THJ Systems Limited & Anor v Daniel Sheridan & Anor

A graphic work is original where its author has expressed creative ability through free and creative choices which give the work a personal touch. The test is objective. It concerns the work’s visual appearance, carries no requirement of artistic merit and is not satisfied where technical constraints leave no room for creative freedom.

A low degree of creativity does not prevent copyright from subsisting. It instead produces a correspondingly narrow scope of protection, so that only a close copy may infringe.

A defendant must plead a territorial defence to infringement. It cannot introduce that defence after the evidence has closed where it previously admitted infringement upon proof of subsistence and authorship. Such an admission cannot be withdrawn without an application and an arguable justification.

The claimants developed and licensed software which displayed options-trading information through risk and price charts. After the parties’ commercial relationship ended, the claimants alleged that the defendants had communicated charts generated by the software to the public without a licence.

The Deputy High Court Judge held that copyright subsisted in the graphical user interface, graphical displays and a logo, but dismissed the infringement claim for want of evidence that the communications were directed to the United Kingdom: [2023] EWHC 927 (Ch).

The defendants appealed against the finding of subsistence. The claimants cross-appealed against the dismissal of infringement, relying on the defendants’ earlier conditional admission. The central issues were the correct test for originality and whether communication to the public in the United Kingdom remained an issue for trial.

1. The defendants’ appeal was dismissed, subject to narrowing the declaration. The judge had applied the former English test of skill and labour rather than the more demanding test of the author’s own intellectual creation. The Court of Appeal therefore reassessed originality for itself. The declaration was confined to the risk and price charts, and no declaration was maintained concerning the logo.

2. The correct test was whether the author had expressed creative ability by making free and creative choices which stamped the work with a personal touch. Content dictated by technical considerations, rules or constraints leaving no room for creative freedom did not satisfy that test. The inquiry was objective, did not concern artistic merit and focused on the visual appearance of the charts rather than the software’s functionality.

3. The charts satisfied that test. Their creator had arranged a substantial amount of information on one screen and had chosen the location and order of components, commands, fonts and colours. Although some components came from a third-party library, their particular arrangement and configuration involved creative choices. The evidence was limited but uncontradicted, and no suggestion had been put to the creator that technical constraints dictated the appearance.

4. The degree of visual creativity was low, but it was not absent. Low creativity narrowed the scope of copyright protection, so that only a close copy would infringe; it did not remove protection altogether.

5. The claimants’ cross-appeal was allowed. A defence that the communications had not been made to the public in the United Kingdom had never been pleaded, as required by rule 16.5(2) of the Civil Procedure Rules 1998. The pleaded denial of infringement depended solely on the disputes about subsistence and authorship. The defendants had also clearly admitted that infringement would follow if the claimants established those matters.

6. The defendants could not introduce a new territorial case in written closing submissions after the evidence had closed. That course ambushed the claimants, who had reasonably limited their evidence and disclosure in reliance on the admission. The claimants’ failure to object immediately did not waive their procedural rights. No application or arguable basis for withdrawing the admission had been identified.

7. The two pleaded displays of the charts constituted infringement. An inquiry as to damages or, at the claimants’ election, an account of profits was directed.

1. Court of Appeal (Civil Division): The defendants’ appeal was dismissed, save that the copyright declaration was confined to the risk and price charts. The claimants’ cross-appeal was allowed, infringement was declared and an inquiry as to damages or an account of profits was directed: [2023] EWCA Civ 1354.

2. High Court, Business and Property Courts: A Deputy High Court Judge held that copyright subsisted in the graphical user interface, graphical displays and logo, but dismissed the infringement claim because communication to the public in the United Kingdom had not been proved: [2023] EWHC 927 (Ch).