All of the acts of David Dutton (and/or C2R) which related to the large scale Pepper's Ghost system in this period were carried out pursuant to a common design between David Dutton, Simon Humphreys and Activ8. The object of that collaborative venture was to create a suite at Trilogix premises which included (but was not necessarily limited to) a large scale Pepper's Ghost system in order for it to be used for demonstration purposes to potential customers. In my judgment Trilogix were as much a party to this common design as the others.

ix) I doubt David Dutton was a "partner" in any technical sense but equally I have little doubt that all the relevant individuals were and knew they were working together towards the common goal I have mentioned. The joint efforts were as much for the Activ8 defendants' benefit as for the benefit of Trilogix and David Dutton.

x) The idea that the installation of the large scale Pepper's Ghost system was installed independently of Activ 8 / Simon Humphreys makes no sense on the evidence and I reject it. Simon Humphreys's testimony that they were all friends working together is strongly supportive of the existence of the common design. The direct assistance Simon Humphreys (and Paul Andrews on Activ8's behalf) gave at the installation itself made the installation their own as much as if they had built every last piece. In my judgment Simon Humphreys and Paul Andrews did as much as they were capable of in the circumstances. The reason Simon Humphreys did not do much physical work was not because he did not want to and not because it was not his project, it was simply because had had surgery.

98. In summary, the large scale Pepper's Ghost system at Trilogix was offered for disposal, disposed of and made by David Dutton (and/or C2R). There is no finding that that system infringes a valid patent claim, however if it does, then in my judgment the Activ8 defendants would be liable as joint tortfeasors for all of those acts.

iii) The Trilogix demonstrations from June 2007

99. In the period between its installation and David Dutton becoming a director of Activ8 on 26^th July 2007 a number of demonstrations of the large scale Pepper's Ghost system at Trilogix took place: The relevance of such demonstrations is that they are pleaded as "offers for disposal" of a system of the same kind in all relevant respects as the apparatus at Trilogix. The issues are (a) who did so? and (b) were they "offers for disposal"?
100. The demonstrations are:

i) On 3^rd or 4^th June Sylvie Garat visited Trilogix and was shown what was going on by Simon Humphreys and David Dutton. Since she was not a potential customer this demonstration could never be an "offer for disposal" on any view.

ii) On 13^th June the large scale Pepper's Ghost system was demonstrated to Martijn Adema of Vision Impossible.

iii) On 13^th July there was to be a visit by TRI Technology but it did not go ahead in the end.

iv) On 19^th July there was a demonstration to David Small. He was not a potential customer, he was really just a friend of David Dutton's. The best that could be said was that he was someone who might have been able to provide sales leads. I find that this demonstration was essentially showing a product to a friend and was not an "offer for disposal".

101. Thus the only demonstration which could be an "offer for disposal" is the one to Vision Impossible. The other events play a role in the case in setting the context.
102. The key evidence relating to the Vision Impossible visit on 13^th June is an email from Simon Humphreys to David Dutton, Paul Andrews, Raj Balasundaram, Deepak Chandrababu and Vik Tara dated 10 June 2007, as follows:

Fellas

It is all go Weds am, our first client demo. […]

They are a Dutch company, who produce and manage large rave events on Europe. I have met this guy before at Musion and they are hot to trot and have 8 events organised for Jan/Feb 2007. (sic)

Paul – How's the content/encoding coming along?

David – We only have you available on Monday, so I guess everything must work and run smoothly by the end of Monday. It would be good to have you on Wednesday please too for this 1^st demo.

Deepak – Can you organise on Weds am, some sandwiches/drinks for these clients please? We also really need:

1. Cutlery, knifes, forks, spoons (inc tea spoons)

[…]

9. Box of nice biscuits

Everybody – Please make yourselves available in the demo studio all day Monday, as we will have a great deal to do.

Lets rock and roll everybody, and seriously impress our first client.

