JJH ENTERPRISES LIMITED v MICROSOFT CORPORATION & ORS.

In competition claims, strike-out and summary judgment depend on whether the pleaded case has a realistic, more-than-arguable prospect of success. The court must avoid a mini-trial, but may analyse evidence and consider evidence reasonably expected at trial. Liability may be pleaded against an undertaking or single economic unit comprising several companies; it is not necessary to allege that each company itself committed the infringement, provided the undertaking and relevant links are properly pleaded. A knowing-implementation case is ordinarily fact-dependent and unsuitable for summary disposal. Once the domestic claim survives, the necessary or proper party gateway may support jurisdiction over foreign co-defendants. England and Wales may remain the clearly appropriate forum where the dispute concerns a substantial UK market, English law and the risk of inconsistent findings.

ValueLicensing brought a standalone damages claim alleging that Microsoft’s campaign restricting resale of pre-owned perpetual software licences infringed UK, EU and EEA competition rules.

Microsoft UK applied to strike out or obtain summary judgment. Microsoft US and Microsoft Ireland challenged jurisdiction or sought a stay, principally on forum non conveniens grounds. The applications raised the liability of companies within a single undertaking, the alternative implementation case, post-Brexit treatment of EU authority, the jurisdictional gateway for foreign defendants, and the appropriate forum.

Disposition. Both applications were dismissed.

1. The court applied Civil Procedure Rules 1998 rules 3.4(2)(a) and 24.2. The pleaded case needed a realistic, more-than-arguable prospect of success. The court had to avoid a mini-trial, but could analyse the evidence and consider evidence reasonably expected at trial. The case against Microsoft UK met that threshold.
2. On the primary case, the relevant actor was the Microsoft undertaking, understood as a single economic unit, rather than each company considered in isolation. Following the approach in [2021] Bus LR 1755, it was sufficient at this stage to allege that Microsoft UK formed part of an infringing undertaking and to plead the relevant economic, organisational and legal links. Liability within the economic unit was capable of being joint and several.
3. Even if that approach were ultimately not followed, the alternative implementation case was realistically arguable. Whether a company participated in or knowingly implemented anti-competitive conduct was fact-dependent and unsuitable for summary disposal. The evidence of negotiating contracts, offering discounts and imposing resale restrictions could support direct involvement. Knowledge could be inferred from the pleaded conduct, and whether it existed was a matter for trial. The court declined to determine finally the scope of the implementation doctrine or the correctness of the Provimi line on a summary application.
4. The court could have regard to post-Brexit EU authority under section 6(2) of the European Union (Withdrawal) Act 2018. Questions concerning section 6(1), accrued pre-Brexit rights and the possible continuing relevance of later EU authority were unsuitable for summary determination.
5. Because the claim against Microsoft UK survived, the necessary or proper party gateway in Practice Direction 6B was available against Microsoft US and Microsoft Ireland. England and Wales was clearly the appropriate forum. Relevant considerations included the UK market, witnesses in England and the United States, the absence of identified Irish witnesses, the risk of duplication and inconsistent findings, and the application of English law. The jurisdiction and stay application was therefore dismissed.