Lilley v DMG Events Ltd

A claim may be an abuse of process where the maximum recoverable benefit is plainly disproportionate to the court resources required to determine it. There is no fixed damages threshold. The assessment depends on the forum, the likely costs and complexity, and whether any injunction or other remedy has real value. For a royalty-based assessment of copyright damages, earlier licences must involve royalty terms comparable to those of the hypothetical licence required to make the infringement lawful. A claimant cannot extrapolate limited royalty arrangements into an expansive hypothetical licence without evidence of comparable dealings.

The claimant alleged that the defendant had infringed copyright in articles supplied for publication by authorising third-party databases to reproduce them. He claimed nearly £1 billion in damages. The defendant applied to strike out parts of the pleadings concerning an alleged tort of unlawfully resisting the infringement claim, and later applied to strike out the proceedings as an abuse of process.

The court considered the proper basis for assessing the maximum arguable damages, the effect of limitation, the claimant’s proposed royalty-based calculation, and whether a trial would justify the use of court resources.

1. The parts of the statements of case based on a tort of unlawfully resisting a copyright infringement claim were struck out. The claimant’s alternative case in negligent misstatement was not struck out at that stage, although the pleaded material did not disclose a reasonable ground for that claim and a further application could be made.
2. The pleadings failed to comply with CPR 63.20(1), which required the facts and arguments relied on to be stated concisely. This was also a matter of procedural fairness because the defendant remained unsure of the case it had to meet.
3. Applying Jameel v Dow Jones & Co Inc [2005] EWCA Civ 75; [2005] QB 946 and Sullivan v Bristol Film Studios Ltd [2012] EWCA Civ 570; [2012] EMLR 27, the court had to weigh the claimant’s potential benefit against the resources required. There was no precise tariff, and the appropriate assessment depended on the circumstances and the possibility of a proportionate forum or procedure.
4. Under General Tire and Rubber Company v Firestone Tyre and Rubber Company Limited [1975] 1 WLR 819, a Group 2 royalty assessment required evidence of licences with royalty rates calculated on the same or at least comparable terms to the hypothetical licence. The claimant’s limited licences did not support his proposed worldwide and repeated-infringement calculation.
5. The court therefore proceeded on the Group 3 willing licensor and willing licensee approach. The claimant accepted the defendant’s calculation that the maximum damages were about £83. There was no injunction of value because the alleged authorisations had stopped. A trial and necessary case management would consume disproportionate resources and would delay other litigants’ claims.

The Particulars of Claim were struck out in their entirety as an abuse of process.

The judgment records earlier procedural decisions transferring the proceedings to the Patents County Court and dismissing an appeal against that transfer, but this was a first-instance decision on the defendant’s strike-out applications.