Point Solutions Ltd v Focus Business Solutions Ltd & Anor

A court may grant a negative declaration in copyright proceedings under its inherent jurisdiction, even though the Copyright Designs & Patents Act 1988 contains no equivalent statutory remedy for unjustified threats. The claimant must establish a sufficient assertion of right and prove the relevant facts on the balance of probabilities. The court must then consider whether the declaration is just, useful, necessary, accurate and appropriate. It should weigh the claimant’s interest against fairness to the defendant, including the risk that a declaration would prevent a later infringement claim. Where the alleged copying has not been properly tested and the claimant has not shown independent design, declaratory relief should be refused.

Point sought declarations that its Acuo software did not infringe copyright in Focus’s Goal software, together with an injunction restraining Focus from representing that infringement had occurred. Point relied on correspondence, statements allegedly made to customers and Focus’s conduct before and during the proceedings.

Focus denied making an allegation of infringement and had not seen Point’s software. No expert comparison was available at trial. The central issues were whether Focus had sufficiently asserted a right to trigger the declaratory jurisdiction, whether Point had proved independent design, and whether the court should exercise its discretion to grant relief.

1. Jurisdiction and sufficient assertion. The absence of a statutory right to a negative declaration did not prevent the court exercising its inherent jurisdiction. The question was whether, in all the circumstances, it was just to grant the declaration. Focus’s letter of 9 October 2002 implicitly asserted that Point had copied or otherwise used Focus’s software and was sufficient to trigger the discretion. The Swiss Life conversation likewise amounted to an implicit assertion. The later correspondence and the alleged dealings with The Exchange did not independently establish a sufficient assertion.
2. Applicable discretion. The court considered the principles concerning real and non-theoretical questions, a claimant with a real interest and a proper contradictor. It also considered whether the order would serve any useful purpose, fairness to both parties and any special reason for or against relief. A court should be slow to require a party that has made no positive allegation of copying to answer a negative case of non-copying.
3. Proof of independent design. Point bore the burden of proving, on the balance of probabilities, that its software had been independently designed. The absence of the competing software, expert evidence and tested development material, together with concerns about the completeness and reliability of Point’s evidence, meant that Point had not discharged that burden. The court could not determine whether any constituent literary work had been copied or adapted.
4. Utility and fairness. Point had not shown a real need for the declaration or identifiable commercial loss. Granting relief would potentially prevent Focus bringing a future infringement claim without the evidence normally required to decide infringement. The declaration was therefore refused, and the claim for an injunction fell with it.