Warm regards

Simon

103. It is clear the demonstration took place as planned on 13^th June 2007. It was attended by Dirk [Henst], Robin [] and Martijn Adema. Mr Adema provided a short witness statement on the point served under a hearsay notice. His statement states that "what Activ8 showed us was a 3D holographic display, involving a stage set up and a projector. What we were shown was quite large – it was not a television sized display". I find as a fact that the demonstration included the large scale Pepper's Ghost system. David Dutton did not remember the demonstration very well, all he remembered was looking over the shoulder of Raj Balasundaram who was operating the media. I find as a fact that the system was operated by Raj Balasundaram.
104. In his oral evidence in chief Simon Humphreys said the demonstration was given by Trilogix, meaning by that Trilogix and therefore nothing to do with Activ8. That is plainly wrong. Trilogix were involved without doubt but so were Simon Humphreys, Paul Andrews and David Dutton. On any view it seems to me that this demonstration was conducted as part of a joint venture between at least Trilogix and Activ8. That joint venture was the fulfilment of the earlier work installing the large system (and the holopod) at Trilogix. The common purpose of all of this was to demonstrate all the technology which had been installed, including the large scale Pepper's Ghost system, to potential clients in general.
105. In cross-examination Simon Humphreys accepted that the email of 10^th June was talking about Activ8's first client but he took pains to say that it was also Trilogix's first client demo. However Simon Humphreys point was that Activ8's only interest at this stage was in the holopod which was also at Trilogix. He pointed out that the only people who could operate the large scale Pepper's Ghost system to demonstrate it were Raj Balasundaram or David Dutton but he could not remember which of them did so.
106. After the demonstration Simon Humphreys sent an email to Dirk Henst thanking him for coming and asking for feedback. From his reply it is clear that Dirck Henst thought the demonstration had not been terribly impressive. Although Simon Humphreys's initial email refers to holopod aesthetics, it is also clear from the reference in Dirk Henst's reply to spot lights that the demonstration included the large scale Pepper's Ghost system. In response Simon Humphreys thanked Dirk Henst for his feedback and referred to "our first client visit".
107. The question is whether the demonstration of the large scale Pepper's Ghost system was by or on behalf of Activ8. I find that it was. That is the only thing which makes sense of the documents. Simon Humphreys was clearly the contact with the clients. He was conducting the dialogue with Dirk Henst. I also bear in mind and place reliance on what Raj Balasundaram told Ian O'Connell in October 2007. Finally I accept David Dutton's evidence that the system was being operated by Raj Balasundaram. It will be recalled that at that time Raj Balasundaram was a director of Activ8 and Trilogix. I find that Activ8 had used the installation as a whole and including the large scale Pepper's Ghost system to demonstrate its capabilities to potential clients.
108. What was the role of David Dutton at this stage? David Dutton's evidence was that all this work was done on behalf of Activ8. Simon Humphreys's evidence was to the contrary. The question seems to me to be whether the dividing line as regards David Dutton's action on behalf of Activ8 should be taken as the point at which he became a director (on 26^th July) or the point at which the installation was finished and the demonstrations began. Although it might be neater to say that David Dutton only started acting on Activ8's behalf once he became a director, in my judgment the better view of the documents is that the real dividing line as far as the people working at the time were concerned was between installation and demonstration.
109. There is no documentary evidence whatever to support a suggestion that the clients were potential clients of David Dutton's (or of C2R) so the only possible candidates would be Trilogix and Activ8. The point of the involvement of Trilogix was because they wanted to demonstrate their capabilities with regard to motion simulation. From the point of view of the Pepper's Ghost system, the potential client was a potential client of Activ8 and thus in my judgment David Dutton was acting on Activ8's behalf at this demonstration. I also rely again on what Raj Balasundaram told Ian O'Connell in October 2007, that the system was "used by Activ8 (including David Dutton)". Finally I note that the 10^th June email is addressed to [email protected] rather than using David Dutton's C2R email address.
110. Applying Gerber, the demonstration of the large scale Pepper's Ghost system at Trilogix was an offer for disposal. The system offered was one in the form of the installation at Trilogix. There is no suggestion that at that stage customers were being offered anything other than a system in that form. That apparatus was not in accordance with the Baker Botts drawing. In my judgment the preliminary issue does not require me to go further and decide exactly what form that system took and I decline to do so.

iv) David Dutton becoming a director of Activ8: 26^th July 2007

111. There is no doubt that on 26^th July 2007 David Dutton became a director of Activ8. At the point (or thereabouts) Raj Balasundaram ceased to be a director. From then on David Dutton's status with respect to Activ8 becomes clear. The question of his own liability as a result of that status for acts he did not personally carry out does not arise on the preliminary issue.
112. There was a reference in the witness statements of David Dutton and Simon Humphreys to an email exchange on 6^th / 7^th August 2007 between David Dutton and Mike Bell of Clever Works in relation to a proposed installation at the O2 arena. Mike Bell emailed David Dutton on 6^th August (at his C2R email address) seeking a screen for a Pepper's Ghost effect to be supplied. David Dutton replied with various questions, copying the reply to Simon Humphreys (at his Activ8 email address). David Dutton explained that this was a large scale horizontal system and showed that C2R had ceased that activity because it would be a conflict of interest with Activ8. Simon Humphreys points to this as an example of C2R still actively trading in relation to large scale Pepper's Ghost systems. David Dutton denied that, pointing to the fact he had copied in the reply to Simon Humphreys. The issue was not developed in cross-examination but for what it is worth I prefer the evidence of David Dutton on this point. By August 2007 it makes more sense of the evidence as a whole if David Dutton is now, without question, acting for Activ8 in relation to large scale Pepper's Ghost systems.

