Lilley v Chartered Institute of Management Accountants

Copyright infringement under Copyright, Design and Patents Act 1988 is territorial. Online communication to the public requires a United Kingdom target and downloading in the United Kingdom. Limitation postponement for mistake applies only where the action seeks relief from the consequences of a mistake that is an essential ingredient of the cause of action. It does not apply merely because a defendant’s conduct may have resulted from a mistake. Deliberate concealment requires deliberate concealment of relevant facts or deliberate wrongdoing involving knowledge of the breach. A claim may be struck out to the extent that it is time-barred, while a potentially viable residual claim may be preserved subject to further particulars and a later proportionality assessment.

Mr Lilley claimed damages from CIMA concerning the electronic publication of articles originally submitted for first British serial rights. He alleged breach of contract and copyright infringement, relying on an assignment of copyright from his company. The claim also included damages for CIMA’s alleged conduct in resisting the infringement claim.

CIMA applied to strike out the claim under CPR 3.4 and the court’s inherent jurisdiction. Issues included service and substitution of the defendant, limitation, the territorial scope of online copyright infringement, and whether the additional claim disclosed a cause of action.

1. The court extended time for service. Mr Lilley had acted diligently in seeking amendment, had sent the defendant notice of the intended amended claim form within the four-month period, and CIMA suffered no material injustice.

2. Substitution of CIMA for Mr Tilly was permitted. For CPR 19.5 purposes, the mistake was sufficiently a mistake as to the name of the intended party rather than an intention to sue a different person. CIMA was aware of the proceedings and suffered no injustice.

3. Contractual breaches occurring before 26 April 2006 were time-barred. Under Copyright, Design and Patents Act 1988, section 16, the relevant infringement had to involve copying or communication to the public in the United Kingdom. Online publication required both targeting the United Kingdom and downloading in the United Kingdom. The pleaded case did not establish downloading during the relevant six-year period.

4. Section 32(1)(c) of the Limitation Act 1980 did not assist. The provision concerns an action for relief from the consequences of a mistake where mistake is an essential ingredient of the cause of action. It does not cover a mistake merely connected with a copyright or contractual claim.

5. The deliberate-concealment provisions also did not assist. There was no pleaded basis for concluding that CIMA knowingly committed a breach of duty or deliberately concealed relevant facts. The pre-26 April 2006 claim was therefore struck out.

6. The possible post-26 April 2006 claim was not struck out at this stage. Mr Lilley was given 28 days to particularise United Kingdom downloading or viewing. CIMA had liberty to apply for further strike-out on proportionality and cost grounds. The claim for damages for unlawfully resisting the infringement claim disclosed no cause of action and was struck out.