SAS Institute Inc v World Programming Ltd

A foreign judgment will not be enforced where enforcement would contradict a fundamental public policy of the forum. The Software Directive embodied such a policy by preventing copyright owners from monopolising ideas and principles underlying computer programs. A fraud claim founded on contractual terms rendered void by that Directive could not be enforced.

Issue estoppel requires the later issue to be identical to, or covered by, an issue necessarily decided earlier. The Henderson principle requires a broad, merits-based assessment of whether a claim both could and should have been brought earlier. Under the Protection of Trading Interests Act 1980, a judgment for multiple damages is unenforceable in its entirety, while qualifying payments may give rise to a statutory recovery.

SAS sought to enforce in England compensatory damages awarded by a United States District Court judgment following claims concerning the development of competing software. The US judgment awarded damages for fraudulent inducement and under North Carolina’s Unfair and Deceptive Trade Practices Act, together with treble damages under that statute.

The parties had previously litigated related software licence and copyright issues in England. The English courts held that contractual restrictions contrary to the Software Directive were void. WPL resisted enforcement on grounds including issue estoppel, Henderson abuse of process, public policy, natural justice and the Protection of Trading Interests Act 1980. It also counterclaimed under section 6 of that Act.

1. Preclusion. Issue estoppel requires identity of issue, not merely similarity. The English proceedings had determined that the relevant licence terms did not exist as legally effective terms. Those terms were a fundamental component of the US fraudulent-inducement claim, which alleged an intention not to comply with them. The claim was therefore precluded by issue estoppel.
2. The same claims were also barred by the Henderson principle. The Fraud Claim and the dependent UDTPA Claim could have been pleaded by February 2010, when the necessary primary facts and admissions were available. They should have been pleaded then. The broad, merits-based assessment required by Johnson v Gore Wood led to the conclusion that it was abusive to pursue them later in the United States.
3. No counter-estoppel arose. Participation in the US proceedings and failure to deploy equivalent preclusion arguments did not amount to an unequivocal representation, nor were reliance and detriment established.
4. Software Directive. Even apart from preclusion, enforcement would offend English public policy. The Directive prevents the monopolisation of ideas and principles underlying computer programs. Enforcement of claims dependent on terms rendered void by that policy would undermine the Directive. The “lawful acquirer” point could not be reopened.
5. The natural-justice objection failed. WPL had a full opportunity to present its case in the US proceedings. The US court’s refusal to apply the European policy concerning software rights was not a denial of substantial justice.
6. Protection of Trading Interests Act 1980. Section 5 prevented recovery of the UDTPA judgment because it was a judgment for multiple damages. The statutory prohibition attached to the judgment founded on the relevant cause of action, not merely to the additional multiplied sum.
7. Under section 6, payments made pursuant to the US judgment were payments on account of the judgment for multiple damages. The statutory formula operated pro rata, giving WPL a right to recover the non-compensatory proportion. WPL’s counterclaim therefore succeeded in principle; the proposed set-off did not arise.

This was a first-instance decision. The judgment records that the underlying US judgment had been upheld by the US Court of Appeals in October 2017 and that a petition to the US Supreme Court had been dismissed.