v) Trilogix after 26^th July 2007

113. The only evidence of another demonstration of the apparatus at Trilogix which has been drawn to my attention relates to Christian Morris in March / May 2008. Before turning to that question I will briefly deal with the interim.
114. August 2007 appears to be the time at which the Musion patent first came to the attention of the defendants (and Trilogix) and in October 2007 Ian O'Connell of Musion visited the premises and spoke to Raj Balasundaram.
115. In February 2008 Simon Humphreys' claim against Musion relating to his dismissal was heard in the Central London County Court. There were a number of disputes about this but in my judgment the disputes are peripheral and I decline to deal with them.
116. Throughout the period there were discussions involving Trilogix about the way forward. In March 2008 Raj Balasundaram sent an email to Simon Humphreys saying that Vik Tara had asked him to close down the demonstration unit. Trilogix felt they had put substantial sums into the venture "without any light in sight". It was this email to which Simon Humphreys was responding on 6^th March to which I have referred above.

vi) Christian Morris

117. Christian Morris was a potential investor in Activ8 who might then operate a US sales office for the company. There is no dispute that he visited the UK twice – once on 17th March and once in May 2008. The dispute is as to what he was shown. Musion's case is that he was given a demonstration of the large scale Pepper's Ghost system at Trilogix. This case is based on the evidence of Christian Morris himself. However Simon Humphreys is adamant that Mr Morris was not shown the Trilogix unit. For various reasons it is unlikely that such a demonstration would have been on the second visit and so everything turns on the first visit. I should record that David Dutton's position was that he was not involved heavily in the first visit and has no relevant evidence to give.
118. As before I will consider all the other evidence first before Simon Humphreys' testimony. The points are as follows.
119. First, there is an email from Raj Balasundaram to Simon Humphreys in March 2008 which shows that Trilogix wanted to close down the demo studio. So the Activ8 defendants contend that a demonstration of the large system would have been awkward. That is a fair point as far as it goes but there is no suggestion the system was not still in place and available for use at that time.
120. Second, after the first visit Mr Morris sent an email to Don Andrews of a third party called Bessemer. The Activ8 defendants contend that it merely enthuses about the holopod, so that must be all that was seen on that occasion. However the email mentions holopods by stating that Activ8's technology includes a stand alone version (i.e. the holopod). I do not read the email as saying that the holopod is all that Activ8 had or all that Christian Morris saw.
121. Third a draft business plan produced at the time stresses holopods and small scale Pepper's Ghost systems, not the large scale Pepper's Ghost systems in question. This was prepared by Christian Morris (from earlier documents produced by David Dutton and Simon Humphreys) and a copy was attached to an email dated 6^th May 2008 to his partner Mike Dowling. It does indeed lay some stress on holopods but it never says in terms that that is the only product in question. Indeed the plan also refers to two further products: "Proprietary 3D Holo Film" and a "tensioning clip system". There is no reason I have been given as to why these two things should be limited to use in holopods.
122. Moreover the draft business plan needs to be seen in context. It is clear on the evidence that holopods were a key business of Activ8 but it is also clear that by March 2008 Activ8's interest in larger system was increasing. One of the prior messages to Christian Morris was an email on 10^th April 2008 from David Dutton (now clearly acting on behalf of Activ8). It encloses a 6 page document setting out the history of Activ8, reviewing the technology and the patent position and the management team (David Dutton, Paul Andrews, Simon Humphreys and Kim Clarke). This document mentions small scale Pepper's Ghost systems but also large scale systems, which are clearly not holopods. In cross-examination Simon Humphreys accepted that this showed that by April 2008 Activ8 were getting interested in large systems.
123. However it is not sufficient to refer to a system as being large in order to determine whether it is infringing or not. Simon Humphreys maintained that the large scale systems referred to were limited to vertical type large systems, i.e. systems in accordance with the Baker Botts drawing. However the document is not so limited. The document refers to compact peppers ghost systems as being systems which can be provided without fear of "prosecution" by Musion. That is a reference to vertical type systems of a kind which do not infringe the Musion patent in this case. The document then goes on to refer to "large format peppers ghost installations" and in that context makes the point that although Musion could attempt to prosecute the patent on such systems the patent is limited to the UK and Australia and the strong prior art evidence would make it hard for Musion to win. Whether Activ8's assessment of the strength of the patent is right or not is not the point. The point is that this is evidence that Activ8 were interested in large scale Pepper's Ghost systems, not made as per the Baker Botts drawing. If the large systems had been as per the Baker Botts drawing then the Musion patent would have been irrelevant.
124. Fourth I come to the evidence of Christian Morris. Mr Campbell submitted that Mr Morris only had a hazy recollection of events from that time and that his recollection was flawed in at least one respect. I have dealt with that above. Although Christian Morris' recollection on the significance of holopods was not accurate, what was clear in cross-examination was that he remembered going to an off-site warehouse facility on his first trip. He said it was the thing that actually everybody had been excited for him to see. It was plainly Trilogix premises. I find as a fact that Mr Morris did so. If he did then there is no plausible reason why he would not have been shown the large scale Pepper's Ghost system. I doubt a demonstration of it would have been awkward but even if it was that does not make it impossible. It is clear that Christian Morris was interested in holopods but there is no evidence he was interested only in holopods. Furthermore the planned itinerary (part of an email on 10^th March) refers to "Demo studio in Warwick (large holograms)". (That is plainly a reference to Trilogix.) Although Mr Campbell rightly points out that the planned itinerary also proposed a visit to Cadburys World earlier on the same day which it is common ground did not take place, in my judgment the itinerary supports Musion's case. The parties clearly contemplated in advance that Christian Morris would be shown the large holograms at Trilogix. There is no reason for them not to have done so save the weak point that Trilogix were threatening to close the unit.
125. Simon Humphreys denied that Christian Morris had been shown the large scale Pepper's Ghost system at Trilogix. I do not accept that denial. Contrary to Simon Humphreys evidence, I find as a fact that Christian Morris was indeed shown the large scale Pepper's Ghost system at Trilogix on the first visit in March 2008.
126. However just because he was shown the equipment does not necessarily carry with it a conclusion that a system was offered for disposal. Christian Morris was not a potential user of such systems. The point of the visit was about investment into the Activ8 business. Christian Morris was a potential investor or someone who, it was hoped, would be able to introduce investors into the business. That is why the parties were preparing a business plan. The demonstrations all took place in that context.
127. In Gerber Jacob J referred to a person approaching potential customers and although investment was the primary purpose of meeting, part of the plan was for Christian Morris to become the US distributor of Activ8 products. Is that sufficient to make this demonstration an offer for disposal within the terms of the 1977 Act? In my judgment the answer is no. It is not a fair summary of the position to say that Christian Morris was a potential customer. Moreover there is no evidence the discussions ever got down to any level of detail in that respect. It is not accurate to describe the meeting as one in which Activ8 were offering a specific product to Christian Morris at all. The correct characterisation of this episode is that Activ8 was showing him its capabilities in general. I do not think it is accurate to describe this as putting the apparatus on the market. In terms of a market, these were discussions at the pre-market stage.

