Entertainment Aps Limited v Yash Patel & Ors

At the preliminary stage, the question is whether a claim has sufficient substance and is properly pleaded, not whether it will ultimately succeed. The court must avoid a mini-trial, but need not accept bare assertions at face value. A claim should proceed where the pleaded facts disclose a real prospect of success and enable the opposing party and the court to understand the case. Parts of a pleading may nevertheless be struck out where they are immaterial, incoherent, hopeless or likely to confuse. Contractual claims concerning ownership and use of developed intellectual property may be sufficiently pleaded by identifying the relevant agreements, obligations, alleged breaches and resulting loss without itemising every component of the underlying software. An interim injunction should not be discharged merely because the later pleading uses different terminology, where the operative substance of the claim and the basis of the injunction remain materially unchanged.

The claimant alleged that agreements concerning the assignment and development of a property-marketing website required the first to third defendants to provide development services and transfer the relevant rights. It alleged that the defendants prevented the intended commercial launch, retained or used the website and associated intellectual property, and caused loss.

The first to third defendants applied under the Civil Procedure Rules 1998 to strike out the amended particulars of claim or obtain summary judgment. They also sought discharge of an interim injunction restraining use or replication of the websites and misuse of defined confidential information. The central issues were whether the pleading disclosed a viable contractual claim, which individual allegations should be removed, and whether the basis of the interim injunction had materially changed.

1. Strike out and summary judgment. The application was dismissed except in respect of specified parts of the amended particulars of claim. Under CPR 3.4(2) and CPR 24.2, the court considered whether the claim had a real prospect of success. It avoided a mini-trial, but was not required to accept unsupported assertions.
2. The contractual case was sufficiently pleaded. The amended pleading identified the relevant agreements, their material terms, the performance relied on, the alleged prevention of the intended launch, breach and loss. The claim therefore had sufficient substance to proceed.
3. The court struck out allegations concerning the claimant’s understanding of Indian law, an inadequately pleaded advisory obligation, implied payment and timing terms inconsistent with the express contract, the third defendant’s purported termination, the claim to recover £34,000, an investigative account concerning possible overpayment, and the independent authorship claim concerning alleged original works and a slogan.
4. The pleaded claim that contractual arrangements transferred or captured future intellectual property rights was not fanciful at the preliminary stage. The claimant was not required to particularise every item of software where its case concerned deprivation of the contractual benefit of a developed and operational website.
5. The court retained allegations concerning associated websites and the similar slogan insofar as they supported the wider contractual and intellectual-property case. It directed that “wrongfully interfered” be read as “infringed” for the purposes of the pleading.
6. Interim injunction. The application to discharge the injunction was dismissed. Although the amended pleading no longer expressly relied on breach of confidential-information obligations, its operative substance remained the alleged use of software and intellectual property contrary to rights acquired under the agreements. The duty identified in Speedier Logistics v Aardvark Digital was therefore not triggered.
7. The application dated 18 May 2023 was dismissed save to the limited extent of the directed strike-outs. The first to third defendants were to serve defences.

The judgment was a first-instance decision on an application concerning amended particulars of claim and an interim injunction.

• High Court (Technology and Construction Court): an earlier order dated 25 November 2022 struck out the then particulars of claim, refused permission for a proposed amendment, and permitted a further amended pleading. An interim injunction had been granted on 11 November 2021. The present application was dismissed except for the limited strike-outs identified in the judgment.