Microsoft Corporation v P4 Com Ltd & Ors

On an application under Civil Procedure Rules 1998 Part 24, the court should not finally determine a seriously disputed question of fact where the evidential picture is incomplete and disclosure and cross-examination may materially affect the result. The court must avoid conducting a mini-trial. The application should be dismissed where there is a real factual issue requiring trial, even if the applicant has substantial documentary support. A proposed amendment should ordinarily be permitted where it clarifies or reshapes the case, subject to appropriate costs consequences.

Microsoft claimed copyright and trade mark infringement and passing off arising from alleged dealings in counterfeit Microsoft software. It sued P4 Com Ltd and Dr Nami, alleging that P4 traded as Phase 4 during 2002 and 2003 and that Dr Nami procured P4's acts. P4 sought summary judgment under Part 24 on its counterclaim under section 21 of the Trade Marks Act 1994, contending that it was dormant during the relevant period and that Microsoft's threats were groundless.

Microsoft also sought permission to amend its Particulars of Claim to allege, in the alternative, that Dr Nami had traded as a sole trader. The central issue on the summary judgment application was whether P4's role during the relevant period could safely be determined without a trial.

1. Summary judgment. P4's application was dismissed. The documentary evidence provided substantial support for P4's case that it had been dormant, but serious factual questions remained about its role in the Phase 4 business. Those questions arose in particular from the ownership and use of two websites and from aspects of Dr Nami's evidence.
2. Under Part 24, the court was not conducting the trial. The relevant facts were primarily within P4's knowledge, there had been no disclosure, and Dr Nami had not been cross-examined. Disclosure and cross-examination could cast a new light on the case. It would therefore be wrong to decide finally, at that stage, which party's account was correct or to engage in a mini-trial of the disputed facts.
3. The court could not proceed on the assumption that the evidence selected by P4 was complete. Whether P4 traded as Phase 4 during the material period could fairly and safely be resolved only at trial. P4 was accordingly not entitled to summary judgment on its counterclaim.
4. Permission was granted for Microsoft to amend its Particulars of Claim, including an alternative case that Dr Nami traded as a sole trader and additional allegations concerning Netcom. Service of the amendment was dispensed with by agreement. Microsoft was to bear the costs of, and occasioned by, the amendments.
5. The defendants were ordered to pay the costs of the summary judgment application down to 16 January 2007, with P4 paying the costs incurred thereafter. Microsoft's assessed costs were reduced to £20,793.50, and payment was ordered within 28 days.

Not stated in the judgment. This was a first-instance decision of the High Court (Chancery Division).