vii) Waterside

128. The Waterside theatre in Stratford on Avon had one (or two) of Musion's Eye-liner systems on the premises and it is not (now) in dispute that the Activ8 defendants used it to demonstrate Musion's image projection apparatus and "to illustrate the technology of image projection apparatus systems generally" (see the Activ8 defendants' Amended Defence paragraph 7(g)). The issue to be decided is whether the Activ8 defendants have offered to supply customers with an image projection apparatus of the type installed at Waterside. Simon Humphreys evidence was that he had used the Musion system for demonstrations about 10 times but had always made it clear to potential customers that the actual system Activ8 was offering was different and he always intended to supply a system as per the Baker Botts drawing if it was going to be supplied in the UK. David Dutton's evidence is that he also made it clear when using this system for demonstrations that Activ8's system to be supplied was different from Musion's but there is a vital difference between Simon Humphreys and David Dutton on this. The distinction David Dutton relies on relates to a point about clamps. The C2R defendants' case at trial will be that this clamping point means their system does not infringe.
129. Just as Lord Macnaghten said "thirsty folk want beer not explanations" to make the point that customers are likely to be indifferent to the details if they get what they want or something like it (Montgomery v Thompson "Stone Ales" (1891) 8 RPC 361 at 368 ln34), so here one might think that the suggestion that customers shown the Waterside apparatus did anything other than assume they were being offered that very thing, would be inherently unlikely. If things were as simple as that I would have grave doubt about Simon Humphreys' position.
130. While instinctively it seems surprising that customers were being told that the system offered was not the one being displayed, that is exactly what David Dutton says as well. He gives an example of a demonstration to Robert Winslow of York Theatre but nothing came of that. Although of course David Dutton is a personal defendant and will give evidence against Musion at trial, on this occasion he is a witness for Musion. Accordingly Musion's own witness at this stage undermines what might otherwise have been the straightforward point that customers were simply being offered the system as shown.
131. Indeed it is clear that within Activ8 the key individuals (Simon Humphreys and David Dutton) had been well aware of Musion's patent since it was drawn to their attention in the summer of 2007 and had been taking it into account in all their dealings afterwards. I find as a fact that at the demonstrations customers were being told that the system offered would differ (at least if it was for the UK). In my judgment I do not have the evidence to safely conclude that in the particular circumstances of this case, merely demonstrating the Musion system to potential customers can be taken as an offer for disposal of a system constructed in that manner. More detail is required.
132. The issue is then whether a particular configuration was being offered on any given occasion and if so which? Was it the Baker Botts drawing system (for UK customers), as Simon Humphreys contends, or the special clamping system not as per the Baker Botts drawing as David Dutton contends?
133. One demonstration was to the Royal Academy of Performing Arts (RAPA). The system installed at RAPA as a result was a vertical system, in accordance with the Baker Botts drawing. Mr Dutton's position was that that was only because it had to be vertical as a result of horizontal space constraints. This led to a short witness statement from Mr Knight, who designed it, stating that the system could have been a horizontal system. Mr Dutton replied that he had done a horizontal design but that had been rejected on space grounds. None of this matters in my judgment. I am not satisfied that what was actually offered to RAPA at any stage was ever anything other than the vertical Baker Botts drawing system.
134. David Dutton refers to an installation for BMW in South Africa. That is an installation not in accordance with the Baker Botts drawing but it is outside the UK and therefore consistent with Simon Humphreys' position that for offers outside the UK, Activ8 were prepared to offered horizontal systems.
135. Finally, David Dutton refers to a demonstration he made to Robert Winslow of the York Theatre. He says he explained to Robert Winslow that the system built by Activ8 would not be the same as the Waterside system. David Dutton states that he did not tell them it would be a system in accordance with the Baker Botts drawing and states that the system would have been his specially clamped but horizontal system. In reply Simon Humphreys is not surprised that David Dutton did not tell Robert Winslow the system would be as per the Baker Botts drawing because customers were not generally interested in how the system differed from Waterside. He challenges David Dutton's statement that the system would have been horizontal saying that Paul Andrews and himself would have been involved in deciding what type of system would have been provided to York Theatre if they had got the contract. In answer David Dutton simply states that a vertical (Baker Botts' drawing) type system would not have met the requirement. The project did not proceed. In my judgment this does not establish an offer for disposal of a non-Baker Botts drawing system. The evidence is that the customer was told the system would be different but there is no evidence the customer was ever offered anything specific.
136. Aside from the testimony, Musion refer to Activ8's website which refers to "our 3D Holographic theatre" based in Stratford on Avon as being available for demonstrations and to the fact that Mr Morris does not remember being told that anything sold to customers would be different. However these are both minor matters in my view.
137. Taking the Waterside issue as a whole, in my judgment there is no sufficiently cogent evidence to allow me to conclude that an actual offer for disposal within the meaning of s60(1)(a) of the 1977 Act took place of a non-Baker Botts drawing system. I decline to do so.

