![HP-2020-000016 - [2025] EWHC 1451 (Ch)](https://backend.juristeca.com/files/emisores/logo_O3rEzCI.png){kind=logo}
Heading
MRS JUSTICE BACON Approved Judgment | Cabo v MGA |
Rolls Building
Fetter Lane
London, EC4A 1NL
Before :
MRS JUSTICE BACON
Between :
(1) CABO CONCEPTS LIMITED
(2) THE LICENCE WORLD LIMITED
Claimants
- and -
(1) MGA ENTERTAINMENT (UK) LIMITED
(2) MGA ENTERTAINMENT, INC
Defendants
Ronit Kreisberger KC, Mark Chacksfield KC, Stefan Kuppen, Alfred Artley& Greg Adey (instructed by Spector Constant & Williams Limited) for the Claimants
Victoria Wakefield KC, Jennifer MacLeod & Richard Howell (instructed by Fieldfisher LLP) for the Defendants
Hearing dates: 8 October–15 November 2024, 14–21 January 2025
Approved Judgment
This judgment was handed down remotely at 10 am on 16 June 2025 by circulation to the parties or their representatives by email and by release to the National Archives.
Introduction 1
The evidence of fact 9
Cabo’s witnesses of fact 9
MGA’s witnesses of fact 16
Mr Larian’s breaches of purdah 27
The expert evidence 38
The toy industry experts 38
The economic and valuation experts: preliminary comments 42
Assessment of the economic and valuation evidence 55
The Decision Tree Model (DTM) 58
Issues 62
Factual background 66
The UK toy industry 67
MGA and LOL Surprise 74
The founding of Cabo and development of Worldeez 79
The initial marketing of Worldeez 89
Discussions with the launch retailers 93
MGA’s intervention 104
Worldeez repackaging and relaunch 154
Demise of Cabo 177
Procedural background 182
Abuse of dominance claim 188
Overview of the legal framework 188
The relevant market definition 192
Whether MGA was dominant on the relevant market 255
Whether MGA’s conduct amounted to an abuse 306
Conclusion on abuse of dominance 357
Unlawful agreements claim 358
Overview of the legal framework 358
Agreements with the toy traders 367
Anticompetitive object or effect 375
Exemption under the VBER 387
Exemption under s. 9 / Article 101(3) 411
Conclusion on the unlawful agreements claim 415
Patent threats claim 416
Overview of the legal framework 416
Threats of patent infringement proceedings 421
“Person aggrieved” 444
Conclusion on the patent threats claim 446
Causation and quantum 447
Preliminary comments 447
Legal principles 451
Causative effect of MGA’s conduct 478
Actionable damage and causation: Cabo’s heads of loss 493
Whether Cabo would have traded profitably in the counterfactual case 501
The parties’ quantum models 594
Declaratory relief 680
Conclusions 682
MRS JUSTICE BACON:
- 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