Chateau & Villa Company Ltd v Accomodia Ltd

For an interim injunction, the court must first decide whether there is a serious issue to be tried. If so, it must assess the balance of convenience, including the relative injustice of granting or refusing relief and the consequences likely to follow at trial. Contractual arrangements governing ownership and termination are central to that assessment. Where a database created through collaborative efforts is, on the evidence, jointly made under the Copyright and Rights in Databases Regulations 1997, an injunction based on the claimant’s exclusive ownership is unlikely to be justified. The court may refuse an intrusive injunction where the cause of action is insufficiently established, the defendant can account for relevant receipts, and competition or ordinary business activity would otherwise be improperly restrained.

The claimant and defendant operated a joint venture for a web portal providing French holiday accommodation. Their agreement included a six-month termination period and provisions for ownership of intellectual property arising from their joint endeavours. After the claimant gave notice terminating the agreement, the defendant restricted the claimant’s access to the website. The claimant sought an interim injunction restraining the defendant from using or dealing with a database of property owners and related documents.

The central issues were whether the claimant had established a serious issue to be tried concerning exclusive database rights and whether the balance of convenience justified the injunction.

1. The court applied the American Cyanamid approach. It first considered whether there was a serious issue to be tried and, if so, would assess the balance of convenience by weighing the relative injustice of granting relief when no underlying cause of action existed against refusing relief when one did, including the likely consequences at trial.
2. The Joint Venture Agreement required six months’ notice and recognised shared ownership of material arising from joint efforts or joint expenditure. Its intellectual-property provisions were inconsistent with the claimant’s contention that the relevant database rights belonged exclusively to it.
3. Under regulations 13 and 14 of the Copyright and Rights in Databases Regulations 1997, database right depends on substantial investment and the maker is ordinarily the person taking the initiative and assuming the investment risk. Regulation 14(5) provides for joint making where persons act collaboratively, and regulation 14(6) treats all joint makers as makers.
4. On the evidence, the database was, at its highest for the claimant, made jointly. The claimant therefore had not sufficiently established an exclusive right capable of supporting the injunction sought. The injunction was also inconsistent with the contractual six-month working-out period.
5. The injunction was refused. The defendant’s undertaking to keep full and proper accounts of receipts from clients introduced by the claimant and pay 50 per cent of those receipts, after proper deductions, into a solicitor’s account pending trial was embodied in the refusal. The defendant remained free to compete, and the claimant retained access to the underlying information and could continue its business.