viii) Glass Page.

138. A Pepper's Ghost installation was provided by C2R to Glass Page sometime in 2008. The installation was for London Underground and depicts an image of a tube train. Musion contends this installation infringes, the C2R defendants deny infringement. That question is for the trial. At least one of the issues is, I understand, concerned with the clamps. Although the system was installed by David Dutton's company C2R, the initial discussions were with Activ8 in about June/July 2008. That was because at that stage David Dutton was at Activ8. However on 14^th August 2008 David Dutton was removed as a director of Activ8 and in September Simon Humphreys discovered that David Dutton had taken the project with him.
139. Thus the Particulars of Infringement pleads that Activ8, David Dutton and/or Simon Humphreys offered to supply an image projection apparatus to Glass Page Ltd for the further supply to or use by Transport for London in mid 2008. The Particulars of Infringement then plead that the C2R defendants made, offered to supply and supplied an image projection apparatus to Glass Page in mid 2008.
140. The Activ8 defendants' Defence is that they did not make, offer or supply a system to Glass Page. They contend that to the best of their knowledge, C2R did so. Consistent with this, in their initial Defence dated 18^th December 2009, the C2R defendants' position was: "it is admitted that the Second Defendant offered to supply and supplied image projection apparatus to Glass Page for use by Transport for London Limited in or around August 2008. The First and Fourth Defendants had no involvement in that project." (This is followed by a denial that the apparatus infringes.)
141. On 3^rd November 2010 the C2R defendants' defence was amended in various respects. The second sentence in the paragraph quoted above was amended to read "The First and Fourth Defendants had no involvement in that project." Consistent with this the C2R defendants served a Product and Process Description (PPD) in December 2010 with a statement of truth signed by David Dutton. It is referred to by Ian O'Connell in his witness statement. The PDD states that the system concept was originally designed by David Dutton in his role as a director at Activ8 and refers to an initial costing proposal being sent from Activ8. After David Dutton left Activ8 the client asked C2R to continue the project.
142. Thus, on the pleadings, the C2R defendants' position seems to be now that although Activ8 were involved in the project, Simon Humphreys was not.
143. It is clear from the documents that Activ8 were engaged in active discussions with Glass Page about an image projection installation. The key document is an email dated 4^th July 2008 from David Dutton to Nick Simpson concerning the project. Although Nick Simpson is at an organisation called The Pointy End it is not in dispute that he was acting for or on behalf of Glass Page. The email is copied to Simon Humphreys. It is headed "Quotation for Installation" and discusses pricing and other matters. The total price is said to be £21,525 for the project.
144. Simon Humphreys's interpretation of the email was that David Dutton was not putting forward any specific design. Simon Humphreys' position is that if Activ8 had got the contract – which they clearly hoped to – the system would have been like the RAPA system – i.e. as per the Baker Botts drawing. David Dutton's evidence in reply in his witness statement was that he would have already produced drawings of his intended set up for this project. That is highly likely simply because a business would be foolish to quote for an installation of systems like these without knowing what their configuration would be at least to some degree.
145. In his witness statement David Dutton said he still had an early version of those drawings on his computer (as files in a drawing system called Autocad). Orally in chief Mr Dutton identified such a drawing which I understand had only been produced a few days before the hearing despite the fact the witness statement was signed in January 2011. The drawing in question is of a horizontal system. It is not in dispute that it is not in accordance with the Baker Botts drawing. A point was taken that no such design could have been done at that stage because it was only in August that David Dutton learned the height of the space into which the system was to fit but he denied that. I found David Dutton's point on this convincing for the same reason as I have given before, I cannot imagine a quote being provided without that key parameter having already been determined (at least in broad terms). I accept David Dutton's evidence on that point.
146. In cross-examination Mr Campbell put to David Dutton that he did not claim to have sent the drawing to Glass Page at that stage in the negotiations. David Dutton thought he would have done but did not produce any evidence that he had done so.
147. In cross-examination Mr Miller put the quotation email to Simon Humphreys. He said that it seemed to him on the basis of what he knew now that David Dutton had been doing an awful lot of work on his own unbeknownst to Simon Humphreys or his fellow director Paul Andrews. Simon Humphreys' testimony on this point had the ring of truth about it.
148. Then in the cross-examination Mr Miller sought to introduce a new document and put it to Simon Humphreys. The new document was said to be an email by which David Dutton sent the drawings to Glass Page. David Dutton had produced it after he left the witness box on the previous day. Mr Campbell for the Activ8 defendants objected. I heard the parties and refused to admit the document, with reasons to be given in this judgment. These are those reasons:

