Point Solutions Ltd v Focus Business Solutions Ltd & Anor

A negative declaration in a copyright dispute is available under the court’s inherent jurisdiction, although no statutory right to such relief exists. The court must decide whether there is a real question, a claimant with a real interest and a proper contradictor, and whether relief is just and useful in all the circumstances. A claimant seeking a declaration that its work was independently created bears the burden of proving that case on the balance of probabilities. That burden may not be discharged where material contributors are not called, the evidence is incomplete or insufficiently transparent, and the court must rely on unreliable opinion evidence. The court should also be slow to permit a trial conducted without expert assistance needed to determine the real issue.

Point Solutions sought declarations that its Acuo software did not infringe copyright in Focus Business Solutions’ Goal software, together with an injunction restraining repetition of infringement allegations. Focus had made allegations and suggestions of infringement but had not advanced a positive copying case. The High Court accepted that there had been sufficient assertion of rights to engage the discretion to grant anticipatory declaratory relief, but dismissed the claim: [2005] EWHC 3096 (Ch). The judge found that Point had not proved independent design, given gaps in its evidence, the absence of evidence from relevant Indian developers and concerns about key witnesses’ reliability. Point appealed on burden of proof, utility and discretion.

1. Appeal dismissed. The Court of Appeal upheld the conclusion that Point had not established, on the balance of probabilities, that all the literary works comprising Acuo had been created without copying or adaptation from Focus’ code.
2. The judge had approached the case on the accepted basis that Point had to demonstrate independent design. Focus was entitled to challenge the reliability and completeness of Point’s evidence without advancing a positive case of copying. The material findings were that developers in India had undertaken substantial work, those developers were not called, and the court had no direct evidence about their access to Focus’ software.
3. The judge was also entitled to assess the reliability of Mr Green and Mr Blatchford. Their evidence was the principal basis for asking the court to infer that no copying had occurred in the absence of direct evidence from the Indian developers. Her concerns about their accuracy, completeness and reliability justified caution and supported the conclusion that Point had not discharged its burden.
4. For completeness, Chadwick LJ was not persuaded that the judge was wrong to find that Point did not need the declaration. Independent confidential expert scrutiny had provided a sensible means of resolving the dispute, and Focus’ solicitors had indicated that a finding of no copying would be accepted. Chadwick LJ expressed difficulty, however, with the alternative discretionary reasoning that a declaration should be refused because it would prevent a future infringement claim. Once Focus had allowed the case to proceed without the expert evidence considered necessary, it could not complain if a finding of no copying prevented a later claim.
5. The court regarded the result as unsatisfactory, but attributable to the parties’ forensic choices. A judge should be slow to allow proceedings of this nature to go to trial where parties disregard directions for expert assistance needed to decide the real dispute. Lindsay J added that the absence of reliable evidence from persons who could have copied may justify an adverse decision based on the burden of proof.

• Court of Appeal (Civil Division) [2007] EWCA Civ 14: dismissed Point Solutions’ appeal. Chadwick LJ gave the judgment, with Hallett LJ and Lindsay J agreeing.
• High Court, Chancery Division [2005] EWHC 3096 (Ch): HHJ Kirkham dismissed the claim for negative declaratory and injunctive relief, with costs on an indemnity basis.