Burrows v Smith & Anor

An idea may qualify for protection in equity where it has sufficient originality, is clearly identifiable, has commercial attractiveness and is sufficiently developed for realisation. However, disclosure by an employee to an employer in the ordinary performance of duties does not ordinarily import an obligation of confidence owed by the employer. Contractual intellectual-property provisions may vest copyright in work created during employment, and a claimant must identify an infringing act by the defendant. A director is not personally liable merely because he is described as the company’s guiding mind. A quia timet injunction requires an actionable right and a strong probability that the apprehended harm will occur.

The claimant, a computer-games designer, alleged that the defendants had infringed copyright in a document recording a game idea and had misused confidential information. He had developed the idea before joining Circle Studio Ltd, but later worked on related game concepts during his employment. Circle subsequently entered liquidation, and the second defendant acquired rights in a different, developed game concept. The claimant alleged that the first defendant personally, and the second defendant through him, had used or disclosed the original idea and document. The central issues were whether an obligation of confidence arose, whether copyright had been infringed, whether the first defendant was personally responsible for any infringement, and whether injunctive relief was justified.

1. The claim was dismissed. The idea was capable of protection in confidence. It contained sufficient originality in its combination of elements, was identifiable, commercially attractive and sufficiently developed for realisation, applying the approach in De Maudsley v Palumbo [1996] FSR 447.
2. No obligation of confidence arose on disclosure to Circle. Mr Burrows was employed to generate ideas, and disclosure of the game idea to enable Circle to develop and market it was part of his duties. There was no indication that the idea had been created before employment or was being disclosed as a personal confidential asset.
3. Clause 14 of the employment contract concerned ownership rather than confidence. On its proper construction, copyright in work created during Circle’s time and at its expense vested in Circle. The “own time” exception applied only to inventions, not to copyright treated as “soft IP”. The incorporation of earlier work into the employee’s later work was most naturally regarded as an assignment rather than an implied licence. That analysis was consistent with IBCOS Computers Ltd v Barclays Mercantile Highland Finance Ltd [1994] FSR 275.
4. There was no evidence that Crush had used the 2006 document or any infringing copy. In any event, Mr Smith was one of two directors and was not shown personally to have carried out infringing acts or to have been personally responsible for them. The “guiding mind” assertion was insufficient, although personal responsibility had been established on the facts in MCA Records Inc v Charly Records Ltd [2001] EWCA 1441.
5. A quia timet injunction was unavailable. The claimant had to establish an actionable right and a strong probability that the apprehended harm would occur, applying A-G v Corporation of Manchester [1893] 2 Ch 87. Neither requirement was satisfied.