i) The overriding objective is to deal with cases justly. This includes ensuring the parties are on an equal footing, saving expense and dealing with the case in ways which are proportionate, ensuring the case is dealt with expeditiously and fairly and allocating an appropriate share of the court's resources to the case.

ii) The main reason I refused to admit the document was its likely effect on the course of the trial. I assumed for that purpose that the document at least on its face showed that David Dutton sent a drawing, of the kind he had already produced, to Glass Page at some point before he left Activ8. I did not look at the document.

iii) David Dutton had referred to the drawings in his witness statement but had not claimed there that he had sent any to Glass Page. His evidence that he thought he had sent them emerged in cross-examination when he was under pressure. The pressure included the point that he had already been asked to disclose the Glass Page emails the previous week and no such email emerged. Accordingly admitting the document was going to inevitably require David Dutton to return to the witness box if only to deal with that. The document was being produced without even a short witness statement from David Dutton explaining the situation.

iv) Moreover Mr Campbell submitted that his clients did not accept the new email document was authentic and that would obviously require David Dutton to be recalled and would be likely to lengthen the proceedings considerably.

v) Had it been admitted dealing with the document would have been likely to lengthen that cross-examination considerably. This court is the Patents County Court. Although this case proceeds under the old rules of procedure, proportionality is always a factor to bear in mind. The preliminary issue occupied three days of court time. A few minutes before the document was introduced I had made clear to Mr Miller that his cross-examination of Simon Humphreys was to be completed by 12:00 noon. That was in accordance with his estimate and was quite sufficient time to put his client's case. Simon Humphreys had not been a prolix witness or slow to respond to questions. Both sides had kept to their estimates, perhaps partly because they understood that I expected them to be adhered to. If the document had been admitted it was in my judgment highly likely that the case would not be completed with speeches that Friday. Three days was entirely sufficient for an issue of this kind.

vi) The possible probative value and potential relevance of the document is clearly an important factor but it cannot be determinative. If I had admitted the document, the costs to the parties would have increased and the time taken up with the case would have increased out of proportion to the issues. The hearing would almost certainly not have finished within its estimated time and would have begun to encroach on other litigants' time. In the circumstances these factors override the possible relevance of the document.

vii) I have not been given an assessment of the value of this case but since it has been proceeding in the Patents County Court I take it that it is an appropriate case to be dealt with here. Even if this document would have put beyond doubt the question of whether the Activ8 defendants had or had not offered a non-Baker Botts system to Glass Page, in my judgment that would still not be a sufficient ground to admit it. The claim form was issued in July 2009. The issue was ordered in July 2010. The hearing took place in March 2011. Half way through the last day of a three day hearing in the Patents County Court on a preliminary issue is too late.

viii) Second, the document clearly ought to have been disclosed well beforehand. The case against the Activ8 defendants had already been a moving target since David Dutton had emerged as a witness prepared to give evidence for Musion. That had led to an adjournment of the hearing. The issues had been developing right up to the start of the hearing. At the outset I had heard and rejected a submission on the Activ8 defendants' behalf that new issues were being unfairly raised. The court always has power to admit late material on good grounds but in my judgment it would not have been fair to Simon Humphreys to admit this material at this stage in these circumstances.

ix) Third, Mr Miller submitted that it was not the fault of his client, Musion, that the document had been produced at this late stage. I accept that to a large extent but not completely. David Dutton is giving evidence for the claimant Musion at this preliminary issue although he is a defendant. Mr Campbell showed me correspondence in which Baker Botts for the Activ8 defendants were pressing Schneider Page (for David Dutton and C2R) for disclosure generally and in particular in relation to Glass Page. This new email was not produced at that (already very late) stage although plainly relevant. Although Musion do not control David Dutton, Mr Miller did not suggest that Musion were pressing David Dutton for confirmation that disclosure had been done properly. That is something they should have done in the circumstances of this case.

x) The main reason is the first one above, which in my judgment is sufficient on its own, but for all these reasons I refused to admit the document.

