B&M and other retailers
B&M and other retailers
On 24 May 2017 Mr Laughton emailed Ms White asking “On another note I assume you’re not going to be selling Worldeez?” Ms White replied “Where has that come from?” Mr Laughton responded “Saw the youtube video and we are protecting our L.O.L IP – all other retailers are not supporting but I thought perhaps because of your relationship with Marc [Sivner] that perhaps you may.” Ms White then asked whether she could buy LOL from MGA, saying that she was “still keen to buy but you said you couldn’t get stock”. Mr Laughton responded confirming that he did not have enough stock to meet his current orders. As discussed below, B&M went on to launch the Worldeez range in its stores in July 2017.
Mr Laughton’s evidence was the retailers he had contacted by telephone on 23 or 24 May 2017 included Argos and Tesco, and that they had agreed not to take the Worldeez globe: see §§136–137 above. When cross-examined, Mr Laughton indicated that he had also telephoned Sainsbury’s and Asda. On 25 May Mr Sivner told the Cabo founders in a Whatsapp message that “Argos will take when you get a letter”, i.e. a letter confirming that Worldeez did not infringe MGA’s IP rights. In a later WhatsApp message on 18 August Mr Sivner reported that “Tesco love it” but would not take the globe “because of lol”. These reports from Mr Sivner were not entirely consistent with the evidence set out at §103 above, indicating that even prior to MGA’s intervention Tesco and Argos were not interested in stocking Worldeez.
There is one contemporaneous message indicating that Hamleys declined to stock Worldeez “because of LOL”, but there is no evidence that MGA ever contacted Hamleys. In the circumstances I do not make any findings of threats by MGA to Hamleys.
- Heading
- INTRODUCTION
- THE EVIDENCE OF FACT
- MGA’s witnesses of fact
- Mr Larian’s breaches of purdah
- THE EXPERT EVIDENCE
- The economic and valuation experts: preliminary comments
- Assessment of the economic and valuation evidence
- The Decision Tree Model (DTM)
- ISSUES
- FACTUAL BACKGROUND
- The UK toy industry
- Table 1: NPD dolls classifications
- MGA and LOL Surprise
- Section 14
- The founding of Cabo and development of Worldeez
- Section 16
- The initial marketing of Worldeez
- Discussions with the launch retailers
- The Entertainer
- Toys R Us
- Smyths
- Other retailers
- MGA’s intervention
- Contacts with Cabo and Singleton
- The Entertainer
- Toys R Us
- Smyths
- B&M and other retailers
- AB Gee
- Worldeez repackaging and relaunch
- Launch of Worldeez globe in B&M
- Decline in B&M sales after August 2017
- Sales to other retailers
- Licensing and international distribution
- Nickelodeon advertising
- Demise of Cabo
- PROCEDURAL BACKGROUND
- ABUSE OF DOMINANCE CLAIM
- The relevant market definition
- The parties’ submissions
- Mr Colley’s approach
- Mr Parker’s approach
- Section 44
- Conclusions on market definition
- Whether MGA was dominant on the relevant market
- The parties’ submissions
- Table 2: 2017 market shares for Colley and Parker markets (%)
- Table 3: Parker market share estimates for 2018–19 (%)
- Table 4: 2017 market shares for extended Colley market (%)
- Market shares
- Figure 1: Colley diagram of 2017 MGA and competitor market shares
- Competition from products outside the relevant market
- Barriers to entry and expansion
- Countervailing buyer power
- MGA’s conduct
- Conclusions on dominance
- Whether MGA’s conduct amounted to an abuse
- The parties’ submissions
- The overall exclusionary campaign
- MGA’s “response to commercial attack” argument
- MGA’s passing off defence
- Section 63
- Conclusion on abuse of dominance
- UNLAWFUL AGREEMENTS CLAIM
- Agreements with the toy traders
- Discussion and conclusions
- Anticompetitive object or effect
- Discussion and conclusions
- Exemption under the VBER
- Scope of the VBER
- Market share threshold
- Excluded restrictions
- Conclusion on the VBER
- Exemption under s. 9 / Article 101(3)
- Conclusion on the unlawful agreements claim
- PATENT THREATS CLAIM
- Threats of patent infringement proceedings
- The parties’ submissions
- Discussion
- “Person aggrieved”
- Conclusion on the patent threats claim
- CAUSATION AND QUANTUM
- Legal principles
- Quantification of the loss
- The approach to claims for lost profits
- Conclusions on the overarching approach
- Causative effect of MGA’s conduct
- Actionable damage and causation: Cabo’s heads of loss
- Whether Cabo would have traded profitably in the counterfactual case
- Product quality
- Section 92
- Marketing campaign
- Retailer support
- Business plan/financial projections
- Inventory management
- Working capital
- Toy expert evidence on commercial success
- Breakeven analysis
- Table 5: Volumes and working capital required to break even in 2017
- International sales
- Conclusions on whether Cabo would have traded profitably
- The parties’ quantum models
- Mr Colley’s quantum models
- Table 6: Cabo calculations of losses (£m)
- Assessment of Mr Colley’s models
- Mr Parker’s quantum models
- Table 7: MGA calculations of losses (£)
- Assessment of Mr Parker’s significant success model
- Table 8: Loss calculation for significant success model, comparing MGA and Cabo cost stacks (£)
- Assessment of Mr Parker’s moderate success model
- Figure 2: Parker moderate success model: average monthly revenue (£)
- Conclusions on the quantum models
- DECLARATORY RELIEF
- Conclusions
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