Noemalife SPA v Infinitt UK Ltd

An implied contractual licence requires, viewed objectively, an intention to create legal relations. Where parties have not addressed payment or continuation of the arrangement, the court cannot infer a contractual licence or licence fee merely from continued use. The duration of an implied software licence granted to perform a fixed-term services contract extends only as far as the licensee is contractually obliged to provide the services, including any extension which it must reasonably accept under the contract’s machinery. A longer extension made outside that machinery does not extend the licence. A late amendment introducing a copyright infringement claim may be refused where it raises substantial new issues, although refusal does not necessarily bar a fresh claim.

The claimant claimed licence fees from the defendant for continued use of Lifeweb RIS software under a managed services contract with an NHS trust. The contract provided for an initial seven-year term and extensions in six-month blocks, up to 36 months. The claimant contended that the original implied licence had ended or that a further fee-bearing licence arose. The defendant denied any agreement to pay. Shortly before trial, the claimant also sought to introduce a copyright infringement claim. The issues concerned the duration of the implied licence, the effect of the purported 30-month extension, and whether the late amendment should be permitted.

1. Whether a contractual licence can be implied depends on whether the evidence objectively demonstrates an intention to create legal relations. No such intention existed concerning payment or continuation after 31 March 2011.
2. The contract’s provision for extensions in six-month blocks had an enforceable purpose and was subject to the change-control machinery. The purported 30-month extension was not made under that machinery and was not an extension the defendant was obliged to accept.
3. The 2003 implied licence lasted for the minimum period necessary to perform the contract and extended to the six-month extension which the defendant was contractually obliged to accept. It therefore continued until 31 March 2011, but no further. Continued use thereafter required a further licence, which had not been granted.
4. Permission to amend the Reply to introduce copyright infringement was refused. The proposed claim raised substantial new issues, including ownership of the copyright and identification of infringing acts, which could not fairly be accommodated at trial. The refusal did not itself prevent a fresh copyright claim for the later period.
5. The claim was dismissed. Costs were reserved.