149. There are emails in September 2008 from Simon Humphreys to Glass Page after David Dutton had left. They show that Glass Page had been intended to be an Activ8 project and that Simon Humphreys thought it was. They are consistent with the idea that, before David Dutton left, Activ8 had been in serious negotiations with Glass Page. In my judgment the email of 4^th July 2008 was or at its lowest evidences an offer by Activ8 to supply Glass Page with something. The question is: what?
150. It is perfectly possible to offer a product for disposal to a customer or potential customer without giving them a drawing. To satisfy the 1977 Act the offer does not need to be an offer capable of contractual acceptance (see Gerber) but to satisfy the Act it must put something specific on the market.
151. Like a made-to-measure suit, the large scale image projection system being offered by Activ8 at time were not sitting on a shelf ready to be taken "off the peg" and handed to a customer. But a tailor can still offer to supply made-to-measure suits even though the particular suit will still have to be made after the contract with a tailor has been entered into.
152. It is always possible that as at July 2008 nothing concrete was being offered and a decision had not been made at Activ8 as to what sort of system Glass Page were being offered. However the drawing David Dutton produced shows in my judgment that what was being offered by David Dutton acting for Activ8 was something specific. It was a horizontal system not in accordance with the Baker Botts' drawing. The fact that Glass Page may well not have known how it was configured is irrelevant.
153. This is a different situation from the one pertaining to the Waterside demonstrations. In this case Glass Page may or may not have known that a system along the lines of David Dutton's drawing was what was on offer, but that does not alter the fact that the drawing depicts the system the quotation was based on and represents the system which was in fact on offer. For the Waterside demonstrations I am not satisfied in any particular case that any particular configuration of non-Baker Botts drawing system was ever offered to a potential client (whether they knew it or not).
154. Accordingly it is not necessary to resolve whether a drawing was sent to Glass Page or not.
155. In August 2008 David Dutton left Activ8 on bad terms. He succeeded in keeping the Glass Page project for himself.
156. Is Simon Humphreys personally liable for this particular act of Activ8? I have yet to deal with that issue directly but it is convenient to address this particular point at this stage. I am struck by David Dutton's Defence and the manner in which it was amended. Initially David Dutton denied that Activ8 and Simon Humphreys had anything to do with Glass page. Then that was changed but only to a case in which Activ8 was involved – because David Dutton was a director. David Dutton's defence still denies that Simon Humphreys was involved. Although it is clear Simon Humphreys was copied in to the 4^th July 2008 email, that does not in my judgment fix him with personal responsibility. Being copied in with such an email is consistent with Simon Humphreys performing no more than his role as a director of what as a small company.
157. In my judgment David Dutton and Simon Humphreys did not altogether agree how best to go about dealing with Musion's patent. Whatever Simon Humphreys thought of David Dutton's clamping system as a way of avoiding infringement, my clear impression was that Simon Humphreys' approach to the Musion patent was not to offer a horizontal system to UK customers. It is not clear when the relationship between David Dutton and Simon Humphreys began to break down and I make no finding on it. By August 2008 David Dutton was clearly working behind Simon Humphreys' back. On the Glass Page issue I accept Simon Humphreys' evidence that he did not know all the details of what David Dutton was doing. Simon Humphreys may well have thought that a vertical Baker Botts drawing system was possible for Glass Page even if, unknown to Simon Humphreys, such a system was unfeasible. I should say that I make no finding whether in fact it was feasible or not. I find that Simon Humphreys is not liable for the acts of Activ8 on Glass Page.

ix) The website

158. I can deal with the Activ8 website shortly. It has gone through a number of iterations but there is no doubt that it includes systems not in accordance with the Baker Botts drawing. One simple example is the reference to the system at the Waterside theatre. The Activ8 defendants main point is that the website does not offer any specific apparatus and no customer would buy a product like this without a demonstration. There was a silly argument in cross-examination about whether website was like the Amazon website ("click to order"). It is not realistic to think that a customer would usually take a large scale Pepper's Ghost system of the kind in question without a demonstration, but in my judgment that is not the issue.
159. In my judgment the website would be taken by potential customers as an advertisement of the same systems which are referred to on the site and for which images (in 2D) are shown. There is no suggestion that the systems might be different in any way. In my judgment the website (in its various forms) advertises non-Baker Botts drawing systems such as the Waterside system itself to potential customers, including in particular potential UK customers. Following Gerber, that amounts to putting such systems on the market and is an act within s60(1)(a) of the 1977 Act.
160. The website operates in a different way from the actual Waterside demonstrations, albeit that it mentions the Waterside theatre installation. That is because on the evidence customers at demonstrations were told the system would be different. No such statement appears on the website.
161. Musion also point to other Musion installations on the website but Simon Humphreys contends that they are simply example of previous work he has been involved in and are unobjectionable. I do not agree. Perhaps if they had a rubric stating that that is what they were but that the systems Activ8 now supply are different, then the point might start to get off the ground, but they do not. As they stand the references to the Musion system are just as objectionable as the reference to the Waterside system.

