HP-2020-000016 - [2025] EWHC 1451 (Ch)

Fecha: 16-Jun-2025

Mr Parker’s quantum models

Mr Parker’s quantum models

641.

Mr Parker adopted a different (and simpler) approach to that of Mr Colley. Rather than constructing a simulation model, he calculated what Cabo’s profitability would have been if it had achieved the same volume of sales as a selected comparator product or basket of products, using NPD sales data. As with Mr Colley’s models, Mr Parker’s evidence was not that his models were reliable proxies for what Cabo’s likely success in the counterfactual scenario. Rather, he sought to assess what Cabo’s profitability would have been if Cabo had achieved the sales volumes or revenues set out in his models.

642.

Mr Parker constructed two models illustrating alternative levels of commercial success. Each model calculated profitability over an assumed lifecycle of three years for Worldeez:

Mr Parker’s “significant success” model assessed the likely lost profits if Worldeez had achieved the same sales volumes in its first three years as My Little Pony Fash’ems during the years 2016–2018. This product (pictured at §520.i) above) was the top selling toy in the Mash’ems/ Fash’ems range during that period, and was included in both Mr Colley’s and Mr Parker’s proposed market definitions. It was comparable in price to the Worldeez globe, with an average retail price of £2.84 in both 2016 and 2017, increasing to around £3.00 in 2018. The NPD data showed sales (by volume) for My Little Pony Fash’ems of 479,572 in 2016, 498,748 in 2017 and 269,428 in 2018. Those sales were taken as indicating significantly successful sales volumes in the first three years of marketing Worldeez.

ii)

Mr Parker’s “moderate success” model was based on a basket of comparators made up of the best performing product of every brand newly launched between July 2018 and July 2019 in the playset dolls and collectibles class (using that period because of limited data availability for the period before then). Mr Parker used average month by month revenues for that basket of products, over three years, as a proxy for the revenues which Cabo might have achieved in its first three years. Mr Parker placed more weight on this model than his significant success model, contending that this was the better way of considering the likely success of Cabo in the counterfactual case.

643.

Mr Parker’s models did not include any licensing revenues, on the basis that he considered licensing to be unlikely given the limited UK revenues that his scenarios predicted, and Cabo’s lack of experience with licensing. He did, however, include a “broad brush” estimate of international sales during the second year of sales onwards, assuming that these would generate 10 times the UK sales, and that Cabo would have obtained a 15% margin on its sales to international distributors.

644.

Both models used cost assumptions which were based on the costs estimated in the Cabo projections. What Mr Parker did not consider was whether those costs assumptions would be realistic if Cabo’s sales levels were (as in his scenarios) far smaller than those predicted in the Cabo projections.

645.

In its closing submissions, and in the final updated version of the DTM provided after the trial, MGA updated Mr Parker’s calculations in several ways. In particular:

MGA updated the costs assumptions for Mr Parker’s models in light of the questions put to Mr Parker in cross-examination. It also (again in light of the cross-examination of Mr Parker) uplifted the sales figures in both models by 33% to account for the fact that the NPD data covered only 75% of the market.

ii)

In respect of the significant success model, MGA produced a further sensitivity analysis based on the sales figures for the entirety of the Mash’ems/Fash’ems range (i.e. including all of the Mash’ems and Fash’ems toys, rather than only using the sales generated by the My Little Pony Fash’ems product).

iii)

In respect of the moderate success model, MGA produced a further calculation which assumed that Worldeez would have been twice as successful as the average product in the basket of comparator products.

646.

MGA’s updates of Mr Parker’s calculations produced the following figures for UK and international profits over an assumed three-year lifecycle of Worldeez.