x) Simon Humphreys personal liability

162. Save for Glass Page, which I have addressed above, I need to address whether Simon Humphreys would be personally liable for the other acts of Activ8 if they are torts. As far as I am aware during the relevant period Activ8 consisted or little more than Simon Humphreys and Paul Andrews and (between July 2007 and August 2008) David Dutton and possibly Kim Clarke. Simon Humphreys role was as the leader and organiser at all times. The installation at Trilogix (offer, supply and making) was done pursuant to a common design to which Simon Humphreys was a party as I have addressed above. Simon Humphreys was personally closely involved in the demonstrations of the Trilogix system. In particular the first client demo to Vision Impossible was something Simon Humphreys took personal charge of and made his own. I also find that Simon Humphreys bears a personal responsibility for the website. Save for Glass Page, Simon Humphreys is personally liable for all the other relevant acts of Activ8.
163. I should record that if (which I was not) I had been satisfied that the demonstration to Christian Morris or the Waterside demonstrations were within the terms of the 1977 Act then Simon Humphreys personal involvement would have made him liable for those too.

7. Conclusion

164. In summary I find:

i) The large scale Pepper's Ghost system at Trilogix was offered for disposal, disposed of and made by David Dutton (and/or C2R). He was not doing that on behalf of Activ8. The large scale Pepper's Ghost system is not in accordance with the Baker Botts drawing.

ii) However the acts in sub-paragraph (i) above were carried out pursuant to a common design with Simon Humphreys and Activ8 such that both Simon Humphreys and Activ8 would be liable as joint tortfeasors for them if they are torts.

iii) The large scale Pepper's Ghost system at Trilogix was used by Activ8 to demonstrate to at least one potential customer (Vision Impossible) and that amounted to an offer for disposal of that system under the 1977 Act.

iv) The large scale Pepper's Ghost system at Trilogix was demonstrated by Activ8 to Christian Morris but that did not amount to an offer for disposal of that system under the 1977 Act.

v) I am not satisfied that any of the admitted uses of the Musion apparatus at the Waterside theatre by Activ8 to demonstrate to customers amounted to offers for disposal of that system under the 1977 Act.

vi) Activ8 (acting by David Dutton) did offer for disposal within the 1977 Act to Glass Page a horizontal system which was not in accordance with the Baker Botts drawing. The system offered is the one depicted in the drawing identified by David Dutton. Simon Humphreys is not personally liable for this act of Activ8.

vii) The Activ8 website does offer for disposal within the 1977 Act horizontal large scale Pepper's Ghost systems not in accordance with the Baker Botts drawing. They are the Musion systems at Waterside and elsewhere which are referred to.

viii) Simon Humphreys would be personally liable for the acts of Activ8 referred to in sub-paragraphs (i) to (v) and (vii) as a joint tortfeasor if those acts are found to be torts.




Annex 1 Note sent to the parties Musion v Activ8-3D and others
165. I understand Paragraph 28 of the claimant's skeleton argument to amount to a submission that joint tortfeasance is one of the issues to be decided as part of the preliminary issue. I did not understand the first and fourth defendants to demur in general terms from that submission. Equally the representative of the second or third defendants did not object.
166. However I am concerned to ensure that I have the parties' submissions as to the precise scope of the issues to be decided.
167. Paragraph 28(a) of the claimant's skeleton alleges that D3 and D4 were both responsible for procuring and directing the acts of D1.

a. Once I have decided what acts (in terms of the Order paragraphs 9(i) and (ii)) were carried out by D1, or D4 on its behalf, does the preliminary issue include the question of whether D3 was responsible for procuring those acts? My preliminary view is that it does not given (a) the wording of the order and (b) that I have heard no submissions on D3's behalf.

b. On the same premise (that I have decided what acts were carried out by D1 (or D4 on its behalf)) does the preliminary issue include the question of whether D4 is liable for acts of D1? My preliminary view is that the preliminary issue has been approached on the basis that this is included, irrespective of the wording of the Order. Comments please.

168. I understand paragraph 28(b) of the claimant's skeleton to be a submission that the relevant infringing acts were carried out pursuant to a common design between D1, D3 and D4 so as to render each of them jointly and severally liable for those acts. It includes but is not limited to a submission that D1 and D4 are liable for acts which may have been committed by D3. I also understand from the way the case was argued by both the claimants and D1/D4, that despite the wording of the Order, those parties expect this to be included within the decision on the preliminary issue. They have focussed on whether D1 or D4 are jointly liable with D3 for acts committed by D3. Comments on that please. In addition please consider the extent to which this may or may not relate to the liability of D3.
169. All three parties (claimant, first and fourth defendants, and second and third defendants) should provide their response in writing by 4pm Monday 18^th April.